Rohda v. Boen
| Decision Date | 18 November 1954 |
| Docket Number | No. 32874,32874 |
| Citation | 45 Wn.2d 553,276 P.2d 586 |
| Court | Washington Supreme Court |
| Parties | Charles M. ROHDA and Rosalie Rohda, his wife, Appellants, v. Olav BOEN and Jane Doe Boen, his wife; P. D. Koon and Jane Doe Koon, his wife; Olav Boen Construction Co.; Sealand Construction, Inc.; and Boen-Sealand Constructors, Respondents. |
Dodd & Russell, Seattle, for appellants.
Lycette, Diamond & Sylvester, Lyle L. Iversen, Seattle, for respondents.
This is an action for a division of profits or, in the alternative, for unpaid salary. The controversy arises out of the operations of Boen-Sealand Constructors, a joint venture comparising a partnership (Olav Boen Construction Company) and a corporation (Sealand Construction, Inc.). The partnership portion of the joint venture was composed of three men, each having an equal interest in the partnership. The corporation had three stockholders, each owning one third of the stock, and each being a director and an officer of the corporation. This suit was instituted by appellant Charles M. Rohda, one of the stockholders and president of the corporation, to recover twenty-five thousand dollars which he alleges was either (1) his share of the profits of the joint venture for the year 1952, or (2) his salary for that year.
Appellants' claim to a share of the profits of Boen-Sealand Constructors rests on the premise that the joint venture was in fact composed of the six individuals rather than the two legal entities, the partnership, and the corporation.
Prior to the formation of the joint venture in the spring of 1950, the partnership and the corporation had each been working on government contracts in Alaska. Because it was deemed to the mutual advantage of each firm, they formed the joint venture to pool their resources for the purpose of gaining additional bonding capacity and borrowing ability to facilitate future bidding on larger government contracts. The joint venture contract was entered into on Jone 26, 1950.
At this time, the three stockholders executed an indemnity agreement to the members of the partnership. To enable the joint venture to obtain credit and bonding, all six individuals subsequently executed an agreement of guaranty to a bank and an agreement of indemnity to a bonding company.
In that part of the joint venture contract which states its purpose is the following provision:
'It Is Hereby Stipulated that:
'(a) * * *
'(b) * * *
'(c) No officers, employee or any partner of either of the parties shall be directly compensated from the funds of this joint venture except they shall be compensated for such time as such officers or partners or employees are directly connected with the actual performance of the work to be done * * * or actually engaged specifically for the benefit thereof; * * *' (Emphasis supplied.)
By the end of 1950, it had become apparent that the venture would be a profitable one. Realizing that their operations would reflect a large profit, consideration was given to ways and means of charging a larger proportion of the earnings to cost of operations for the purpose of reducing tax liability and obtaining a more favorable basis for contract re-negotiation. Among other measures that were taken, it was decided that the joint venture would pay twenty-five thousand dollars per year to each of the 'partners' as 'salaries'. The minutes of the meeting of the joint venture on December 15, 1950, read:
The sum of twenty-five thousand dollars was paid to each of the six indiciduals in 1951.
On September 23, 1952, appellant was removed as president of the corporation. He thereafter secured releases of any further liability on his indemnity and guaranty agreements. On October 7, 1952, the joint venture took formal action to terminate appellant's employment with the joint venture. Thereafter, appellant was notified of this action. He performed no services for the joint venture after October 7, 1952. The joint venture subsequently tendered to appellant a check in the amount of $15,342.55 as his salary, prorated to that date. This check represented a gross salary of $19,245.69, less old-age benefit and Federal income tax. The check was returned by appellant and, subsequently, was paid into court by respondents.
At the trial of this action, respondents' challenge to the sufficiency of the evidence, at the conclusion of appellants' case, was sustained. The court made findings of fact and conclusions of law to the effect: that the appellant was not a party to the joint venture and was not entitled to any of the profits of the joint venture; that the provision for payment of twenty-five thousand dollars per year was a provision for payment of salary; that appellant's contract of hire was terminable at the will of either party; that appellant was discharged on October 7, 1952; that appellant should recover only his prorated salary to that date, which was the amount of the check tendered by respondents and refused by appellant.
Appellants' assignments of error raise two questions: (1) Was the challenge to the sufficiency of the evidence properly sustained? (2) Does the evidence clearly preponderate against the significant findings of fact of the trial court, which are challenged by appellants?
When, in a trial to a jury, the defendant interposes a challenge to the sufficiency of the evidence at the conclusion of plaintiff's case, the question to be determined by the trial court is whether the plaintiff has proved sufficient facts to entitle him to have the jury decide the issues of the case. Plaintiff's evidence and inferences therefrom must be construed most favorably to him. However, in a trial without a jury, the situation is somewhat different, and the trial judge may weigh the plaintiff's evidence in disposing of a motion challenging the sufficiency of the evidence. Graff v. Geisel, 39 Wash.2d 131, 234 P.2d 884; Fisher v. Hagstrom, 35 Wash.2d 632, 214 P.2d 654; Lambuth v. Stetson & Post Mill Co., 14 Wash. 187, 44 P. 148.
The trial judge obviously did weigh the evidence here, as indicated by the entry of findings of fact. These findings are adverse to the appellants on all of...
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