Ambrecht Lumber Co. v. Adair

• Decision Date: 12 March 1926
• Parties: AMBRECHT LUMBER CO. v. ADAIR et al.
• Court: Florida Supreme Court

108 So. 222

91 Fla. 460

AMBRECHT LUMBER CO. v. ADAIR et al.

Florida Supreme Court, Division B.

March 12, 1926

Suit by the Ambrecht Lumber Company against Z. D. Adair and others for an accounting and the appointment of receiver. From an adverse decree, the complainant appeals.

Reversed and remanded.

Syllabus by the Court

SYLLABUS

Although sharing profits was at one time test as to partnership particularly as to third persons, such doctrine is obsolete and is no longer law; where lender is to share profits, as or in lieu of interest on or in repayment of loan or advance there is no partnership either between parties or as to third persons, unless parties hold themselves out as partners. The law at one time treated the sharing of profits as the true test that established a partnership, particularly as to third persons; but this doctrine has become entirely obsolete, and is no longer law either in England or in this country. The law is now well settled that where a person loans or advances money or goods to another to be invested in some business or enterprise, the lender to share in the profits as or in lieu of interest on, or in repayment of, such loan or advance does not constitute a partnership; neither will it constitute a partnership as to third persons, unless the acts of the parties in furtherance of the agreement between themselves amount to such holding of themselves out as partners as that third persons are misled into a reasonable belief that a partnership exists in fact.

When one does not allow public or individual dealers to be deceived by appearance of partnership, true test of whether partnership exists is intent of parties as shown by contract and names amount to nothing when substance of agreement shows them inapplicable. When one does not allow the public or individual dealers to be deceived by the appearance of a partnership, the true test of whether a partnership does in fact exist between the parties is to be found in their intent as shown by the contract which they make, and names amount to nothing when the substance of the agreement shows them to be inapplicable.

Parties entering into trade arrangement on basis giving them community of interest in capital stock and community of interest in profits resulting therefrom are partners. Where parties enter into a trade arrangement upon such a basis as that they have a community of interest in the capital stock engaged in the business, and also a community of interest in the profits resulting therefrom, the uniform rule is that they will be held to be partners in such a venture.

Where claimed partnership agreement is in writing and free from ambiguity or doubt, its legal effect must be determined as matter of law and intention of parties gathered therefrom; where terms employed in alleged partnership agreement leave true meaning of parties in doubt, construction put on contract by parties may be looked to in determining legal effect. Where the agreement under which a business arrangement is carried on, and which is claimed to be a partnership, is in writing and free from ambiguity or doubt, its legal effect must be determined as a matter of law and the intention of the parties gathered therefrom; but if the terms employed leave that true meaning in doubt, the construction put upon the contract by the parties thereto may be looked to in determining its legal effect.

Plea denying existence of relation in which defendants are sued puts on plaintiff burden of proving existence of relation. A plea denying the existence of the relation in which defendants are sued imposes upon the plaintiff the burden of proving the existence of the relation as alleged.

Before party could be held liable as partner of another, it was necessary that existence of partnership relations should be established. Before the complainant could be held liable as a partner of W. C. McDaniel, it was necessary that the existence of partnership relations should be established by one who sought to recover against the complainant upon the theory that such relations actually existed.

Appeal from Circuit Court, Walton County; A. G. Campbell, judge.

COUNSEL

W. J. Oven, of Tallahassee, for appellant.

John L. Moore, of West Palm Beach, for appellees.

OPINION

BUFORD J.

The appellant, the complainant in the court below, filed his bill of complaint on the 6th day of June, 1921, in the following language, to wit:

'The Ambrecht Lumber Company, a corporation, brings this its bill of complaint against Z. D. Adair, C. F. Hinesly, T. J. Hunt and W. J. Richards, trading as Hunt & Richards, L. V. Laird, M. T. King, trading as M. T. King & Co., C. M. Tidwell, C. V. Carter, D. S. Sellars, G. H. Kellough, Ray Merritt, Thad Bell, as sheriff of Walton county, Fla., and the R. E. L. McCaskill Company, a corporation, and thereupon complaining, alleges as follows:

'(1) That your complainant is a corporation organized under the laws of the state of Alabama. That the above-named individual defendants are all residents of Walton county, Fla., and are all over the age of 21 years. That the defendant the R. E. L. McCaskill Company is a corporation under the laws of the state of Florida, and has its principal place of business in Walton county, Fla.

