Dusek v. Reese

• Citation: 119 N.W.2d 656,80 S.D. 96
• Decision Date: 15 February 1963
• Docket Number: 9990,Nos. 9970,s. 9970
• Parties: Fred DUSEK, Plaintiff and Appellant, v. Sheldon F. REESE, Northwest Realty Company, a corporation, and Acme Company, a corporation, Defendants and Respondents.
• Court: South Dakota Supreme Court

Page 656

119 N.W.2d 656

80 S.D. 96

Fred DUSEK, Plaintiff and Appellant, v. Sheldon F. REESE, Northwest Realty Company, a corporation, and Acme Company, a corporation, Defendants and Respondents.

Nos. 9970, 9990.

Supreme Court of South Dakota.

Feb. 15, 1963.

Bangs, McCullen, Butler & Foye, Rapid City, for plaintiff and appellant.

Morrill & Morrill, Sturgis, for defendants and respondents.

HANSON, Presiding Judge.

The plaintiff, Fred Dusek, seeks rescission of an alleged contract relating to the ownership and collection of certain accounts receivable. So far as material the trial court entered judgment (1) quieting title to the accounts in the defendant Northwest Realty Company subject to an interest of 10% therein in plaintiff, (2) ordering an accounting between the parties and appointing a referee for such purpose, and (3) dismissing the action against the defendants, Sheldon F. Reese and the Acme Company. Plaintiff has appealed from the whole of such judgment and the Northwest Realty Company appeals from that portion allowing plaintiff a 10% interest in the accounts and for an accounting.

In August 1960 the Internal Revenue Service of the United States levied upon all the assets of the Furniture Exchange, Inc., of Rapid City, South Dakota and a receiver was appointed to take charge of and sell the same. Dusek was president of Furniture Exchange, Inc. In his complaint plaintiff alleged that on or about December 16, 1960, he purchased and was the owner of all the accounts receivable of the Furniture Exchange, Inc.; that on or about December 17, 1960 he entered into an agreement with defendants for the collection of said accounts and for the advancement of money to purchase the same, upon consideration the accounts would be collected in plaintiff's place of business in Rapid City; and upon making collection defendants were to reimburse themselves for the amount advanced with legal interest and were further to receive the sum of 10% on all amounts collected.

In accordance with the allegations of his complaint plaintiff testified at the trial, in substance, that he was the owner of the accounts receivable; that he had purchased them from the Receiver through his agent, Joe Laugel; the defendant Northwest Company had loaned him the sum of $21,000 to pay for the accounts; and Northwest was to be reimbursed with interest out of the collections and also was to receive 10% of all the accounts collected. On the other hand, defendant claimed it purchased the accounts from Dusek for the sum of $21,000 and Dusek was to collect the accounts in his store for which he was to receive 10% of the accounts collected.

Contrary to plaintiff's allegations and proof as to the nature of the agreement and relationship between the parties the trial court made and entered the following findings of fact:

'I

'That at a receiver's sale held on December 16th, 1960, Joe Laugel, as agent for the plaintiff, Fred Dusek, for the benefit of the plaintiff, Fred Dusek, made and entered a bid in the amount of $21,000 for lot No. 2 of the items duly advertised for sale by the receiver, which Lot No. 2 consisted of accounts receivable of Furniture Exchange, Inc., of Rapid City, South Dakota, and at the time of making the bid of $21,000 for said accounts receivable paid to the receiver ten per cent of the amount of the bid, being $2,100. That thereafter order confirming sale was duly made and entered by the United States District Court for the District of South Dakota, and that Fred Dusek thereupon became entitled to all bills and accounts receivable of Furniture Exchange, Inc., of Rapid City, South Dakota, generally described in the notice of sale as Lot No. 2.

'II

'That subsequent to the date of sale, and on or prior to December 23rd, 1960, plaintiff, Fred Dusek, entered into an agreement with the Northwest Realty Company by and through its President, Sheldon F. Reese, by the terms of which the parties agreed orally that the Northwest Realty Company would purchase the accounts and bills receivable for the sum of $21,000, and the plaintiff, Fred Dusek, would collect said accounts at his store in Rapid City, South Dakota, for ten per cent of the amounts collected on said accounts. The consideration thereby agreed upon between Fred Dusek and the Northwest Realty Company being $21,000, and ten per cent of the amounts collected of the condition that plaintiff, Fred Dusek, would handle at his store the collecting of the accounts receivable, and that on the 23rd day of December, 1960, at the Rushmore State Bank in Rapid City, Pennington County, South Dakota, for the purpose of effecting the agreement, the Northwest Realty Company, through its officer, agent, and employees, paid to Joe Laugel, the duly authorized agent of Fred Dusek, the plaintiff, for the benefit of Fred Dusek, the sum of $2,100, and to the receiver, the sum of $18,900, and bill of sale of accounts receivable was duly delivered to Joe Laugel conveying the accounts receivable described as Lot 2 in the notice of sale, Joe Laugel at that time being the duly authorized agent of the plaintiff, Fred Dusek, and receiving the conveyance on behalf of and for the benefit of Fred Dusek, and that thereupon in the further completing of the agreement, Joe Laugel, in the presence of, and at the instance of the plaintiff, Fred Dusek, did execute and deliver to the Northwest Realty Company an assignment, assigning to the Northwest Realty Company all accounts receivable contained in Schedule A, annexed to the assignment, which Schedule A had been prepared by the Northwest Realty Company by and through its officers, agents, servants, and employees, which assingment was delivered to Northwest Realty Company at the instance and request, and in the presence of the plaintiff, Fred Dusek, and was duly accepted by the Northwest Realty Company by and through its duly constituted officers, agents, or employees.

'III

'That at the same time and place on December 23rd, 1960, for the purpose of further carrying out the agreement, and for the purpose of properly preserving to the benefit of the parties, the proceeds received from the accounts receivable, there was established at the Rushmore State Bank for the deposit of the proceeds received from said accounts, Northwest Realty Company Account No. 10, and that a book of deposit slips for use in making the deposits in the Rushmore State Bank to the Northwest Realty Company Account No. 10, was furnished and delivered to the plaintiff, Fred Dusek.

'IV

'That the written assignment executed and...