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Tripp v. Chubb

Supreme Court of Arizona

July 11, 1949

CHUBB et al

Appeal from Superior Court, Maricopa County; M. T. Phelps, Judge.

Judgment affirmed.

George Sterling, of Phoenix, for appellant.

Hill, Robert, Hill & Price, of Phoenix, for appellees.

Gibbons, Superior Judge. La Prade, C. J., and Udall, Stanford and De Concini, JJ., concur. Phelps, J., being disqualified, as he was the trial judge, the Honorable J. Smith Gibbons, Judge of the Superior Court of Apache County, was called to sit in his stead.


Gibbons, Superior Judge.

[69 Ariz. 32] This is an action to dissolve an alleged partnership, for an accounting, and for a division of partnership property.

The complaint alleges that plaintiff (appellant) N. R. Tripp and defendants (appellees) Robert D. Chubb and Isabel Chubb, his wife, and Archie H. Chubb and Helen Chubb, his wife, entered into an oral agreement of copartnership under the name of "Professional Pharmacy" for the purpose of engaging in the general business of operating a drug store and pharmacy; that

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plaintiff, a registered pharmacist, was to contribute his experience and knowledge and prepare prescriptions; that the defendants were to contribute money to lease, equip, and stock said business; that plaintiff was to receive one third of the net profits and from said profits to repay to defendants one third of the capital invested by them; and that plaintiff was to have one third, Robert D. Chubb and wife one third, and Archie H. Chubb and wife one third interest in said partnership. In addition to said profits, plaintiff and defendants were to each receive $ 50 per week and to cooperate in the management of the business. That from October 28, 1945, to August 6, 1946, plaintiff, pursuant to said agreement, expended time and labor in the management and control of said pharmacy, and at no time was an accounting had, although plaintiff made demands therefor; and that defendants have assumed actual management and control thereof and converted and dealt with partnership assets as their own.

The answer sets forth an unsigned agreement prepared by the law firm of Hill, Robert and Hill at the alleged request of plaintiff and defendant Robert D. Chubb, which in substance provides: That the parties desire to form and operate a drug store and prescription pharmacy on East Monroe Street, Phoenix, Arizona; defendants [69 Ariz. 33] Helen Chubb and husband to finance the undertaking and the plaintiff and defendant Robert D. Chubb to have an option to purchase one-third interest each within two years from date at a cost of one third of the investment; plaintiff and Robert D. Chubb to each receive an agreed salary of $ 50 per week and one third of the profits, said profits to be applied on the purchase of an interest in the business, payments to be forfeited as consideration for option if buyer decided to abandon purchase before full payment. Contract also provides for an accounting every three months and recites that Helen Chubb and Archie H. Chubb are the sole owners and proprietors of the business until the full amount of one third is paid by either or both purchasers, and that the arrangement is not to be considered a partnership in any respect during the period of purchase.

The answer further alleges plaintiff and defendant Robert D. Chubb presented said agreement to Helen Chubb and husband who agreed to all terms therein, provided there be inserted a provision that plaintiff withdraw from the business if he continued drinking. This provision was not inserted and the contract was never executed. The answer then alleges that the plaintiff was employed upon a straight salary of $ 50 per week and remained so employed until discharged, for drinking, in August, 1946. Defendants alleged that plaintiff had not contributed any capital; that the assets of the business did not exceed the contributions made by the defendants; and denied that plaintiff was entitled to any of the assets of the business.

At the conclusion of the trial the court entered judgment for the defendants and against the plaintiff finding that no partnership existed. Plaintiff has appealed and urges eleven assignments of error and an equal number of propositions of law, which for clarity and brevity may be summarized as follows: That the court erred (a) in finding that no partnership existed between plaintiff and defendants; (b) in denying plaintiff's motion to strike from the amended answer that portion which sets forth the purported unsigned agreement of the parties; (c) in calling defendants' attorney as a witness and admitting the attorney's file in evidence; and (d) in denying plaintiff an accounting, for the reason that even under defendants' theory of the case he was entitled to receive one third of the net profits. These matters will be discussed in the order named.

The only issue involved in this case is the existence or nonexistence of a partnership. The editors of American Jurisprudence in the treatment of the law of partnership, 40 Am.Jur., section 32, page 145, in discussing tests or indicia of partnership, state that the courts have encountered great difficulty in laying down tests by which to determine the existence or nonexistence of a partnership relation. They comment upon the fact that, while the reports are replete with cases ...

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