Opinion
9-27-1955
Thomas BURKE and Doris Burke, Plaintiffs, Cross-Defendants, Appellants, v. Stanley M. CHROSTOWSKI, Defendant, Cross-Complainant, Respondent. Civ. 21143.
Harry M. Irwin, Los Angeles, for appellants. Joseph L. Graves, Monterey Park, for respondent.
Thomas BURKE and Doris Burke, Plaintiffs, Cross-Defendants, Appellants,
v.
Stanley M. CHROSTOWSKI, Defendant, Cross-Complainant, Respondent.
Sept. 27, 1955.
Hearing Granted Nov. 23, 1955. *
Harry M. Irwin, Los Angeles, for appellants.
Joseph L. Graves, Monterey Park, for respondent.
MOORE, Presiding Justice.
Action for $2,500 allegedly promised appellants by respondent for appellants' half interest in the assets and good will of a copartnership which appellant Thomas Burke and respondent had operated in the City of Monterey Park under the fictitious name of El Adobe Coffee Shop.
Respondent made a general denial and by cross complaint alleged that while the firm was proceeding in the operation of the business of the coffee shop on September 13, 1953, appellant Thomas disappeared with three days' unbanked receipts; that at the time of Thomas' departure, he forwarded to respondent an assignment of 'all assets and liabilities' of their partnership in consideration of 'monies received and continued payment of $100.00 per week for the period of 25 weeks * * * till the additional sum of $2500.00 is reached or paid'; that with such assignment, Thomas sent respondent (1) a signed check to 'be used to draw out any money' in the bank account of the El Adobe Coffee Shop and 'then put in your name,' (2) a note 'giving you the business and you can settle with Doris. I have no intention of returning ever. Sorry, Tom.'
The question for decision is whether the writings and the signed check of Thomas Burke and the conduct of respondent with reference thereto constituted a contract between the partners, a settlement of their partnership affairs, and obligated respondent to pay the sum of $2,500 in installments to Doris Burke.
Prior to Thomas' letter and assignment, he and respondent had engaged in conversations relative to the latter's purchase of Thomas' interest; but no conclusions had been reached. However, the court found that, on the day of his receipt of the assignment and signed check, respondent 'took possession of the equipment, merchandise, cash, credits and business of the said El Adobe Coffee Shop and has retained possession thereof and has conducted and operated said business since said date.' The proof was that after receiving the signed check, respondent ascertained the exact balance on deposit in the partnership account to be $1,887.19, inserted that sum in the blank check, and withdrew $1,887.19, closed the partnership account and deposited the money in his own account, jointly with his wife. Thereafter he conducted all of the coffee shop business through such account, deposited some $2,000 of his own cash therein, and both he and his wife drew therefrom money for their personal needs. To make certain that he had cleared his business from any claim of Mr. Burke, respondent promptly published his 'Notice of Dissolution of Partnership' which declared that Thomas Burke and Stanley M. Chrostowski 'did on the 14th day of September, 1953, by mutual consent dissolve and terminate their relations as partners therein. Said business in the future will be conducted by S. Chrostowski, who will pay and discharge all liabilities and debts of the firm and receive all monies payable to the firm. Further notice is hereby given that the undersigned will not be responsible from this day on for any obligation incurred by Thomas Burke in his own name or in the name of the firm. Dated at Monterey Park, California, this 18th day of September, 1953. Stanley W. Chrostowski.'
In the operation of the coffee shop, the partners had made deposits with the utilities and with the Board of Equalization to establish credit and to carry on their business. Respondent had all such partnership accounts and the deposits which had been made to secure them transferred to his own name, and also had the Board of Equalization transfer the partnership sales tax number to his own name. He had intended to settle with the Board by taking credit for the partnership deposit against his sales tax account, 'but through an oversight or error, I paid it out of my own pocket.'
At the time of receiving Thomas' assignment, signed check and advice of his departure, respondent estimated that the amount of 'week end receipts' that had been taken by Thomas was 'a little over $600.' Respondent concluded that such receipts were the 'monies received' as part of the consideration for the assignment.
The performance of the acts recited in the foregoing, after receipt of the assignment, compel the conclusion that respondent accepted the offer of his partner; thereby a bilateral agreement of the parties was effected, and the terms contained in the assignment became respondent's obligations. If he had not intended to accept the offer but preferred to maintain the partnership, he would not have taken over the business into his own name, closed out all partnership accounts, or published his notice of dissolution. If he did not intend to pay the $2,500 to Doris, he would have taken no steps to notify the world that the partnership was dissolved 'by mutual consent.' Inasmuch as no definite term for the continuance of the partnership had been fixed at the time of entering into it, a dissolution could be lawfully effected by either partner at any time. Corp.Code, § 15031(1)(d). That is what Thomas Burke did in forwarding the assignment to respondent, 'giving you the business and you can settle with Doris.' It was respondent's assent to his partner's proposal that created the 'mutual consent' he advertised to the world.
