Bertozzi v. Collaso

• Decision Date: 07 April 1920
• Docket Number: Civil 1780
• Parties: TONY BERTOZZI, Appellant, v. LUIGI COLLASO and JOE VALDRINI, Appellees
• Court: Arizona Supreme Court

188 P. 873

21 Ariz. 388

TONY BERTOZZI, Appellant, v. LUIGI COLLASO and JOE VALDRINI, Appellees

Civil No. 1780

Supreme Court of Arizona

April 7, 1920

APPEAL from a judgment of the Superior Court of the County of Yavapai. John J. Sweeney, Judge. Affirmed.

Mr. A L. Hammond, for Appellant.

Messrs O'Sullivan & Morgan, for Appellees.

OPINION

BAKER J.

The plaintiff, Bertozzi, sued the defendants, Collaso and Valdrini, to recover damages for the alleged conversion of certain personal property. The court dismissed the action and the plaintiff appeals. The evidence, fairly considered, tends to show that Bertozzi and Collaso were partners, and that in the month of August, 1918, and for a considerable time prior thereto, they were engaged in the business of conducting a hotel at Prescott, Arizona, under a lease of the property from the defendant Valdrini. The lease was for a term of five years, commencing April 13, 1918, at the monthly rental of $300 payable on the fifteenth day of each and every month in advance. The lease contains the following clause:

"It is further mutually agreed and stipulated, . . . in case the parties of the second part throw up and abandon this lease at any time during the life thereof, then in such event the first party may immediately seize and take hold of and reduce to his possession all of said personal property which may at any time be owned or claimed by the parties of the second part under their rent lease thereon, and shall retain the same and the whole thereof as liquidated damages for a failure to carry out the terms of the lease by the parties of the second part, in which event the parties of the second part, shall have no further right, title, or interest in and to the personal property in said building, outside of their wearing apparel and personal effects."

The rent of the hotel for the month of August, 1918, fell in arrears and remained unpaid, and Collaso abandoned the lease and turned the hotel over to the defendant Valdrini. At the same time he turned over the personal property situated in the hotel and belonging to the firm as liquidated damages for the failure of the lessors to continue under the lease for five years. Bertozzi was absent at the time of this transaction. He claims that Collaso was in possession of partnership funds sufficient to pay the rent, and that there was fraudulent collusion between Valdrini and Collaso for the purpose of defrauding him out of his undivided one-half interest in the firm property.

Conceding that the testimony, fairly considered, tends to show fraud in the transaction between Collaso and Valdrini whereby the plaintiff was deprived of his interest in the property belonging to the firm, still we are satisfied that he cannot maintain the present action. It is not alleged in the complaint nor was it proven that the affairs of the partnership between Bertozzi and Collaso had been closed up nor that there had been any settlement of the partnership debts. It is well settled that one partner cannot sue the other at law as distinguished from an action in equity with respect to the partnership transaction, except after a full accounting and balance struck, and such an action is on contract, and not ex delicto. One partner cannot sue his copartner for damages in conversion in respect to the firm property. The case of Sindelare v. Walker, 137 Ill. 43, 31 Am. St. Rep. 353, 27 N.E. 59, is illustrative of the proposition stated. That was a suit brought by one partner against his copartner and a third person based upon the ground of collusion and fraud, whereby the entire assets of the copartnership were diverted. The allegations of the complaint were, in substance, that plaintiff and Hubka were partners in the dry goods business, owning a stock of goods and certain store fixtures, on which they had previously executed a chattel mortgage to defendants; that long before the maturity of this chattel mortgage, and without any authority of law whatever, defendant, by collusion with Hubka, wrongfully foreclosed the mortgage and took possession of not only the goods and chattels described therein, but also others of the value of $5,000, belonging to said firm, which he afterwards pretended to sell to Hubka; that by reason of such wrongful transfer plaintiff was deprived of his said goods and profits and the goodwill of said business; that said wrongs were committed in consideration of the confederation and collusion of said Hubka and defendant to injure and defraud plaintiff. There was no averment that the copartnership between plaintiff and Hubka had been dissolved, or any settlement had of their partnership affairs. The court says:

"The declaration, therefore, not only fails to show any individual title or ownership in plaintiff to said property, partnership business, or the profits or goodwill thereof, which he says he lost, but affirmatively discloses a state of facts from which it appears that he had only a community of interest therein with his partner, who consented to said transfer and all that was done by defendant in error. A partner's right to partnership property is an ownership of all the assets of the firm, subject to the ownership of every other copartner, all of the partners holding all of the firm assets subject to the payment of the partnership debts and liabilities. Parsons on Partnership, 350. It is clear therefore, that the individual interest of one partner in the firm property and business can only be ascertained by a settlement of the partnership. ...