Harvey v. Harvey

• Decision Date: 03 November 1993
• Docket Number: No. 2187,2187
• Citation: 91 Ohio App.3d 404,632 N.E.2d 956
• Parties: HARVEY, Appellant, v. HARVEY et al., Appellees.
• Court: Ohio Court of Appeals

Page 404

91 Ohio App.3d 404

632 N.E.2d 956

HARVEY, Appellant, v. HARVEY et al., Appellees.

No. 2187.

Court of Appeals of Ohio, Ninth District, Medina County.

Decided Nov. 3, 1993.

Stephen J. Brown, Medina, for appellant.

Ian Haberman, Lawrence S. Brandel and William B. Young, Medina, for appellees.

DICKINSON, Judge.

Plaintiff Olive Elizabeth Harvey has appealed from an order of the Medina County Court of Common Pleas that reformed a deed. The grantee clause of the deed conveyed certain real estate to "James D. Harvey and Son, a partnership consisting of James Duncan Harvey and Olive Elizabeth Harvey and James Donald Harvey and Beverly Ann Harvey." The trial court held that the named partnership actually consisted of James Duncan Harvey and James Donald Harvey and reformed the grantee clause to correct what it found was a mutual mistake. Plaintiff has argued (1) that the trial court incorrectly held that the deed did not create a partnership; (2) that the trial court incorrectly ignored testimony that the grantors intended to convey the land to four people; and (3) that the trial court incorrectly ignored testimony that the grantors intended to convey the land to a partnership of four rather than a partnership of two. This court affirms the judgment of the trial court because the deed at issue did not itself create a partnership, and the trial court's conclusion that the description of the partnership contained in the deed was a mutual mistake was not against the manifest weight of the evidence.

I

On December 9, 1960, plaintiff Olive Elizabeth Harvey and her husband, James Duncan Harvey, purchased approximately one hundred fifteen acres of real estate in Montville Township, Medina County, Ohio. They purchased the real estate so plaintiff's husband and the couple's son, defendant James Donald Harvey, could establish a cattle farm. Plaintiff and her husband paid the down payment and borrowed the remainder of the purchase price from The Old Phoenix National Bank, securing the loan with a note and a mortgage deed. The signatures of James Duncan Harvey, Olive Elizabeth Harvey, James Donald Harvey, and Charlotte Harvey (defendant James Donald Harvey's first wife) appeared on the mortgage deed.

The four Harveys moved into the house located on the real estate and defendant James Donald Harvey began building a second house on the real estate. During December 1963, the four Harveys borrowed money from Akron Savings and Loan Company. Part of the loan was used to pay off the Old Phoenix note and the remainder was used to finish defendant James Donald Harvey's house.

In January 1965, James Duncan Harvey and defendant James Donald Harvey executed "Articles of Co-Partnership." The partnership that was created by those articles was to operate under the name James D. Harvey and Son and its stated purpose was to buy, sell, and breed cattle. Article III of the document stated that the capital of the partnership included "trade fixtures, furniture, equipment, cattle, good will, real estate, and two dwelling houses." The included real estate was described in Schedule A of the document:

"Parcel I. Situated in the Township of Montville, County of Medina and State of Ohio, and known as being the South part of Lot 18, containing 50 acres.

"Parcel 2. Situated in the Township of Montville, County of Medina and State of Ohio, and containing 37.50 acres in Lot 17 and 27.50 acres in Lt. 36." (This was the same real estate mentioned previously that plaintiff and her husband had purchased on December 9, 1960.)

Article IX of the document stated that all monies generated by the partnership were to be deposited with Old Phoenix or any other mutually agreed upon bank "to the account and credit of James D. Harvey and Son." Article IX also provided that the respective wives of James Duncan Harvey and defendant James Donald Harvey were to have authority to sign checks on behalf of the partnership.

During October 1965, the Harveys opened a checking account at Old Phoenix in the names of Harveys Hereford Farm, James D. Harvey and Olive E. Harvey. Plaintiff, her husband, defendant James Donald Harvey, and defendant James Donald Harvey's first wife had authority to sign checks drawn on the account. ¹ The proceeds from the cattle business were deposited into the account and, when necessary, the four Harveys equally contributed additional amounts. The Harveys paid mortgage payments, real estate taxes, insurance premiums, and all other expenses related to the operation of the farm from the account at all times relevant to this case.

