Opinion
Page 1350
Harold L. Neufeld, Denver, for plaintiffs-appellees.
A. Daniel Rooney, Aurora, for defendant-appellant.
SMITH, Judge.
This appeal arises out of a contract dispute between plaintiffs, John and Barbara Novinger, and defendants Roger L. Allen, d/b/a The Briarwood Companies, and Gerald L. Hammer. Trial was to the court and judgment for rescission and incidental damages in the amount of $2,805.19 was entered against the individual defendants on the contract claim. The court denied Hammer's cross-claim against Allen, and the court dismissed plaintiffs' claim as to the Briarwood Corporation. Hammer appeals the entry of judgment against him. We affirm.
The questions raised on this appeal deal with the nature of the relationship between Hammer and Allen and whether Hammer should be jointly liable with Allen.
The relevant facts may be summarized as follows: The Novingers contacted Hammer, a real estate salesman whom they knew. The Novingers wanted a custom home built, and Hammer placed them in contact with Allen, a builder. Thereafter the Novingers, Allen, and Hammer worked out plans for the construction of a custom home. Hammer and Allen drew up a contract which included in its terms constuction of the house, price, and financing arrangements. The contract was signed by John and Barbara Novinger, as purchasers, and by Roger L. Allen, as president of the Briarwood Companies and as builder.
Subsequently, a proposed amendment, denominated 'Counter Proposal', was submitted to the Novingers by Allen and Hammer providing for an extension of the completion date. This proposal was signed by 'Roger L. Allen & Gerald L. Hammer (briarwood Companies) sellers' and by the Novingers, as purchasers. The amendment was incorporated by its own terms into the original contract. The real estate which had been previously acquired by the Novingers was then conveyed to Hammer and Allen, as joint tenants so that they could procure a construction loan. Hammer and Allen co-signed a note for the construction loan. They both participated in decisions as to the purchase of materials and labor, costs, and construction of the house. The undisputed testimony disclosed that both were to share equally in the profits to be made from this contract; however, Hammer contends that his equal share was intended to be his 'real estate commission' on the sale. Novinger testified that Hammer had represented to him that Allen was his partner. Hammer testified that there was no joint venture or partnership agreement with Allen. However, Hammer also testified that he did not have any listing or brokerage agreement with Allen.
Finding the contract ambiguous and uncertain in its terms, the court concluded that all parties should be returned to the status they occupied prior to execution of the contract. Although the court found no specific agreement existed between Hammer and Allen to share losses and therefore concluded that no joint venture or partnership agreement existed between them, it entered judgment for plaintiffs' incidental damages against both Hammer and Allen.
I
The right to participate in profits implies a corresponding liability for losses, and although there is no provision which states how losses will be shared, in absence of evidence to the contrary, losses will be presumed to be borne in the same proportion in which profits are shared. Richardson v. Keely, 58 Colo. 47, 142 P. 167. Thus, because defendants agreed to share profits equally, the trial court's finding that there was no agreement as to sharing of losses does not preclude, as a matter of law, the conclusion that there was a joint venture agreement between defendants. Bushman Construction Co. v. Air Force Academy Housing, Inc., 327 F.2d 481 (10th Cir.) . In Realty Development v. Feit, 154 Colo. 44, 387 P.2d 898, the court enumerated three requirements for a joint venture, namely:
'(1) There must be joint interest in the property by the parties sought to be held as partners;
(2) there must be agreements, express or implied, To share in the profits and losses of the venture; and
(3) there must be actions and conduct showing co-operation in the project.'
In the instant case, careful examination of the record and the court's findings shows that all three of the above elements have been satisfied: (1) Hammer and Allen owned the property on which the home was built as joint tenants; (2) there was an express agreement to share profits equally, and, by presumption of law, there was an implied agreement to share losses equally; and (3) evidence was uncontroverted that both defendant actively participated in this project. These facts compel the conclusion, as a matter of law, that a joint venture existed between Allen and Hammer. Thus, the defendants having created a joint venture relationship, they are both liable on any contract relating to matters within the scope of their joint venture. Bloom v. McPhee & McGinnity Co., 26 Colo.App. 256, 143 P. 825. See Colorado Jury Instructions 7:13 and 7:14; and C.R.S. 1963, 104--1--9(1).
II
Hammer argues that the evidence was not sufficient to support that portion of the judgment relating to plaintiffs' expenditures for carpets and custom drapes. The court found that $2,806.19 had been spent by the plaintiffs for drapes, and that since these drapes had been custom made for this specific house, no salvage value would be taken into consideration. The court further found that plaintiffs had spent $1,000 as a deposit on the carpet and that a refund of this deposit could not be obtained. These findings, which are supported by competent evidence in the record, will not be overturned on appeal. Briano v. Rubio, 141 Colo. 264, 347 P.2d 497.
Judgment affirmed.
SILVERSTEIN, C.J., and PIERCE, J., concur.