Kirkpatrick v. Christensen

206 P.2d 577, 68 Ariz. 364, 1949 Ariz. LEXIS 149
CourtArizona Supreme Court
DecidedMay 23, 1949
DocketNo. 5086.
StatusPublished
Cited by2 cases

This text of 206 P.2d 577 (Kirkpatrick v. Christensen) is published on Counsel Stack Legal Research, covering Arizona Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Kirkpatrick v. Christensen, 206 P.2d 577, 68 Ariz. 364, 1949 Ariz. LEXIS 149 (Ark. 1949).

Opinion

STANFORD, Justice.

*365 This litigation arose out of an unsuccessful partnership mining venture in the operation of the “Yeager Mine” in Yavapai County. While the action seeks a dissolution of the partnership, to which all of the parties are agreed, primarily it is an action in rem for the fixing of the rights of the partners with respect to the remaining partnership assets which consist of certain machinery and equipment. There are no general creditors of the partnership. Kirkpatrick (plaintiff-appellant) is not seeking a personal judgment against his copartners (defendants-appellees) for the services he rendered, nor for moneys advanced by him to the partnership, as he concedes that under the law such relief could not be granted. 40 Am.Jur., Partnership, section 468. As will be later developed, the matter before us resolves itself into a question as to the order of priority of payment out of the remaining assets. This involves an interpretation of the partnership agreements and a recitation of the facts.

In December, 1943, appellant had obtained a five-year lease and option on the “Yeager Mine” conditioned upon the doing of a certain minimum of development work and payment of royalties. In late May, 1944, appellant and appellees Markham, Westphalen, Christensen, Brashear and Murray orally agreed to form a partnership for the operation of this mining property. Later, on June 17, 1944, their agreement was reduced to writing and signed by all of the parties.

Appellant agreed to assign to the partnership his lease to said claims. Appellees Christensen, Brashear and Murray agreed to furnish one drag line and all machinery and equipment necessary to operate said drag line and to install said equipment and all other machinery and equipment necessary for the operation of the partnership venture. Markham and Westphalen agreed to furnish the sum of $5,000 to be deposited to the credit of the partnership in the Valley National Bank in Prescott, Arizona, said sum to be used for the purchase of such equipment necessary for the operation of said venture and to pay operative expenses.

The agreement stated that if it was necessary to raise additional funds Kirkpatrick was to advance such sums up to the amount of $2,000 and to loan such equipment as he might have without charge. This $2,000, with the further sum of $1,423.23, he claimed was advanced. Also Kirkpatrick agreed to act as superintendent of said enterprise and devote such time as necessary to the same at a reasonable salary to. be set by a two-thirds vote of the partners; that any partnership matters were to be decided by a two-thirds vote of the partners; that the net returns of the partnership should be paid as follows: 75% to H. G. Westphalen and T. R. Markham until they were repaid the entire amount of $5,500 and that thereafter from said 75% of said venture there should be repaid to W- H. Kirkpatrick, such sums which he advanced to the partnership venture.

*366 On November 7, 1944, a revised partnership agreement was entered into between the above-named parties. We find no important change in the agreement except the addition of the name of Charles M. Archibald, who became a member of the partnership, paying in the sum of $2500, and the change that appellees Markham and Westphalen had raised their contribution from $5,000 to $5,500. Thereafter from the 75% of said venture there was to be paid to Charles M. Archibald such sum that he may have advanced to said partnership venture.

This last agreement was the one in effect at the time this action was brought for the dissolution of the partnership and for the other purposes heretofore stated.

By each of the written agreements it was provided :

“That all equipment purchased by said partnership shall be purchased in the name of T. R. Markham and H. G. Westphalen, and title shall remain in their names until they shall have been repaid the full sum of Fifty Five Hundred Dollars ($5,500.00), at which time they shall execute a Bill of Sale to said partnership for all of said machinery.”

The operations under the partnership between the parties having ceased on or about July .15, 1945, the owners of the mining claims gave notice of the termination of their lease with the appellant.

Thereafter appellant brought this action for the dissolution of the partnership, for compensation in the amount of $3,000 for services rendered as superintendent of the operations, and for the sum of $1,423.23 as the balance due him for money advanced for the use and benefit of the partnership, and sought to impress on the assets of the co-partnership a lien for his services and money invested.

A trial was had before the court, sitting without a jury, and findings of fact were made.

We quote the following from the judgment entered:

“2. That defendants Markham and Westphalen have a first and prior lien upon the proceeds derived from the sale of the equipment which is held by them as security in accordance with the partnership agreement to the extent of Fifty-Five Hundred Dollars ($5,500.00), said machinery and equipment being particularly descibed as follows: (Here follows the same list of equipment, supplies and personal property)
“3. That plaintiff, W. H. Kirkpatrick, have judgment against the partnership in the sum of Three Thousand Dollars ($3,-000.00) and that he have a first and prior lien on the proceeds of the assets sold, subject, however, to the priority of defendants Markham and Westphalen, as provided for in the foregoing paragraph, and that any proceeds of said sale over and above the lien for Fifty-Five Hundred Dollars ($5,500.00) due defendants Markham and Westphalen, to apply thereon.
*367 “A. That plaintiff, W. H. Kirkpatrick, have judgment against the partnership in the sum of One Thousand, Four Hundred and Twenty-Three Dollars and Twenty-Three Cents ($1,423.23), and that he have a prior lien next in order and subject to the liens as herein provided for in paragraphs 2 and 3 immediately preceding, and that the moneys from the sale of said assets, subject to the liens, as aforesaid, be applied thereon.
“5. That plaintiff, W. H. Kirkpatrick, have judgment in the sum of Five Hundred Dollars ($500.00) against said partnership, and that the said W. H. Kirkpatrick have a fourth priority subject to the foregoing liens upon the moneys derived from said sale to the extent of these respective amounts.
“6. That the remaining proceeds from . the sale of said assets, if any, after the satisfaction of the foregoing liens and priorities, be divided among the partners in such amounts as their interest in said partnership sale bears to the whole of said partnership as agreed to in ‘Exhibit No. 3’ in evidence.
“7. That after the partnership assets have been sold and the moneys derived therefrom applied to the satisfaction of the liens and priorities as herein directed, and a proper accounting is filed with this Court complying with these directions, order shall enter herein dissolving said partnership.”

From said judgment the appellant gave notice of appeal to this court.

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Bluebook (online)
206 P.2d 577, 68 Ariz. 364, 1949 Ariz. LEXIS 149, Counsel Stack Legal Research, https://law.counselstack.com/opinion/kirkpatrick-v-christensen-ariz-1949.