Bussell v. Barry

• Decision Date: 23 February 1940
• Docket Number: 6483
• Citation: 102 P.2d 276,61 Idaho 216
• Parties: J. S. BUSSELL, Respondent, v. HARRY W. BARRY, as Special Administrator of the Estate of CHARLES F. JOHNSON, Deceased. SECURITY PRODUCTS COMPANY, an Arizona Corporation, and GERTRUDE WALTER, Appellants
• Court: Idaho Supreme Court

102 P.2d 276

61 Idaho 216

J. S. BUSSELL, Respondent, v. HARRY W. BARRY, as Special Administrator of the Estate of CHARLES F. JOHNSON, Deceased. SECURITY PRODUCTS COMPANY, an Arizona Corporation, and GERTRUDE WALTER, Appellants

No. 6483

Supreme Court of Idaho

February 23, 1940

PARTNERSHIP-PROOF OF-APPEAL AND ERROR-EVIDENCE.

1. A "partnership" and duties and obligations arising therefrom can be created only by contract, express or implied.

2. Fact that ranch owners each owned an undivided half interest in the ranch and shared profits arising therefrom did not establish ownership of ranch as "partners." (I. C A., sec. 52-307, subd. 2.)

3. Evidence was insufficient to sustain finding that ranch was owned by partnership, so as to require an accounting of rents and profits of the ranch, in view of evidence that while partners owned the ranch each looked upon and treated his undivided half interest therein as his sole and separate property. (I. C. A., sec. 52-307, subd. 2.)

4. The Supreme Court was not bound by findings which were not supported by the evidence.

5. Evidence was insufficient to sustain finding that holder of record title to an undivided half interest in ranch was agent of one of the partners for purpose of holding title for and on behalf of the partner, as a member of the partnership, so as to require an accounting of rents and profits of the ranch.

The foregoing syllabus is by West Publishing Company, that following is by author of opinion.

I. A partnership, and the duties and obligations arising therefrom, can be created only by contract, express or implied.

II. "Joint tenancy, tenancy in common, tenancy by the entireties, joint property, common property, or part ownership does not of itself establish a partnership, whether such coowners do or do not share any profits made by the use of the property."

III. Appellate court is not bound by findings which are not supported by the evidence.

APPEAL from the District Court of the Eleventh Judicial District for Twin Falls County. Hon. T. Bailey Lee, Judge.

Action for dissolution of partnership and accounting. Judgment for plaintiff. Reversed and remanded.

Reversed and remanded with directions. Costs awarded to appellants.

James R. Bothwell and Harry Povey for Appellants.

Where the undisputed legal title to real estate rests in one by conveyance in writing attended with all the solemnity imposed by statute, and where it is alleged that the grantee holds the real estate as trustee or successor to the grantor, and no evidence is offered attacking the conveyance, equity will not convert the legal owner into a trustee for the grantor who has voluntarily parted with title. And equity will not impose a trust relationship upon the grantee in behalf of one who claims to be a partner, and who has recognized the legal title in the grantee, and who has benefited by the grantee's ownership of both the legal and equitable title. Nor will the grantee by accepting title under the circumstances become a partner with another who holds title to an undivided one-half interest in the real estate. This is especially true where the rights of the grantee will be seriously impaired by invoking such a rule, and where the rights of the one who claims to be a partner can be properly safeguarded without resort to such construction. (Dunn v Dunn, 59 Idaho 473, 83 P.2d 471; Aker v. Aker, 52 Idaho 713, 20 P.2d 796; Sheehan v. Sullivan, 126 Cal. 189, 58 P. 543; 65 C. J. 324, sec. 85; Nichols' Applied Evidence, vol. 5, p. 4527; 65 C. J. 318, sec. 80; McGuire v. Hansen, 48 Idaho 34, 279 P. 413; Bliss v. Bliss, 20 Idaho 467, 484, 119 P. 451; 23 C. J. 24 (sec. 1759).)

Chapman & Chapman, for Respondent.

On the dissolution of a partnership a creditor partner has an equitable lien on the share of the debtor partner for any balance or claim incident to the partnership business. (Sec. 877, 47 C. J., p. 1183; Martin v. Carlisle, 46 Okla. 268, 148 P. 833, 6 A. L. R. 154; Meeve v. Eberhardt, 49 Tex. Civ. App. 327, 108 S.W. 1013.)

