Thompson v. Levereau
Thompson v. Levereau
Opinion of the Court
Rosalyn E. Thompson, as executrix of the estate of Louis William Thompson, deceased, brought this action against Anna Thompson Levereau for declaratory relief, calling for the construction of an agreement reading as follows:
“This Agreement, made and entered into this 11th day of November, Nineteen Hundred and Thirty-eight (1938) in the City of Los Angeles, County of Los Angeles, State of California
“By and between BelIíE Thompson Levereau, of the City of Los Angeles, County of Los Angeles, State of California, Party of the First Part, and Louis W. Thompson, of the same place, Party of the Second Part,
“For and in consideration of Ten ($10.00) Dollars in hand paid each to the other, receipt of which is hereby acknowledged, and the further consideration of the covenants herein contained,
“The said parties hereto agree as follows, to-wit:
“That whereas the party of the first part is a copartner to the extent of a quarter interest in that certain business known and designated as the United States Burglar Alarm Co., sometimes designated as the U. S. Burglar Alarm Co., located at 1315 West Pico Street, in the City of Los Angeles, County of Los Angeles, State of California, and whereas the said party of the first part is unable to devote any time or take any active part in the conduct or management of said business,
*764 “Now, Therefore, the said party of the first part, and the party of the second part, covenant and agree as follows, to-wit:
“The said party of the second part agrees to act for and represent the said party of the first part in the conduct and management of said business so far as her interest therein requires, and pay to the said party of the first part from the earnings of her interest in said business during the period of her lifetime not less than One Hundred ($100.00) Dollars each and every month for the said period of her life.
“The said party of the first part agrees to accept the said sum of not less than One Hundred ($100.00) Dollars each and every month for the period of her life as hereinbefore provided, and in consideration therefor, upon her the first party’s death the said quarter interest which she has in said business shall go to the said Louis W. Thompson, party of the second "part, as his separate property, and in the event of his death prior to the death of the said party of the first part then upon the death of the said Belle Thompson Levereau, party of the first part, said quarter interest in said business shall pass to the Estate of Louis W. Thompson.
“It Is Further Covenanted and Agreed, between the parties hereto that in the event of the sale or other disposition of said business during the lifetime of said party of the first part, the parties hereto shall agree to a fixed sum to be paid to the party of the first part by the party of the second part, or his representative, such sum to be based upon a fair and reasonable proportion of the sale price received as her quarter interest bears to the price received for said business.
‘ ‘ This agreement shall be binding upon the heirs, executors, administrators and assigns of the parties hereto.
Belle Thompson Levereau
Party of the First Part
Louis W. Thompson
Witnesses: Party of the Second Part
Fred J. Spring
Marie K. Thompson
“As a Copartner, I have no objection to this agreement.
Marie K. Thompson,
[Verification] Copartner. ’ ’
Defendant answered and filed a cross-complaint alleging facts upon which she sought to have the agreement declared
Upon a former trial the court gave judgment declaring the agreement to be an assignment of Mrs. Levereau’s quarter interest in the partnership, subject to the payment to her by Louis W. Thompson of at least $100 per month from the earnings of said quarter interest. Mrs. Levereau appealed and this court reversed the judgment. (Thompson v. Levereau, 66 Cal.App.2d 795 [153 P.2d 206].) The action was retried before another judge and resulted in findings and judgment for the defendant; from that judgment plaintiff appeals. As conclusions of law the court found:
“1. On the appeal from the judgment rendered after the first trial in this action, the District Court of Appeal held that the instrument set forth under Paragraph III of these Findings of Fact was not a present assignment, and this constitutes the law of the case, but that court did not pass upon the question as to the validity of the said instrument.
“2. The instrument set forth under Paragraph III of these Findings of Fact is void.
“3. The instrument set forth under Paragraph III of these Findings of Fact is wholly lacking in consideration.”
