Stone v. Ryals

BRAY, J.

In an action for contribution between former partners of a dissolved partnership, plaintiffs appeal from the judgment in favor of defendant.

[524]

Questions Presented

1. Primarily,—whether on dissolution plaintiffs assumed the obligations of a certain contract. 2. Correctness of the findings.

(A companion case instituted by defendant to reform the agreement of dissolution was consolidated and tried with this case. The court found against defendant in that case. No appeal was taken.)

Facts

For some time prior to September 30, 1948, the parties were partners doing business under the name of Stone-Ryals Electric and Manufacturing Company. Their business was making welding equipment, making and installing crane and hoisting equipment, and doing electrical wiring and other electrical contracting work. On January 28, 1946, a written contract was entered into between the partnership and Victor Equipment Company for the manufacture of certain welding equipment, to be resold by the latter to Mission Appliance Corporation. Among the specifications in the contract were requirements that the equipment meet certain tests. The purchase price was $20,350, payable on acceptance by Mission. The final delivery of equipment was March 19, 1947. The equipment was of a special nature and the tests could not be made at the factory. It was understood by all that additional work might have to be done on the equipment after delivery to make it meet specifications. An' exchange of letters took place between the partnership, Mission and Victor, in which it was agreed that the partnership guaranteed the performance of the equipment, and if it did not give satisfactory performance as specified, it would be taken back and the purchase price refunded. The final payment was made in December. No tests had yet been made. The first tests were made March 15, 1948, which, by coincidence, was about the date when the partners commenced negotiating between themselves for a dissolution of the partnership. A dissolution agreement was executed dated December 9th, effective as of September 30, 1948. The equipment did not meet specifications and after considerable work on it by the partnership prior to dissolution and by plaintiffs after dissolution, Victor demanded the return of the purchase price. Without defendant's knowledge or consent, plaintiffs about December 8th returned the purchase price, partly in cash and partly by a promissory note of plaintiffs and received