Bratton v. Morris

• Decision Date: 20 September 1934
• Docket Number: 6094
• Citation: 54 Idaho 743,37 P.2d 1097
• Parties: H. H. BRATTON, Appellant, v. FRANK MORRIS, Respondent
• Court: Idaho Supreme Court

37 P.2d 1097

54 Idaho 743

H. H. BRATTON, Appellant, v. FRANK MORRIS, Respondent

No. 6094

Supreme Court of Idaho

September 20, 1934

PARTNERSHIP-DISSOLUTION-CONTRACT CONSTRUCTION OF.

1. Evidence that lease running to named partners doing business under designated partnership name was negotiated by copartnership, and that expenses incident thereto were paid with partnership funds, and that profit therefrom was partnership profit, established that lease was held as partnership property rather than tenancy in common notwithstanding that lease was signed by partners individually without use of partnership name.

2. Primary object of construction of contract is to discover intention of parties at time contract was made, and, in effectuating primary object, contract must be construed as a whole to accomplish intended purposes.

3. Where parties to contract dissolving partnership expressly agreed that final settlement set forth in contract was complete, and that they mutually discharged each other from liability arising from previous association as copartners partner who agreed to pay all liabilities arising from leasehold of partnership could not recover from copartner one-half of rent accruing after dissolution of partnership which was paid by him under covenant in lease "liability" being a broad term of most comprehensive significance.

APPEAL from the District Court of the Tenth Judicial District, for Nez Perce County. Hon. Miles S. Johnson, Judge.

Action by H. H. Bratton, plaintiff and appellant, to recover from his co-lessee, Frank Morris, defendant and respondent, one-half of certain sums of money paid by appellant to lessor under written lease. Judgment for defendant. Plaintiff appeals. Affirmed.

Judgment of the trial court affirmed, with costs to respondent.

James F. Ailshie and Tannahill & Durham, for Appellant.

The contract of dissolution herein does not relieve or excuse defendant from any liability which might thereafter accrue on account of rentals to the landlord on the Kroutinger lease. (2 Thompson on Real Property, p. 505, secs. 1384, 1385; Cauble v. Hanson, (Tex. Civ. App.) 224 S.W. 922; 5 Elliott on Contracts, secs. 4573, 4574; Samuels v. Ottinger, 169 Cal. 209, 146 P. 638, Ann. Cas. 1916E, 830.)

However general the terms may be in which a contract is made it only covers those things in respect to which it appears the contracting parties proposed to contract and not things they never thought of; and where general terms are used followed by specific enumerations, or vice versa, the general terms of description will be limited to things of like classes or kinds to those specifically enumerated. (Case v. Cushman, 3 Watts & S. (Pa.) 544, 546, 39 Am. Dec. 47; Gohlke v. Hawkeye Commercial Men's Assn., 198 Iowa 144, 197 N.W. 1004, 35 A. L. R. 1177; Lewiston Orchards Irr. Dist. v. Gilmore, 53 Idaho 377, 23 P.2d 720, 722.)

A. S. Hardy and Verner R. Clements, for Respondent.

The meaning of the dissolution contract is to be determined from the construction of the language used in the contract, which clearly comprehends all liabilities of the partnership and especially the liability here involved. (Feil v. City of Coeur d'Alene, 23 Idaho 32, 50, 129 P. 643; 36 C. J. 1050; Price v. Parker, 197 Mass. 1, 83 N.E. 323, 125 Am. St. 326; Swain v. Grangers Union of San Joaquin Valley, 69 Cal. 186, 10 P. 404.)

The purpose of the contract was to settle all matters between the parties, and such purpose will be taken into consideration in construing the contract as an assumption of all partnership liabilities by Bratton. (Clarke v. Blackfoot Water Works, 39 Idaho 304, 228 P. 326; Southern R. Co. v. Stearns Bros., 28 F.2d 560; Oberwise v. Poulos, 124 Cal.App. 247, 12 P. 2d 156.)

HOLDEN, J. Budge, C. J., Givens, Wernette, JJ., and MORGAN, J., concurring.

OPINION

HOLDEN, J.

October 27, 1919, appellant and respondent entered into a partnership agreement for the purpose of engaging in a general merchandise business at Lewiston, Idaho, under the firm name and style of Bratton-Morris Company. A little more than nine years later, to wit, January 1, 1929, appellant and respondent leased a store building, located in Lewiston, from one A. W. Kroutinger, for a term of five years. The introductory recital reads:

"THIS INDENTURE, made this 1st day of January, 1929, between A. W. Kroutinger, of Lewiston, Nez Perce County, State of Idaho, the first party herein, and H. H. Bratton and Frank Morris, co-partners doing business under the firm name and style of Bratton Morris Company, the second parties hereto."