'(2) That heretofore, to wit, from about the 1st of April 1921, up to about the 1st of May, 1921, one W. C. McDaniel was engaged in the work of cutting, hauling, and making up certain railroad ties for your orator. That such railroad ties as the said W. C. McDaniel cut and manufactured were to become, be, and remain the property of your orator under an arrangement and agreement as set forth in the memorandum of agreement between W. C. McDaniel and your orator, dated March 25, 1921, a copy of which is attached hereto, marked 'Exhibit A' and made a part hereof. That the said W. C. McDaniel, under the terms of the said agreement, cut and made up a large number of railroad ties. That some of the ties which were made up by the said W. C. McDaniel for your orator have been sold and shipped, but that there still remain made up for your orator approximately 2,000 railroad ties in Walton county, Fla. These ties are located partly in the woods, and partly at the railroad track, some being located on property of Mr. L. V. Laird in section 31, township 3 N., and in sections 5 and 6, township 5 N., all in range 21 W.; some of the ties north of Mossy Head, Fla.; some of the ties on the Sand Mountain track, and some of the ties at and near the Dudley McCaskill switch on the Louisville & Nashville Railroad track, about three miles east of De Funiak. That on or about the 1st day of May, or shortly before said date, the said W. C. McDaniel left Walton county for parts unknown, and left the said ties in the places above stated. That thereupon, your orator sent its agent to Walton county and proceeded to take possession of all of the railroad ties and to mark said ties as follows: 'A. L. Co.' That at the time when your orator took possession of the ties, no other person or persons had any claim or claims upon or to the ties of which your orator had any notice.

'(3) The said defendant M. T. King, trading as M. T. King & Co., claims title to all the above-mentioned cross-ties under a bill of sale which he alleges was given him by the said W. C. McDaniel covering all the said ties. Your orator alleges that whatever right the said defendant M. T. King has in and to the said ties, or any of them, was obtained subsequent to and with due notice of your orator's rights in and title to the said ties, and that whatever interest accrued to the said defendant M. T. King, under the said bill of sale, is subject to and inferior to your orator's rights as owner of the said ties.

'(4) That the defendants Z. D. Adair, C. F. Hinesly, T. J. Hunt and W. J. Richards, trading as Hunt & Richards, C. M. Tidwell, C. V. Carter, G. H. Kellough, and Ray Merritt, all claim to have liens in various amounts against said ties for labor furnished in the cutting, manufacturing, and hauling of the said ties. Your orator alleges that it is without positive knowledge as to which of the said defendants named in this paragraph are validly entitled to labor liens and which are not, and it is without positive knowledge as to the amounts of the various claims. That Z. D. Adair, C. F. Hinesly, T. J. Hunt and W. J. Richards, trading as Hunt & Richards, and C. V. Carter have filed separate suits in the county judge's court of Walton county, and have each issued, in their suits, writs of attachment which have been levied upon the ties as aforesaid by the defendant Thad Bell as sheriff of Walton county, and the said suits are now pending in the said county judge's court. That your orator believes, and therefore avers, that a large number of the claims filed by the defendants named in this paragraph are not valid claims for labor or work done in the cutting or manufacturing of the said ties, and that the said defendants, and no one of them is entitled to liens upon the ties to secure the total sums as respectively claimed by them. And further that the writs of attachment issued in the aforesaid cases were issued after your orator had taken possession of the said ties as aforesaid.

'(5) That the defendants D. S. Sellars, L. V. Laird and the R. E L. McCaskill Company, a corporation, have claims against W. C. McDaniel for money due for stumpage, which stumpage the said defendants allege was used by the said W. C. McDaniel in the making up of the cross-ties above described, and the said defendants mentioned in this paragraph claim liens on the said ties for amounts due on the said stumpage. That the said three defendants named in this paragraph sold their stumpage to W. C. McDaniel under a written contract...