We shall consider first conclusion No. 1, but before doing so will state the theory of appellant with reference to the proper construction of the instrument and the effect that should be given to our former decision with relation thereto. The former opinion should be read in connection with the present one, and it is unnecessary to quote from it at any length. There is no uncertainty as to what was decided on the first appeal and no doubt that the point here involved was decided adversely to the present contentions of appellant. Plaintiff was contending, and the trial court had determined, that the agreement effected a transfer of defendant’s interest in the partnership business to Louis W. Thompson. We held that the agreement could not be given that effect. Upon the second trial plaintiff conceded that our judgment was a final adjudication that no present transfer of interest took place, but contended that our opinion did not hold that the agreement did not effect a transfer of a future interest. She says that if the agreement did not effect a transfer of the entire interest, it amounted to a present
The trial court correctly construed the opinion on the former appeal as a determination that the November, 1938, agreement did not effect a transfer of all or any portion of defendant’s quarter interest in the partnership business and therefore properly rejected plaintiff’s contention that there was a transfer of said interest, with a reservation of a life interest therein.
Upon the first trial findings and conclusions were in favor of plaintiff upon defendant’s cross-complaint, and it was accordingly found that the agreement was executed for a valuable consideration and was not induced by fraud or undue influence of Louis W. Thompson, and that he took no unfair advantage of defendant in the transaction. Inasmuch as a reversal of the judgment was required, the opinion on the former appeal dismissed the questions presented as to the correctness of the findings, conclusions and judgment upon the issues raised by the cross-complaint as unnecessary to be decided in a disposition of the appeal. Those issues therefore remained for decision on the second trial. Upon that trial the case was submitted upon the transcript of the evidence taken at the first trial, and that transcript is now before us.
The court found in favor of defendant and cross-complainant upon the cross-complaint, and decreed the agreement to be without consideration and void and of no effect. Plaintiff attacks the judgment insofar as it decrees invalidity of the agreement based upon want of consideration and the exercise of undue influence by Louis W. Thompson, contending, first, that the allegations of the cross-complaint were insufficient to state a cause of action for rescission, and, second, that the evidence was insufficient to establish failure of consideration or the exercise of undue influence.
However, it is immaterial in the disposition of this appeal whether the agreement was subject to rescission upon the ground of the use of undue influence. Also immaterial is the conclusion of the trial court that the agreement is void. There are two reasons for this. The first is that defendant not only did not seek to disaffirm the agreement but, as we shall see, she ratified it. In the three and one-half years between the date of the agreement, November 11, 1938, and the date of Louis W. Thompson’s death, May 20, 1942, large profits were earned by the partnership, namely, $12,000 in 1938, $19,000 in 1939, $18,000 in 1940, $25,000 in 1941, and in 1942, between January 1 and May 19, more than $11,000. There was no allegation or proof that defendant was under the influence of her brother during this period. She willingly allowed him to retain all the profits accruing to her interest in excess of the sums which he paid to and for her monthly. In fact, the same practice had been followed since the formation of the
The conclusions and judgment declare the contract to be void, from which we understand that the court considered it to be voidable. That would have been a proper conclusion of law from the facts found if defendant had accomplished a rescission of the agreement. There was no finding or conclusion as to whether defendant had affirmed and ratified the agreement, although there was a finding that she did not ratify it as a transfer of her interest. A further finding and an appropriate conclusion should be made to the effect that defendant at all times consented to the retention by Louis W. Thompson of the sums received and retained by him and has waived all right to recover the same, or any part thereof, from his estate.
The trial court is directed to make such finding and conclusion and to enter judgment that defendant is the owner of a quarter interest in the copartnership, United States Burglar Alarm Company or U. S. Burglar Alarm Company, that plaintiff or the estate of Louis W. Thompson, deceased, has no interest in or claim upon said quarter interest, and that plaintiff, or said estate, has no right to receive all or any of the profits accruing to defendant’s quarter interest since the death of Louis W. Thompson, May 20, 1942, but that defendant is entitled to receive and have paid over to her such profits as have accrued since that date and those that may accrue to her said quarter interest, and that defendant recover her costs of suit.
As so modified the judgment is affirmed.
Wood, J., and Kincaid, J. pro tem., concurred.
Case-law data current through December 31, 2025. Source: CourtListener bulk data.