Oswald v. Dawn

Decision Date02 August 1960
Docket NumberNo. 18848,18848
Citation143 Colo. 487,354 P.2d 505
PartiesElizabeth L. OSWALD, Administratrix of the Estate of George Oswald, Plaintiff in Error, v. Clyde S. DAWN; The Dawn Motor Company, a Colorado corporation; Josephine Dawn; A. B. Dawn; and Velma Joe Dawn, Defendants in Error.
CourtColorado Supreme Court

O. F. Adams, Trinidad, Kreager & Sublett, Sterling, for plaintiff in error.

Anthony Zarlengo, Denver, Dean C. Mabry, Trinidad, for defendants in error.

DOYLE, Justice.

Plaintiff in error was plaintiff in an action instituted in the District Court of Las Animas County in which the defendants in error were named as defendants. The parties will be referred to in accordance with their designation in the trial court except where the reference is to a particular defendant.

The judgment of the district court awarded plaintiff the sum of $552.45. This was the amount that plaintiff had sought in her 'Fifth Cause of Action.' Plaintiff's other demands (described in her First, Second and Fourth Claims) were dismissed at the close of the plaintiff's case and she seeks review of this aspect of the judgment.

Plaintiff seeks an accounting of partnership transactions. She is the widow of George Oswald, deceased, who during his lifetime had been engaged for a number of years in various enterprises with the defendant Clyde S. Dawn in Trinidad, Colorado. Plaintiff alleges that the defendant Dawn made unauthorized use of funds in excess of $37,000 belonging to the partnership. She seeks an accounting of these funds and a judgment for one-half of the sum alleged to have been diverted. Her prayer is for judgment in the amount of $18,969.24.

Although the existence of a partnership is admitted, no formal articles of partnership were executed; the various enterprises of the parties were carried on informally. Oswald and Dawn had been engaged in various businesses, including a cleaning establishment, a coal company and a motel. They also maintained bank accounts under the name of Dawn-Oswald Real Estate Company and the controversy generally revolves around deposits and withdrawals from this account.

Oswald died on July 30, 1952. Following this the various accounts of the partnership were audited. Plaintiff and defendant agreed to have Richard Azar, a Certified Public Accountant, who had been auditor for Dawn and the partnership, audit the partnership books, records and accounts, which records and accounts consisted merely of deposit slips, checks and bank statements. There was also a private memorandum which was kept by the defendant Clyde Dawn and his wife, Josephine Dawn. The accountant recognized this as a memorandum and not as a book of original entry and the court excluded it as evidence. Nevertheless the accountant made use of it in the course of his audit and the judgment of the court appears to have been based upon certain controversial entries contained in this memorandum book.

Prior to the trial, the court considered it necessary to refine the fact material and to that end appointed another accountant, Robert J. Miles

'* * * to act as Referee to take and state an account of all dealings and transactions between George Oswald, deceased, and the defendant, Clyde S. Dawn, a co-partnership doing business under the firm name and style of Dawn-Oswald Real Estate Company, during the lifetime of the said George Oswald.

'For the better taking and stating of such account which the parties are to produce before the said Referee under oath, all books, deeds, papers and writings in their custody or under their control relating to said partnership; and are to be examined upon interrogatories or otherwise as the said Referee shall direct, who, in taking said account, is to make all just allowances to the parties as between said partners; and what, if any, balance of the said account shall appear to be due from either party to the other, is to be paid as the said Referee shall find and direct; and said Referee is at liberty to state and report any special circumstances, as well as his reasons for allowing or disallowing any allowances which may be claimed.'

Contrary to the court's order, the Referee failed to hold hearings, did not swear the witnesses nor make a record. Instead he made an investigation in the course of which he interviewed the interested parties and examined the Azar audit. His final report was in substantial agreement with this audit, being based in part on the defendant Dawn's memorandum book, his deposition and statements.

The evidence essential to this determination appears in the testimony of the accountant, Richard Azar, and in his audit which was for the period commencing January 1, 1948 and ending July 31, 1952. This audit was based upon deposit slips, checks and bank statements, plus the memorandum book which was shown to have been kept by the defendant Clyde Dawn and his wife Josephine Dawn. Azar concluded that there was due and owing from Dawn to the estate of Oswald the sum of $552.45.

