Simandl v. Schimandle

• Decision Date: 25 March 1982
• Parties: , 3 O.B.R. 414 SIMANDL et al., Appellees, v. SCHIMANDLE, Admr., Appellant.
• Court: Ohio Court of Appeals

Page 357

3 Ohio App.3d 357

445 N.E.2d 734, 3 O.B.R. 414

SIMANDL et al., Appellees, v. SCHIMANDLE, Admr., Appellant.

Court of Appeals of Ohio, Eighth District, Cuyahoga County.

March 25, 1982.

Syllabus by the Court

1. A court can properly find a partnership exists from evidence that there has been a sharing of net profits from a continuing business operated by two or more persons, where each is capable of binding the business entity.

2. The rights of a deceased partner in specific partnership property vest in the surviving partners subject to their settlement with the estate of the deceased partner, and the legal representative of the deceased partner's estate is entitled to an accounting for that partner's interest.

3. The Ohio Dead Man's Statute was superseded by Evid.R. 601 and 804(B)(5) which apply to all actions brought after July 1, 1980. Those rules also replace the Dead Man's Statute for all actions pending on that date, unless the party relying on the Dead Man's Statute to exclude evidence can affirmatively demonstrate that the replacement of the former competence restriction with the newer rules would not be feasible or would work injustice in the specific circumstances of that case.

John T. Price, Cleveland, for appellees.

Thomas C. Vanik, Cleveland, for appellant.

MARKUS, Judge.

Defendant appeals from a judgment granting plaintiff an accounting for one-half of the real property and business of an informal partnership conducted by plaintiff's decedent and defendant's decedent, ¹ and granting judgment for an unpaid debt owed plaintiff herself by defendant's decedent. Defense counsel argues that the trial court's findings of a partnership and an unpaid debt were against the manifest weight of the evidence, that plaintiff cannot recover her decedent's share in any such partnership, and that plaintiff's testimony about prior transactions should have been barred by the Dead Man's Statute. ² We find no merit in these contentions.

The evidence established that the Simandl family participated in the operation of a gas station and combination delicatessen and magazine stand. The family members involved were George Simandl (plaintiff's decedent), Albina Simandl (George's wife, executrix of his estate, and plaintiff here), Clarence Simandl (George's brother and defendant's decedent), and Lillian Simandl (George's sister). The business began in 1942 with the operation by George and Clarence of the gas station, and it subsequently grew to include the delicatessen and rental of adjacent business properties.

The land on which the businesses were conducted was originally obtained by Clarence and George in 1938 by a warranty deed for 6.638 acres, the majority of which remained undeveloped until 1972. In 1942, a nearby but non-contiguous parcel was acquired in the names of George, Albina, and Clarence; it served as George and Albina's residence. The purchase of that residence property was financed with a mortgage covering both properties.

In 1946, both parcels were transferred by quitclaim deed from Clarence and his then wife to George. In 1947, the 6.638 acre business property was transferred by warranty deed from George and Albina back to Clarence. Albina testified that the intra-family transfers were made to aid the credit of appropriate family members when they were making other investments. Finally, in 1972, approximately 5.5 acres of the 6.638 acre business property was sold to non-family interests by a warranty deed from Clarence. The Simandl lawyer for that transaction testified that the proceeds from that sale were divided equally between George and Clarence. The Simandl businesses continued on the remaining business acreage after George's death in 1978 until Clarence's death in 1979, with Albina's participation in her deceased husband's place after he died.

Evidence showed that all receipts from the Simandl businesses were commingled, except rentals from the adjacent business properties which went directly to George and Albina. George and Albina maintained a checking account for the joint family business purposes. George and Clarence each made business decisions.

In support of her claim that Clarence owed her money personally, Albina testified she issued a check to an automobile dealer at Clarence's request in December 1978, so Clarence could purchase a new automobile. She further testified that Clarence failed to repay that $5,413.76 as he had promised to do.

After Clarence's death, Albina filed a claim against Clarence's estate on her own behalf and in her capacity as executrix of George's estate for one-half interest in the remaining acreage, the gas station, and other businesses operated there. As administrator of Clarence's estate, defendant denied that claim, as well as Albina's personal claim for the alleged outstanding debt of $5,413.76. Albina then initiated this action.

