Reece v. Rhoades

• Decision Date: 11 June 1917
• Docket Number: 870
• Parties: REECE v. RHOADES
• Court: Wyoming Supreme Court

165 P. 449

25 Wyo. 91

REECE v. RHOADES

No. 870

Supreme Court of Wyoming

June 11, 1917

ERROR to District Court, Park County; CARROLL H. PARMELEE, Judge.

Suit by C. J. Rhoades and wife against Arthur Reece and wife, for equitable relief, accounting as to partnership property, the appointment of a receiver and the recovery of the amount found due plaintiffs. From a judgment for plaintiffs, the defendants bring error.

Affirmed.

E. E Enterline, W. L. Walls and W. E. Mullen, for plaintiffs in error.

Plaintiff sought to recover on the alleged copartnership agreement. The instrument as appears from its face is not a partnership agreement and is insufficient as a basis of an action for dissolution of partnership, accounting, etc. There was a finding that the agreement did not create a partnership and that it had been abandoned. Voluntary consent of both parties is necessary to create a partnership. (Burnett v Snyder, 76 N.Y. 344; Holm v. Hammond, L. R. 7 Exch. 218; Sargeant v. Collins, 3 Nev. 260; Gibbs' Estate, 157 P. 59, 22 L. R. A. 276; Dunham v Loverock, 158 Pa. 197, 38 Am. St. Rep. 838; Flathead Bank v. Ingham, 51 Mont. 438, 153 P. 1005.) It was alleged in the petition that the agreement created a copartnership. (1 Elliott on Contracts, Secs. 476 and 480.) The partnership relation cannot be formed by operation of law. (Central City Savings Bank v. Walker, 66 N.Y. 424; Heye v. Tilford, 2 A.D. 346, 37 N.Y.S. 751; Butler Savings Bank v. Osborne, 159 Pa. 10, 28 A. 163.) Courts cannot create partnership contracts without the consent of the parties. (Fairly v. Nash, 70 Miss. 193, 12 So. 149.) Mere joint ownership in property does not create a partnership. (Quackenbush v. Sawyer, 54 Cal. 439; Edson v. Gates, 44 Mich. 253; 1 Lindley on Partnerships, 2nd Ed., p. 123.) If something remains to be done before the right of profit sharing accrues, the parties will not be partners until the happening of the event. (1 Lindley on Partnerships, 2nd Ed., p. 65.) Practical construction by parties evidenced by conduct indicates a proper construction of the agreement. (22 A. & E. Ency. of Law, 113.) There were no legal grounds for a receivership. (Wyo. Comp. Stats. 1910, Sec. 4914.) Practical construction by the parties will be accepted as to their intention. (Dayton v. Hogglund, 39 Ohio St. 680; Mereau v. U.S. 107 U.S. 437; Windmiller v. People, 78 Ill.App. 273; City of Vincennes v. Citizens' Gas Light & Coke Co., 132 Ind. 114, 16 L. R. A. 485; Pratt v. Prouty, 104 Ia. 419, 73 N.W. 1035; Ellis v. Harrison, 104 Mo. 270, 16 S.W. 198; Williams v. Auten, 68 Neb. 26, 93 N.W. 943; American Soda Fountain Co. v. Bakery, 14 Okla. 258, 78 P. 115.) Subsequent acts and declarations of the parties showing their construction of the agreement may be shown to explain the meaning of the instrument. (Lewiston Co. v. Grand Trunk Co., 97 Me. 261, 54 A. 750; Laclede Construction Co. v. T. J. Moss Tie Co., 185 Mo. 25, 84 S.W. 76; Kopper v. Fulton, 71 Ver. 211, 44 A. 92.) And are entitled to great, if not controlling influence. (Switzer v. Pinconning Mfg. Co., 59 Mich. 488, 26 N.W. 762; Board of Commissioners v. Gibson, 158 Ind. 471, 63 N.W. 982.) The findings and conclusions are not responsive to the issues and the judgment is not warranted by the pleadings. (8 Enc. Pl. & Pr. 944-945; 1 Black on Judgments, Sec. 183; Insurance Co. v. Trout, 83 Va. 397; Bank v. Ins. Co., 85 Tenn. 76; Reynolds v. Stockton, 43 N.J. Eq. 211; Schmidt v. Mining Co., 28 Ore. 9.) Failure to make sufficient findings upon a request therefor is reversible error. (School Dist. v. Western Tube Co., 13 Wyo. 304; Shattuck v. Costello (Ariz.), 68 P. 529; Kehr v. Hall (Ind.), 20 N.E. 279; Ex parte Walls, 73 Ind. 95; Mitchell v. Brawley, 140 Ind. 216; Hamill v. Talbott, 72 Mo.App. 22; Ins. Co. v. Tribble, 86 Mo.App. 546; Evans v. Kister, 92 F. 828; Land Co. v. Lombard, 132 F. 721; Mitchell v. Jensen, 29 Utah 346, 81 P. 165; Wood v. Broderson, 12 Ida. 190, 85 P. 490; Daggs v. Hoskins, 5 Ariz. 236, 52 P. 357; Carpenter v. Yeadon Borough, 208 Pa. 396, 57 A. 837; McHale v. Wellman, 101 Tenn. 150, 46 S.W. 448; Farmer v. Power Co., 117 Wis. 76, 93 N.W. 830.) Findings of fact merely announcing legal conclusions deducible from facts not stated are not sufficient to support a judgment; all the facts essential to a recovery must be stated in special findings. When findings are silent respecting a material fact, it is taken as formed against the party upon whom the burden of proving it rested. (Mitchell v. Brawley, 39 N.E. 497; Bruner v. Brown, 38 N.E. 318; Leach v. Church, 10 O. St. 148; Fiske v. Casey (Cal.), 36 P. 668; Foster v. Devinney, 28 Neb. 416; 8 Ency. Pl. & Pr. 943; Siebel v. Bath, 5 Wyo. 409; Bank v. Farwell, 56 F. 570.) Special findings must cover the issues made by the pleadings. (Lumber Co. v. Davis, 14 Wyo. 478.) Where special findings are inconsistent, the judgment must be reversed. (McBride v. U. P. Ry. Co., 3 Wyo. 253; Koshland v. Weber, 23 Wyo. 241, 148 P. 369.) There was no finding as to insolvency of defendants and it must be presumed that defendants were and are solvent. The conclusions of law are not supported by the findings of fact. The judgment is unsupported by the findings of fact and conclusions of law. The findings of fact, conclusions of law and judgment are irreconcilable to the issues made by the pleadings.

