Hampton v. Rose

MARKS, J. This is a motion to dismiss the appeal on the grounds, (1) that the questions on which the decision of the court depends are so unsubstantial as not to need further argument (sec. 3, rule V, Rules for the Supreme Court and District Courts of Appeal); and, that appellant has accepted and benefited by the fruits of the order.

The record discloses that a receiver was regularly appointed after a hearing on an order to show cause. The only documents in the record that were before the trial court at the hearing are the complaint and an affidavit of appellant. The complaint alleges that on June 20, 1932, plaintiff and defendant entered into a contract to conduct a business at 713 South Broadway in Los Angeles; that they would organize a corporation for such purposes; that plaintiff was the owner of a contract for a lease on the premises and that defendant was operating a business therein; that plaintiff would contribute the lease on the premises and defendant Rose the furniture, fixtures, equipment, improvements and $1300; that the business was to be conducted jointly; that plaintiff procured the lease in the joint names of himself and defendant Rose; that Rose took possession of the premises and business, excluded plaintiff therefrom and appropriated large profits to his own use; that plaintiff demanded an accounting and a transfer of the business to the corporation which had been organized to take it over; that Rose refused both demands; that Rose had withdrawn large sums of money and property from the business and appropriated them to his own use. Plaintiff, among other things, sought an accounting. and the appointment of a receiver to operate the business pending the determination of the suit.

[169]The affidavit filed by Bose contradicted many of the allegations of the complaint. This merely created a conflict in the evidence which was resolved in favor of plaintiff by the trial judge.

Section 2400 of the Civil Code provides that “A partnership is an association of two or more persons to carry on as coowners a business for profit.” It is clear from the allegations of the complaint that it was the intention of the parties to enter into an association to carry on a business for profit. It is true that the parties contemplated the formation of a corporation to operate the business. Such a corporation was formed and defendant refused to transfer to it his contribution to the business. He cannot deprive plaintiff of his interest by refusing to carry out his contract. As far as the record before us on this appeal shows, the parties became joint owners in the business and would continue as such until the assignment of the assets to the corporation or the dissolution of the partnership.