Paxton v. McDonald

236 P.2d 364, 72 Ariz. 378, 1951 Ariz. LEXIS 242
CourtArizona Supreme Court
DecidedOctober 9, 1951
Docket5234
StatusPublished
Cited by14 cases

This text of 236 P.2d 364 (Paxton v. McDonald) 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
Paxton v. McDonald, 236 P.2d 364, 72 Ariz. 378, 1951 Ariz. LEXIS 242 (Ark. 1951).

Opinion

PHELPS, Justice.

In granting the motion for rehearing in this case we are adopting the statement of facts in our original opinion, found in 72 Ariz. 240, 233 P.2d 450, and reaffirm the porton thereof adjudicating the issues alleged in the first cause of action between McDonald and Industrial Research, Inc. We are persuaded, however, that we misapprehended the action of the trial judge in denying appellee’s motion to amend the complaint to conform with the evidence but, notwithstanding, found in favor of appellee on the issue sought to be incorporated in the complaint by amendment.

The court, twice during the trial, denied appellee’s motion to amend his complaint to conform with the evidence to include an allegation that the spark plug type machine invented by Paxton was a partnership asset under the agreement between Paxton and McDonald.

The first motion was denied upon the objection of appellant, upon the ground, in substance, that depositions had been-taken within ten days previous to the trial and counsel for appellee had not exercised due diligence with respect to such amendment.

The second motion to amend was denied'" in the following language: “At this time I wouldn’t permit it. I am not saying for sure I won’t some time, but not now.”' And at the close of all the evidence appellee again renewed his motion to amend upon the ground “ * * * that the proof in the matter shows conclusively that it was the intention of the parties,, Paxton and McDonald, to include other machines in this invention, and that whether or not other machines were included— The court, interrupting, said: “Of course that is something that is on an issue the jury doesn’t have to decide anyway. That isn’t a matter that we are submitting to. the jury anyhow. I will take that matter under advisement. We won’t change the issues on the first cause of action. I am not saying I won’t permit you to on the second, if I try the second cause of action. So, with that situation there is nothing to submit except the partnership. * * *"

When the agreement assigning the spark plug machine to Industrial Research, Inc.,, was offered counsel for appellants objected that it was immaterial but might properly have some materiality on the second cause of action. This objection was overruled.

*381 The assignment could only be material if the court found the spark plug type machine to be a partnership asset. We are unable to understand the theory of either the court or counsel on just what was necessary to be shown in establishing a partnership relation between Paxton and McDonald. If it was only intended to establish that some kind of a partnership relation existed between them without establishing its scope and purpose, the nature of the business to be conducted, and what each partner was to contribute to the partnership assets, their share in the profits and losses, etc., then of course it was not necessary that appellee establish that the spark plug type machine was a partnership asset. If this were true it would likewise be unnecessary to establish the fact that the diaphragm type machine was a partnership asset, or to establish the character of any of its assets or of the business in which it was to engage.

We are of the view that to establish such relation the entire partnership agreement should have been shown including the portion thereof relating to the spark plug type machine. Such evidence was necessary in order to establish a basis for an accounting on the second cause of action. Therefore, as stated in our original opinion, the motion to amend the complaint to conform to the evidence should have been granted as a matter of record, as the evidence was undisputed on that point.

The trial court indicated in its ruling both on the second motion to amend and at the close of the case that it may permit an amendment of the pleadings to include the spark plug type machine as a partnership asset (properly holding that the issue was a question for the court to determine) finally stating that: “We won’t change the first cause of action. I am not saying I won’t permit you to on the second. * * * ” However, the court, in rendering its judgment on the first cause of action found and adjudged that the 25 shares of stock received by Paxton from Industrial Research, Inc., as a consideration for the assignment of the patent right to the spark plug type machine to it was a partnership asset. It necessarily had to find as a predicate, therefor, that the spark plug type machine was a partnership asset. In no other manner could it have reached the conclusion that the 25 shares of stock was a partnership asset.

The question of whether the spark plug type machine was a partnership asset was an issue as essential to the establishment of the partnership as any other portion of the partnership agreement.

We believe the question falls under the provisions of section 21-449, A.C.A.1939, Rules of Civil Procedure 15(b), relating to amendments to conform to the evidence.

In the case of United States v. Cushman, 9 Cir., 136 F.2d 815, 817, the court said: “Leave to file the proposed amended answer *382 was denied. At the trial, however, the application mentioned in the proposed amended answer was admitted in evidence without objection. There was also admitted without objection evidence that some of the foregoing answers were false. Thus the issue of fraud, though not raised by the pleadings, was tried by implied consent of the parties. Accordingly, and properly, the court treated that issue as if it had been raised by the pleadings.”

And in Balabanoff v. Kellogg, 9 Cir., 118 F.2d 597, 599, the court in discussing Rule 15(b), Federal Rules of Civil .Procedure, 28 U.S.C.A., which is identical with our Rule 15(b), supra, said: “When issues not raised by the pleadings are tried by express or implied consent of the parties, they shall be treated in all respects as if they had 'been raised in the pleadings. Such amendment of the pleadings as may be necessary to cause them to conform to the evidence and to raise these issues may be made upon motion of any party at any time, even after judgment; but failure so to amend does not affect the result of the trial of these issues.” (Emphasis supplied.)

We can reach no other conclusion than that the learned trial judge in finding .and adjudging that the 25 shares of stock of Industrial Research (received by Paxton in consideration of the transfer to it by him of the right to patent the spark plug type machine) was a partnership asset, either treated the complaint as having been amended or reached the conclusion that the allegations without amendment were broad enough to support the judgment. Otherwise the judgment rendered by the trial court is ambiguous in that it limits the assets of the partnership to the diaphragm type machine and at the same time adjudges the consideration received for the spark plug type machine to be a partnership asset.

It is said in 49 C.J.S., Judgments, § 436, that:

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Bluebook (online)
236 P.2d 364, 72 Ariz. 378, 1951 Ariz. LEXIS 242, Counsel Stack Legal Research, https://law.counselstack.com/opinion/paxton-v-mcdonald-ariz-1951.