The lease contained the following "assignment" provisions:

"The second parties (referring to appellant and respondent) may assign this lease or sub-let any part of the premises provided that the second parties shall continue bound for the payment of rentals and the performance of all the obligations of the second parties with the same effect as if such assignment or sub-lease had not been made."

And it was executed as follows:

"IN WITNESS WHEREOF, the parties have hereunto set their hands and seals the day and year in this instrument first above written.

"A. W. KROUTINGER, (Seal)

"First Party.

"H. H. BRATTON, (Seal)

"FRANK MORRIS, (Seal)

"Second Parties."

The record shows that the purpose of leasing the Kroutinger store building was to enable the partnership to control the property against competitors and to acquire the exclusive sale of certain standard lines of merchandise.

March 11, 1929, the lease was assigned to one A. B. Servey. The assignment reads:

"KNOW ALL MEN BY THESE PRESENTS: That undersigned, for and in consideration of the sum of Ten Dollars ($ 10.00) and other valuable considerations, to them in hand paid, the receipt whereof is hereby acknowledged, do by these presents bargain, sell, transfer, convey, assign and set over unto A. B. Servey, of Denver, Colorado, all our right, title and interest of, in and to the annexed lease, dated January 1, 1929, between A. W. Kroutinger and the undersigned, subject, however, to all of the terms, conditions and covenants of said lease, which the said A. B. Servey assumes and agrees to discharge according to the provisions of said lease.

"Dated this 11th day of March, 1929.

"H. H. BRATTON, (Seal)

"FRANK MORRIS, (Seal)

"GRACE MORRIS, (Seal)

"NELLIE BRATTON. (Seal)"

And thereafter Servey assigned the lease to Servey Stores Company, a corporation.

The partnership, from partnership funds, paid the rent on the Kroutinger lease until it was assigned to Servey, and from partnership funds the expenses incident to obtaining the lease were also paid. It further appears that the Kroutinger lease transaction was entered in the partnership books in several different ways, one of which was by account No. 122, entitled "Alexander," the items of which are as follows:

"'February rent--Kroutinger

$ 650.00

March 10, Servey-Alexander lease

$ 3,500.00

March 30, Al Kinkle--See H. H. B.

25.00

March 30, A. W. Kroutinger

650.00

May 30, Cox & Martin

Closed to P. & L.

2,040.00'"

The partnership net profit amounting to the sum of $ 2,040 was carried into the partnership profit and loss account as a part of the total partnership profit, and distributed to the partners.

October 18, 1930, apparently because the partners were not getting along very well together, the partnership was dissolved. The material provisions of the contract of dissolution are as follows:

"Fifth: The said Herbert H. Bratton hereby assumes and agrees to pay and save and hold the said Frank Morris harmless from any and all obligations of whatsoever kind or nature of the said copartnership outstanding and unpaid up to and as of the date of this contract, as shown and recorded upon the books of said copartnership, together with and including any and all liabilities or lease holds and goods ordered and goods in transit and unpaid insurance premiums."

"Eighth: It is agreed that this agreement is a full and complete settlement of all matters and things between the respective parties, and they do mutually release and discharge each other from liability to the other on account of their previous association as copartners and on all other accounts."

"It is further agreed that this settlement is made and based upon the book value of the assets of said business, which is agreed to by the respective parties, and represents and is a fair adjustment of the rights of the respective parties."

The Servey Stores Company paid the rent accruing under the terms of said lease up to September 1, 1931, but failed to pay all of the rent for the months of September and October, and thereafter wholly defaulted. Later, and on account of such default, Kroutinger demanded payment from both appellant and respondent, and, thereupon, appellant made demand upon respondent that he pay one-half of the rent, which respondent refused to do, whereupon appellant made several payments, but later on quit making payments in response to Kroutinger's demands. Kroutinger then brought an action against appellant and respondent to, and recovered judgment for, the balance of the rent money due under his lease, which judgment, with interest and costs, the appellant paid, and then brought this action against respondent to recover one-half of the sums paid to Kroutinger in response to his demands, as well as one-half of said judgment, interest and costs.

The complaint sets forth four causes of action. Three for one-half of the sums, respectively, of rent money paid to Kroutinger upon demand, and one for one-half of the amount paid in satisfaction of said judgment. The pertinent allegations, set forth in each cause of action, are:

"That on or about the 1st day of January, 1929, the plaintiff H. H Bratton and ...