The trial court found that George and Clarence Simandl were partners and ordered an accounting. The court further found for plaintiff on her claim for the $5,413.76 loan.

I

Defendant's counsel first contends the weight of the evidence does not support the trial court's findings that Clarence and George Simandl were partners, that the real estate where the businesses were operated was held by Clarence in trust for George and himself, and that Clarence owed Albina $5,413.76.

R.C. 1775.05(A) defines a partnership:

"A partnership is an association of two or more persons to carry on as co-owners a business for profit."

R.C. 1775.06 provides guidelines for determining the existence of a partnership. ³ A court can properly find a partnership exists from evidence that there has been a sharing of net profits from a continuing business operated by two or more persons, where each is capable of binding the business entity.

Plaintiff Albina testified that George and Clarence operated the gas station and other businesses together, and that they shared in the receipts of the businesses and the profit from the sale of part of the realty in 1972. Other witnesses testified that building permits were issued for construction on the property in the names of both George and Clarence as owners of the property, that both George and Clarence signed contracts for the purchase of merchandise sold at the gas station for a period of ten to twelve years, that the two brothers ran the business together and made business decisions only after consulting each other, and that it appeared to several witnesses who had done business with the brothers that they were partners.

The attorney who represented the brothers in 1972 for the sale of part of the business property testified both George and Clarence were surprised to find the title was in Clarence's name only, and the proceeds from the sale of the property were divided equally between George and Clarence. Finally, a barber who operated his shop next to the gas station on the Simandl property testified Clarence had stated the two brothers ran the business together.

Plaintiff Albina's testimony concerning division of receipts from the various businesses was somewhat confusing, and the exact share received by Clarence and George is unclear. However, there was abundant testimony that George and Clarence both shared in the net proceeds of the businesses, both acted as co-owners, each made business decisions, and each was able to bind the other. Therefore, there was abundant unrebutted evidence to support the court's finding that an equal partnership existed between the two brothers. R.C. 1775.05; R.C. 1775.06; Southern Ohio Pub. Serv. v. Pub. Util. Comm. (1926), 115 Ohio St. 405, 154 N.E. 365; Garrison v. Place (1952), 92 Ohio App. 239, 109 N.E.2d 569 .

Further, evidence from plaintiff Albina and the attorney who represented the brothers in the 1972 realty sale supported the court's finding that Clarence held the real property in trust for George and himself. Plaintiff testified the property was deeded to Clarence from George and Albina in 1947 to assist Clarence in raising investment capital. The evidence as a whole showed that the property was used as partnership property. When they sold part of the business property they were surprised to find that it was titled solely in Clarence's name, and they divided the resulting profit equally.

Defendant's counsel also challenges the finding that Clarence owed plaintiff Albina $5,413.76. Plaintiff testified she wrote a check for $5,413.76 at Clarence's request for the purchase by Clarence of an automobile. She further testified Clarence orally promised to repay her the amount of the check, but failed to do so. No rebuttal evidence was offered by defendant. As the initial trier of fact the trial court was not required to accept the plaintiff's testimony, but was authorized to do so. State v. DeHass (1967), 10 Ohio St.2d 230, 227 N.E.2d 212 . Since that testimony was not so inconsistent with the remainder of the evidence, we cannot say that the finding was against the manifest weight of the evidence or that the trial court erred in that finding.

II

Defense counsel next contends that plaintiff is not entitled to an accounting for any partnership interest in the partnership property, as George's spouse and heir. He contends that all partnership property vested in Clarence upon George's death, relying on R.C. 1775.24:

"(A) A partner is co-owner with his partners of specific partnership property holding as a tenant in partnership.

"(B) The incidents of this tenancy are such that:

"* * *

"(4) On the death of a partner, his right in specific partnership property vests in the surviving partners, unless he was the last surviving partner, in which case his right in the property vests in his legal representative. The surviving partners have, or the legal representative of the last surviving partner has, no right to possess the partnership property for any but a partnership purpose. This division is subject to the procedures set forth in sections...