Jones v. Jones, 9933

Decision Date07 October 1981
Docket NumberNo. 9933,9933
Citation310 N.W.2d 753
PartiesJudy I. JONES, Personal Representative of the Estate of Robert T. Jones, deceased, Plaintiff and Appellant, v. Irene H. JONES, Individually; Irene H. Jones as Personal Representative of the Estate of R. H. Jones, also known as Robert H. Jones, deceased; and Ina M. Still, Judge of the County Court of Golden Valley County, North Dakota, Defendants and Appellees. Civ.
CourtNorth Dakota Supreme Court

Freed, Dynes, Malloy & Reichert, Dickinson, for appellant; argued by George T. Dynes, Dickinson.

Orrin B. Lovell and Harold H. Halstead, Beach, for appellees, appeared on briefs but did not argue.

Zuger & Bucklin, Bismarck, for appellees; argued by Leonard H. Bucklin, Bismarck.

SAND, Justice.

This is an appeal by the plaintiff, Judy I. Jones (Judy), in her capacity as personal representative of the estate of Robert T. Jones (Timer) from a judgment dismissing her complaint which sought to rescind an assignment issued by Timer to his mother, Irene Jones (Irene), to release Timer's claim in the estate of his father, Robert H. Jones. 1

Judy is the widow of and personal representative of the estate of Timer who died on 26 Apr 1976. Irene is the widow of and personal representative of the estate of Bob who died on 8 June 1974. Bob and Irene lived at Beach, North Dakota, and had five children: Jeanne Faiman, Karen Burkhardt, Rosemary Hodges, Jule Neville, and Timer.

Bob and Irene were partners in what was originally a six-person partnership known as the Hudson Company. The original partnership was formed in the early 1950's and was documented by a written partnership agreement. The written agreement was destroyed in a fire in 1967, and it is undisputed that there was no written partnership agreement between the partners after that date.

Due to death and buy-outs, the number of partners in the partnership changed. The last change occurred in 1970 when Bob and Irene became the owners of all the partnership property. The partnership property consisted of ranch land, cattle, and machinery. The record reflects that Bob and Irene owned 40% of the property as joint tenants and 60% of the property as tenants in common.

On 8 June 1974 Bob died intestate leaving only a little property except for his partnership interest. 2 Irene contacted attorney Orrin Lovell to probate Bob's estate, and he prepared individual appearance and waiver, assignment of interest, and request for distribution papers (assignments) which were sent to each of the five children. The assignments released the children's interest in the estate of their father. The assignments were prepared after Irene told Lovell that, pursuant to the partnership agreement between her and Bob, the surviving spouse was to take the entire interest in the partnership.

The assignment which Lovell sent to Timer was accompanied by a cover letter which, in relevant part, provided:

"Essentially, the majority of the property in the Estate is part of the Hudson Company partnership. As such, this partnership property would go to your mother under the Partnership Agreement....

"As indicated, I do not believe that your interest would be very great, but it may be that you might be in disagreement with this. If so, you should understand that this Assignment gives to your mother all your interest in the estate."

Prior to signing the assignment, Timer consulted attorney William E. Gilbert concerning his legal rights. After consulting with Gilbert who, in turn, had telephone conversations with Lovell, Timer signed the assignment on 29 July 1974.

Timer died on 26 Apr 1976, and Judy subsequently commenced the present action to rescind her husband's assignment. Judy asserted that she was entitled to rescind the assignment on the ground that Timer was led to believe that a written partnership agreement with survivorship rights in the surviving spouse existed when, in fact, it did not. Judy also claimed that Timer was induced by fraud, misrepresentation, and mistake to sign the assignment.

The district court found that after 1970, Bob and Irene operated the partnership under an oral agreement and that the oral agreement included a provision that the survivor of Bob and Irene would become the owner of the partnership property. The district court also found that Timer's consent to sign the assignment was freely given and was not induced by mistake, fraud, duress, menace, or undue influence. Further, the district court found that representations or statements made by Irene or her representatives that there was a survivorship agreement constituted neither fraud nor misrepresentations. Based on these findings, the district court dismissed Judy's complaint, and she appealed to this Court.

The first issue raised by Judy is whether or not the district court erred in finding there was an oral partnership agreement between Bob and Irene which contained a provision that the surviving spouse would receive the partnership property.

The agreement between the parties is controlling as to the features of the partnership and is the law of the partnership. Liechty v. Liechty, 231 N.W.2d 729 (N.D.1975). A partnership arises from the contract between the parties as expressed in their agreement or as implied by the dealings with each other. Schlichenmayer v. Luithle, 221 N.W.2d 77 (N.D.1974). The agreement between the parties may be oral. Gangl v. Gangl, 281 N.W.2d 574 (N.D.1979). See, 59 Am.Jur.2d Partnership § 34, p. 956. In Rummel v. Rummel, 265 N.W.2d 230, 236 (N.D.1978), we noted that "marriage is in a sense a partnership."

