Wormsbecker v. Donovan Const. Co.

Decision Date17 January 1958
Docket NumberNo. 36771,36771
Citation87 N.W.2d 660,251 Minn. 277
PartiesRalph WORMSBECKER, Appellant, v. DONOVAN CONSTRUCTION COMPANY of Minnesota et al., Respondents, S. J. Krannak, Defendant in Interpleader, Respondent.
CourtMinnesota Supreme Court

Syllabus by the Court.

1. The evidence supports the finding that a partnership existed between the parties.

2. Since there is no arbitrary test for determining the existence of a partnership, each case must be decided on its own peculiar facts, and on appeal this court will not disturb the findings of the trier of fact unless the evidence is conclusive.

3. There is nothing in the record disclosing any error requiring reversal.

Wm. E. MacGregor, Benedict Deinard, Minneapolis, Guesmer, Carson, MacGregor & Clifford, Leonard, Street & Deinard, Minneapolis, of counsel, for appellant.

B. J. Loftsgaarden, Loftsgaarden & Loftsgaarden, St. Paul, Bundlie, Kelley & Maun, St. Paul, for respondents.

MAGNEY, Commissioner.

In Wormsbecker v. Donovan Const. Co., 247 Minn. 32, 76 N.W.2d 643, an action to recover for services rendered in connection with an F.H.A. construction project, the trial court found for plaintiff on the basis of the jury's answers to certain interrogatories. On the appeal, a new trial was ordered. This litigation was settled on April 12, 1957, without retrial. S. J. Krannak, respondent here, was defendant in interpleader in the above action, claiming that a partnership existed between Ralph Wormsbecker, the plaintiff, and Krannak and that the employment contract between Wormsbecker and Donovan Construction Company was an asset of such partnership. The issues between Wormsbecker and Donovan and the issues between Krannak and Wormsbecker were tried separately. Wormsbecker appeals from the judgment which Krannak secured against him.

For some time Wormsbecker and Krannak had been in the real estate business. At one time Krannak had worked for Wormsbecker and later bought him out. They again became business associates in the fall of 1948. In planning future activities, they became interested in promoting F.H.A. projects and spent considerable time familiarizing themselves with F.H.A. procedure, making inquiries of officials and employees in the local F.H.A. office and others and studying literature which had been furnished them. Since September 1948 Krannak had been the owner of a nine-acre piece of land at 1201 West Larpenteur Avenue, across the street from the city limits of St. Paul. Krannak and Wormsbecker discussed the proposition of building a housing project under the F.H.A. setup on Krannak's land or any other land acceptable to the housing auhority. They considered hiring a Mr. Berg, who was familiar with F.H.A. projects, but did not do so because of the problem of financing his employment. Krannak testified that Wormsbecker asked: 'How are we going to pay Mr. Berg?' and that Krannak answered: 'I don't know, but I imagine we will each have to pay our share,' and that Wormsbecker then said: 'Yes, but he said he won't be satisfied with just a salary. He wants a percentage.' They agreed that they probably would have to give him ten percent and then divide the other expenses equally. As at first, they contemplated using Krannak's land for the project, and the question of division of profits arose. Krannak testified:

'* * * We discussed percentages. I said that I wanted to get paid for the land. Then he could have 50% And I would have 50% Of the profits over and above it, whatever we made. He said 'That's fine."

On March 15, 1949, an agreement was drawn up between Wormsbecker and Krannak relative to an F.H.A. housing project on a part of Krannak's land. It recites that Krannak was to convey his land to 'the designated corporation' upon receipt of $7,500 (which appears to have been the amount of the encumbrance) and 'it is understood that S. J. Krannak and R. W. Wormsbecker will be equilly (sic) interested, and stay equilly (sic) interested through the whole project, in buildings and construction.' This agreement remained unsigned because of inability to get Krannak's land rezoned for the purpose they intended to use it.

On March 17, 1949, an agreement was signed between 'S. J. Krannak & R. W. Wormsbecker, by R. W. Wormsbecker,' and the Newstrom architectural firm for professional services in connection with the proposed F.H.A. project on the Krannak tract. Wormsbecker made an initial payment of $125 to the architects, which represented one-half of the downpayment of fees. Two days later Krannak gave him his check for $67.50 to cover his share. Later Donovan paid the other half of the downpayment. On March 22, 1949, Krannak secured a 90-day option from one Gottfried to purchase an adjacent piece of land for $15,000. It ran jointly to Krannak and Wormsbecker. Later this option was extended to August 1, 1949. They then had in mind using the Newstrom plans on the Gottfried land.

