Radermacher v. Daniels , 64 Idaho 376 ( 1943 )

This action was commenced by plaintiff (respondents here) to recover from the defendants the sale price of certain livestock wrongfully sold by them as auctioneers, which property belonged to the plaintiff at the time the sale was made. Defendants answered and denied plaintiff's ownership and alleged that the property had been decreed to plaintiff's wife, Freda M. Radermacher, prior to the auction sale by them. That prior to the sale plaintiff consented to the making of the sale. Defendants also alleged that the sale was made by the Twin Falls Commission Company, Inc., and that the corporation had long since been dissolved; that the defendants, M.M. Daniels and F.C. Erwin, were co-partners doing business under the firm name and style of Twin Falls Commission Company. Trial was had and judgment was entered for the plaintiff as prayed for by his complaint, and defendants have appealed.

The case out of which this action ultimately arose (Radermacher v. Radermacher) has a long and varied history and has found its way to this court a number of times: Radermacherv. Radermacher, 59 Idaho 716, 87 P.2d 461; Radermacher v.Sutphen, 60 Idaho 529, 92 P.2d 1070; Radermacher v.Radermacher, 61 Idaho 261, 100 P.2d 955; Radermacher v.Eckert, 63 Idaho 531, 123 P.2d 426. The facts material to the consideration of the present case are as follows:

By decree of District Court, September 3, 1937, entered in the case of "Henry J. Radermacher, Plaintiff, v. Freda M. Radermacher, Defendant", (59 Idaho 716) defendant was awarded the community personal property consisting of "not less than 52 head of cows, together with their 1937 calves, . . . . also not less than 25 head of horses." Appeal to the Supreme Court was taken November 12, 1937. That judgment was reversed by this court September 8, 1939, (59 Idaho 716); and the District Court was directed to eliminate from his decree that part thereof, awarding to Mrs. Radermacher any of the personal property. While the case of Radermacher v.Radermacher was pending in this court on appeal, defendants in this case, upon the solicitation of Mrs. Radermacher, made auction sale of a part of the personal property "for the account of Freda Radamaker", as follows: September 15, 1937, 1 W. F. Cow, $56.35; Oct. 6, '37, 1 Red Hfr. $40.25; Oct. 26, '37, 1 Roan Hf., $51.40; Jan. 10, 1938, sale of 9 mares and 2 geldings, $292.50; and March 7, 1938, sale of 2 geldings, $102.50, totaling $543.00.

Defendants had knowledge of the pendency of the action and the appeal and were so notified thereof prior to the making of the sale. Plaintiff testified that he notified them personally of the pendency of the appeal and forbade them to sell the property. That testimony, however, is disputed. All the livestock sold by defendants (with the possible exception of one animal) were branded with the Triangle Bar brand, () which was duly registered. (Sec. 24-1004, I. C. A.) and filed in the department of agriculture in accordance with the requirements of the statute, as plaintiff's brand. This wasnotice of ownership of stock having that brand. (Sec. 24-1011;State v. Dunn, 13 Idaho 9, 88 P. 235.) Plaintiff admits being present at the first sale but denies being present at any of the other sales.

Peculiar to this case is the fact that plaintiff had previously been cited for contempt in the divorce case for failure to make maintenance and suit money payments as ordered by the court. Consequently, he might well and wisely have hesitated about interfering with a sale authorized by the trial court. At any rate, it is not thought that, under these circumstances, he should be estopped for keeping silent, if he did. Defendants knew whose property they were selling.

It is claimed that no cause of action was shown against defendants, M.M. Daniels and F.C. Erwin, doing business under the firm name and style of Twin Falls Commission Company, for the reason that they were only copartners; whereas the sale of the property involved was made by the Twin Falls Commission Company, a corporation. Ordinarily, that would be a complete defense to a cause of action, but here facts existed which seem to fully sustain plaintiff's position. The corporation was organized April 20, 1937. Defendants, Daniels and Erwin, owned 55% of the outstanding stock; 15% was owned by other parties. On petition of Daniels and Erwin, the corporation was dissolved April 23, 1940. At the time of the dissolution of the corporation or immediately prior thereto, Daniels and Erwin purchased all the outstanding stock, so that, when the corporation was dissolved, they owned all the corporate stock. They immediately "took over all of the assets of said corporation, consisting of buildings, fences, scales, corrals and bins owned by said corporation and continued to transact business under the same name as copartners and with the equipment of the said corporation; that, ever since the dissolution of said corporation, the said defendants . . . . have been in possession of all the corporate assets remaining after the dissolution."

So it appears that the business was continued in the same partnership name as the corporation had used in its corporate capacity; the stock of the corporation was owned by the same people who owned the entire interest and property of the partnership. In other words, they dissolved their corporate capacity, and took up the new relation under the same name in a co-partnership capacity, simply a change from tweedledum to tweedledee.

The trial court found that the value of the assets taken over by the co-partnership "was approximately $4,000". The law seems to be well settled, that those who take over the business and assets of a dissolved corporation, take it subject to the debts and liabilities of the corporation, to the full extent of the value of the property taken over. (19 C.J.S., p. 1541, Sec. 1760; United States v. Pann, 23 F.2d 714.)

In the comparatively recent case of Ortego v. Nehi BottlingWorks, 182 So. 365, 369, the Lousiana Court of Appeal had before it a very similar state of facts to the case here presented, and held the successors to the corporate assets liable to the extent of the value of such assets, saying:

"The pleadings show that the husband and wife owned all of the issued shares of the corporation, and upon the dissolution they acquired all of its assets and continued the operation of the business. Even if it be assumed that those individuals paid a valuable consideration to the liquidator for the corporation's assets, necessarily that consideration was returned to them because of their being the sole stockholders. The transaction amounted to nothing more than a bookkeeping entry, or, as plaintiffs' counsel state, 'taking money out of one pocket and putting it into another.'

"We are still of the opinion that plaintiffs are entitled to proceed against defendants, the alleged successors of the corporation, notwithstanding the fact that their claim is founded in tort and is unliquidated."

It seems to be conceded by all the parties before the court, that this property was originally community property; and that the sole right of management, control, and disposition of the same rested in the (plaintiff) husband. (Sec. 31-913, I. C. A.;Kohny v. Dunbar, 21 Idaho 258, Ann. Cas. 1913D, 492, 39 L.R.A., N.S., 1107, 121 P. 544; Radermacher v. Eckert, 63 Idaho 531,123 P.2d 426; Radermacher v. Radermacher, 61 Idaho 261,272, 273, and 278 et seq., 100 P.2d 955.) It is argued, however, that appellants were justified in making the sale under the decree of the District Court awarding the property to the wife at any time prior to the reversal of that judgment. We are unable to agree with that contention. The judgment in the case of Radermacher v. Radermacher, supra, did not become final until the appeal was heard and finally disposed of by the Supreme Court. (Sec. 12-606, I. C. A.; Radermacher v. Eckert,63 Idaho 531, 123 P.2d 426, 429; Benson v. District Court,57 Idaho 85, 93, 62 P.2d 108; Bedal v. Sake, 10 Idaho 270, 66 L.R.A. 60, 77 P. 638.)

The question as to whether the jury should have passed on all the facts and their findings have been final thereon, or whether they should have acted only in an advisory capacity upon the special questions submitted to them, is of no moment in the present state of the case. The trial court, with the assent of counsel on both sides, tried the issues as in an equity case and empaneled a jury in a mere advisory capacity. Defendants apparently acquiesced in this procedure and presented to the court a number of interrogatories which they requested be given the jury. The trial court, on his own motion, submitted to the jury five separate interrogatories, which were answered as follows:

"Interrogatory No. 1. "Do you find from the evidence that any act or words spoken by Henry J. Radermacher, caused the defendants to sell the property in question here?

"Answer: No.

"Interrogatory No. 2. "Do you find from the evidence that the Twin Falls Commission Company would have held the sales as they did if Henry J. Radermacher had not been present?

"Answer: Yes.

"Interrogatory No. 3. "Did plaintiff before the sales alleged notify defendants that all cattle bearing a certain described brand were his property and forbid them to sell any of the same?

"Answer: No.

"Interrogatory No. 4. "Did defendants as principal stockholders of Twin Falls Commission Company, Inc., take over the business and assets after its dissolution?

"Answer: No.

"Interrogatory No. 5. "If you find that the business and assets of said Twin Falls Commission Company, Inc., were taken over by the defendants, what do you find as the approximate value of said assets?

"Answer: __________."

The court adopted the answers to Interrogatories I and 2, rejected the others and made findings of fact in accordance therewith, on which the judgment was later entered. The evidence supports the findings. Under these circumstances, we are not called upon to determine whether the case made by the pleadings was one at law or in equity. (Frank v. Frank, 47 Idaho 217, 221, 273 P. 943; Village of Kendrick v. Nelson, 13 Idaho 244, 251, 89 P. 755, 12 Ann. Cas. 993; 4 C. J., p. 714, Sec. 2627; 3 Am. Juris., p. 35, Sec. 253.)

Judgment affirmed, with costs in favor of respondent.

Holden, C.J., and Buckner, D.J., concur.