Fourth Nat. Bank of Tulsa v. Cochran

• Decision Date: 10 April 1956
• Docket Number: No. 35888,35888
• Citation: 298 P.2d 784
• Parties: The FOURTH NATIONAL BANK OF TULSA, Oklahoma, a National Banking Association, and Jack S. Dyer, Plaintiffs in Error, v. Jack COCHRAN, individually and as the partner of Govits Refrigeration Company, a co-partnership composed of Jack Cochran and James Govits, and James Govits, Commercial Credit Corporation, and Edwin Vaughn, Defendants in Error.
• Court: Oklahoma Supreme Court

Page 784

298 P.2d 784

1956 OK 126

The FOURTH NATIONAL BANK OF TULSA, Oklahoma, a National

Banking Association, and Jack S. Dyer, Plaintiffs in Error, v. Jack COCHRAN, individually and as the partner of Govits

Refrigeration Company, a co-partnership composed of Jack

Cochran and James Govits, and James Govits, Commercial

Credit Corporation, and Edwin Vaughn, Defendants in Error.

No. 35888.

Supreme Court of Oklahoma.

April 10, 1956.

Rehearing Denied June 19, 1956.

Syllabus by the Court.

1. 54 O.S.1951 §§ 81 and 83, requiring a fictitious partnership to file a certificate containing the names of the partnership members in the office of the District Court Clerk before maintaining an action as provided therein are for the protection of persons dealing with such fictitious partnerships. They are defensive in nature and unless properly pleaded may be waived.

2. Where defendant relies upon facts that plaintiff is a partnership doing business under a fictitious name without complying with 54 O.S.1951 §§ 81 and 83, but offers no proof that plaintiff has failed to comply with said statutes, the law will presume that plaintiff has complied therewith.

3. Whatever is notice enough to put a reasonably prudent person on his guard and calls for inquiry is notice of everything to which such inquiry might have led. When a person has sufficient information to lead him to a fact, he shall be deemed conversant with it.

Appeal from the Court of Common Pleas of Tulsa County; Stanley C. Edmister, Judge.

Action by one partner against his co-partner and others seeking an accounting dissolution of partnership and recovery of certain loss dealer reserve account held by one of the defendants. From a judgment of trial court in favor of defendant Edwin Vaughn, and plaintiff Jack Cochran, the defendant, Jack S. Dyer, and intervenor, Fourth National Bank of Tulsa, appeal. Affirmed.

Gable, Gotwals & Hays, Manatt, Knight & Knight, Tulsa, for plaintiffs in error.

Sanders & McElroy, John R. Woodard, Floyd L. Walker, Tulsa, for defendants in error.

PER CURIAM.

This action was instituted on September 19, 1950, by Jack Cochran, individually and as the partner of Govits Refrigeration Company, a co-partnership composed of Jack Cochran and James Govits, against James Govits, Jack S. Dyer, Commercial Credit Corporation and Edwin Vaughn seeking an accounting, dissolution of the partnership, and the recovery of reserves held by Commercial Credit Corporation to the credit of Govits Refrigeration Company.

The case was tried to the court without the intervention of a jury. Upon the conclusion of the testimony the case was taken under advisement. Six months after the trial and while under advisement plaintiff in error, Fourth National Bank, was permitted to intervene in the case. The petition of intervention claimed the reserve held by defendant, Commercial Credit Corporation, to the credit of Govits Refrigeration Company by reason of an assignment from defendant Dyer, and further alleged that the alleged partnership of plaintiff was a fictitious partnership which had failed to comply with statutes in reference to forming such a partnership. It offered no further testimony in the case other than the introduction of the assignment of Dyer to intervenor but adopted the evidence of defendant, Dyer, as its own. Thereupon the court rendered judgment for the plaintiff in the amount of $3,130 and for defendant Vaughn, in the amount of $305.66, and the assignments of Dyer and intervenor, Fourth National Bank of Tulsa, Oklahoma, were held to be of no effect. From an order overruling separate motions for new trial, the intervenor bank, and defendant, Jack S. Dyer, bring this appeal.

Plaintiffs in error contend that defendant in error, Jack Cochran, could not maintain the action as a partner without complying with 54 O.S.1951 §§ 81 and 83.

We have carefully examined the record herein in light of the rules heretofore adopted by this court in the cases on Magnolia Petroleum Co. v. Galloway, 183 Okl. 432, 83 P.2d 174; Crisp v. Nunn, 173 Okl. 203, 47 P.2d 139; and Hill v. Paige Motor Co., 123 Okl. 254, 253 P. 97, and in view of the holdings of this court in such cases, we are unable to agree with such contention.

In the Magnolia case, supra, we held in effect that, 54 O.S.1951 §§ 81 and 83 were designed to protect persons dealing with fictitious partnerships, by compelling the disclosure of the various partners; that when such sections were relied on they were defensive in nature and unless properly pleaded may be waived. Plaintiffs in error neither pleaded nor proved non-compliance with the aforementioned sections in the manner required by the Crisp and Hill cases, supra.

Plaintiffs in error next contend that the assignment made by Govits to Dyer was a valid sale and transfer of the Dealer's Reserve Account held by Commercial Credit Corporation to the credit of Govits Refrigeration Company and that the assignment made by Dyer to the bank as security for his indebtedness to the bank is a valid transfer of said reserve account. To substantiate their contention they rely wholly upon the bona fide purchaser rule as edited in 8 C.J., Bona Fide Purchaser, pp. 1146-1149; 11 C.J.S., Bona Fide Purchaser, p. 388.

If the assignment from Govits to Dyer was valid then certainly Dyer's assignment to the bank would be valid. Therefore, we deal only with the validity of the Govits assignment.

The evidence discloses that prior to February 3, 1948, the defendant, Govits, was engaged in the refrigeration sales and service business as sole owner and operator under the firm name, James Govits Refrigeration Company. Items of merchandise which were sold on conditional sales contracts were financed through defendant, Commercial Credit Corporation. A reserve or portion of the profit of each conditional sale was withheld by Commercial to create a fund to cover unpaid contracts.

On February 3, 1948, plaintiff and defendant Govits entered into a written partnership agreement to carry on the refrigeration business under the firm name of Govits Refrigeration Company. Under this agreement Govits owned a 9/10 interest, plaintiff a 1/10 interest. At the time of the formation of the partnership the loss dealer reserve account due from Commercial to Govits was transferred to the partnership and it in turn assumed the contingent liability thereon. Also, a new dealer statement showing the partnership interests was made to Commercial. Govits was the executive manager of the new company, and plaintiff continued on as service mechanic. The defendant, Vaughn, prior to the partnership was a broker sales representative of the old company and continued in that capacity under the new company. His pay was in the form of commissions and on conditional sales made by him a portion of his commission was represented in the loss dealer reserve withheld by Commercial. The partnership continued in business until March, 1949 when, due to illness of Govits, it ceased to operate. At this time there was due and owing to Vaughn on unpaid sales contracts as commissions payable from the loss dealer reserve the sum of $305.66.

During the operation of the partnership plaintiff received none of the profits nor the return of any of his capital investment. Govits had informed him by letter that his share of the profits was $930...