Steinmetz v. Grennon

• Decision Date: 13 February 1923
• Citation: 212 P. 532,106 Or. 625
• Parties: STEINMETZ v. GRENNON.
• Court: Oregon Supreme Court

212 P. 532

106 Or. 625

STEINMETZ v. GRENNON.

Supreme Court of Oregon

February 13, 1923

Department 1.

Appeal from Circuit Court, Klamath County; D. V. Kuykendall, Judge.

Action by Wm. J. Steinmetz against Fred U. Grennon, upon an account stated. Judgment for plaintiff, and defendant appeals. Reversed.

This is an action brought by William J. Steinmetz against Fred U Grennon upon an alleged account stated. The verdict of the jury was for the plaintiff. The defendant appealed from the consequent judgment.

The complaint alleges:

That on January 20, 1919, the plaintiff and defendant entered into a copartnership for the purpose of engaging in the general retail butcher business; that pursuant to such partnership agreement they conducted a general retail butcher shop in Klamath Falls "up to and including about July 1, 1919 at which time said defendant sold and disposed of said business," and received therefor approximately $22,000 that after paying all the debts of the firm the plaintiff and defendant struck a balance of the net profits, and found settled, and determined the amount to be $7,905.80; that "at said time the plaintiff and defendant then and there settled the amount due and owing the plaintiff from the defendant, and it was ascertained by and between the parties plaintiff and defendant, that there was a balance due and owing the plaintiff from the defendant of the sum of $3,952.90, which said sum of money the defendant retains and refuses to pay to the plaintiff, although often requested so to do, except the sum of $2,000, leaving a balance due and owing the plaintiff from the defendant of the sum of $1,952.90."

The defendant in his second amended answer denies that the parties entered into an agreement of partnership, denies that they conducted a butcher shop as partners, denies that they struck a balance, and denies the alleged account stated.

The answer contains explanatory affirmative allegations to the effect:

That on or about January 10, 1919, the plaintiff came to the defendant and proposed to buy into the People's Market, a butcher shop then conducted by the defendant; that the proposal resulted in an agreement that they should take an inventory of the property; that plaintiff should pay defendant for a one-half interest, to be ascertained by taking an inventory; that plaintiff should share equally with the defendant in profits and losses, and that it was further expressly agreed that plaintiff should not become a partner until he "paid in full for a one-half part of said inventory"; that pursuant to the agreement the parties "did take a full and complete inventory" on January 10, 1919, and found the total amount to be $14,155.81; "that thereafter plaintiff paid this defendant on account, and looking to the consummation of said purchase, the sum of $1,000, and thereafter sold this defendant the Fach butcher shop, on Main street, in Klamath Falls, Or., for the sum of $867.30, total $1,867.30, to be applied on said purchase price; that plaintiff has heretofore paid defendant on said amount of $7,077.81 the sum of $1,867.30, and no more; that it was expressly stipulated, understood, and agreed by and between plaintiff and defendant at said time that plaintiff should not become a partner with said defendant in said business or be given any of the profits thereof until such time as plaintiff had paid defendant the said total sum of $7,077.81;" that after making the alleged agreement and paying $1,867.30 the plaintiff told defendant that he was unable to pay the balance of the purchase price of one-half part of the inventory and said that, if defendant would return the $1,867.30, "the defendant would consider himself no longer a partner of defendant's and no longer entitled to share in the profits or liable to share in the losses of said business; that thereupon this defendant did pay the plaintiff the sum of $2,000, being $137.50 more than the plaintiff had paid into said business; that besides said sum of $2,000 so paid by defendant to plaintiff, as aforesaid, defendant paid the plaintiff a salary of $550 during the 5 1/2 months that plaintiff worked for defendant and turned over to him, during said period, butcher supplies of the value of $137.50; that defendant owes plaintiff nothing."

J. H. Carnahan, of Klamath Falls, for appellant.

W. H. A. Renner, of Klamath Falls, for respondent.

HARRIS, J. (after stating the facts as above).

