Claude v. Claude

• Decision Date: 14 March 1951
• Parties: CLAUDE v. CLAUDE.
• Court: Oregon Supreme Court

Page 776

228 P.2d 776

191 Or. 308

CLAUDE v. CLAUDE.

Supreme Court of Oregon.

March 14, 1951.

Rehearing Denied April 11, 1951.

See 230 P.2d 211.

P. J. Gallagher, of Ontario, argued the cause for appellant. On the briefs were Gallagher & Gallagher, of Ontario.

Robert E. Lees, of Ontario, and Charles W. Swan, of Vale, argued the cause for respondent-cross appellant. With them on the brief was Earl Garrity, of Nampa, Idaho.

Before LUSK ^*, C. J., and BRAND ^**, ROSSMAN, HAY, LATOURETTE and WARNER, JJ.,

WARNER, Justice.

This is an appeal from the decree entered after a hearing in the above entitled matter directed by our decision on the first appeal, Claude v. Claude, 180 Or. 62, 174 P.2d 179.

In that appeal this court granted defendant a divorce from plaintiff but reversed the lower court 'for failure to give the plaintiff appropriate relief under the contract of March 13, 1944', and remanded the cause for such further proceedings. Claude v. Claude, supra, 180 Or. at page 85, 174 P.2d at page 188. The Mandate on that decision was filed January 6, 1947, and thereafter an accounting was had which resulted in a decree on September 7, 1949, from which the defendant now appeals and the plaintiff cross appeals.

It is necessary to an understanding of this appeal to know that the defendant, ever since the marriage of the parties in 1924, was engaged in the cattle and sheep business in southeastern Oregon in which he had the active help of the plaintiff. As a result of their mutual endeavors they had acquired substantial holdings of real property in Malheur county, Oregon and Owyhee county, Idaho, and numerous cattle and sheep, together with the machinery and equipment essential to the successful operation of an enterprise of that kind. On June 3, 1935, they executed articles of partnership for the governance of their cattle and sheep operation. The agreement of that date provided eath party would contribute to the capital of the business all of his or her property 'of every kind or character' but without description or reference to the particular contributions of each. This partnership agreement, which we shall hereinafter refer to as the '1935 agreement,' further provided that the net profits and losses should be divided between the parties as follows: two-thirds to defendant and one-third to plaintiff. It was to continue until terminated by mutual consent.

As indicated in our opinion on the first appeal, plaintiff, after a quarrel between the parties in January, 1944, established a temporary home for herself and three daughters in Boise, Idaho and thereafter instituted a suit for divorce on January 28, 1944 in the Circuit Court for Malheur county. As stated in our first opinion: 'After prolonged negotiations between the parties and their attorneys they agreed to compose their differences, and, under date of March 13, 1944, entered into a written agreement for the settlement of their property rights.' That agreement, in accordance with its design, resulted in a dismissal of that suit in May, 1944.

Although they thereafter resumed marital relations, the peace effected by the reconciliation and dismissal of the divorce suit was short lived. Renewed quarreling prompted plaintiff to file another complaint in divorce on August 4, 1944, wherein she sought, among other things, specific performance of the agreement of March 13, 1944. This we shall hereinafter refer to as the 'agreement of 1944.' Defendant, by his cross-complaint in that suit, asked to have the agreement of 1944 set aside on the ground that its execution was procured by the plaintiff's fraud. The decree of the lower court in the trial of the second divorce suit resulted in an appeal to this court wherein we denied the relief prayed for by the defendant as to the agreement of 1944 and granted the specific performance requested by plaintiff.

The instant appeal relates solely to the character and terms of the agreement of 1944 and the lower court's subsequent decree with relation thereto. The terms of the 1944 agreement are disclosed in our first opinion only to the extent that it was necessary for the determination of the matters required by the first appeal. This appeal demands a fuller statement. We will, therefore, here summarize the provisions of that document in so far as they bear on this appeal and later in this opinion set up in haec verba such of the provisions of the agreement of 1944 as may seem to merit special construction or attention. They are: (1) the cash settlement clause providing for a division of $17,000.00 to each party; (2) the declaration of ownership of plaintiff, i. e., one-third in all of the properties owned by either party; (3) the provision for the division of surplus annually in proportion to their respective ownership; (4) the creation of a future trust for three minor children; (5) the management and administration of joint properties after the date of the agreement; and (6) the provision requiring defendant's approval to all expense items other than 'household necessities, medical attention, costs and expense of education.'

