Bacon v. Christian

• Decision Date: 25 February 1916
• Docket Number: 22,925
• Citation: 111 N.E. 628,184 Ind. 517
• Parties: Bacon v. Christian
• Court: Indiana Supreme Court

111 N.E. 628

184 Ind. 517

Bacon v. Christian

No. 22,925

Supreme Court of Indiana

February 25, 1916

From Superior Court of Marion County (83,236); John J. Rochford Judge.

Action by Thomas J. Christian against Charles S. Bacon. From a judgment for plaintiff, the defendant appeals. (Transferred from the Appellate Court under § 1405 Burns 1914, Acts 1901 p. 590.)

Affirmed.

Edgar A. Brown, James E. Kepperly and J. Olias Vanier, for appellant.

Joseph B. Kealing and Martin M. Hugg, for appellee.

OPINION

Spencer, J.

For some time prior to April 5, 1910, appellant and appellee were the owners respectively of the Bacon Lumber Company and the A. S. McIlvaine Lumber Company, and on that date they entered into the following written contract with reference thereto:

"This agreement made and entered into this 5th day of April, A. D., 1910, by and between Thomas J. Christian of Indianapolis, Indiana, and Chas. S. Bacon of Grand Rapids Michigan, Witnesseth: Whereas it is the intention to merge the business now carried on under the name of the A. S. McIlvaine Lumber Company and the Bacon Lumber Company into a corporation with a capital stock of ten thousand ($ 10,000) dollars, to be incorporated under the laws of the State of Indiana, and Whereas it is agreed and understood that there is to be issued to said Thomas J. Christian, or to whom he may direct, one-half of the above mentioned capital stock, and to said Chas. S. Bacon, or to whom he may direct, one-half of the above mentioned capital stock. Now, therefore, in consideration of the mutual agreements hereinafter contained, the said Christian agrees to purchase one-half of said capital stock for the sum of twenty-five hundred ($ 2,500) dollars, and the said Bacon agrees to purchase the remaining one-half of said capital stock for the sum of twenty-five hundred ($ 2,500) dollars; that to purchase said stock the parties have arranged with the Union National Bank, of Indianapolis, Indiana, to loan to them the sum of five thousand ($ 5,000) dollars upon the individual endorsement and suretyship of said Christian, the parties to be severally liable as between themselves, for one-half only of the said five thousand ($ 5,000) dollars; that in order to protect, indemnify and hold harmless the said Christian for the one-half of said five thousand ($ 5,000) dollars for which as between themselves the said Bacon shall be solely liable, and to protect, indemnify and hold the said Christian harmless upon his endorsement and suretyship upon said loan by said Union National Bank, the said Bacon agrees to execute to said Christian a non-interest bearing note for the sum of twenty-five hundred ($ 2,500) dollars; that said sum so loaned by said bank shall be used exclusively as the capital of said corporation when incorporated, and until then to be used as the capital of the business to be conducted by the parties hereto and for no other purpose. It is further agreed that said Bacon shall pledge his stock in said corporation to said Christian as a protection and indemnity upon his liability upon said loan. It is further agreed that the money so advanced and loaned to the parties shall be held and used in accordance with the agreement with the Union National Bank by the parties hereto. In Witness Whereof," etc.

The corporation which was contemplated under the terms of the above agreement was never incorporated, but the parties thereafter engaged in the business of buying and selling lumber under the name and style of the Bacon-McIlvaine Lumber Company, and continued in such business until about November 15, 1910, when they agreed to settle up the affairs of the concern and dispose of its assets. In this action for an accounting between the parties appellee alleges that he advanced a considerable sum of money for the conduct of the business in question, but that appellant did not contribute any part of the amount agreed on to be contributed by him; also that both parties withdrew for personal use certain sums out of the capital and assets of the firm. Trial, finding and judgment for appellee that he is entitled to recover from appellant the balance found due and owing on the accounting had by the court of the affairs of the alleged partnership.

In prosecuting this appeal from said judgment appellant takes the position that the evidence fails to show the existence of a partnership, and contends (1) that the mutual assent of the partners is necessary to create the relation; and (2) that neither a naked agreement to form a partnership nor the advancement by one party of his agreed share of the capital is sufficient to establish a partnership in fact.

Preliminary to a consideration of these propositions, however, it is important to determine, in general, the...