W. L. Simpson, J. H. Van Horn and Lonabaugh & Wenzell, for defendants in error.

The findings of fact cover all the essential allegations of the petition. The judgment follows the findings of fact. There is no error warranting a reversal of the case. (Jack v. Hudnall, 25 O. S. 255; Hihn v. City of Santa Cruz, 150 P. 62; Shinkle, et al., v. First National Bank, 22 O. St. 523.) True, there must be a lawful and valid agreement to enter into partnership, and the contract must be executed. (Holgate v. Downer, 8 Wyo. 334.) In the present case there was clearly an agreement to execute a partnership. The agreement to form a partnership was consummated by the acts of the parties insofar as the cattle were concerned. It is not necessary that the partnership agreement provide that the profits or losses shall be shared equally. (Munic. Paving Co. v. Herring, 150 P. 1067.) The intermingling of findings of fact with conclusions of law is not reversible error. (Griffin v. Pacific Elec. Ry., 82 P. 1084; O'Reilley v. Campbell, 116 U.S. 420, 6 S.Ct. 422; 29 Law. Ed. 699; Baker v. DeArmigo, 128 P. 73; Frazier v. State Savings Bank, 137 P. 592.) Immaterial findings or conclusions of law are not grounds for reversal. (Gregory v. Morris, 1 Wyo. 213; Jenkins v. City of Cheyenne, 1 Wyo. 287; Fein v. Davis, 2 Wyo. 118.) A finding of insolvency is not required in order to warrant a receivership; there was sufficient ground for the appointment of a receiver. Failure of the plaintiff to call the attention of the court to an omission and to request further finding, relieves the court of criticism therefor. This is a queer case, but the trial court rendered substantial justice to all parties in its disposition of it. The livestock transaction is separable from other features of the agreement. (Kennedy v. Lonabaugh, 19 Wyo. ___; Foyer v. Harken, 121 N.W. 526.) The judgment of the trial court should be affirmed.

POTTER, CHIEF JUSTICE. BEARD, J., concurs. SCOTT, J., did not sit.

OPINION

POTTER, CHIEF JUSTICE.

This action was brought in the District Court by the defendants in error, C. J. Rhoades and B. A. Rhoades, seeking equitable relief, including an accounting, the appointment of a receiver, and a judgment for the amount found to be due the plaintiffs to be paid out of certain property referred to in the petition as partnership property. There was a general denial of the material averments of the petition, and a trial by the court resulted in granting some of the relief prayed for. The case is here on error, but without the evidence, the errors assigned relating to the sufficiency of the petition and findings of fact to sustain the conclusions of law and judgment or authorize the relief demanded or granted.

The petition alleges and the court found that on the date thereof the plaintiffs and defendants entered into the following written agreement:

"LIVINGSTON, MONT., April 25, 1912.

"This an article of agreement for and between Arthur Reece and Alice Reece, his wife, parties of the first part, and C. J. Rhoades and B. A. Rhoades, his wife, parties of the second part, wherein the parties of the first part are owners or controllers of a body of land held under different grants, namely, homestead desert claims and leases, etc., controlling mountain range and water filings and rights (as per description attached), do hereby bargain and agree to become and entertain parties of the second part as full and one-half interest co-partners in all lands, grants, leases and holdings, real estate and personal property for a consideration of six thousand dollars ($ 6,000.00) to be paid by parties of the second part, in installments best suited to all parties on or before October 1, 1915. One thousand dollars ($ 1,000.00) of this amount to be paid on or before June 1, 1912, of which shall be used to pay all outstanding acts and debts of first parties. The remaining $ 5,000.00 to be invested on the ranch or in live stock and improvements and shall become a part of this said whole property as controlled by this agreement under the same agreement (co-partnership) as hereinafore mentioned. Parties of the second part further agree to share equally in expenses or all moneys actually expended for ranch improvements and stock purchased."

After setting forth this agreement, the petition refers to it as a partnership agreement and alleges due performance by the plaintiffs of everything required of them thereby, that they had...