The mere dissolution of the partnership by Burke did not diminish the interest of either partner in the assets of the firm "until the final closing up of its affairs." Zeibak v. Nasser, 12 Cal.2d 1, 17, 82 P.2d 375, 383. At that time two courses were open to respondent, to wit: (1) he could reject the offer of Burke, conserve and carry on the coffee shop in the accustomed way, wind up its business, 'apply its property to discharge its liabilities,' and divide any surplus between himself and Burke or the latter's assignee, Corp.Code, § 15038; or (2) by acceptance of Burke's offer, respondent could thereupon 'wind up the partnership affairs.' Corp.Code, § 15030. The latter course was chosen with all statutory ceremonials and the fan fare of a happy dissolution.
If respondent had chosen to reject Burke's offer, he was obligated to liquidate the partnership's business in such manner as to conserve the interest of his partner in the assets including the good will, and to use none of its property adversely to the interest of both, and to pay to his partner the latter's pro rata share of the profits, based on the value of his interest as of the date of dissolution. Vangel v. Vangel, 116 Cal.App.2d 615, 628, 254 P.2d 919; Ruppe v. Utter, 76 Cal.App. 19, 24, 243 P. 715. He did not follow that course. He took over the business and the assets as proposed by Burke, and wound up the partnership. He complied with the offer in all respects except in not paying Mrs. Burke the $100 weekly payments.
The performance of the conditions of a proposal is an acceptance thereof. Civ.Code, § 1584; Davis v. Jacoby, 1 Cal.2d 370, 378, 34 P.2d 1026; In re Estate of Cheda, 58 Cal.App. 433, 438, 209 P. 70; Walmsley v. Holcomb, 61 Cal.App.2d 578, 581, 143 P.2d 398; Wood v. Gunther, 89 Cal.App.2d 718, 730, 201 P.2d 874. The voluntary acceptance of the benefits of an offer is equivalent to a consent to undertake all obligations arising from it. Civ.Code, § 1589.
Because respondent (1) took over the coffee shop and operated it as his own individual property in his own name, (2) withdrew the $1,887.19 by using the check signed by Burke and sealed in the same envelope that contained the offer, (3) deposited that money in a personal account from which he withdrew funds for his own individual and family requirements, and (4) deposited in the same account all receipts of the coffee shop, (5) had all accounts of the partnership transferred to his name only, and (6) published the 'Notice of Dissolution by mutual consent' and that he would henceforth conduct the business--the conclusion is unavoidable that respondent for a valuable consideration agreed to pay Mrs. Burke $2,500.
Respondent filed a cross complaint in which he made some allegations which the court found to be true. We find no substantial evidence to support such findings. While it is true that Burke had taken certain unbanked receipts, that fact is immaterial for the reason that Burke stated in his assignment that the consideration passing to him was 'monies received and continued payment of $100 per week to my wife Doris * * * till the additional sum of $2500 is paid.' If respondent had thought that Burke had taken an unreasonable sum of 'monies', it was time then to reject the offer. There is no evidence that respondent told Doris that the 'offer was unacceptable.' But, had he done so, such conversation was contrary to his actual acceptance of the offer. There is no evidence that respondent published the notice of dissolution 'to forestall further actions of Burke.' Had he so testified, it would have been an inadmissible, self-serving statement, no more than a thought to himself. There was no evidence that Burke 'advised that there had been no acceptance of said offer, no formal dissolution of the partnership.' The finding that the 'Board of Equalization demanded that the old sales tax number be cancelled and defendant operate on his own sales tax number' is of no advantage to respondent. The Board acted in view of the published notice of dissolution 'that the business would be conducted' by respondent only. The finding that respondent had stated an account to which appellant made no objection was immaterial. Appellants had made no demand for an accounting. The business was under respondent's sole control at all times after September 13, 1953. There was no occasion for appellants to inspect an ex parte account prepared by an employee of respondent. The finding that plaintiffs are estopped by the conduct of Thomas Burke from asserting an interest in the 'net worth' since September 14, 1953, is technically correct. He had already retired and the partnership dissolved 'by mutual consent.'
The judgment is that defendant has accounted for all of plaintiffs' share of copartnership money and that plaintiffs are estopped to assert any interest in values created by the partnership business after September 14, 1953. There is no evidence to support an implied finding essential to such judgment. There is no evidence that appellants did any act that misled respondent to his prejudice. (18 Cal.Jur.2d pp. 405, 413.) The mutual dissolution of the partnership was attended by Thomas Burke's withdrawal of $550 from the cash drawer and the withdrawal by respondent of $1,887.19 from the bank account of the firm. Also, he took over the ownership and operation of the business and called it his own, until demand was made that he pay the balance of the purchase price of Burke's share. There is no evidence that either appellant did any deceitful or wrongful act or misled respondent to his detriment.
Judgment reversed with instructions to enter judgment for appellants.
McCOMB and FOX, JJ., concur. --------------- * Opinion vacated 296 P.2d 545.