Opinion
No. 21692.
April 7, 1952.
APPEAL FROM THE CIRCUIT COURT, JACKSON COUNTY, THOMAS R. HUNT, J.
Donald L. Brenner, Bernard L. Balkin and Robert L. Jackson, all of Kansas City, for appellants.
J. D. James, Robert R. Hogsett, and Hogsett, Trippe, Depping, Houts James, all of Kansas City, for respondent.
This action was brought by plaintiff, Truck Leasing Corporation, against defendants, George E. Swope and Michael Berbiglia, partners. A jury was waived and the case submitted to the court, resulting in a judgment for plaintiff for $1,344.69 with interest in the amount of $747, or a total of $2,091.69. Defendants appeal.
Plaintiff is a corporation engaged in the rental of trucks to various businesses. Its practice is to rent trucks, paint the signs of the hirer upon them, service them, furnish garage space, and keep the trucks in repair; the hirer furnishing the drivers.
On February 10, 1941, plaintiff entered into a written agreement with defendants, partners, doing business as "B-1 Beverage Company of Kansas City", whereby defendants hired a number of trucks from plaintiff agreeing to pay "a weekly stand-by charge of $14" per truck, plus $.05 for each mile the trucks were driven.
On May 24, 1941, defendants organized a corporation under the identical name of their partnership trade-name to wit: "B-1 Beverage Company of Kansas City." It was admitted to be "a wholly-owned corporation, wholly-owned by these two individuals" (defendants). Four days later, on May 28, defendants, as co-partners, conveyed the assets of their business conducted under the name of "B-1 Beverage Company of Kansas City," to the newly formed corporation of the same name.
After the transfer of the assets, the corporation continued to use the trucks in exactly the same manner as had the partnership, received the bills and paid them in full until sometime in September, 1941, when the rental payments began to be delinquent. On January 27, 1942, the corporation, "B-1 Beverage Company of Kansas City" was adjudged a bankrupt. Plaintiff was listed as a creditor but, instead of participating in the bankruptcy proceedings, filed this suit against defendants, as partners.
At the conclusion of the evidence the court, at plaintiff's request, made the following findings of fact:
"1. On February 10, 1941, plaintiff entered into a contract with defendants doing business as partners under the firm name of B-1 Beverage Company of Kansas City, the terms of which contract are set out in plaintiff's Exhibit 1.
"2. Pursuant to the terms of the contract plaintiff rented to defendants six trucks at a rental of 5 ¢ per mile plus stand-by charge of $14.00 per week for each truck, and defendants used said trucks until on or about January 31, 1942.
"3. Plaintiff performed all the conditions of the contract up to the date suit was filed but defendants quit using the trucks on about January 31, 1942, and at the time this suit was filed the balance of rental charges remaining unpaid by defendants was $1,344.69.
"4. Plaintiff had no notice of any dissolution of defendants' partnership or of any transfer of defendants' rights under the contract of February 10, 1941; and plaintiff did not consent or agree to any substitution of any corporation in place of defendants as lessees under the contract and did not at any time release defendants from their obligations under said contract."
Defendants contend that there was no evidence on which to base the above findings of fact 2 and 3, and that No. 4 is unsupported by the credible evidence in the case and is clearly erroneous.
The rule which governs the instant case is not in dispute. It is well established as a general principle of partnership law that upon the dissolution of a partnership, wherein the business passes to a corporation, to relieve a retiring partner from subsequent transactions, notice of dissolution must be brought home to one who has dealt with the partnership in the past. Martin v. Fewell, 79 Mo. 401, and annotations in 89 A.L.R. at
While plaintiff's president, Mr. Boserine, was on the witness stand the following questions were put to him:
"Q. (By Mr. James, plaintiff's counsel) Well, so far as you knew, were you doing business with the partnership at all times?
A. Yes, sir.
"Q. Were you ever notified of any transfer of the rights or liabilities under this contract to any corporation? A. No.
"Q. Were you ever notified that the partnership ever ceased to exist? A. This morning is the first time I ever heard any such statement.
"Q. And was that when I gave you a copy of the (amended) answer filed by Mr. Jackson here this morning? A. That is right.
"Q. Is that the first you were ever told or received any notice whatever that this partnership ceased to exist and was taken over lock, stock and barrel by any corporation? A. That is right."
All that defendants' testimony shows is that Mr. Boserine was told only that a corporation was being planned for the future. There is not one word of testimony in the transcript to the effect that defendants advised Mr. Boserine that the dissolution of the partnership was an accomplished fact.
The evidence shows that there was no change in the name or personnel of defendants' business, nor was there any change in the location. It remained at 3036 Main Street in Kansas City. There was no change in the manner in which the rentals were paid (while they were paid), no change in the business name that appeared on the checks sent to plaintiff.
As stated in 40 Am.Jur. p. 186: "There would seem to be particularly strong reason for holding the former partner liable where the corporation operates under the same name and circumstances as did the partnership, or substantially so."
It is also undisputed that there was no letter or written notice of any kind concerning the cancellation of the contract or its assignment to a successor corporation, or the cessation of the partnership to do business, or the substitution of a corporation for the partnership under the contract. It would seem odd indeed that men who would enter into a formal, carefully drawn, truck leasing contract consisting of many printed pages would agree to a cancellation of all the obligations of the original lessees under the contract and the substitution of a corporation as lessee, without so much as a letter, memorandum or any other kind of written word passing between the parties evidencing the substitution of a new party to the contract.
This being a case tried to the court without the aid of a jury, it is our duty to review the case upon both the law and the evidence. We are not bound by any conclusion reached by the trial court either as to the facts or the law. However, the mandate of the statute, section 510.310 RS Mo. 1949, V.A.M.S., is that the judgment shall not be set aside "unless clearly erroneous".
We are of the opinion that the evidence fully supports the above findings of fact made by the learned trial court.
Defendants also contend that the rental agreement of February 10, 1941, although called a "lease" was, in fact, a "bailment", terminable at will and was terminated when the partnership was dissolved. We have no fault to find with defendants' statement that a bailment for an indefinite time is terminable at will. However, the contract here involved for the rental of the trucks whether designated a "lease" or a "bailment" specifically provided that it could only be terminated "by giving 60 days written notice of the intention of either party to so terminate" * * *. No such notice was given, which fact alone, disposes of the question adversely to defendants.
Finally, defendants say the trial court's assessment of damages was incorrect. The answer to that is that the court fixed plaintiff's damages in exact accord with the contract; $14 per week for each truck used and $.05 for each mile the trucks were driven.
Defendants also say that the trial court should have deducted from the amount of plaintiff's recovery the value of defendants' right to purchase the trucks. Under the contract, defendants' right to purchase the trucks only came about in the event they elected to terminate it by "giving 60 days written notice" of their intention to so do. This they did not do.
The judgment is correct and should be affirmed. It is so ordered.
All concur.