Lenz v. Young

1957 OK 14, 307 P.2d 844, 1957 Okla. LEXIS 362
CourtSupreme Court of Oklahoma
DecidedJanuary 22, 1957
Docket36999
StatusPublished
Cited by6 cases

This text of 1957 OK 14 (Lenz v. Young) is published on Counsel Stack Legal Research, covering Supreme Court of Oklahoma primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Lenz v. Young, 1957 OK 14, 307 P.2d 844, 1957 Okla. LEXIS 362 (Okla. 1957).

Opinions

JACKSON, Justice.

This appeal involves an action by Charles A. Lenz, as plaintiff, against the partnership of E. L. Young and Dolly Young wherein it is alleged that they are partners doing business as Royal Crown Shows. From judgment in his favor against Dolly Young, individually, in the sum of $1,902, plaintiff appeals. His appeal is based upon the alleged insufficiency of the judgment.

The record shows that E. L. Young, owned and operated the Royal Crown Shows prior to March 23, 1951. His wife, Dolly Young, assisted him and had charge of some of the concessions. The plaintiff, Lenz, was in the insurance business in Florida and furnished insurance for Royal Crown Shows.

On February 19, 1951, E. L. Young waá delinquent in the payment of his insurance premiums and on that date signed a note in [846]*846favor of plaintiff in the amount then due, $8,201.75.

In March, 1951, E. L. Young and Dolly-Young were having marital and financial difficulties and on March 23, 1951, they entered into a partnership agreement to the effect that each owned an undivided 50% interest in the partnership doing business as Royal Crown Shows. On March 28, 1951, Mrs. Young obtained a divorce from her husband, but they continued in business as partners until November 13, 1951, at which time it was dissolved by Dolly Young buying out the interest of E. L. Young. Dolly Young assumed the indebtedness for insurance premiums accruing between March 23 and November 13, 1951, as a partnership obligation. Her oral testimony is that this amounted to> $5,902.

After November 13, 1951, and during the carnival season of 1952, Dolly Young operated the Royal Crown Shows as sole owner thereof.!’ During this period she paid the plaintiff $4,000 which, according to her testimony, was to be applied on the partnership obligation of $5,902, thus reducing that indebtedness to $1,902. During the same period there accrued an additional obligation for insurance premiums against Dolly Young, individually, of $5,872.

Thereafter, and on October 1, 1952, this action was filed against E. L. Young and Dolly Young, as partners, doing business as Royal Crown Shows, notwithstanding the fact that Lenz was informed of the dissolution of the partnership soon after it was dissolved, and before he wrote any insurance for Dolly Young as the individual owner and operator of the Royal Crown Shows.

In plaintiff’s first cause of action he prays judgment against the defendants and attaches itemized statements for insurance furnished during the years 1951 and 1952 on the theory of partnership liability during the entire period. In his second cause of action he prays judgment against the defendants on the noté, as a partnership obligation. Plaintiff obtained an order of attachment against the effects of the partnership and bond was made to discharge the attachment. Issues involving the attachment were before this court in Lenz v. Young, Okl., 262 P.2d 886.

Dolly Young filed her answer on March 4, 1954, and denied that a partnership relation existed at the time the suit was filed and specifically denied that the note was executed as a part of any transaction arising out of any partnership in which she had an interest or was a partner.

The record shows that Dolly Young was adjudged a bankrupt on April 8, 1954, and was discharged as a bankrupt on March 3, 1955. However, it further appears that the Referee in Bankruptcy authorized plaintiff to prosecute this action to final judgment.

E. L. Young was not summoned and when the case came on for trial on April 19, 1955, plaintiff dismissed the case against him without prejudice. It is not contended that this changed the nature of the action into a suit against Dolly Young individually as distinguished from a suit against the partnership. Near the end of the trial plaintiff sought permission to amend his petition to conform to the proof hut this request was denied. This action of the trial court is not assigned as error.

The record does not disclose any substantial proof that the note was a partnership obligation. Dolly Young did not sign the note. It was signed by E. L. Young, individually, before Dolly Young entered into the partnership agreement, and plaintiff failed to prove that Dolly Young assumed this obligation. While this question was submitted to the jury by interrogatory and the jury found that Dolly Young was not obligated on the note, we think without the jury’s verdict the plaintiff failed to prove that Dolly Young was obligated for the payment of the note. In our opinion the trial judge should have directed a verdict for the defendant on the note, and there is no error in the judgment in so far as it does not permit recovery thereon.

In plaintiff’s first cause of action he sues for $11,179.84 on an open account. A verified account was introduced in evidence [847]*847and when the exhibits attached to the “Summary of Enclosed Statements” are considered it is apparent that the partnership incurred in 1951 an indebtedness for insurance in the sum of $5,307.84. It is also apparent that the items accruing after November 13, 1951, in the sum of $5,872, were the obligations of Dolly Young, as an individual, and not an obligation of the partnership.

Why Dolly Young assumed a partnership obligation of $5,902 instead of the partnership obligation of $5,307.84, as it appears from plaintiff’s exhibit, is not explained. However, she did assume that amount and the jury found that after applying the $4,000 payment as a credit against $5,902 that she was still indebted to the plaintiff in the sum of $1,902. It is not disputed that Dolly Young had directed plaintiff’s employee to apply this $4,000 against the partnership account. The trial court entered judgment against Dolly Young, individually, in the sum of $1,902 and that judgment has become final as to her.

Plaintiff presents his argument under 4 propositions:

I. Plaintiff was entitled to an instructed verdict for the full sum sued for.

II. The Instructions given by the court were wholly inapplicable and erroneous.

III. The court erred in failing to submit the case to the court for a general verdict, instead of by interrogatories.

IV. The court was without power to enter the judgment entered herein.

We find no merit in plaintiff’s first and fourth propositions, and the view we take of this case makes it unnecessary for us to pass upon his second and third propositions.

As heretofore pointed out, plaintiff pleaded his case against the defendants as partners; he obtained an order of attachment against the partnership assets and defendant’s bond was made to discharge that attachment; and the trial court instructed the jury, without objection, that the action was brought against the partnership.

We are not unmindful of the rule that where a partnership has been dissolved before an action is commenced for recovery on an obligation of such partnership, no judgment can be rendered against the partnership entity as such. Aetna Casualty and Surety Company v. Wofford, Okl., 296 P.2d 967. However, where the partnership is dissolved before the suit is instituted but the case is tried throughout as against a partnership, we see no reason why judgment could not be rendered against the partnership as such. Our attention is invited, to Pine Belt Lumber Co. v. Riggs, 80 Okl. 28, 193 P. 990, wherein this court held in the first paragraph of the syllabus:

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Lenz v. Young
1957 OK 14 (Supreme Court of Oklahoma, 1957)

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Bluebook (online)
1957 OK 14, 307 P.2d 844, 1957 Okla. LEXIS 362, Counsel Stack Legal Research, https://law.counselstack.com/opinion/lenz-v-young-okla-1957.