Hilde v. Flood

• Decision Date: 01 September 1964
• Docket Number: No. 10103,10103
• Parties: George HILDE, Plaintiff and Respondent, v. Claude A. FLOOD, Defendant and Appellant.
• Court: South Dakota Supreme Court

Page 100

130 N.W.2d 100

81 S.D. 25

George HILDE, Plaintiff and Respondent, v. Claude A. FLOOD, Defendant and Appellant.

No. 10103.

Supreme Court of South Dakota.

Sept. 1, 1964.

Mundt & Weisensee, Henry C. Mundt, George D. Weisensee, Sioux Falls, for defendant and appellant.

Davenport, Evans, Hurwitz & Smith, Lyle J. Wirt, Sioux Falls, for plaintiff and respondent.

RENTTO, Judge.

These parties started operating together in the business of earth removal and the installation of sewer and water facilities about February 11, 1958 and continued to do so until March 31, 1961. This suit seeks an accounting of the activities of that association and its dissolution and the winding up of its affairs. That such relationship may be dissolved by a decree of court is not questioned. See Lunn v. Kaiser, 76 S.D. 52, 72 N.W.2d 312. The period in question covers seven separate jobs in which they were involved. Hilde contends that they carried on such activities as a joint venture and were to share all profits and losses equally. Flood admits that this was their arrangement on six of the jobs, but claims that on the Cheyenne River Agency project he was the contractor and Hilde was a subcontractor for a fixed compensation.

The trial court found that all of the work under review was done by the parties as a joint adventure doing business as Flood-Hilde Construction Company and that they were to share the profits and losses of the venture equally. The judgment, and the order amending it, so decreed and ordered the dissolution and winding up of the affairs of the company and appointed a receiver to carry out the provisions of the judgment. It further determined that Flood owed the enterprise a substantial sum of money and ordered him to reimburse it in that amount. The parties were held to be equally liable for such debts of the company as remained after its liquidation.

On this appeal from the judgment Flood specifies 16 claims of error, but they present only two questions. First, did the evidence sustain the finding that the business of the Flood-Hilde Construction Company was operated as a joint venture on an equal basis on all projects; and second, did the court err in accepting the determination of Don W. Doherty, a certified public accountant, in the final accounting that he made of the affairs of the joint venture as to the relative obligations of the parties thereto?

In advancing his position as to the first question Flood makes this statement in his brief: 'It is axiomatic that the burden of proof lies with the Plaintiff (Respondent) and that in civil cases the proof must be by a preponderance of the evidence. Now, let us examine the evidence and see if the Respondent has sustained his burden of proof.' His view misconceives the function of this court in reviewing facts found by the trial court.

Whether a party having the burden of proof on an issue has sustained it is determined by the trial court. This process entails a weighing of the evidence which in turn is vitally dependent on the credibility of the witnesses. Not having seen nor heard them, we are ill prepared to make this determination. Consequently, when findings of fact are challenged on review we proceed from the premise that they are presumptively correct. In re Rowland's Estate, 70 S.D. 419, 18 N.W.2d 290. This places the burden of establishing incorrectness on the appellant.

It has long been the rule in this state that we may disturb the trial court's findings of fact only if it appears they are contrary to a clear preponderance of the evidence. See West's Dakota Digest, Vol. 2, Appeal and Error, k1010 to k1013. To do so we must be able to say as a matter of law that the facts are other than as found. Martindale v. Dickey, 72 S.D. 595, 38 N.W.2d 140. In reviewing them we are required to accept as true all evidence favorable to the findings, except that which is so unreasonable as to challenge the credulity of the court. Libertin v. St. Paul Fire & Marine Ins. Co., 75 S.D. 238, 63 N.W.2d 248. Otherwise we would be usurping a function which of necessity is committed to the trial court. When he has found facts on evidence that is conflicting the burden on him who would undo them is heavy.

In the fall of 1957 S. E. Gustafson Construction Company learned that it was the low bidder on a construction job that the U.S. Government was undertaking at the Cheyenne River Indian Agency. Before this contract was formalized Gustafson approached the defendant, then operating as C. A. Flood Construction Company, about subletting a part of the project to him. Flood invited the plaintiff, then operating as George Hilde Construction Company, to undertake some of the work as his subcontractor. Hilde orally agreed to do this for about $9,811.80. His version was that this figure covered the 'sewer ditching and the water ditching and hoisting in a small amount of concrete sewer pipe, storm sewer pipe.' On or about November 15, 1957, they entered into a written agreement concerning such work. It is denominated a subcontract and is in evidence as Exhibit 2. On the face of it, this contract does not appear to conform with their prior oral understanding.

It recites that Flood 'holds certain contract for excavation for sewer, storm sewer and water mains, installation of sewer, storm sewer and water mains and refilling of the excavations in regard thereto' on the Cheyenne project and that Hilde 'agrees to perform such work under and for said contractor for the consideration hereinafter stated.' It describes the work to be done in eight categories, the footage thereof and the compensation to be paid for each, totaling $32,279.70. Hilde agreed at his own expense to furnish the necessary equipment, manpower, tools and materials to do the job, but not pipe, hydrants and fittings. These were to be furnished by the principal contractor. Hilde was also required to furnish at his own expense a performance bond.

After the execution of Exhibit 2 Flood concluded that in order to secure the subcontract from Gustafson he and Hilde would have to do the work as a joint venture. He so informed Hilde. While the reason for this is not clear it is inferable that he was unable to provide the required bond. Thereafter each man had prepared his individual financial statement for the purpose of getting a bond as a joint venture. They made application to several insurance agencies for such bond without success. Eventually they were successful. Both of them executed the application for it and on February 4, 1958, the Standard Surety Company of Rapid City issued them a bond. In this bond the principal was Claude A. Flood and George Hilde, a joint venture. Hilde paid the initial premium on it by his personal check, but was later reimbursed out of company funds. Hilde never furnished a bond to Flood as stipulated in Exhibit 2.

On February 11, 1958, Gustafson entered into a written subcontract agreement with Flood and Hilde. It designates Gustafson as the contractor and Claude A. Flood and George Hilde, a joint venture, as the subcontractor. In essence it provides that the joint venture would furnish the labor, equipment and materials necessary to perform and complete the work required of Gustafson under a described contract with the government on the Cheyenne Indian Agency project, except certain pipe, hydrants and fittings which the contractor was to furnish. It specified the work to be done as all trenching, installation and backfilling of sewers--$46,279.83, and the same for watermains--$30,808.75, and provided that any additions would be handled under supplementary agreement. Other provisions here significant were that the subcontractor...