Duncan v. Bartle

• Citation: 188 Or. 451,216 P.2d 1005
• Parties: DUNCAN v. BARTLE et al.
• Decision Date: 28 March 1950
• Court: Supreme Court of Oregon

216 P.2d 1005

188 Or. 451

DUNCAN v. BARTLE et al.

Supreme Court of Oregon.

March 28, 1950

Argued Dec. 13, 1949.

Robert G. Davis and Dudley C. Walton, both of Roseburg argued the cause for appellants. With them on the brief was R. L. Whipple, of Roseburg.

William F Johnson, of Grants Pass, argued the cause for respondent. With him on the brief was O. S. Blanchard, of Grants Pass.

Before LUSK, C. J and BELT, ROSSMAN, BAILEY and BRAND, JJ.

ROSSMAN, Justice.

This is an appeal by the two defendants from a decree of the Circuit Court which dissolved a partnership and adjudicated the accounts between the former partners. The plaintiff-respondent was one of the partners. The other two were the defendant-appellant Juanita Bartle, and James Claxton, now deceased, of whose estate the defendant-appellant, Juanita Bartle, is administratrix. The estate is one of the two appellants. The challenged decree (1) dissolved the partnership; (2) wound up its affairs; (3) held that the respondent is sole owner of the assets of the former partnership; and (4) award the respondent judgment against the appellants, severally and jointly, in the sum of $667.68. It is conceded that the partnership out of which this suit arose was formed on or about August 12, 1946, and that its purpose was the purchase and operation of an establishment known as the Laurel Camp Cafe. When the partnership was formed the appellant, Juanita Bartle, was the wife of Claxton. It is also conceded that on or about December 16, 1946, that is, about four months after the partnership was formed, the Claxtons left the place of business and never thereafter returned to take any part in its operation. June 8, 1947, Mr. Claxton died. Sometime between December 16, 1946, and June 8, 1947, the Claxtons were divorced.

The appellants present nine assignments of error. The first, sixth, seventh, eight and ninth follow:

1. The Court erred in extending to the respondent, the surviving partner, an extension of sixty days after the disposition of this suit in which to file an inventory of the partnership assets.

6. Error was committed in finding that the respondent 'had a right under the Uniform Partnership Act (§ 79-610, O.C.L.A.) to continue the operation of the business as a going concern after the dissolution of the partnership.'

7. 'The Court erred in finding the value of the partnership property to have been $16,000.00 on December 16, 1946.'

8. The Court erred in finding that the respondent was entitled to wages as an expense of the partnership after the dissolution took place.

9. The Court erred in finding that the partnership business was operated at a loss.

The effect of the other assignments of error may be summarized as follows:

1. Was the partnership dissolved December 16, 1946, when the Claxtons left the place of business, or not until June 8, 1947, when Mr. Claxton died?

2. Is it possible to determine from the records which the respondent kept the state of affairs between the partners, or should a receiver be appointed with power to sell the business?

The challenged findings of fact recite: 'On December 16th, 1946, both Mr. and Mrs. Claxton, without giving Mrs. Duncan any notice whatsoever, abandoned the partnership * * *. Since no limitation of time was fixed by the parties for the existence of the partnership, it could have been terminated by the express will of any partner, as provided by sub-section (b), Section 79-603, O.C.L.A. There was no evidence produced at the trial which would tend to indicate that any of the partners attempted under this section to terminate the partnership. Both of the Claxtons left the partnership without any word to Mrs. Duncan, and, in fact, Juanita Claxton left in a surreptitious manner. So the Court cannot do other than find that the partnership was not terminated by express will of any partner. * * * In view of that fact, therefore, the Court is bound to conclude that the partnership was terminated on December 16th, 1948. * * * Since the Court has found that the Claxtons caused the dissolution wrongfully on December 16th, 1946, it, therefore becomes necessary to determine now the interest of each partner in the partnership.' Thus we see that the trial court found that the partnership was terminated December 16, 1946, and that its termination was due to wrongful conduct of the Claxtons. The appellants deny that dissolution took place December 16, 1946. They argue that no dissolution occurred until June 8, 1947, and that it was then effected by the death of Mr. Claxton.

We shall now consider the merits of the contention just mentioned. It will be necessary to mention some of the evidence.

