Sta-Rite Industries, Inc. v. Johnson
| Decision Date | 29 February 1972 |
| Docket Number | No. 301-70.,301-70. |
| Parties | STA-RITE INDUSTRIES, INC., a corporation, Plaintiff-Appellant, v. Homer JOHNSON, Defendant-Appellee. |
| Court | U.S. Court of Appeals — Tenth Circuit |
Norman E. Reynolds, Oklahoma City, Okl., for plaintiff-appellant.
Denver W. Meacham, Clinton, Okl., for defendant-appellee.
Before HILL, HOLLOWAY and DOYLE, Circuit Judges.
Appellant Sta-Rite Industries, Inc. (Sta-Rite) sued on an account of $18,125.61 for merchandise sold to Central Pump and Supply Company (Central) seeking recovery from appellee Johnson and another defendant, Monte Bunch, on the theory they were both liable for Central's obligation as partners. Judgment was entered against Bunch, who was in default, and he has not appealed. However, judgment was entered in favor of Johnson and against the Sta-Rite company which appeals from that denial of recovery.
Sta-Rite claims that Johnson is liable for Central's obligation as a partner, arguing that (1) as a matter of law under the Uniform Partnership Act as adopted in Oklahoma, 54 O.S.1961 § 201, et seq., Johnson was an actual partner; and (2) in any event, Johnson was estopped to deny the existence of the partnership and is liable under the estoppel provisions of the Act, 54 O.S.1961, § 216. The case was tried to the Court whose findings and conclusions were stated in its Memorandum Opinion, 335 F.Supp. 1311.
Appellant's contentions based on the proof favorable to Sta-Rite were essentially considered in detail and rejected in the Memorandum Opinion which states the facts fully.1 We accept the District Court's determinations and will treat the issues and facts only briefly to deal with the arguments of Sta-Rite as addressed to us.
In essence the District Court found that Johnson and Bunch never became partners or intended to be partners; that the evidence failed to show their participation in profits and losses; that Johnson was interested in getting into the business only as a corporation, and that he advanced money and assisted in the business on this basis; and that Sta-Rite had failed to prove an actual partnership. It was further found that while the question was close and difficult, Sta-Rite had failed to carry its burden of establishing partnership liability of Johnson by estoppel. We are satisfied that the record amply supports the findings and conclusions and affirm.
In reviewing the findings Sta-Rite argues that the clearly erroneous rule under Rule 52(a) F.R.Civ.P. should be applied less stringently since the District Court viewed the case as close and because much of the proof was by documentary evidence and depositions, relying on Mid-Continent Casualty Co. v. Everett, 340 F.2d 65 (10th Cir.), and similar cases. However, in determining the factual issues the District Court relied on the testimony of Johnson, Bunch and an attorney handling incorporation papers later for them, and evaluated also the testimony of several witnesses who appeared in person for Sta-Rite, along with the depositions and exhibits. Therefore, we cannot agree that there is any substantial relaxation of the provisions of Rule 52(a) which enjoin us to give due regard to the opportunity of the trial court to judge the credibility of the witnesses. See United States v. United States Gypsum Co., 333 U.S. 364, 394-395, 68 S.Ct. 525, 92 L.Ed. 746. Moreover, on the evaluation of the whole record we are convinced that the findings are amply supported. Even where the record is wholly documentary our scope of review is enlarged only to the extent that no regard need be given to the opportunity of the trial court to observe witnesses; in such cases we nevertheless do not disturb the findings unless we have a definite and firm conviction that a mistake has been made, Mid-Continent Casualty Co. v. Everett, supra, 340 F.2d at 70, in accord with the general rule respecting the trial court's findings. See Zenith Radio Corp. v. Hazeltine Research, Inc., 395 U.S. 100, 123, 89 S.Ct. 1562, 23 L.Ed.2d 129; and United States v. United States Gypsum Co., supra, 333 U.S. at 394-395, 68 S.Ct. 525, 92 L.Ed. 746.
As to partnership as a matter of law, Sta-Rite urges that the District Court erred in strictly applying Dowdy v. Clausewitz, 361 P.2d 288 (Okl.), which for formation of a partnership requires intent, participation in profits and losses, and such a community of interest, as far as third persons are concerned, as enables each party to make contracts, manage the business and dispose of the property. Sta-Rite instead urges that a less stringent...
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