Cave v. Cave, 8962

Citation81 N.M. 797,1970 NMSC 113,474 P.2d 480
Decision Date14 September 1970
Docket NumberNo. 8962,8962
PartiesEunice M. CAVE, Administratrix of the Estate of Oscar Turner Cave, Deceased, Plaintiff-Appellant, v. Jess CAVE and Olean Cave, his wife, Defendants-Appellees.
CourtSupreme Court of New Mexico
Paul R. Dillard, Farmington, for appellant
OPINION

McKENNA, Justice.

This action was commenced on March 14, 1966, by the administratrix of the estate of Oscar Turner Cave to obtain an accounting of the decedent's interest in a claimed partnership known as the Cave Brothers. She asks that the decedent's one-half interest in the partnership assets be recognized and protected by declaring a trust and a partnership lien thereon. The administratrix appeals from the judgment against her.

The appellant claims that the partnership was an oral one between her deceased husband and his brother Jess Cave, which commenced on or before 1932 and continued to Oscar Cave's death on December 23, 1965. She says that defendant Jess Cave was the managing partner and that he and his co-defendant wife, Olean Cave, concealed the material facts and, either through fraud or mistake, in violation of a fiduciary duty, appropriated unfairly some of the assets to themselves. The defendants denied that Cave Brothers was ever a partnership; but, if one existed, they say it was dissolved and terminated in 1947 by oral agreement and distribution, with final consummation of the dissolution in 1956. They also defended by alleging that Oscar Cave never expressed any dissatisfaction, or made demand or asserted any claim contrary to settlement agreement, and that the claims now presented are barred by laches as well as the four-year and ten-year statutes of limitation.

The trial court faced unusual difficulties in deciding the issues. Aside from the problems accompanied by the claims of an oral partnership and an oral dissolution, sparse records and the considerable span of time, Oscar Cave is dead and Jess Cave is totally mentally incompetent. His defense was conducted by a guardian ad litem.

At the outset, we must state the rules which govern our review of the court's findings. If supported by substantial evidence, we will not question them. Any disputed fact is to be resolved in favor of the defendants and the evidence is to be viewed in the aspect most favorable to the successful parties. The trial court is to determine credibility and weight. All reasonable inferences are to be indulged in to support the findings made; evidence and inferences to the contrary are disregarded. Jones v. Anderson, 81 N.M. 423, 467 P.2d 995 (1970); Fox v. Doak, 78 N.M. 743, 745, 438 P.2d 153 (1968); Tapia v. Panhandle Steel Erectors Co., 78 N.M. 86, 89, 428 P.2d 625 (1967). In Tapia, at 89, 428 P.2d at 628, we defined substantial evidence as

'* * * such relevant evidence as a reasonable mind might accept as adequate to support a conclusion, Wilson v. Employment Sec. Comm'n, 74 N.M. 3, 389 P.2d 855, and has been defined as evidence of substance which establishes facts from which reasonable inferences may be drawn.'

We mention first our customary test and our rules because the following resume of those facts we deem pertinent for our decision are drawn from findings made by the court. We are particularly cognizant of the importance of the factual events in a case such as this and we recite them only after examining the record and after concluding that there is substantial evidence to support the pertinent findings.

In 1924 or 1925 Jess Cave came to Artesia, New Mexico. He bought four lots, built a building and went into the filling station and garage business. He brother Oscar Cave arrived in 1927, moved in with Jess and his wife, and started working in the business. Later, a grocery store and a wholesale gasoline business were added. There is no evidence that Oscar contributed any money to the acquisition of the properties. Jess had exceptional business acumen, with a capacity for hard work and management. He was the manager of the business. The brothers were tight-lipped. Neither trusted banks, nor even their wives, where money or business was concerned. Business records were meager and inconclusive. The evidence disclosed that Olean Cave, the co-defendant, kept what records there were.

Between 1929 and 1947, the enterprise expanded to four tracts of farmlands at Hagerman, New Mexico. Title was taken in various ways: one tract was in Jess' name; one under Jess Cave and Oscar Cave, and two under Jess, Oscar and Nannie Cave, their mother. United States Treasury Bonds were also acquired under the names of Jess Cave or Oscar Cave. The record also reveals that there were two bank accounts under the name of Cave Bros.

