Bridaham v. Moore

No. 82-07
I N THE SUPREME COURT O F THE S T A T E O F MONTANA
1982
V I V I A N B. BRIDAHAM, f o r m e r l y known
a s V I V I A N B . MOORE,
P l a i n t i f f and R e s p o n d e n t ,
ROBERT J . MOORE and RUBY RANCH,
a Mont. Partnership,
D e f e n d a n t s and A p p e l l a n t s .
Appea1 from: D i s t r i c t C o u r t of t h e F i f t h J u d i c i a l D i s t r i c t ,
I n and f o r t h e C o u n t y of Fladison, T h e H o n o r a b l e
W. W. L e s s l e y , Judge p r e s i d i n g .
C o u n s e l of R e c o r d :
For A p p e l l a n t :
C h e s t e r L l o y a Jones, V i r g i n i a C i t y , Montsna
For R e s p o n d e n t :
Poore, R o t h , R o b i s c h o n & Robinson, Butte, Montana
S u b m i t t e d on B r i e f s : M a r c h 18, 1 9 8 2
Decided: July 8, 1 9 8 2
Filed:
Mr. Justice Frank B. Morrison, Jr., delivered the Opinion of
the Court.
Defendants, Robert J. Moore and Ruby Ranch, appeal from
a November 30, 1981, amended judgment holding defendants jointly
and severally liable to respondent, Vivian Moore, for the
sum of twenty-six thousand one hundred fifty-eight dollars
($26,158.00), as well as interest, attorneys' fees, and
litigation expenses.
On November 1, 1978, Vivian Moore entered into a partner-
ship named "Ruby Ranch," whose purpose was to operate a
cattle ranch in Madison County, Montana. The other partners
were Mrs. Moore's former husband, Thomas M. Moore; her brother-in-
law, Robert J. Moore; and A. Marshall Bell, 111. Mr. and
Mrs. Moore were the managing partners.
The partnership was formed by an "Articles of Partnership,"
Article XVIII being especially relevant to the instant case:
" RETIREMENT
"Any partner may retire from the partnership
as of the end of any calendar month, after
giving the other partners at least sixty (60)
days' notice in writing of his intention to
do so ... In the event of the retirement or
death of a partner, neither the partnership
nor its fiscal year shall be terminated, and
the remaining partners shall continue the
business and shall succeed to the interest
of the retired or deceased partner by paying
to him or his representative the then balance
in his capital and undistributed profits
account, and his pro rata share of the income
of that fiscal year based on the ratio of the
number of days prior to death, or retirement,
to the number of days in the fiscal year. . ."
Article VI states that the following figures will be
used in the event initial capital is returned to the partners:
Thomas M. Moore $73,900.00 27.5%
Vivian B. Moore $55,500.00 20%
Robert J. Moore $73,500.00 27.5%
A. Marshall Bell I11 $80,000.00 25%
Article X defines "net profits and losses" and provides for
the use of these same percentages in their distribution.
In September of 1979, Vivian and Tom Moore decided it
would be wise to try to sell the ranch on the general market.
Robert Moore and Marshall Bell did not wish to sell the
ranch, so they offered to buy out Tom and Vivian. An
"Agreement for Sale and Purchase of Partnership Interest"
was prepared by the partnership's attorney. On December 20,
1979, the agreement was executed by Vivian as seller and by
Robert J. Moore, on behalf of the Ruby Ranch, as buyer. The
agreement contained a provision which authorized Robert J.
Moore to execute the agreement, thereby binding Ruby Ranch.
Tom and Vivian Moore were in the process of obtaining a
divorce. Therefore, Tom Moore's interest was handled separately
and is not a subject of this dispute.
The Agreement for sale and purchase contained the
following pertinent provisions:
"Whereas, Seller is desirous of selling and
Buyer is desirous of purchasing all of Seller's
right, title and interest in and to the Montana
co-partnership generally known and referred to
as the 'Ruby Ranch'. .
.Seller agrees to sell
and Buyer agrees to purchase all of Seller's
right, title and interest in and to that cer-
tain Montana co-partnership. ..
"It is agreed and understood by and between
the parties hereto that the partnership interest
being sold by Vivian B. Moore unto the partner-
ship is that partnership interest as set forth
in the original Articles of Partnership dated
November 1, 1978, specifically Twenty (20%)
percent of the total partnership."
"It is agreed and understood by and between
the parties hereto that the purchase price to
be paid by Buyer unto Seller. . .is the sum
of One Hundred Five Thousand Four Hundred
Thirty-One Dollars ($105,431.00). . ."
The sale Agreement required Vivian to resign from the
Ruby Ranch partnership, give the partnership a quit claim
deed of her interest in the partnership and recognize a
credit of $1,431 to be given to the buyer. She completed
all requirements.
The Agreement required the partnership to do the following
in return:
1. Convey a house in Sandpoint, Idaho, to Vivian
for a $55,000 credit on the sale price of
$105,431.
2. Pay Vivian $25,000 cash on or before December
31, 1979.
3. Transfer to Vivian the title to a 1978 Peugeot
car valued at $2,000.
4. Issue and deliver to Vivian a promissory note
for $22,000.
5. Grant Vivian a security interest in cattle as
security for the promissory note.
The partnership has performed all its requirements except
that of honoring the promissory note when it became due.
Vivian filed a complaint against Robert Moore and Ruby
Ranch on October 24, 1980. In the complaint, she requested
immediate possession of the livestock, which was the security
for the note; judgment against defendant for the amount of
the note, $22,000 and interest; and reasonable attorney's
fees in the amount of Five Thousand Dollars ($5,000).
