Dunn v. Baugh

• Citation: 95 Idaho 236,506 P.2d 463
• Decision Date: 13 February 1973
• Docket Number: No. 11037,11037
• Parties: Charles O. DUNN and Greta H. Dunn, Husband and wife, Plaintiffs-Appellants, v. J. LaTharr BAUGH and Patricia Baugh, husband and wife, Defendants-Respondents.
• Court: United States State Supreme Court of Idaho

Page 463

506 P.2d 463

95 Idaho 236

Charles O. DUNN and Greta H. Dunn, Husband and wife, Plaintiffs-Appellants, v. J. LaTharr BAUGH and Patricia Baugh, husband and wife, Defendants-Respondents.

No. 11037.

Supreme Court of Idaho.

Feb. 13, 1973.

Ronald G. Carter, Boise, for plaintiffs-appellants.

Bruce O. Robinson, Kenneth F. White, Nampa, for defendants-respondents.

SHEPARD, Justice.

This is an action for dissolution of a partnership and an accounting. The matter arose out of a complex series of transactions between the parties concerning the operation of four farms in Gooding County. Following trial, the district court found that there had been an informal partnership agreement between the parties under the terms of which they would contribute equally to the farming business. The court ordered the sale of one of the farms which was the sole remaining partnership asset, and further ordered that the proceeds first be applied to the liquidation of outstanding partnership debts and the remaining sum be divided equally between the parties. We affirm.

The relationship between plaintiffs-appellants Dunn and defendants-respondents Baugh arose in 1964 which Baugh executed a purchase agreement to buy the 'Porter' and 'Hagerman' farms from Dunn. Baugh worked both of those farms during the 1965 crop year but was unable to make the payments called for by the purchase agreement. The parties thereafter cancelled the purchase agreement by mutual agreement in early 1966. Thereafter in a separate transaction Dunn exchanged the 'Hagerman' farm for the 'Matthews' farm.

After the parties had agreed to a dissolution of the 1964 purchase agreement they decided to purchase the 'Johnson' farm in early 1966. The parties had the following understanding at the beginning of the 1966 crop season pertaining to the operation of three farms. Baugh was to work the 'Porter' and 'Matthews' farms and Baugh and Dunn were to share equally in any profits realized from the sale of crops off those farms. As to the operation of the Johnson farm Dunn agreed to supply the land and Baugh agreed to supply the labor and machinery. Bauth was to use farm income to pay the operating expenses as well as the purchase price. The parties planned to share equally in any profits realized therefrom.

Baugh farmed the Porter, Matthews and Johnson farms during the 1966 crop season. In order to operate these farms, Baugh borrowed cash from the Bank of Idaho on promissory notes, two of which were guaranteed by Dunn. At the end of the 1966 crop season, Dunn sold both the Porter and Matthews farms. Baugh continued to work the Johnson farm during the 1967 season under the general oral partnership agreement. During 1967 Dunn refused to supply Baugh with any financial backing to facilitate Baugh's obtaining loans for operating capital. Baugh was unable to make the contract payments on the Johnson farm during 1967.

Dunn brought this action in October 1968 seeking to dissolve the partnership and requesting payment of Dunn's share of the partnership proceeds. All of the partnership assets were liquidated with the exception of the Johnson farm. The proceeds of liquidation were applied to debts incurred during the partnership operation but there remained some $5,936.92 in unsatisfied partnership debts. Dunn and Baugh had met on occasion to discuss their farming operations and to plan the obtaining of credit at the Bank of Idaho for operating expenses, but never during the entire pendency of their business relationship did the parties enter into any formal partnership agreement, nor did they ever file a partnership tax return.

Dunn first asserts that the trial court erred in failing to hold Baugh liable on the purchase agreement pertaining to the Porter and Hagerman farms. At trial the following colloquy took place between Dunn and the court concerning the purchase agreement on the Porter and Hagerman farms:

THE COURT: But in the complaint you are asking him to now pay you these (purchase payments) as part of the settlement. Now, weren't those stricken as far as any obligation between you and Baugh were concerned at the time you closed out that sale agreement?

DUNN: Yes. Yes, they were.

THE COURT: There was an agreement actually between you and Baugh. You said we can't work this out, and we will make a new deal; isn't this about right?

DUNN: Yes.

By his own admission at trial, Dunn indicated that the purchase agreement on the Porter and Hagerman farms had been terminated by mutual agreement and this demonstrates the lack of foundation for Dunn's first assignment of error.

Dunn next asserts that the trial court erred in failing to hold that Baugh had breached a fiduciary obligation to Dunn. At no point during the three years between commencement of the action and the entry of judgment did Dunn ever raise the issue of fiduciary obligation. This issue was not included in the pretrial order which was approved by counsel for both parties. Issues not presented to the trial court will not be considered on appeal. Williams v. Havens, 92 Idaho 439, 444 P.2d 132 (1968); ...