May v. Triangle Oil Co., Inc., 11312

• Decision Date: 21 October 1974
• Docket Number: No. 11312,11312
• Citation: 527 P.2d 781,96 Idaho 289
• Parties: Richard A. MAY and Arthur Paz, Plaintiffs-Appellants, v. TRIANGLE OIL CO., INC., a Foreign corporation and D. J. Allred, Defendants-Respondents.
• Court: Idaho Supreme Court

Page 781

527 P.2d 781

96 Idaho 289

Richard A. MAY and Arthur Paz, Plaintiffs-Appellants, v. TRIANGLE OIL CO., INC., a Foreign corporation and D. J. Allred, Defendants-Respondents.

No. 11312.

Supreme Court of Idaho.

Oct. 21, 1974.

Robert C. Huntley, Jr., Racine, Huntley & Olson, Pocatello, for plaintiffs-appellants.

Clark Gasser, Terrell, Green, Service & Gasser, Pocatello, for defendants-respondents.

SHEPARD, Chief Justice.

This is an appeal from a judgment in favor of defendants and against plaintiffs in an action upon a note. We reverse.

Plaintiffs-Appellants May and Paz brought this action for a balance due on a promissory note together with interest thereon and attorney fees. The note was executed and delivered to plaintiffs-appellants as part of the consideration paid by defendants-respondents in the purchase of a business establishment, in Pocatello, Idaho, known as the Syndicate Bar.

Defendants-respondents answered and counterclaimed admitting in essence all of the above facts but alleging an offset against the plaintiffs. It was alleged that plaintiff-appellant Paz, following the sale of the business, had entered into a partnership with the defendants, had contributed the above mentioned promissory note to the new partnership, had agreed to contribute the additional sum of $3,000.00 to the partnership and assume the duties of management of the business. Defendants further alleged that thereafter plaintiff-appellant Paz had refused to cancel the said note, but refused to contribute the $3,000.00 and had further refused to manage the business. It was alleged that such refusal of Paz had resulted in damage to the defendants-respondents in the sum of $7,000.00.

Following trial the court made Findings of Fact to the effect that the promissory note was not duly nor properly executed by or on behalf of the corporate entity and that no consideration existed for the execution of the note. Such matters were not raised in the pleadings of the parties, are completely without support in the evidence and the respondents are candid in admitting that those Findings are clearly erroneous.

Nevertheless, respondents assert that if the judgment of the trial court can be sustained upon any theory it must be affirmed. Fischer v. Fischer, 92 Idaho 379, 443 P.2d 463 (1968); Berry v. Koehler, 86 Idaho 225, 384 P.2d 484 (1963). Respondents assert that the trial court found in its favor as to the agreement that Paz should become a partner with the respondents, that the consideration for Paz's partnership interest was the transfer of the note to the corporation and Paz's breach of that agreement to become a partner. Such Findings were indeed made by the court.

Appellant on the other hand asserts that even if the court's stated findings are partially supported by the record nevertheless they do not provide a basis on which the court could have denied relief to the plaintiffs. Appellants assert that even if such agreement to enter into a partnership by Paz did exist it was nevertheless stated orally, was withdrawn by Paz within a matter of hours and that no damages were proved which resulted from such withdrawal and breach. Appellant further asserts that the only evidence before the trial court was that the partnership between may and Paz terminated at the time of the sale of the business to respondents. Appellants also assert that the evidence discloses absolutely no authority, actual, apparent or implied in Paz to act for May in the alleged contribution of the note to the partnership.

We review the facts surrounding the alleged partnership agreement from the standpoint most favorable to the respondents. Clayton v. Jones, 91 Idaho 87, 416 P.2d 34 (1966); Huggins v. Green Top Dairy Farms, 75 Idaho 436, 273 P.2d 399 (1954). The sale of the business and the execution of the note by respondents in favor of appellants took place on March 16, 1971. Defendants' testimony, which at this juncture must be assumed to be correct, Planting v. Board of County Commissioners of Ada County, 95 Idaho 484, 511 P.2d 301 (1973); Hollandsworth v. Cottonwood Elevator Company, 95 Idaho 468, 511 P.2d 285 (1973), is to the effect that on June 1, 1971, a meeting took place between Paz and Allred. Out of the meeting came an oral agreement between Allred and Paz that Paz would re-enter the business as a third partner. Paz's...