For the sake of convenience we shall speak of James Claxton and of the appellant, Juanita Bartle, his wife when the partnership was formed, as the Claxtons. For the same purpose we shall refer to the appellant, Juanita Bartle, by the name she bore while she was active in the partnership, that is, Mr. Claxton. On or about August 12, 1946, when the Claxtons and the respondent, Mrs. Edna Duncan, formed the partnership, they purchased a business known as the Laurel Camp Cafe at a price of $16,000. The purchase included land, building and equipment. The cafe is located on the Pacific Highway near Wolf Creek. Of the purchase price only $4,500 was paid at the time of the transaction.

Each partner contributed $1,500 of the initial payment. The balance of the consideration was payable in monthly installments of not less than $175. According to an admitted averment of the complaint, the 'partnership was to last for indefinite period of time' and, therefore, by virtue of § 79-603(1)(b), O.C.L.A., which is § 31(1)(b) of the Uniform Partnership Act, the partnership was terminable 'by the express will of any partner.' No writing evidences the partnership agreement.

The parties contemplated that Mrs. Duncan should operate the kitchen, that Mrs. Claxton have charge of the dining room, and that her husband should attend the bar when a beer license was obtained, and, in the meantime, render himself useful in other phases of the business.

No one questions the devotion which Mrs. Duncan bestowed upon the business. She freely conceded the faithfulness to the business of Mrs. Claxton as long as the latter remained with the business. The evidence indicates that Mr. Claxton gave the venture inadequate attention.

The Laurel Camp Cafe served meals and beer. Appurtenances to the place were some bedrooms, one of which was occupied by Mrs. Duncan and another by the Claxtons. At the outset the cafe operated twenty-four hours per day.

The partnership had no bookkeeper until July 30, 1947. The absence of accounting records until August 1, 1947, commanded much attention during the trial. None of the three partners had had training in bookkeeping. Mrs. Duncan was the only one of the three who maintained records. The entries which she made and the supporting vouchers are before us. Her entries recorded daily expenditures and cash balances for the period of August 12, 1946, to January 22, 1947. From January 22, 1947, to August 1, 1947, the entries were discontinued, but in that interval receipted bills, cancelled checks and similar memorandums were carefully preserved. From August 1, 1947, we have a complete set of books kept under competent supervision. At the outset the records were kept in an unlocked desk in the dining room. Later, the desk was moved into Mrs. Duncan's bedroom. The room was not locked and the Claxtons entered it at will. Accompanying Mrs. Duncan's account book were alll of the ancillary records which came to her hands, such as receipted bills, pay roll items and bank deposit books. In the unlocked desk where the records reposed, Mrs. Duncan placed the cash which was taken from the till about midnight. Although the appellants devote much space in their brief to criticism of the respondent's bookkeeping, the facts just mentioned show that nothing was concealed from them. They were as free as the respondent to maintain records, but kept none. The respondent repeatedly asked them to help with the bookkeeping. While the appellants, during the trial, were engaged in faultfinding with the records, the trial judge remarked: 'Each one of the parties was trying to get the other to keep the records.' Mrs. Duncan was more faithful than her partners to the drudgery attendant upon the partnership and was the only one who kept records. Mr. Claxton, near the beginning of the venture, suggested that the bookkeeper for a nearby tavern, the Alpine Lodge Cafe, be hired as bookkeeper. The three partners had worked in that place prior to their purchase of the Laurel Camp Cafe. To Mr. Claxton's suggestion, Mrs. Duncan replied that she did not like his choice. The matter was dropped at that point.

One of the customers of the cafe was a truck driver whom the witnesses termed Dutch Bartle. He and Mrs. Claxton became fond of each other. He is now her husband. December 12, at 8:00 p. m when Mrs. Duncan returned to the cafe after a short absence, she saw Mrs. Claxton and Mr. Bartle in each other's company. During Mrs. Duncan's absence Mrs. Claxton had hired a new waitress who was then on duty. Mrs. Duncan and Mrs. Claxton had had no quarrels or misunderstandings and their relationship was cordial. Shortly after Mrs. Duncan entered the cafe, Mrs. Claxton told her that she was not feeling well and that she would like to retire for the night. Then, according to Mrs. Duncan's further uncontradicted testimony, Mrs. Claxton said: 'Browine (Mr. Claxton) wants to sell, but I don't want to, and I think I can raise the money to buy him out if he decides to and we will go on just like we are.' At that point, so Mrs. Duncan swore, 'she put her arm around me and kissed...