In 1938, Oscar moved to the Hagerman farm to live with his mother on one of the tracts and until 1947 looked after the farming operations. In 1947, he decided to retire and expressed a desire to be relieved of all duties on the farm. In August, 1947, he and Jess entered into an agreement of settlement.

By this agreement, which was not in writing, Oscar conveyed by deeds all his interest in the Artesia properties to Jess, and Jess conveyed to Oscar one-half interest in the entire Hagerman farm, comprised of the four tracts which we have mentioned. Additionally, Jess agreed to pay all bills, taxes, assessments and other expenses in connection with the farm, and to take care of all tax returns under partnership returns for the Cave Brothers. He agreed to pay all income taxes for the entire operation so long as the farm was retained. Jess fully performed his agreement. Oscar received all the fruits of his one-half interest in the farming properties.

After his retirement in 1947, Oscar was never again gainfully employed; he did not participate in the work or the revenue of the Artesia properties; he did not assist in the operation of the farm, but he did share in the rental income from it. In 1948 he married the plaintiff.

In 1956, the Hagerman farming properties were sold and Oscar participated to his one-half interest. Thereafter, Jess did not pay the total income taxes. Each brother, after 1956, reported and paid his own tax on his distributions from the sale. No partnership returns were filed after 1956. In 1956, Oscar and his wife moved off the farm to Truth or Consequences, New Mexico, where he lived until his death on December 23, 1965.

There is no evidence that Oscar ever complained in any manner against the 1947 settlement. The defendants never concealed any material fact as to the claimed partnership assets. Although Jess was the manager, the brothers were close and Oscar knew their affairs or had the means available to acquire such knowledge. Since 1947, Jess expended time and labor in improving, operating and managing the various properties.

For reversal, the appellant argues that the court erred in law and fact in finding and determining: (1) that there was no partnership and that the assets were not partnership assets; (2) that the business arrangement was dissolved in 1947 and finally terminated in 1956; (3) that certain bonds registered under the names of Oscar Cave or Jess Cave became the sole property of Jess upon Oscar's death; (4) that the claims are barred by laches and limitations, and urges (5) that there was not substantial evidence to support the findings and conclusions. It is the appellant's position that the partnership continued until Oscar's death in 1965. She does not claim any wrong was visited upon Oscar as to the Hagerman farm per se.

As we decide this case, we do not need to determine whether or not the business relationship between the brothers was a partnership; for it is our opinion that whatever it was, it came to an agreed end in 1947 with final and full termination and winding-up in 1956 when the Hagerman farm was sold with each brother receiving his one-half share of the sale. We will assume, however, for the purpose of our rationale, that a partnership did exist between the brothers.

Our Uniform Partnership Act, § 66--1--29, N.M.S.A.1953, defines dissolution as 'the change in the relation of the partners caused by any partner ceasing to be associated in the carrying on * * * of the business.' Absent any violation of the partnership agreement, dissolution is caused by 'the express will of any partner when no definite term or particular understanding is specified * * *.' § 66--1--31(1)(b), N.M.S.A.1953. We have no reason to believe that our assumed oral partnership agreement prevented a termination by the express will of Oscar. In any event, partners may by mutual consent dissolve such relationship. Such intent may be evidenced by their acts in the absence of formal articles of dissolution. Fisher v. Fisher, 83 Cal.App.2d 357, 188 P.2d 802, 804 (1948); Brand v. Erisman, 84 U.S.App.D.C. 194, 172 F.2d 28, 29 (1948); 40 Am.Jur., Partnership, § 235. In 1947, Oscar executed three deeds to Jess, conveying his interest in the Artesia properties in exchange for a one-half interest in the Hagerman farm and Jess' promises which we have enumerated. After his retirement in 1947, Oscar was never gainfully employed. He did not thereafter participate in the work or the profits of the Artesia businesses.

Furthermore, Jess' wife, Olean, testified that in 1947 the partnership was dissolved. A nephew testified that Oscar told him that 'he and Jess had all their business all fixed up, all prepared and settled, whatever there was.' A niece told of a breakfast conversation between her uncles:

'Q Now, at this breakfast conversation, would you mind running that by one more time, so I can, perhaps, understand it better?

'A Well, the breakfast conversation wasn't the first thing (time) they had discussed it. I had heard him say he wanted to retire. So, he did retire. He had told Jess that he would deed him the property in Artesia for half of the farm and he was to pay the bills and the taxes on the farm.'

The plaintiff verified...

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