In granting judgment for plaintiff Moore, the District
Court found that contrary to defendants' allegations, ~ i v i a n
Moore had not retired from the partnership, pursuant to
Article XVIII, Articles of Partnership. Rather, the judge
found that Vivian had sold her interest to the partnership;
t h a t t h e " ~ g r e e m e n tf o r S a l e and P u r c h a s e of P a r t n e r s h i p
I n t e r e s t " was s u p p o r t e d by s u f f i c i e n t c o n s i d e r a t i o n and
was v a l i d ; t h a t t h e promissory n o t e w a s a n e g o t i a b l e i n s t r u m e n t
s u p p o r t e d by v a l u a b l e c o n s i d e r a t i o n and t h a t t h e n o t e w a s
b i n d i n g on d e f e n d a n t s . The judgment was l a t e r amended t o
correct clerical error. W a f f i r m t h e amended judgment b u t
e
a l s o remand t h i s c a u s e t o t h e t r i a l c o u r t f o r a d e t e r m i n a t i o n
of r e a s o n a b l e a t t o r n e y ' s f e e s on a p p e a l t o be awarded r e s p o n d e n t .
R o b e r t J . Moore and t h e Ruby Ranch p r e s e n t t h e f o l l o w i n g
i s s u e s on a p p e a l :
1. Whether t h e o r i g i n a l p a r t n e r s h i p agreement, t h e
A r t i c l e s of P a r t n e r s h i p , s h o u l d c o n t r o l t h e s a l e of p l a i n -
t i f f ' s partnership i n t e r e s t t o the partnership.
2. Whether t h e p a r t n e r s h i p i s e n t i t l e d t o a r e f u n d of
t h o s e amounts p a i d t o Moore which exceed t h e amount Moore
would have r e c e i v e d had s h e r e t i r e d .
I s s u e number o n e i s d i s p o s i t i v e .
D e f e n d a n t s ' major c o n t e n t i o n i s t h a t V i v i a n Moore, by
s e l l i n g h e r i n t e r e s t i n t h e p a r t n e r s h i p , r e t i r e d from t h e
partnership. R e t i r e m e n t i s c o n t r o l l e d by A r t i c l e X V I I I
of Ruby Ranch's A r t i c l e s of P a r t n e r s h i p . Pursuant t o t h a t
a r t i c l e , a r e t i r i n g partner i s e l i g i b l e f o r "the then balance
i n h i s c a p i t a l and u n d i s t r i b u t e d p r o f i t s a c c o u n t , and h i s
p r o r a t a s h a r e of t h e income of t h a t f i s c a l y e a r . . .'I
According t o t h e e v i d e n c e p r e s e n t e d a t t r i a l , M r s .
Moore would have r e c e i v e d $55,650.00 p l u s i n t e r e s t of $6,492.50,
f o r a t o t a l of $62,142.50, had s h e r e t i r e d . Pursuant t o t h e
"Agreement f o r S a l e and P u r c h a s e of P a r t n e r s h i p I n t e r e s t , "
Mrs. Moore was t o r e c e i v e money and p r o p e r t y t o t a l l i n g
$105,431.00. She h a s i n f a c t r e c e i v e d money and p r o p e r t y
totalling $83,841.00. Therefore, defendants contend that
Mrs. Moore owes them $21,698.50 and that they need not honor
the promissory note as there is no consideration to support
it.
Moore contends that the Articles of Partnership do not
apply to this transaction as she did not retire from the
partnership. Rather, Mrs. Moore contends that she sold her
partnership interest to the partnership and that the "Agreement"
is binding on the parties.
Whether, by selling her interest in the partnership,
Mrs. Moore "retired" from the partnership, as contemplated
by Article XVIII, is irrelevant. The "Agreement for Sale and
Purchase of Partnership Interest," not the "Articles of
Partnership," controls this transaction. The parties chose
to enter into the "Agreement" when Mrs. Moore decided to
sell, and the partnership decided to buy, her interest.
They therefore chose not to act pursuant to the original
"Articles of Partnership."
"If the parties to a contract make a new and
independent agreement concerning the same
matter, and the terms of the latter are so
inconsistent with those of the former that
they cannot stand together, the latter may
be construed to discharge the former."
Kester v. Nelson (1932), 92 Mont. 69,74, 10
P.2d 379, 380.
A later written contract may alter or modify terms
of a former contract if both parties agree to the new contract
and it is supported by adequate consideration. Section 28-
2-1602, MCA; Jenson v. Olson (1964), 144 Mont. 224, 395
P.2d 465; Sturm v. Boker (1893), 150 U.S. 312, 37 L.Ed.
Both parties voluntarily entered into the "Agreement for
Sale and Purchase of Partnership Interest"; therefore, both
parties agreed to the new contract. Mrs. Moore resigned
from the Ruby Ranch partnership and gave the partnership a
quit claim deed of her interest in the ranch. There was
adequate consideration to support the second contract.
The "Agreement" is the contract controlling the sale of
Mrs. Moore's interest in "Ruby Ranch" to the partnership.
The "Agreement" provided for a promissory note for $22,000,
plus ten percent interest per annum, to be paid to Mrs.
Moore by the partnership on or before June 1, 1980. Defendants
defaulted on the note.
The note provides that should default occur, "the whole
amount shall become immediately due and payable . . .
together with any reasonable expenses incurred by the holder
thereof in collecting or enforcing payment thereof, including,
but not limited to, reasonable attorney's fees."
The District Court's judgment is pursuant to the terms
of the note and is affirmed. Moore's award of ten percent
interest on the costs she incurred in collecting on the note
is pursuant to section 25-9-205, MCA, and is also affirmed.
Finally, we remand this cause to the District Court for a
determination of the appropriate attorney's fees on appeal
We Concur: