Matson v. Jones

FOTJRT, J.

Juanita Jones appeals from a judgment by the trial court sitting without a jury which determined that she made a gift to Ollie Matson of certain restaurant property and stock, that her real property dealings with Matson constituted the performance of an agency rather than a partnership, and that she was entitled to no additional compensation.

Jones originally filed an action seeking to dissolve an alleged oral partnership with Matson; Matson concurrently instituted an action to obtain an accounting from Jones in relation to the acquisition and management of certain specified parcels of income property which Jones alleged constituted the subject matter of the partnership. Pursuant to stipulation, these two independent actions were consolidated for all purposes.

Appellant contends that (a) the evidence was insufficient to support the trial court’s finding that she made a gift to Matson of certain restaurant property and her shares in Entre Nous Corporation (hereinafter sometimes called Entre Nous); (b) the evidence was insufficient to support the trial court’s finding that the parties operated under an oral agency rather than a partnership agreement; and (c) assuming an agency existed, the court erred in failing to award appellant either compensation for her services or reimbursement for personal funds advanced in furtherance of the purposes of the agency for the benefit of the principal.

It is undisputed that sometime in December 1959 the parties entered an oral agreement according to which Matson was to furnish funds and Jones was to locate, purchase, and manage real property to produce rental income. The agreement was performed to the extent that a number of parcels of real property were indeed acquired with Matson’s funds and in his name and this property was managed by Jones who handled the escrow transactions, arranged for repairs and maintenance, and rented the properties and collected the rents. A single parcel of property on East 75th Street in Los Angeles was acquired in Jones' name and, although she included this parcel in her schedule of purported partnership properties, Matson conceded that it was her sole property.

[829]

Matson and Jones met when for a period of time Matson and his wife were next door neighbors of Jones and her husband. At that time Jones and her husband owned and operated a small restaurant and bar on Jefferson Boulevard in Los Angeles known as the Entre Nous. Matson was persuaded to invest some funds in the enterprise and the Entre Nous Corporation was then established. Matson paid $5,000 to acquire 1,500 shares of Entre Nous; Jones and her husband each held 750 shares of the Entre Nous stock, and the restaurant, land and building remained in their names. When, at a subsequent time, she and her husband suffered financial reverses the restaurant property was threatened with foreclosure and she transferred this property to Matson without monetary consideration. In the intervening period Matson purchased from Mr. Jones his 750 shares of stock in Entre Nous. Thereafter Juanita Jones sold Matson the liquor license and fixtures which had belonged to Entre Nous for the sum of $13,000 which she retained for her own use and benefit, and she transferred to Matson her 750 shares of Entre Nous common stock without monetary consideration. Matson testified that the restaurant property and Entre Nous stock was transferred to him without consideration and as a gift. Jones testified that no gift was intended.