Eder v. Reddick

• Decision Date: 06 January 1955
• Docket Number: No. 32912,32912
• Citation: 278 P.2d 361,46 Wn.2d 41
• Court: Washington Supreme Court
• Parties: Bert EDER, Respondent and Cross-Appellant, v. Elmer C. REDDICK and Laura Reddick, his wife, Appellants.

Page 41

46 Wn.2d 41

278 P.2d 361

Bert EDER, Respondent and Cross-Appellant, v. Elmer C. REDDICK and Laura Reddick, his wife, Appellants.

No. 32912.

Supreme Court of Washington, Department 1.

Jan. 6, 1955.

Rehearing Denied Feb. 18, 1955.

Cunningham, Ries & Kenison, Moses Lake, for appellants.

Campbell & Klasen, Ephrata, for respondent.

HAMLEY, Justice.

Bert G. Eder brought this action to establish the existence of a partnership agreement with Elmer C. Reddick to construct and sell a motel. An accounting, sale of the motel, and a division of the profits were also sought. Reddick and his wife were named defendants. Their answer was a general denial, it being alleged that plaintiff was not a partner in the undertaking, but was employed and compensated as a carpenter in constructing the motel.

The action was tried on January 13 and 14, 1953. Immediately after the close of the case, the court rendered its oral decision in favor of defendants. Plaintiff moved for judgment notwithstanding the oral decision, or for a new trial. Following argument on this motion, the court, on February 2, 1953, filed its memorandum opinion reversing the position originally taken by the court. Defendants then interposed a like motion, which was denied.

On April 6, 1953, the court entered findings of fact and conclusions of law to the effect that the parties had entered into such a partnership agreement; that the agreement required Reddick to provide the financing and to purchase the materials for the construction of the motel, while Eder was to draw the blueprints and furnish his services; that, under this agreement, plaintiff was to receive one third of the profits or be liable for one third of the losses in connection with the construction and sale of the motel; that the partnership came into existence in April, 1952, and was dissolved on August 8 of that year; that the motel had been constructed but had not been sold as agreed upon; and that it was being operated by defendants.

On the same day, April 6, 1953, the court entered an interlocutory order requiring defendants to account to plaintiff concerning the cost of constructing the motel, and the profits or losses resulting from its operation. This order further provided that, unless the parties could agree upon the market value and sale of the motel, a receiver would be appointed, the property sold, and the profits revealed by the accounting divided in accordance with the partnership agreement.

On September 21, 1953, defendants filed their accounting. Hearings on this and supplemental accountings were held on October 14 and 23, 1953, and January 29, 1954. On March 15, 1954, the court entered an order settling the accounts and winding up the affairs of the asserted partnership.

Defendants appeal from both orders. With regard to the interlocutory order, the assignments of error are directed primarily to the finding of fact that Eder and Reddick had entered into a partnership agreement of the kind described above.

The evidence is uncontradicted that, for a period of twenty months extending from 1950 to 1952, Eder was employed by Reddick in connection with the construction of several houses and duplexes in Portland, Oregon. Eder, who did not belong to a union, performed carpenter, finishing, and layout work. He also prepared blueprints for at least two of Reddick's houses. Eder testified that he was employed as a foreman on this work, but this was denied by Reddick. Eder usually worked six days a week, for which he received a weekly wage of $114. This work was terminated in February, 1952.

Eder gave this version as to what then transpired: After Eder's employment for Reddick in Portland came to an end, the two discussed the construction prospects in the Columbia Basin area. These discussions took place in Portland, and during several trips the two made to that area. Eder told Reddick that he could not work for wages, and the only way he could 'go in' with Reddick would be as a partner. On one of the trips to the Columbia Basin area, about April 1, 1953, he and Reddick and one George Livingstone, who was with them at the time, discussed a possible three-way partnership to build houses. However, nothing came of this suggestion. On another trip later the same month, Eder and Reddick decided to build and sell a motel at Moses Lake under a partnership agreement. Eder could not remember the exact date when they entered into this agreement.

Eder further testified: The two orally agreed that Reddick would put up the capital, handle the financing, and provide materials. Eder would furnish the 'knowhow,' prepare the blueprints, place orders for materials, and supervise construction. The motel would be sold for about $65,000. Reddick offered to split the profits evenly, but Eder said that his own share should be one third. Each was to draw $100 a week for subsistence from a 'building' fund.