When the avoidance of a fraudulent transfer or of a scheme harmful to the partnership in which a partner has had a confederate is necessary to a full settlement and accounting by the partnership, such fraudulent transferee or confederate are proper parties. (Sec. 925, 47 C. J., p. 1215; Doudell v. Shoo, 20 Cal.App. 424, 129 P. 478; Clay v. Palmer, 104 Neb. 476, 177 N.W. 840; Capecci v. Alladio, 8 Wash. 637, 36 P. 692.)

That the relationship of principal and agent can be established by all the facts and circumstances of the particular case, including the conduct of the parties and their relationship. (2 C. J., secs. 32, pp. 435-438, 34, p. 440.)

MORGAN, J. Ailshie, C. J., Givens and Holden, JJ., concur.

OPINION

MORGAN, J.

This action was commenced April 3, 1936, in the District Court of the Eleventh Judicial District for Twin Falls County, by respondent against C. F. Johnson, being the person mentioned in the title hereof as Charles F. Johnson, Security Products Company, a corporation, and Gertrude Walter. Prior thereto respondent commenced an action in the court of the same district, for Jerome County, against Johnson and Security Products Company. The cases were consolidated and tried together in Twin Falls County, and resulted in a decree, made applicable to both cases, in favor of plaintiff, from which all defendants appealed. Pending hearing of the appeal Johnson died and Harry W. Barry was, by the probate court, appointed special administrator of his estate. In his appointment it was ordered that he be named and substituted as a party defendant, as the legal representative of Johnson, in these actions.

Because a party litigant in one of the cases is not a party to the other, and because each case involves title to real estate situated in the county in which it was commenced and not in the other, we deem it advisable to treat the appeal as if it had been separately taken in each case. This opinion has to do with the case commenced in Twin Falls County and with real estate therein situated, referred to in the record as the Snake River Ranch.

Respondent alleged in his complaint, among other things, that in 1918 he and Johnson formed a partnership for the purpose of purchasing, owning, operating, selling and dealing in real estate; that the partnership entered upon the business for which it was organized and that thereafter Gertrude Walter acquired the interest of Johnson in it and that it has continued to transact its business and has not been dissolved; that Johnson and Security Products Company have some interest in and to said partnership, although said interest stands in the name of Gertrude Walter; that Johnson conveyed and transferred to Gertrude Walter certain lands and premises in Twin Falls County, described in the complaint (being the Snake River Ranch) and that she either owns said property as trustee for Johnson and Security Products Company or owns the same as successor to Johnson, and that she, as trustee or individually, became and is a member of the partnership entered into by plaintiff and Johnson, in the ownership and operation of said land; that Johnson and Gertrude Walter have wrongfully and without respondent's consent, from time to time, applied to their own use from the receipts of the partnership business, large sums of money and still continue to appropriate moneys of the partnership to their own use; that he has requested them to repay to the partnership the moneys so appropriated, but they have neglected and refused and still neglect and refuse to do so, or to account to the partnership therefor; that Security Products Company has, or claims to have, some right, title or interest in the real estate described in the complaint as belonging to the partnership.

Plaintiff prayed for a dissolution of the partnership, for an accounting, for sale of the real estate described in the complaint, and a division of the proceeds thereof among the parties as their rights and interests might appear, and that a receiver be appointed to take charge of the property pending litigation.

Gertrude Walter, in her answer, denied each and every allegation of the complaint, except those expressly admitted. She denied that any interest of Johnson, or of Security Products Company, in the land stood of record in her name, and alleged that she was the legal and equitable owner of an undivided one-half interest in the real property described in the complaint; that her said interest stood of record in the recorder's office of Twin Falls County in her name and that neither Johnson nor Security Products Company had any right, title or interest in or to it. She also denied that she, either as trustee or individually, became a member of the partnership entered into between respondent and Johnson. She specifically denied having misappropriated, or applied to her own use, the receipts of the business, or moneys belonging to the partnership. She further denied that the real estate described in the complaint was the property of the partnership, and alleged that an undivided one-half interest in it was her property.

In his answer to the complaint Johnson admitted the formation and existence of the partnership between himself and respondent and denied that Gertrude Walter was a member of it or acquired an interest in it. He denied that she owned or held the premises as trustee for him, or for Security Products Company. He further denied that the real property described in the complaint ever belonged to the partnership, or that it ever had any interest in it. Johnson admitted that he had, at times, collected some money, rents and profits of the real estate described in the complaint, and denied that respondent had any right, title or interest in or to the...