The farm was operated under the name Harveys Hereford Farm. The Harveys, however, never formally designated that as the name of a separate partnership or as a d.b.a.

During 1973, plaintiff and her husband executed the deed at issue in this case. It was prepared by defendant James Donald Harvey's attorney. That deed, which was recorded on or about April 27, 1973, conveyed all but one acre of the real estate that had been purchased by plaintiff and her husband on December 9, 1960. The grantee clause at issue in this case provided that the real estate was to be conveyed to "James D. Harvey and Son, a partnership consisting of James Duncan Harvey and Olive Elizabeth Harvey and James Donald Harvey and Beverly Ann Harvey."

The one-acre parcel that was not included in the 1973 deed had been previously conveyed to Kenneth G. Spires and Judith M. Spires, plaintiff's son-in-law and daughter. On January 17, 1978, James D. Harvey and Son, a Partnership, conveyed a second one-acre parcel of the real estate to Mr. and Mrs. Spires. That deed was signed "James Duncan Harvey, Partner" and "James Donald Harvey, Partner." The certificate of partnership filed with that deed stated that the partners were James Duncan Harvey and James Donald Harvey.

During January 1979, James Duncan Harvey and defendant James Donald Harvey executed a "Restatement of Partnership Agreement." That document's stated purpose was the same as the original partnership agreement signed in 1965. There were some differences, however, from the 1965 agreement. For example, the 1979 restatement listed additional assets, namely farming equipment, and it provided for a division of the real estate upon a partner's death.

Pursuant to the 1979 restatement, upon the death of a partner, the surviving partner could choose to either purchase the deceased partner's interest in the partnership or allow the partnership to terminate. If the surviving partner elected to purchase the deceased partner's interest, Article 14 of the restatement provided that real estate described in Schedule B of the restatement was to be distributed to James Duncan Harvey, or his estate or beneficiary, and real estate described in Schedule C of the restatement was to be distributed to James Donald Harvey, or his estate or beneficiary. Schedules B and C both simply read "see plan of lot split marked final 1/30/79 by Root and Associates," referring to a map in which parts of the real estate surrounding James Duncan Harvey's and defendant James Donald Harvey's houses were blocked off from the rest of the real estate and respectively labeled "B" and "C."

Defendant James Donald Harvey testified that the real estate was to be split so that each partner's share would include his house and the immediately surrounding land. He further testified that the split would permit a deceased partner's spouse to keep possession of her residence. ² Article 14 of the restatement provided that the partnership assets would be valued either by agreement of the parties or by taking one half of the book value or fair market value and subtracting the partnership debts and liabilities. The real estate described in Schedules B and C, however, was valued at $0.00.

Article 15 of the restatement provided that if the surviving partner elected not to purchase the deceased partner's partnership interest, the partnership would terminate. Paragraph (b) of Article 15 provided that in that event, the real estate listed in Schedules B and C would still be distributed in the manner set forth above.

During 1980, a gas lease was executed for the real estate at issue. All four of the Harveys separately signed the lease, and no reference was made to a partnership. All money due under the lease was to be paid to plaintiff's husband.

During the time relevant to this case, Carl Storm, an accountant, prepared individual tax returns for all four Harveys, as well as returns in the name of Harveys Hereford Farm. Harveys Hereford Farm's tax returns reflected that distributions of income were made to James Duncan Harvey and James Donald Harvey. Storm testified that he considered James D. Harvey and Son and Harveys Hereford Farm to be the same entity. No tax identification number was ever obtained, nor bank account opened, in the name of James D. Harvey and Son, a Partnership. Further, no tax returns were ever filed on behalf of James D. Harvey and Son, a Partnership.

By 1988, plaintiff's husband was terminally ill with emphysema. On July 1, 1988, plaintiff's husband and defendant James Donald Harvey purportedly signed two addenda to the 1979 Restatement of Partnership Agreement, although plaintiff has since denied the validity of her husband's signature on those addenda. One addendum changed the description of land contained in one of the two schedules incorporated into the 1979 Restatement of Partnership Agreement. That addendum added additional real estate to Schedule C, the part that was to be conveyed to defendant James Donald Harvey or his estate or beneficiary upon the death of one of the partners. The other addendum amended the dollar value set forth in the 1979 restatement for the remaining real estate, from a nonspecific amount based upon agreement of the parties, book value, or fair market value, to $100,000, with the surviving partner's purchase price at one half, or $50,000.

Following plaintiff's husband's death, defendan...