Krannak and Wormsbecker soon realized that they were unable to finance an F.H.A. project. They had tried unsuccessfully to work out a deal with the Sauers Construction Company so Wormsbecker suggested that they go and see Donovan Construction Company, which they did. Their first meeting was with Richard Donovan. Wormsbecker and Krannak told him what they knew about F.H.A. housing. Together they had worked up their familiarities with F.H.A. projects. Mr. Donovan said that he and his father knew nothing about F.H.A. housing. They also told him about the land they had contracted for and that they thought a larger housing project could be built on this land if they could get financing. Donovan said that he thought the company would be interested but that it would have to be talked over with his father. Later, probably the last week in March, Wormsbecker and Krannack met with the two Donovans and their engineers. The proposition was presented, and they showed the Donovans some architectural drawings of an F.H.A. project. Wormsbecker and Krannak then made a certain proposition to Donovans which involved an investment of about $60,000 by Donovans, who turned it down. Donovans then made a counterproposal whereby each party was to put in $25,000, which Wormsbecker and Krannak later turned down. Then Krannak suggested to Wormsbecker, according to his testimony, that Donovan finance the whole project and 'we would take whatever we could get out of it, work out a percentage, here and there, different things, but we would work something out of that,' and then Wormsbecker said: 'We will work out a basis of whereby we would get a percentage of the contractor's fee or profits, and get the finance commission or fee, that they call it, and whatever else we could get.' They decided to go back to Donovans and suggest this proposition. Wormsbecker did go back.

On April 4, 1949, a contract was entered into between Wormsbecker and Donovan. By its terms, Donovan agreed to pay Wormsbecker ten percent of the stock of the proposed corporation which would own the finished buildings, five percent of the profits in construction, the one and one-half percent commission on the mortgage, and $500 per month. Before this agreement was signed, Wormsbecker called up Krannak and told him about the offer. Krannak testified:

'Well, Mr. Wormsbecker called me by phone and said that he had gone over and talked to Donovans and they are offering him a percentage of the profits, of the contractor's fee which would be, and I said, 'How much?' and he said, 'Well, I am going to get 5 or 10 per cent.' I says, 'All right, what else? He said, 'I am going to get the finance fee or the finance commission.' I says, 'Yes, that's fine.' He said, 'What do you think of it?' I says, 'It sounds good.' He said, 'I will tell you another thing. They want me to go to work for them and they are going to pay me $500 a month if I go to work for them,' * * *.'

Krannak further testified that he said to Wormsbecker:

'* * * 'you keep that $500 a month for yourself. I have some other business that I have to take care of and I will work my personal affairs along so I can--I will keep alive and keep going and pay expenses and so forth while we are working this deal out, and you say on the $500 a month, you can keep that."

He further testified that, after Wormsbecker told him that he was to get $500 a month, he asked '* * * 'What do we have to put into this?' And he said, 'Well,' he said, 'they are going to finance the whole thing.' And I said, 'Well, that sounds good,' I said, 'Well, is there anything else you can get?' He said, 'I am going to get all I can.' And I said, 'Then what?' And he said, 'Well, whatever we get we will divide it equally.' I said, 'That sounds all...

To continue reading

Request your trial
7 cases
  • Agner v. Bourn
    • United States
    • Minnesota Supreme Court
    • 20 Septiembre 1968
    ...The Rules of Civil Procedure and our own decisions authorize the trial court to use the jury as it did. In Wormsbecker v. Donovan Const. Co., 251 Minn. 277, 87 N.W.2d 660, the trial court made findings on the basis of the jury's answers to certain interrogatories. There this court stated (2......
  • Murphy's Estate, In re
    • United States
    • Minnesota Supreme Court
    • 6 Noviembre 1964
    ...The Rules of Civil Procedure and our own decisions authorize the court to use the jury exactly as it did. It Wormsbecker v. Donovan Const. Co., 251 Minn. 277, 87 N.W.2d 660, the trial court made findings on the basis of the jury's answers to certain interrogatories. There the court stated (......
  • Nelson v. Seaboard Surety Company
    • United States
    • U.S. Court of Appeals — Eighth Circuit
    • 3 Septiembre 1959
    ...be sustained if the evidence as a whole shows that the parties had entered into a partnership relation. Wormsbecker v. Donovan Construction Co., 251 Minn. 277, 87 N.W.2d 660, 664; Cyrus v. Cyrus, 242 Minn. 180, 64 N.W. 2d 538, 541, 45 A.L.R.2d 1002; Blumberg v. Palm, 238 Minn. 249, 56 N.W.2......
  • Bradley v. Bradley
    • United States
    • Minnesota Court of Appeals
    • 29 Octubre 1996
    ...538, 541 (1954). "There is no arbitrary test for determining whether a partnership exists * * * ." Wormsbecker v. Donovan Constr. Co., 251 Minn. 277, 284, 87 N.W.2d 660, 664 (1958) (citing Cyrus, 242 Minn. at 183, 64 N.W.2d at 541). Minnesota courts have generally not found a partnership to......
  • Request a trial to view additional results

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT