Chernov v. Sandell, 5076
| Decision Date | 16 May 1949 |
| Docket Number | 5076 |
| Citation | 68 Ariz. 327,206 P.2d 348 |
| Parties | CHERNOV et al. v. SANDELL |
| Court | Arizona Supreme Court |
Rehearing Denied July 16, 1949.
Appeal from Superior Court, Maricopa County; Thomas J. Croaff Judge.
Judgment affirmed.
John M Levy and Lloyd J. Andrews, Phoenix, for appellants.
V. L. Hash, Phoenix, for appellee.
Phelps, Justice. Udall, Stanford, De Concini, JJ., and Jennings, Superior Judge, concur.Note: Chief Justice LaPrade being ill, the Honorable Renz L. Jennings, Judge of the Superior Court of Maricopa County was called to sit in his stead.
Benjamin Sandell, appellee, hereinafter called plaintiff, brought an action in the Superior Court of Maricopa County against Henry B. Chernov and Charles H. Chernov, appellants, hereinafter called defendants, to recover $ 1250 from said defendants which plaintiff claims was obtained by them through representations that were untrue and upon which plaintiff relied.
The plaintiff alleges in his complaint that he was unemployed and on or about November 27, 1946, defendants, who were then copartners engaged in the business of contract painting in Phoenix, offered him a partnership in the business; that they informed him that he would have to pay to defendants the sum of $ 1500 so that defendants might obtain a license from the state of Arizona to engage in the painting contract business as a copartnership and that it was necessary that plaintiff deposit with defendants said sum of $ 1500 to insure the securing of said license; that he relied on said representations and, believing it was necessary to deposit said sum with defendants, did deposit with them the sum of $ 1500. The evidence shows that he paid said sum by check, $ 750 to Henry B. Chernov and $ 750 to Charles H. Chernov.
The complaint further alleges that later Henry B. Chernov returned $ 250 of said sum to plaintiff. He now seeks judgment against defendants for $ 1250.
Defendants filed a motion to dismiss the cause of action upon the ground that said complaint did not state a claim upon which relief could be granted, assigning as a reason therefor that the copartnership agreement, clause 10, thereof, provided for an arbitration of such a claim which constituted his exclusive remedy for redress in this case. Upon said motion being denied by the trial court defendants filed a general denial and Henry B. Chernov filed a cross-complaint against plaintiff praying for recovery of $ 250 from him as and for a loan to plaintiff which he alleged he made to him as evidenced by a promissory note executed by plaintiff in favor of the said Henry B. Chernov dated November 27, 1946. To this cross-complaint the plaintiff filed a reply in which he admitted the execution of said note but alleged that it was wholly without consideration.
The cause was tried to a jury which found the issues on both the complaint and cross-complaint in favor of the plaintiff.
From said verdict and judgment of the court and from an order denying defendant's motion for a new trial the cause is appealed to this court.
The records in this case stand out as a signal monument to a lack of preparation of the case and a proper consideration of the issues involved at the trial of said cause. Certainly it in no wise reflects the ability which we know that all the counsel who participated in the trial possess.
A casual reading of the complaint evidences a total disregard by the pleader of the cardinal rules as set forth by this court as to what is required in a pleading to constitute actionable fraud. The complaint is wholly lacking in the essentials required. No steps were taken by the defense to have the deficiency supplied by requiring the plaintiff to amend his complaint but the case was tried on the theory of actionable fraud, hence we will so treat it here.
Defendants have presented seven assignments of error, some of which do not meet the requirements of the following rule governing appeals in the Supreme Court and therefore will not be considered:
We will first take up the pertinent portion of assignment No. I which is based upon the legal grounds that the court erred in denying defendants' motion to dismiss plaintiff's complaint for the reason that the controversy on which the complaint is based arises out of and is contained in an agreement of copartnership between the parties and that paragraph 10 thereof provides that any such issues as set forth therein must be referred to a board of arbitrators and that no other course is open to plaintiff.
Paragraph 10 reads as follows:
"If at any time during the continuance of the said co-partnership, or after the dissolution or termination thereof, any dispute, difference or question shall arise between the partners, or any of them, touching the copartnership or accounts or transaction thereof, or the dissolution or the construction, meaning or effect of this Agreement or anything herein contained, or the rights or liabilities of the co-partnership in relation to the premises, every such dispute, difference or question shall be referred to the arbitration of five (5) persons to be appointed as follows: One to be appointed by each partner, and three such persons shall appoint two disinterested persons who shall proceed to hear and determine the matters and differences, and that the award or decision of the arbitrators shall be final and binding upon the said parties hereto and their respective administrators, executors and assigns."
We find no error in the ruling of the court denying said motion for the reason that a mere reference to paragraph 10 of said agreement shows that it states in concise English the scope of the matters to be considered by the arbitrators. Clearly the disputes or differences to be arbitrated were limited to those arising between the partners, "touching the co-partnership or accounts or transaction thereof, or the dissolution or the construction, meaning or effect of this Agreement * * * or the rights or liabilities of the co-partnership in relation to the premises, * * *."
There is not a word in paragraph 10, supra, from which even an inference can be drawn that it was within the contemplation of the contracting parties at the time the copartnership agreement was executed that they intended the authority of the arbitrators provided for therein should be retroactive so as to invest them with power to arbitrate any matter that transpired before the copartnership relation was created or before the effective date of the copartnership agreement.
The cause of action here is based upon the alleged wrong of defendants occurring before the copartnership relation arose, in making false and fraudulent representations to the plaintiff. It is alleged to have occurred during the negotiating period before the minds of the parties met and that it was an inducement to the execution of the copartnership agreement. Plaintiff alleges that he relied upon said false representations (which is the basis of this cause of action) and relying thereupon parted with $ 1500 and executed the copartnership agreement.
It follows irresistibly therefore that the provisions for arbitration in paragraph 10 of the copartnership agreement are not broad enough to embrace the issue of fraud here involved and that the court properly denied the motion to...
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