Our review of the district court's findings is governed by the "clearly erroneous" standard of Rule 52(a), North Dakota Rules of Civil Procedure. A particular finding of fact is clearly erroneous when, although there is some evidence to support it, the reviewing court on all the evidence is left with a definite and firm conviction that a mistake has been made. Wilhelm v. Berger, 297 N.W.2d 776 (N.D.1980). Simply because we might have viewed the evidence differently had it been presented to us initially as the trier of fact does not entitle us to reverse the trial court. Wilhelm v. Berger, supra.

In this instance the acts of the parties and the record are consistent with the evidence of an oral partnership agreement between Bob and Irene. Additionally, the record reflects that Irene and her four daughters testified that the survivorship feature was included in the oral partnership agreement. Furthermore, the record reflects that Timer knew that Bob's property was in a partnership and that it would go to the surviving spouse.

However, Judy asserts that some of the acts done by Irene and her counsel after the death of Bob are inconsistent with a partnership agreement containing a survivorship feature. In particular, Judy points to the North Dakota estate tax return and subsequent amendment which was filed for Bob's estate. This return reflects that, for purposes of estate taxes and determination of exemptions, the partnership property was not treated as if there was a survivorship agreement, but was treated in accordance with the assignment.

The estate tax return was prepared by attorney Lovell, who testified in substance that it was his original understanding that he could treat the property under either the assignment or the survivorship feature. Lovell further testified that he prepared the return to reflect the assignment so as to give the greatest estate tax benefit to Bob's estate. Lovell's testimony also reflects that the estate tax return was amended a second time to reflect a partnership survivorship agreement. This return was not admitted into evidence, nor is it part of the record on appeal. Although the estate tax returns may suggest an inconsistency with the survivorship agreement, we believe Lovell's testimony adequately resolves what inconsistencies may have appeared. In addition, we must recognize that Irene had a right to rely upon the advice of her attorney in technical matters such as estate tax returns. Furthermore, it is for the trial court, as the initial trier of facts, to weigh competing evidence and to resolve factual questions.

After reviewing the testimony and the entire record before us we cannot say that the district court's finding that the oral partnership agreement contained a survivorship feature was clearly erroneous.

An interrelated issue raised by Judy is that the trial court erred in finding that the statute of frauds and the statute of wills had no bearing upon this case and that it made no difference whether the partnership agreement was oral or written. The district court determined that the assignment was valid and therefore did not consider the effect of the oral partnership survivorship agreement.

Initially, we note an admission at trial by counsel for Judy that the real and personal property in Bob's estate was "nearly all" utilized in connection with the partnership and was partnership property. The record supports this admission.

Pursuant to NDCC § 45-08-01, a partner is vested with rights to partnership property, but does not get title. That section provides as follows:

"The property rights of a partner are:

1. His rights in specific partnership property.

2. His interest in the partnership.

3. His right to participate in the management."

A partner's interest in partnership property is his share of the profits and surplus and is treated as personal property for all purposes. NDCC § 45-08-03. See also, 60 Am.Jur.2d Partnership § 87, p. 17.

Section 45-08-02, NDCC, relates to a partner's rights to specific partnership property and provides, in part, as follows:

"1. A partner is coowner with his partners of specific partnership property holding as a tenant in partnership.

"2. The incidents of this tenancy are such that:


"d. On the death of a partner his right to specific partnership property vests in the surviving partner or partners, except...

To continue reading

Request your trial
8 cases
  • Estate of Thomas, Matter of
    • United States
    • North Dakota Supreme Court
    • June 5, 1995
    ...partnership property, Tony and Phil were free to predetermine how those funds would pass upon the death of one partner. In Jones v. Jones, 310 N.W.2d 753 (N.D.1981), this court held partners could, by an oral partnership agreement, provide that the survivor would receive all partnership ass......
  • Pegg v. Kohn
    • United States
    • North Dakota Supreme Court
    • April 2, 2015
    ...the parties made an oral partnership agreement. [¶ 8] A partnership agreement may be oral. See N.D.C.C. § 45–13–01(20) ; Jones v. Jones, 310 N.W.2d 753, 755 (N.D.1981). “The existence of an oral contract and the extent of its terms are questions of fact subject to the clearly erroneous stan......
  • Holcomb v. Zinke
    • United States
    • North Dakota Supreme Court
    • March 26, 1985 wholly irrational, preposterous or in bad faith. Asleson at 543.6 Fraud must be proved by clear and convincing evidence. Jones v. Jones, 310 N.W.2d 753 (N.D.1981). Mere failure to disclose any or every fact about real property will not justify rescission. Not all facts are material.7 We ......
  • Martinson v. Holso
    • United States
    • South Dakota Supreme Court
    • May 18, 1988 in writing. Citing to 68 C.J.S. Partnership Sec. 294a. See also Balafas v. Balafas, 263 Minn. 267, 117 N.W.2d 20 (1962); Jones v. Jones, 310 N.W.2d 753 (N.D.1981). The Bailes court said that an agreement which disposes of assets upon the death of a partner is valid and binding even thoug......
  • Request a trial to view additional results

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT