Hurst v. Hurst

• Decision Date: 22 September 1965
• Docket Number: CA-CIV,No. 2,2
• Citation: 405 P.2d 913,1 Ariz.App. 603
• Parties: Perry W. HURST and Estelle V. Hurst, his wife, Appellants, v. Lee J. HURST and Ilah A. Hurst, his wife, Appellees. 9.
• Court: Arizona Court of Appeals

Page 913

405 P.2d 913

1 Ariz.App. 603

Perry W. HURST and Estelle V. Hurst, his wife, Appellants, v. Lee J. HURST and Ilah A. Hurst, his wife, Appellees.

No. 2 CA-CIV 9.

Court of Appeals of Arizona.

Sept. 22, 1965.

Rehearing Denied Oct. 6, 1965.

Review Denied Dec. 1, 1965.

Hughes & Hughes, Phoenix, John C. Hughes, Phoenix, of counsel, for appellants

John C. Haynes, Jr., and Harry H. Haynes, Tucson, John C. Haynes, Jr., Tucson, of counsel, for appellees.

HATHAWAY, Judge.

On the petition for rehearing as to which a second oral argument was had, we have reconsidered this matter in the light of a more complete record. We conclude that a different result is required.

A brief chronological calendar of the history of this litigation is essential to a proper understanding of the problems involved in this appeal:

Complaint filed June 11, 1954

Receiver appointed February 27, 1957

Judgment (appealed from in first appeal) February 21, 1958

Order confirming receiver's sale April 14, 1958

Decision on first appeal October 15, 1959

Judgment December 29, 1960

Judgment and order distributing partnership assets (appealed from in second appeal) March 14, 1961

Notice of appeal April 14, 1961

There have been two trials in the lower court and appeals taken from the judgments therein rendered. Our Supreme Court has commented on the highly confused record This case has taken on the proportions of a 1,000-piece jigsaw puzzle with several pieces missing in the record before us. We have undertaken to examine the entire record of all proceedings, judgments, and orders in order to supply the missing pieces. This 'sifting and sorting' was for the further purpose of determining what matters had become res adjudicata since the first appeal.

in this case, which has simmered for eleven years. ¹ The record became more confused on the second appeal. ²

We shall reconsider the errors alleged by appellants in the same order as they appeared in our opinion filed April 28, 1965. ³

SALE OF PARTNERSHIP PROPERTY

Appellants have called to our attention the fact that, although the order confirming the sale of partnership property was embodied in the abstract of record on the first appeal, the sale occurred after the judgment from which the first appeal was taken. We agree that the propriety of the conduct of the sale was not required to be raised on the first appeal since the question arose subsequent to the judgment appealed from.

We still hold, though for a different reason, that appellants are barred from raising the question. The order confirming the sale was a final order from which an appeal lies. A.R.S. § 12-2101, subsecs. C and E, as amended; Shortle v. McCloskey, 38 N.M. 348, 37 P.2d 800, 801 (1934); see Redman v. White, 85 Ariz. 82, 84, 331 P.2d 1096 (1959). ⁴ Other cases holding that an order confirming a judicial sale has the requisite finality to be an appealable order are Sage v. Central R. Co., 96 U.S. 712, 24 L.Ed. 641, 643 (1878); Vann v. Union Cent. Life Ins. Co. 79 Okl. 17, 191 P. 175, 177 (1920); Brady v. Ford, 184 Wash. 467, 52 P.2d 319, 320 (1935); Poole v. McEntire, 209 Ga. 659, 75 S.E.2d 20, 23 (1953). The order confirming the sale was entered on April 14, 1958, and the appeal was filed four years later. Notice of appeal from the order should have been filed within 60 days from the date of its entry. 16 A.R.S. Rules of Civil Procedure, Rule 73(b) as amended. Since the perfecting of an appeal within the prescribed period is jurisdictional, Murphey v. Gray, 84 Ariz. 299, 307, 327 P.2d 751 (1958); Harbel Oil Co. v. Steele, 80 Ariz. 368, 370, 298 P.2d 789 (1956), we hold that the appeal from the order confirming the sale was not timely brought and appellants are precluded from attacking the validity of the sale.

ALLOWANCE OF SALARY

For the reasons set forth in our original opinion concerning the allowance of salary to Lee Hurst, we reiterate that an allowance of $6,000 per year for 1951 and 1953 is affirmed. The sum of $12,000 for salary is a partnership obligation.

VALUE OF APPELLANTS' SHARE

On the second appeal, appellants argued at great length concerning the erroneous computation of the value of their share. This court agreed that appellants were entitled to recover the value as of the date of dissolution, March 31, 1954. Therefore we remanded the matter for a proper determination of value, rejecting both the 'sale price' value set by the trial court and the 'book' value in the master's accounting report. (The issue of value was not expressly litigated nor was it referred to the master for determination.) 'It is Ordered, Adjudged and Decreed as follows:

The first appeal in this case was taken from the judgment entered February 21, 1958 which recited in part:

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'12. That the partners each own, and are entitled to, an undivided equal interest in and to all of the undistributed profits and assets of the partnership, including the lease on premises farmed, all bank accounts, farming equipment, and any other property or thing that belongs to the partnership; (Emphasis supplied)

'13. That the plaintiffs * * * are entitled to judgment, * * * for a division of the profits and assets equally between the partners that remain after the payment of partnership debts and obligations; (Emphasis supplied)

'14. That depreciation is not to be considered in the accounting or division of the assets;

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'16. That the partnership assets be sold * * *; and in the event a bid of either plaintiffs or defendants is accepted by the Court at said time and place, a credit may be allowed toward the purchase price bid to the extent of the interest owned by such successful bidder in the property;

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'18. That the Court retains jurisdiction * * * until a final judgment is entered distributing the proceeds of the above-mentioned sale and any other partnership assets.'

The above-quoted provisions of the judgment when read together are capable of but one construction. The plaintiffs were awarded one-half of the then-existing partnership property, after payment of partnership obligations, and nothing remained to be done other than liquidation of the assets and distribution of the proceeds in equal shares. Examination of appellants' briefs filed in the first appeal discloses no assignment of error relative to the equal division of partnership assets.

The mandate of the Supreme Court on the first appeal stated that the judgment appealed from was reversed and remanded with instructions (1) to grant a new trial with respect to the issue of 'living or managerial' expenses or remuneration owed to appellee, and (2) to modify the judgment by allowing to appellants interest on the value of their share of the partnership assets utilized by appellees after the date of dissolution. Reading these instructions in the light of the written opinion of the court, we interpret this to mean that in all other respects the judgment was affirmed. The appellants' interest in the partnership property had been finally determined in the February, 1958 judgment, and any objection to the determination should have been raised on the first appeal. As stated by our Supreme Court in Paramount Pictures, Inc. v. Holmes, 58 Ariz. 1, 117 P.2d 90, 91 (1941), quoting from Arizona-Parral Min. Co. v. Forbes, 16 Ariz. 395, 146 P. 504, 506 (1915):

'* * *, 'appeals cannot be allowed by piecemeal. There must be an end to them as speedily as the contention of litigants may be advanced and decided. So it is that all questions reserved for review by an Appellate Court must be presented on the first appeal thereafter from a final judgment, or not at all; for thereafter all questions presented by the record will be considered as finally determined and all such questions not expressly affirmed or reversed will, by implication, be deemed affirmed.'' (Emphasis supplied.)

Therefore, we retract our holding that the value of appellants' share must be computed as of the date of dissolution. The matter is res adjudicata.

Since the determination of value is settled, we shall consider the question of certain 'unidentified deposits' in appellee's bank account prior to dissolution. Appellee Lee Hurst had deposited both partnership funds and personal funds in his own A partner stands in a fiduciary relationship to his co-partner. Smith v. Howard, 76 Ida. 235, 280 P.2d 1060, 1063 (1955); Pacific Atlantic Wine Inc. v. Duccini, 111 Cal.App.2d 957, 245 P.2d 622, 627 (1952); Stowe v. Matson, 94 Cal.App.2d 678, 211 P.2d 591, 594 (1949). If a trustee mixes trust funds with his own, the entire commingled mass should be treated as trust property except in so far as the trustee may be able to distinguish what is his. 54 Am.Jur., Trusts § 256; Boroughs v. Whitley, Okl., 363 P.2d 150, 152 (1961); Ayers v. Fay, 187 Okl. 230, 102 P.2d 156, 161 (1940). The evidence having established that part of the money deposited in Lee Hurst's account was partnership or trust funds, it was incumbent upon the trustee-partner, Lee Hurst, to distinguish his personal funds. Boroughs v. Whitley, supra. He failed to do this and the unidentified deposits for 1951, 1952, and 1953 should have been treated as a partnership cash asset. The amounts involved are:

personal account. The accounting report prepared for the trial court excluded these unidentified deposits in computing the undistributed cash assets belonging to the dissolved partnership. We hold that this was partially erroneous.

                1951   $  295.22
                1952    6,952.87
                1953    2,408.57
                       ---------
                Total  $9,656.66
                       ---------
                

The master's accounting report for the year 1954 excluded certain rental income and unidentified deposits. Appellants claim that one-fourth of each should have been included as a partnership cash asset since the partnership was not dissolved until March 31, 1954. However, the trial court's adoption of the report is binding unless shown to be clearly erroneous. 16 A.R.S. Rules of Civil Procedure, Rule 53(h); Smith v....