It was shown that Dawn had withdrawn the sum of $15,337.50 from the partnership accounts and that $10,000 of this amount had been paid to his business, the Dawn Motor Company. The balance had been used by Dawn to satisfy his obligation. Azar charged Dawn's account with this entire amount.

Azar also determined that Dawn's withdrawals from the partnership bank accounts had exceeded the withdrawals of Oswald by $4,125.67. This sum was also charged against Dawn. Moreover, an audit of the accounts of the Rugby Coal Company, one of the partnership enterprises, also disclosed excess withdrawals by Dawn amounting to $4,617.32. This sum was also charged to his account. It further appeared from this audit that during the period of the partnership Dawn had withdrawn some $11,388.99 from the partnership accounts and used the money to contruct a building in Raton, New Mexico. This is referred to as the Triangle Building. The rentals from this were deposited in the partnership account. Dawn finally sold this building for the sum of $15,000. He treated the sum so invested as a loan to him and reimbursed the partnership account by means of the rentals and other sources. This property was treated by the auditor as the property of Dawn and this conclusion is vigorously controverted by the plaintiff who claims that use of the partnership funds to acquire this building and perfect the title resulted as a matter of law in its being partnership property. In support of the loan theory of Dawn, there is testimony that a Deed of Trust was executed to the partnership. The indications are that this was not recorded, and it was not introduced into evidence. Dawn also claims ownership of the land long prior to the transaction in question.

In addition to the items mentioned, there were deposits to the partnership accounts which the auditor could not identify. These totalled $22,985.31. In view of the inability to discover the source of these deposits, they are not credited to Dawn's personal account.

The various charges to Dawn's personal account were offset by Dawn's claim on behalf of himself and his wife in an amount exceeding $21,000 on account of salaries to them for services rendered by them to the Dawn-Oswald Real Estate Company. As a result of crediting Dawn with these amounts for salary and expenses, the balance in favor of the plaintiff's estate was found to be $552.45.

At the conclusion of the plaintiff's evidence, defendants' motion to dismiss was granted as to each of plaintiff's claims except the fifth in the amount of $552.45. This latter sum has been revealed by the audit to be due and owing, giving full credit to Dawn for the amounts claimed by him for salary and expenses. The court noted that the only information before it was the Azar audit...

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11 cases
  • In re W.A.R. LLP
    • United States
    • United States Bankruptcy Courts – District of Columbia Circuit
    • May 3, 2012
    ...9011 show cause order. In re Don/Mark P'ship is a very short decision that expressly acknowledges and cites as support Oswald v. Dawn, 354 P.2d 505, 510 (Colo. 1960), a case that stands for the proposition that the presumption of partnership ownership arising under C.R.S. § 7-60-108(2) is r......
  • DeLeon v. Tompkins
    • United States
    • Colorado Court of Appeals
    • December 1, 1977
    ...of the legislature to make this testimony admissible, it would have been included among the other exceptions. See Oswald v. Dawn, 143 Colo. 487, 354 P.2d 505 (1960). As stated in Estate of Freeman v. Young, 172 Colo. 322, 473 P.2d 704 " 'The legislature has the right to control the general ......
  • Diversified Capital Corp. v. City of North Las Vegas
    • United States
    • Nevada Supreme Court
    • January 12, 1979
    ...See Foster v. Bank of America, 77 Nev. 365, 365 P.2d 313 (1961). This he did with commendable skill and candor. Cf. Oswald v. Dawn, 143 Colo. 487, 354 P.2d 505 (1960). The master's findings of fact were not We affirm. MOWBRAY, C. J., and THOMPSON, GUNDERSON and BATJER, JJ., concur. 1 The co......
  • Glover v. Innis
    • United States
    • Colorado Court of Appeals
    • March 3, 2011
    ...recognized the standing of personal representatives who sued or were sued in their representative capacity. See Oswald v. Dawn, 143 Colo. 487, 494, 354 P.2d 505, 509 (1960) (former statute barred testimony by former partner of decedent in suit brought by administratrix to recover diverted p......
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