Brudvik v. Frosaker Blaisdell Co., 5391.

• Decision Date: 12 December 1927
• Docket Number: No. 5391.,5391.
• Citation: 216 N.W. 891,56 N.D. 215
• Parties: BRUDVIK et al. v. FROSAKER BLAISDELL CO.
• Court: North Dakota Supreme Court

56 N.D. 215

216 N.W. 891

BRUDVIK et al.

v.FROSAKER BLAISDELL CO.

No. 5391.

Supreme Court of North Dakota.

Dec. 12, 1927.

Syllabus by the Court.

An automobile dealer entered into a contract with two parties whereby such parties agreed to pay for cars supplied to such dealer by a distributor, the cars to be resold by the dealer and the commission divided. In an action brought by the parties so furnishing the money against the distributor for the proceeds of resale contracts made by the dealer, the evidence is examined, and it is held:

(a) It is sufficient to establish that the plaintiffs were jointly interested in the adventure of financing the purchase of automobiles by the dealer.

(b) It is sufficient to establish that the distributor had knowledge of the arrangement existing between the dealer and such third parties.

An arrangement whereby two parties are to furnish money for the purchase of automobiles, to be resold by another party, the profits or commissions to be shared by all, and the contracts of sale to stand as security for the money advanced, is a “joint adventure,” and not a general partnership.

Where, in carrying out a joint adventure, property is purchased with the money of one or more of the interested parties, such property does not become that of all of the joint adventurers, and the parties to such relation may show the actual interest of each in the property so acquired.

Where the proceeds of property belonging to certain of the joint adventurers are converted or withheld by a third party, such owners are the “real parties in interest” in an action brought for the recovery of such proceeds.

Where joint adventurers carry on a joint enterprise in the name of one of their number, P., through whose negotiations moneys are received, which, to the knowledge of the recipient, belong to the other joint adventurers, such parties may recover from the recipient any amount withheld to apply on the personal indebtedness of P., but may not recover the amount of a remittance to P., although the latter may have converted it to his own use.

Appeal from District Court, Ward County; Geo. H. Moellring, Judge.

Action by Gilbert Brudvik and H. H. Steele, copartners, against the Frosaker Blaisdell Company. From a judgment for plaintiffs, defendant appeals. Modified and affirmed.McGee & Goss, L. E. Blaisdell, and J. C. Miller, all of Minot, for appellant.

B. H. Bradford, of Minot, for respondents.

BIRDZELL, C. J.

This is an action by the plaintiffs, as copartners, to recover of the defendant the sum of $1,764, which, the plaintiffs allege, was received by the defendant from the General Motors Acceptance Corporation for the use of the plaintiffs. From a judgment in favor of the plaintiffs entered on a verdict of a jury, the defendant has appealed. The facts necessary to an understanding of the questions presented on appeal may be briefly stated as follows:

The defendant company, of Minot, being in the business of dealer and distributor of certain automobiles, entered into a contract with one John Peterson, under which the latter became an associate dealer in automobiles at Mohall. In March, 1926, Peterson was owing to the defendant a sum of money on an open account and another sum secured by a mortgage. Owing to lack of resources and credit, it was difficult for him to obtain from the defendant cars for sale, for which he would be required to pay the net price. He therefore made arrangements with the plaintiffs, who were in the banking business at Mohall, whereby the plaintiffs would finance the purchase of cars by Peterson from the defendant, honoring drafts accompanying bills of lading drawn by the latter upon Peterson, the plaintiffs to be repaid out of the proceeds of the sale of the cars. As compensation for thus financing the purchase, the plaintiffs were to receive a portionof the commission that would otherwise belong to Peterson.

With this arrangement in mind, the plaintiffs and Peterson went to Minot about March 30, 1926, and went to the place of business of the defendant company, where there was some talk regarding the arrangement. The substance of the talk is involved in dispute, but soon thereafter some cars and trucks were shipped to Peterson. A bill of lading accompanied by a sight draft, was forwarded to the Renville County Bank, an institution operated by the plaintiffs, where the draft and freight were paid, and the cars and trucks were afterward delivered. They were subsequently sold. Peterson then forwarded the sales contracts to the General Motors Acceptance Corporation, which declined to advance money on them and returned them to him. He afterward solicited the assistance of the defendant company in obtaining the cash on these contracts, and after new contracts had been executed by the purchasers and indorsed by the defendant a draft was received by the defendant for the proceeds, $1,764. The defendant cashed the draft and retained the proceeds, crediting Peterson with the amount owing on his open account, returning to him his note and mortgage representing other indebtedness, together with its check for the balance. After some subsequent negotiations, in which Peterson tendered back the note, mortgage, and check, this action was brought.

[1] The first contention on the appeal is that there is a failure of proof as to the existence of a partnership between the plaintiffs, and therefore no proof that the defendant received moneys belonging to the plaintiffs. There is ample evidence in the record that Brudvik and Steele were jointly interested in the venture of financing the purchase of the automobiles by Peterson to be resold by the latter, and in a division of the commission to be thus earned. But it is argued that, if any partnership existed between these plaintiffs, it is a partnership of which Peterson was also a member, and that the plaintiffs in no event could recover without joining Peterson.

The agency contract was in Peterson's name. The cars were shipped by the defendant to Peterson. The bill of lading was sent to the bank designated by Peterson in his contract (it is the bank operated by the plaintiffs). If the plaintiffs have a right to recover the proceeds of the resale of the cars in this instance, it is because of their arrangement with Peterson, known to the defendant.

The principal controversy in this case centers about the arrangement between Peterson and the plaintiffs, and the defendant's knowledge of that arrangement. Brudvik testified that Peterson wanted to be financed, and that he and Steele were buying the cars which Peterson was to resell for them. Peterson testified that the plaintiffs were paying for the cars, and that he was reselling them on a commission basis. There can be no doubt, in our opinion, that there is ample evidence of an arrangement existing between Steele and Brudvik, on the one hand, and Peterson, on the other, to the effect that the former were to furnish the money for the purchase of cars, which were to be resold by the latter, and that the contracts of sale were to stand as security for the money advanced; also that it was contemplated that these should be turned over to the General Motors Acceptance Corporation, where cash would be realized upon them.

The evidence as to the knowledge of the defendant of this arrangement is substantially as follows:

Blaisdell, one of the officers of the defendant company, testified that he remembered the sale of a carload of automobiles to Peterson, the agent at Mohall; that he did not know Steele; that possibly Brudvik was there when this sale was made; that he was not informed that Steele and Brudvik would pay for the cars. Later, however, he testified that on one occasion he saw Brudvik and Steele at the place of business of the defendant in Minot; that Peterson said he had got squared away to handle cars, and wanted to get a carload; that he would pay for them; that the witness told Peterson that, “if we (meaning the defendant) had to finance them, we wouldn't give them as good a commission as if they paid cash, and that Peterson said, ‘All right;”’ that he and Brudvik walked out to the door a little ways from the office, so they were not in his hearing, and he came back and said, “We will pay cash from now on, and I says, ‘Fine;”’ that he heard nothing as to where the cash was coming from; that nothing was said to him; that Brudvik did not talk to him, although he was present part of the time; that it was his understanding that the defendant was selling cars to Peterson, the only man it was authorized to sell them to by the terms of their contract with the company, and that he had no business deals with, and made no sale of cars to, Steele or Brudvik; that Brudvik never told him at any time to ship cars to Peterson, and that he, or he and Steele, would pay for them.

Referring to a later date, after Peterson had failed to get the money from the General Motors Acceptance Corporation, Blaisdell testified that Peterson brought the papers to him, and said that the General Motors Acceptance Corporation would not discount them, and asked if there was anything he could do in the matter. He told Peterson that, if he would leave the papers, the General Motors would accept any papers submitted by the defendant, because its credit was good; that shortly thereafter he made up a new set of papers over the signature of the defendant, and took them to Peterson, who assisted in getting the signatures of the purchasers thereon. He testified to what happened at the time the draft came from the General Motors Acceptance Corporation as follows:

“Q. Did you not then state to Mr. Brudvik and Mr. Peterson, in the presence of Mr. Strommen, that when this money came it was your intention to send the money on immediately to Mohall? A. I did not.

Q. Did you not say, further, that it would have been done, had...