Silvola v. Rowlett

• Decision Date: 21 June 1954
• Docket Number: No. 17222,17222
• Parties: SILVOLA v. ROWLETT.
• Court: Colorado Supreme Court

Page 287

272 P.2d 287

129 Colo. 522

SILVOLA v. ROWLETT.

No. 17222.

Supreme Court of Colorado, En Banc.

June 21, 1954.

Rehearing Denied July 19, 1954.

Gerald W. Bennett, Colorado Springs, for plaintiff in error.

Snyder & Tullis, Colorado Springs, for defendant in error.

ALTER, Justice.

R. G. Silvola instituted an action against E. F. Rowlett to recover judgment in the sum of $1,686 for accountancy services rendered to the McRea Motor Co., of which, it is claimed, Rowlett was a general, rather than a limited, partner. Trial was had to the court, at the conclusion of which, judgment was entered in favor of defendant and plaintiff brings the cause here by writ of error, seeking a reversal. Herein we will designate R. G. Silvola as plaintiff and refer to E. F. Rowlett by name or as defendant.

In the complaint it is alleged that E. F. Rowlett and L. D. McRea were copartners in the automobile sales and repair business in El Paso county, carrying on their operations under the partnership name and style of the McRea Motor Co., and that the partnership now is defunct and has no assets; further, that between February 1, 1949 and April 1, 1950, plaintiff rendered accountancy services to said partnership, the reasonable value of which was $1,686, no part of which has been paid, and plaintiff seeks judgment for this amount. It developed at the trial that L. D. McRea was discharged in bankruptcy on or about May 8, 1951, and the action as to him was dismissed.

Defendant's first defense may be termed a general denial; in his second defense it is alleged that on or about September 28, 1948, McRea and Rowlett signed and verified a certificate of of limited partnership, which said certificate was belatedly filed in the office of the county clerk on April 18, 1949; that the limited partnership was formed and conducted in substantial compliance with the provisions of section 45, et seq., chapter 123, '35 C.S.A., and by reason thereof defendant is not liable.

The record discloses little conflict in the evidence which may be summarized as follows: McRea, prior to September 28, 1948 had been engaged in the sale of new and second hand automobiles. He solicited Rowlett to move his auto repair equipment from his established place of business to McRea's place of business and conduct therein the auto repair business under some arrangement not specifically disclosed by the record. Subsequently, the automobile manufacturer, for which McRea held a dealership, insisted that McRea have, in conjunction with his new and second hand automobile business automobile repair facilities and this resulted in the formation of a partnership with Rowlett. As a result, the certificate of limited partnership heretofore mentioned was entered into and, in accordance with the terms thereof, Rowlett contributed personal property of the reasonable value of $9,000 and paid into the limited partnership the sum of $1,200, for which he was to receive nine/twenty-fourths of the profits of the partnership. McRea was a general partner therein, and Rowlett the sole limited partner. Plaintiff had previously been in McRea's employment, and at the time of the formation of the limited partnership was employed by McRea to keep the accounts and records thereof. Having at that time knowledge of the certificate of limited partnership, he opened the books and records of the partnership in accordance with the terms and conditions accompanying the formation thereof.

Sometime shortly after the partnership was organized, McRea and Rowlett each drew from the funds thereof, the sum of $1,300, which plaintiff testified was charged on the partnership records and anticipated profits. For a time Rowlett, being experienced in the auto repair business, acted as foreman in the partnership repair shop. In all matters, he acted under the direction and control of McRea, who approved all extensions of credit excepting to those persons personally known to Rowlett and to whom he extended credit, with an agreement with MrRea that if the account was not paid, he, himself, would reimburse that partnership for the amount thereof.

In the late spring or early summer of 1949, Rowlett discontinued his services as foreman of the auto repair shop to give attention to some other business in which he was engaged, and another person was employed by McRea as foreman of the shop.

Plaintiff claims payment for his services from February 1, 1949 to April 1, 1950, all amounts due for services theretofore rendered having been fully paid by check on the account of the McRea Motor Co., drawn by McRea. The partnership account in the bank was under the sole and exclusive control of McRea. He alone made all deposits, secured all loans, executed all chattel mortgages in connection with the McRea Motor Co. business, and he was the only person authorized to draw checks on the company account. The bank in which the partnership business was carried on was not aware of any partnership or other arrangement between McRea and Rowlett until the spring of 1949, when it learned that Rowlett had begun some action to prevent the sale of the partnership business.

Plaintiff rendered monthly statements to the McRea, Motor Co., delivering the same to McRea, and although McRea was discharged in bankruptcy on or about May 8, 1951, it was not until July 18, 1952 that any indebtedness of the McRea Motor Co. to plaintiff was called to...