Reddick gave this version: When, in March, 1952, a poor market for the sale of homes developed in Portland, Reddick decided to investigate housebuilding prospects in the Moses Lake area. He made one trip to the area with George Livingstone, and later offered to pay Eder's expenses on a second trip. Eder accepted. The purpose of this trip was to purchase some building lots and a house for Reddick to live in. Before starting this trip, Eder remarked that, if he sold his Portland house and moved to Moses Lake, he would have about $4,000. He asked Reddick if the two could then 'go in together,' with Reddick to handle the financing and Eder to get one third of the profits. Reddick indicated that he would try to work out such an arrangement. This discussion was with reference to the building of houses, no mention being made of a motel.

Reddick further testified: On a later trip, the two lots upon which the motel was thereafter constructed were purchased. On a third trip to Moses Lake, Reddick and Eder surveyed the lots which had been purchased, and dug forms. This trip required three and a half days, and Reddick paid Eder $70 for his time. On their return to Portland, Eder asked Reddick if he could work for Reddick on the motel until he sold his house. Reddick assented, and the wage agreed upon was $100 for a forty-hour week.

Continuing his testimony, Reddick stated that, after work on the motel had been in progress for about six weeks, Eder told Reddick that Eder's wife would not move to Moses Lake, and he could not sell his Portland house. Eder then asked if Reddick would let him supervise the construction of the motel on a partnership basis 'and run it like we were talking of once about building houses.' Reddick declined, but agreed to let Eder continue working on the motel at the rate of $100 a week. Reddick testified that this conversation took place in the presence of Mrs. Reddick, whose testimony corroborated her husband's version.

It is obvious that these two versions of the business transaction between Eder and Reddick concerning the motel are in sharp conflict. The trial court apparently found no reason for outright acceptance or rejection of either version. The court therefore evaluated these conflicting versions in the light of the surrounding circumstances. Regarding some of these circumstances, the evidence is not in dispute, but on some points the evidence is again conflicting.

The evidence is undisputed that Reddick supplied all of the funds and credit which were required to construct the motel. The real property and all materials which went into the motel were purchased by Reddick, in his name. Reddick made application for the building permit, paid for it himself, and it was issued in his name.

Eder testified that he did not receive wages while working on the motel, but that the $100 a week which was paid to him was for 'subsistence,' and was drawn from the partnership 'building' fund. Eder drew a total of $1,470. He stated that Reddick also drew $100 a week from the fund, at least until Reddick's family moved to Moses Lake. Eder testified that the 'building' fund consisted of money which Reddick deposited in a Moses Lake bank. It is not disputed that Reddick and his wife were the only persons authorized to draw on this bank account, which was maintained in their names.

Reddick denied that he drew $100 a week from this account for his own use. He testified that the sums paid Eder represented carpenter's wages and not subsistence. The hourly rate for union carpenters on the job was $2.51, which would be $100.40 for a forty-hour week. Reddick testified that, since Eder was not a union man, the $100 paid to him at Moses Lake represented 'a little extra' for being a 'layout' man. It is not contradicted that Eder prepared the blueprints for the motel.

Concerning the matter of control over the work, Eder testified that it was assumed that he and Reddick had equal rights. Eder testified that he made all of the estimates as to costs, determined what was needed, and drew the blueprints. Eder stated that Reddick consulted with him on practically every expenditure. Eder referred a building material salesman to Reddick, but hired Livingstone to do the plumbing work.

Reddick testified, on the other hand, that he did all of the hiring and firing on the job. He did, however, ratify Eder's act in employing two workmen and in engaging Livingstone to do the plumbing. Reddick stated that he directed Eder in his work on the job. Reddick negotiated the only two subcontracts on the motel, and the subcontractors looked to Reddick alone for payment. A carpenter on the job testified that, when Reddick was there, Reddick was the foreman, and Eder worked the same as the other employees. When Reddick was absent, Eder ran the job.

An apprentice carpenter testified that when he applied for a job, Eder told him that 'the boss' was in Portland. This witness testified that Eder employed him, after some hesitation, and only after the witness agreed that he might be fired when the 'boss' returned,...