A better understanding of the controversy may be had if the outstanding admitted facts are first related. The defendant had been conducting in Klamath Falls a butcher shop known as the People's Market. The plaintiff had been conducting a butcher shop sometimes designated in the record as the Hawxhurst Market, and at other times referred to as the Fach Market. It is conceded that at some time before or about February 8, 1919, the parties entered into an agreement, but the plaintiff and defendant differ sharply as to the terms of the agreement. Pursuant to the agreement, whatever it was, Steinmetz paid Grennon $1,000 in cash and turned over the Hawxhurst Market, and for it was allowed $867.30, making a total of $1,867.30 paid to Grennon. The plaintiff worked in the People's Market until about July 20, 1919, when the business was sold to George W. Bratton and Frank Whiteman, who immediately took possession. During the period when Steinmetz worked in the People's Market he received $25 per week together with whatever meats were used by his family. Grennon did the banking for the People's Market, and he wrote the checks. On August 29, 1919, Grennon paid Steinmetz $2,000.

Stated briefly, the story related by the plaintiff and his witnesses is as follows: The defendant was not feeling well and wanted a partner who would take a personal interest in the business and thus relieve him of some of the responsibility, and this wish was the dominating factor with him. Grennon proposed to Steinmetz that the latter become a partner; and when Grennon was told that Steinmetz did not have enough money to pay for one-half interest Grennon said that he did not care much about that, because his principal object was to secure relief by obtaining a partner who would give personal attention to the business and share the responsibility. After some negotiations the parties entered into an oral agreement of partnership. An inventory was taken on February 8, 1919, and the value of the People's Market was fixed at $14,155.81. Steinmetz paid $1,867.30 on his half, and at once became a partner of Grennon and a debtor to him for the remainder of one-half of the inventory. Grennon and Steinmetz conducted the People's Market until July 20, 1919, when the shop was sold to Bratton and Whiteman. After the sale Grennon paid the partnership debts from time to time until they were all satisfied. At some time in August, 1919, after the partnership bills had been paid, Steinmetz and Grennon settled their partnership accounts, and, after making allowance for the unpaid balance due from Steinmetz to Grennon for a one-half interest in the business, ascertained the amount of the net profits and determined that the share of such net profits due from Grennon to Steinmetz was $3,952.90. The $2,000 paid on August 29, 1919, was to apply as a part payment of the $3,952.90, thus leaving a balance of $1,952.90 due from Grennon to Steinmetz. According to Steinmetz's version, Grennon represented that it was necessary to carry Bratton and Whiteman for a time, and for that reason he could not pay the balance due to Steinmetz, but later on Grennon absolutely refused to pay any more money to Steinmetz.

Stated briefly, the story related by the defendant and his witnesses is as follows: The parties agreed that, if Steinmetz paid Grennon one-half of the amount of the inventory, Steinmetz would, when the full amount was paid, become a partner, but that he would not be a partner until the full amount was paid. The sum of $1,867.30 was paid as a part payment, leaving a balance of $5,210.51 which Steinmetz was obligated to pay before he could become a partner or be entitled to any of the rights of a partner. Steinmetz worked in the People's Market and received $25 a week from Grennon in payment for his work. Finally Steinmetz informed Grennon that he was unable to pay the balance necessary to be paid to become a partner, and that, if Grennon would return the $1,867.30, he would cancel the agreement relating to the shop. Grennon agreed that he would repay the amount, and subsequently, on August 29, 1919, paid $2,000 to Steinmetz, "being $137.50 more than the plaintiff had paid into said business." Grennon says that he alone conducted the negotiations with Bratton and Whiteman, and that when he sold the People's Market to them he was selling his own individual property.

It is simply impossible to reconcile the conflicting stories related by the litigants. The parties agree that there was a contract, but they disagree most radically as to the terms of that contract. Steinmetz says that the agreement consummated a partnership. Grennon claims that the agreement did nothing more than to fix the terms whereby Steinmetz could become a partner in the future if he performed those terms, and that, since the terms were not complied with, Steinmetz never became a partner. Steinmetz asserts that the parties settled their accounts and produced a stated account. Grennon insists that an account was not stated. It is admitted that Grennon paid Steinmetz $2,000; but Grennon claims that this payment was a return of the moneys previously paid to him by Steinmetz, while Steinmetz insists that it was in part payment of the account stated.

The assignments of error arise out of the refusal of the court to require the jury to return a special verdict...