Stephen v. Phillips

689 P.2d 939, 101 N.M. 790
CourtNew Mexico Court of Appeals
DecidedSeptember 25, 1984
Docket7516
StatusPublished
Cited by3 cases

This text of 689 P.2d 939 (Stephen v. Phillips) is published on Counsel Stack Legal Research, covering New Mexico Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Stephen v. Phillips, 689 P.2d 939, 101 N.M. 790 (N.M. Ct. App. 1984).

Opinion

OPINION

WOOD, Judge.

Defendants 1 sold scrap metal, motors, small tools and implements, three vehicles and other items accumulated at defendants’ welding shop (referred to hereinafter as scrap metal) for $6,000. The sales price was paid. This lawsuit resulted from a dispute over who was entitled to take possession of the scrap metal that was sold. Plaintiff sued defendants for fraud, constructive fraud and conversion. The trial court found in favor of defendants on these issues. The trial court also found there had been an accord and satisfaction. Plaintiff appealed. We (1) outline the factual background; (2) discuss plaintiff’s right to sue for conversion; (3) discuss the conversion issue; and (4) modify the trial court’s judgment because one of the defendants is dead.

Factual Background

The following factual recitation is based on unchallenged findings or undisputed evidence.

Prior to sale of the scrap metal, plaintiff, Srader and Pease inspected and made a list of the scrap metal. On April 1, 1978, defendants agreed to sell the scrap metal to Srader for $6,000. On April 1, 1978, Srader delivered to defendants a check for $1,000 as a down payment. This check was signed by plaintiff and was drawn on plaintiff’s bank account. On April 3,1978, Srader delivered to defendants a cashier’s check for $5,000 to complete payment of the purchase price. The cashier’s check was purchased by plaintiff.

On April 3, 1978, Srader was the only purchaser of the scrap metal, and the bill of sale showed only Srader as the buyer. Plaintiff and Pease demanded that their names be included on the bill of sale as buyers. On April 3, 1978, the bill of sale was amended to show plaintiff, Srader and Pease as the buyers. All involved consented to this amendment.

On or before April 3, 1978, plaintiff, Srader and Pease entered an oral partnership agreement to purchase the scrap metal. Defendants became aware of the partnership on April 3, 1978.

On April 4, 1978, Srader removed $2,000 worth of scrap metal from defendants’ property. On April 5, 1978, plaintiff and Srader, as partners, disputed which of them owned and had a right to possess the scrap metal that had been purchased. Defendants became aware of this dispute on April 5, 1978. Plaintiff demanded that defendants allow him to remove the scrap metal. Srader demanded that defendants allow him to remove the scrap metal. Defendants refused to allow either plaintiff or Srader to remove the property for some months.

Plaintiffs Right to Sue for Conversion

The trial court found, after trial, that there was a partnership. Plaintiff does not challenge this finding on appeal. Plaintiff does not challenge the trial court’s ruling that there was neither fraud nor constructive fraud. Plaintiff does challenge the ruling that plaintiff failed to prove a conversion.

In attacking the trial court’s ruling as to conversion, plaintiff relies on partnership law. Plaintiff asserts that as a partner he had a right to possession of the scrap metal because it was partnership property. The answer brief responds that plaintiff’s partnership claim is improper because plaintiff, as a partner, “may not sue alone on a cause of action belonging to the partnership * The answer brief cites Loucks v. Albuquerque National Bank, 76 N.M. 735, 418 P.2d 191 (1966), and Amador v. Lara, 93 N.M. 571, 603 P.2d 310 (Ct.App.1979). Thus in responding to plaintiff’s appellate argument, the answer brief raises an issue as to whether plaintiff, as an individual, had the right to sue on a partnership claim.

The tenor of plaintiff’s complaint and his amended complaint was that he put up the money, he was the buyer of the scrap metal, he was entitled to possession of the scrap metal and he, individually, was entitled to damages. The amended complaint alleged that “Plaintiff was the rightful owner * * No claim on behalf of the partnership was asserted in either the complaint or amended complaint.

At trial plaintiff testified consistent with the theory pleaded. He testified that he owned the scrap metal, that he was the buyer, “I was the only buyer, the sole buyer.” Plaintiff also testified in contradiction to his view that he was the sole buyer. He admitted that there was a partnership consisting of himself, Srader and Pease, and admitted that he had acknowledged the partnership to defendants. Plaintiff testified that among the partners, Pease, a blacksmith, was to make things with the scrap metal, plaintiff was to provide the money and Srader “was the agent to buy and to sell, you know, he was acting as an agent.”

In his requested findings, plaintiff limited his partnership theory. The theory was that Srader and Pease were “future partners who would have a share in any profits made in re-selling the merchandise. These two men were not indentified [sic] in any way as being purchasers of the merchandise.” The trial testimony, including the testimony of plaintiff, provided a basis for the trial court to refuse this requested finding.

We refer to the above evidence again in deciding the conversion issue. At this point our concern is whether plaintiff was a proper party to seek damages on behalf of the partnership for conversion.

Plaintiff’s reply brief asserts that defendants did not raise a defense in the answer as to plaintiff’s capacity to sue “so as to give Mr. Stephen the opportunity to amend his complaint, [as] defendant should not now be heard to deny Mr. Stephen’s capacity to sue.” This contention, in essence, is that any question as to capacity to sue has been waived. See NMSA 1978, Civ.P.R. 9(a) (Repl.Pamp.1980).

It is unnecessary to decide the waiver contention. The evidence is undisputed that prior to trial Srader assigned his partnership interest to plaintiff, excepting only certain of the scrap metal that had been obtained by Srader, while he was a partner. Documents among the exhibits, although denied admission in this case, are to the effect that Pease no longer has a partnership interest and no one claims that he does. In these circumstances, plaintiff, as the holder of the partnership interest, was a proper plaintiff. See Sturgeon v. Clark, 69 N.M. 132, 364 P.2d 757 (1961); Young v. New Mexico Broadcasting Co., 60 N.M. 475, 292 P.2d 776 (1956), modified on other grounds in Reed v. Melnick, 81 N.M. 608, 611, 471 P.2d 178 (1970).

Conversion

The conversion claim on appeal is that plaintiff, as a partner, had a right to control and manage the scrap metal as partnership property. The challenge to the trial court’s holding as to the conversion claim is argued in two parts. One part attacks the propriety of defendants’ action in withholding delivery to plaintiff after learning that the plaintiff and Srader disagreed as to which of them was entitled to possess the scrap metal.

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Cite This Page — Counsel Stack

Bluebook (online)
689 P.2d 939, 101 N.M. 790, Counsel Stack Legal Research, https://law.counselstack.com/opinion/stephen-v-phillips-nmctapp-1984.