Constanti v. Barovic
| Decision Date | 16 May 1939 |
| Docket Number | 27381. |
| Citation | 90 P.2d 724,199 Wash. 117 |
| Parties | CONSTANTI et ux. v. BAROVIC et ux. |
| Court | Washington Supreme Court |
Department 2.
Suit in equity by Peter Constanti and Grace Constanti, husband and wife, against Michael Barovic and Andrea Barovic, husband and wife, for an accounting of the business and a division of the property of an alleged partnership, wherein defendants filed a cross-complaint. From an adverse judgment, plaintiffs appeal.
Reversed with instructions to proceed with an accounting to effect the dissolution of the partnership business.
Appeal from Superior Court, Pierce County; W. O. Chapman, judge.
A. O Burmeister, of Tacoma, Edson M. Case, of Puyallup, and John D. Cochran, of Tacoma, for appellants.
Bogle Bogle & Gates and Ray Dumett, all of Seattle, for respondents.
This is a suit in equity in which the plaintiffs allege a partnership with the defendants, and pray for an accounting of the business and division of the partnership property.
In their amended complaint plaintiffs allege that September 29, 1936, in pursuance of a previous oral agreement, they entered into a written copartnership contract to purchase and operate the Riviera theater in Tacoma, the Liberty and Roxy theaters in Puyallup, and the Riviera theater in Sumner; that immediately after the execution of the articles of the copartnership, the defendant Michael Barovic began a studied course of domination against plaintiffs for the sole purpose of forcing plaintiffs to surrender their partnership interest to defendants without the payment of any sums of money whatsoever. It further alleged that defendant Michael Barovic seldom, if ever, consulted plaintiffs upon any partnership matter; that he refused to account or report to plaintiffs as to his manner and method of doing business, and refused to make a statement concerning the financial affairs or conditions of the various partnership operations; that he refused to make advances to plaintiffs in the sum of one hundred dollars per month, as provided in the copartnership agreement; that he notified plaintiffs that the partnership was at an end and these plaintiffs had no interest whatsoever therein; and refused to make an accounting to plaintiffs.
Defendants answered admitting that they entered into the written agreement mentioned in the amended complaint, admitted the service upon plaintiffs of written notices dissolving the relationship made in the agreement, and with minor reservations, denied the balance of the complaint.
For an affirmative defense and as a cross-complaint, the defendants allege that at the time the property in question was purchased, defendant Michael Barovic was required to and did contribute the initial capital necessary to purchase the property in the total sum of $25,000, and that no cash or capital whatsoever was contributed by the plaintiffs. It was further alleged that May 1, 1936, defendant Michael Barovic, at the request of Peter Constanti, entered into an oral agreement with plaintiffs with respect to the operation of the theatrical properties by the terms of which agreement it was provided that each of the parties should give all reasonably necessary time and attention to the theater business for the joint interests, profits, and advantages of the business; that the agreement further provided that the contribution of $25,000, advanced by Michael Barovic, including interest, and other necessary charges, should be the first and paramount charge against the profits of the partnership; and that as a further essential term of the agreement it was agreed that plaintiff Constanti would have a full interest as partner in the business and property after the $25,000 had been returned to defendant Barovic.
It was further alleged that plaintiff, Peter Constanti, had not complied with the terms and conditions of the copartnership contract, and had failed to give any time, attention, or attendance whatever to the business; that he received money belonging to the business and had failed to deposit the moneys in the firm's bank account; that secretly he had made an arrangment for advertising signs to be shown in the theater in order to pay the plaintiffs' personal bills; that he had taken cash from the box offices of the threaters at Sumner and Puyallup and had, without justification, abused, interfered with, and undermined the morale and efficiency of the employees in the above-mentioned theaters.
Then followed allegations to the effect that defendant had by letter terminated whatever partnership or joint enterprise that had existed between the plaintiffs and defendants.
The reply put in issue the allegations of the answer.
At the conclusion of the trial the court entered judgment to the effect that plaintiffs were not partners and had no interest in the theater or in the theatrical business. Plaintiffs have appealed, and contend that the trial court erred (a) in finding that there was no partnership between plaintiffs and defendants; (b) in dismissing the appellants' amended complaint and in entering judgment for the respondents; and (c) in refusing to grant a new trial.
For convenience we will refer to Peter Constanti and Michael Barovic as though they were the only parties to this action.
Realizing that the trial court decided the controverted facts in favor of the respondents, we summarize the undisputed facts and those favorable to respondents as follows: Several years Before the beginning of the present controversy, Dominic Constanti was engaged in and made a notable success of the motion picture business. At the time of his death he owned the Riviera theater in Tacoma, the Liberty and Roxy theaters in Puyallup, the Harbor theater in Aberdeen, and the Riviera Theater in Sumner, Washington. His heirs were his wife, Mary Constanti, a daughter, Andrea Barovic, wife of defendant Michael Barovic, a son, Peter Constanti, the plaintiff in this action, and three other children. Due to litigation between respondents and Mary Constanti, a hostile feeling was ever present between respondents and the widow and the other children of Dominic Constanti. The widow and her children operated the theaters for some time after the death of Dominic Constanti, but did not continue to enjoy the success of the original owner. During the early part of the year 1936, respondent Michael Barovic was contacted by Peter Constanti with the suggestion that he purchase the theaters from the estate. In April, 1936, a conference between respondents and Mary Constanti and her children was arranged by the attorney representing the estate. During the conference, a suggestion was made concerning respondent Peter Constanti's becoming a partner with respondent in the theatrical business. Appellant contends that respondent agreed to take appellant into the business as a partner, but respondent testified that he did not make any agreement to that effect, but said: 'Listen, Pete, if you promise me to do things, and one thing is, I want this as a promise, I want you to be sincere if we go in together, to work with me side by side, you can come in with me, and after the debts are paid and the contribution I am putting in, we can become fifty-fifty partners.'
As a result of he conference respondent and Mrs. Mary Constanti entered into a contract by the terms of which respondent secured the interest of the estate and that of Mrs. Constanti in the theaters for the sum of $25,000. In order to secure funds for the purchase price, May 1, 1936, respondent borrowed $15,000 from J. C. Murphy payable $5,000 May 1, 1937, $5,000 May 1, 1938, and the balance May 1, 1939, with interest at seven per cent per annum. A chattel mortgage to secure the payment of the loan was given by respondent on the furnishings and equipment in respondent's Beverly theater in Tacoma. May 12, 1936, respondent borrowed $2,000 from the State Bank of Puyallup. These sums, together with $8,405, were used to pay for the theaters and provide a working capital. Appellant signed the notes given to Murphy and the bank. May 1, 1936, respondent took over the operation of the theaters with the exception of the one at Aberdeen which is not concerned in this litigation. September 29, 1936, appellant and respondent entered into a written contract consisting of six pages, the pertinent portions of which are as follows:
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...168 Wn.2d 421, 228 P.3d 1260 (2010): 22.2(2) Cominos v. Kalkanes, 37 Wn.2d 843, 226 P.2d 863 (1951): 14.3(1)(c) Constanti v. Barovic, 199 Wash. 117, 90 P.2d 724 (1939): 14.3(1)(e) Coughlin v. Pinkerton, 41 Wash. 500, 84 P. 14 (1906): 12.4(1) Cummings v. Nordmark, 73 Wn.2d 322, 438 P.2d 605 ......
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