We shall limit our review of the appealed decree to such items thereof as we feel are meritoriously challenged by either of the appealing parties, or which by reason of our own conclusions command attention or modification.

Before proceeding to examine the errors alleged by the respective parties, we digress to observe here that the record before us discloses a studied determination by the defendant to circumvent our holding that the agreement of 1944 was in force and effect. He has not only remained in full possession of all the jointly owned property from the date of that agreement to the present time and treated it and its profit as if he were the sole owner thereof, but has stubbornly refused to disclose the financial record of his stewardship during that period, and only when compelled by order of the lower court did so reluctantly, evasively and by piecemeal. A partial picture of defendant's attitude in this respect is captured from the record which shows that since the filing of the Mandate on our first opinion, four separate orders have been served on defendant to show cause why he should not be held in contempt. Over two and a half years elapsed between the filing of the Mandate and the entry of the decree from which this appeal is taken. This delay is due in a large part to defendant's failure to produce certain required records at stated times or to his presentation of incomplete parts thereof. We marvel at the patience of the lower court and venture the opinion that this entire matter might have long since been more happily and exactly concluded had the lower court earlier imposed a penalty for defendant's obviously contemptuous conduct instead of indulging him with further delay. Even then, the records finally produced by defendant, and acted upon by the court, were not as full as we have reason to expect from a defendant, who had exclusive possession of the same. Certainly, they were not of the kind nor in the form calculated to produce the accounting result that the plaintiff is entitled to receive. We can well understand why the court and plaintiff, after defendant's repeated delays, were impatient for a termination and ready to accept what they then had in order to hasten that desired end, even though a better and fuller record might have inured to plaintiff's advantage. Notwithstanding plaintiff's and the lower court's apparent eagerness to be rid of the matter and have it over, our own labors have been greatly enhanced and our conclusions delayed by this unconscionable attitude and delay on the part of the defendant.

When we examine the record here, we find that there was apparently no effort made in the court below to first determine the true legal relationship of the parties as to the business administration of their jointly owned properties under the agreement of 1944. The decree discloses some of the elements of a partition between cotenants and some of the elements of a dissolution between copartners, but there is nothing in the record here to tell us precisely what theory the court below adopted in arriving at its conclusions. We think the agreement of 1944 must first be examined to determine that question and after the true answer is discovered, grant relief accordingly.

Defendant assumes that the court has proceeded on the theory that the defendant holds the property as a trustee. This has its genesis in defendant's construction of the agreement of 1944. He claims that the relationship of the parties after March 13, 1944 'was not that of partners in the sense that a remaining partner is recognized as a trustee of the assets for the withdrawing partner.' He takes the position that the agreement of 1944 was solely for the purpose of effecting a property settlement between the parties and did not contemplate a continuing partnership relationship.

Before proceeding further, it is well to here clarify one matter in which both parties are in apparent error. Notwithstanding the more or less identical assertions to the contrary found in the briefs of both plaintiff and defendant, this court did not in its previous opinion construe the agreement of 1944 with reference to its partnership character. Both parties quote the following words from page 82 of 180 Or., page 187 of 174 P.2d: 'It is sufficient for present purposes to say that it purports to create a partnership between the plaintiff and the defendant * * *.' Both parties in their respective arguments assume that it refers to the so-called 'Property Settlement Agreement' of 1944; but if they will note the sentence in the same paragraph immediately preceding the sentence above quoted, they will discover that the agreement referred to by the court was 'the previous agreement * * * entered into under date of June 3, 1935.' It follows, therefore, that neither the plaintiff nor the defendant can garner any help...