Bass v. Bass

• Decision Date: 01 July 1991
• Docket Number: No. 1,1
• Citation: 814 S.W.2d 38
• Parties: Linda BASS, Plaintiff-Appellant, v. James Edward BASS and William David Bass, Defendants-Appellees.
• Court: Tennessee Supreme Court

Page 38

814 S.W.2d 38

Linda BASS, Plaintiff-Appellant, v. James Edward BASS and William David Bass, Defendants-Appellees.

No. 1.

Supreme Court of Tennessee at Knoxville.

July 1, 1991.

John Banks, Thomas Banks, Elizabethton, for plaintiff-appellant.

John T. Milburn Rogers, Greeneville, for defendants-appellees.

OPINION

DROWOTA, Justice.

This case involves an asserted partnership interest in property which ostensibly belongs to, and is claimed by, Linda Bass, Plaintiff-Appellant. Linda Bass has appealed from a decision of the Court of Appeals reversing the trial court's finding that she and William Bass were partners in various business ventures. The trial court found that Linda Bass was the business partner of William Bass, who died unexpectedly in 1986 and, accordingly, awarded her one-half of all partnership assets. The Defendants-Appellees are James Edward Bass, who is the co-administer of William Bass' estate, and William David Bass, the deceased's minor son. The sole issue in this appeal is whether the evidence is sufficient to establish that Linda Bass and William Bass were implied business partners, entitling her to one-half of the assets of the partnership. We hold that the record indeed supports such a conclusion and, therefore, reverse the Court of Appeals and reinstate the judgment of the trial court.

For the most part, the essential facts in this litigation are not disputed. In 1974 Linda Bass and William Bass began dating each other and, in 1975, started to live together in Elizabethton. When they first started living together, she was employed full-time and he was unemployed, his only income being a small unemployment check. The Plaintiff and William Bass "just joined [their incomes] together and paid bills and bought food and things." A year later, the deceased acquired the State Line Truck Stop, a restaurant located in Mountain City, and he and the Plaintiff moved to that community in 1976 to operate the restaurant.

The Plaintiff initially operated the restaurant by herself, working 17 hour days taking orders, cooking meals, cleaning, and running the cash register. Meanwhile, William Bass worked at a beer store in Mountain City, but eventually quit in order to work at the restaurant. When William Bass began working at the restaurant, he and the Plaintiff each worked 12 hour shifts in order to keep the restaurant open 24 hours a day. Linda Bass was not compensated for her efforts at the restaurant, although she worked there extensively from 1976 to 1981, when the restaurant burned. During the time that Linda Bass worked at the restaurant, William Bass started a video amusement game business and completed six weeks of schooling on how to operate such a business.

The Plaintiff and the deceased were married in 1980, but divorced that same year. Immediately after the divorce, they resumed living together in Elizabethton and worked at the video game business as that enterprise began to prosper. William Bass eventually built a substantial home on his property in Elizabethton and purchased a convenience market and a used car business in the area. The parties resided in the home from 1981 until his death in 1986. During this period of time, the video game business continued to become more and more profitable, having 60 to 65 video machines in 18 locations in Elizabethton, Mountain City, and North Carolina. ¹ The Plaintiff would assist William Bass in the daily servicing of the video machines, help decide where new machines should be located, and kept most of the records of the various businesses. Although she was not listed as a partner or co-owner of any of the businesses, she wrote and signed most of the checks for the operation of the businesses, worked on the machines, and collected money from them (sometimes more than once a day). She was not paid a salary or wages for her efforts. The Plaintiff testified that she recognized that the checking accounts, savings account, safety deposit box, and real property were all listed in William Bass' name exclusively.

When William Bass died intestate in 1986, the Plaintiff and the deceased's brother, James Edward Bass, were appointed co-administrators of the estate, and each subsequently petitioned to have the other removed from that position. The Plaintiff also filed a complaint seeking to have herself declared the surviving spouse of William Bass, or in the alternative, a business partner of the decedent, or the equitable owner of one-half of the assets of his estate. The trial court initially addressed only the first theory proffered by the Plaintiff, finding that William Bass intended to mislead her and third parties as to their marital status. As a result, the trial judge ruled that the parties were estopped from denying the marital relationship. The Court of Appeals reversed and remanded in Bass v. Bass, 774 S.W.2d 170 (Tenn.App.1987), and this Court denied Linda Bass' application for permission to appeal.

Upon remand, the trial court, without hearing additional proof, addressed the Plaintiff's claim that she had been the business partner of the deceased and, as such, was entitled to one-half of all partnership assets. The trial court found in her favor, holding that she and the decedent had in fact operated the restaurant and the amusement game business as partners. One-half of all partnership assets, including those assets purchased with the proceeds of the restaurant and the amusement game business, were held to be the property of the Plaintiff. After additional appellate proceedings (which are not germane to the case in its present posture) were litigated, the intermediate appellate court held that there was no evidence that the parties agreed to become partners, or that they considered themselves to be partners. Accordingly, the Court of Appeals reversed the trial court's finding that Linda Bass and William Bass were business partners. This appeal followed.

I.

In Tennessee, a partnership is defined as an association of two or more persons to carry on as co-owners a business for profit, T.C.A. § 61-1-105(a), and the receipt of a share of the profits of that business is prima facie evidence that a partnership exists, T.C.A. § 61-1-106(4). ² In determining whether one is a partner, no one fact or circumstance may be pointed to as a conclusive test, but each case must be decided upon consideration of all relevant facts, actions, and conduct of the parties. Roberts v. Lebanon Appliance Service Co., 779 S.W.2d 793, 795 (Tenn.1989). If the parties' business brings them within the scope of a joint business undertaking for mutual profit--that is to say if they place their money, assets, labor, or skill in commerce with the understanding that profits will be shared between them--the result is a partnership whether or not the parties understood that it would be so. Pritchett v. Thomas Plater & Co., 144 Tenn. 406, 232 S.W. 961, 969-70 (1921).

Moreover, the existence of a partnership depends upon the intention of the parties, and the controlling intention in this regard is that ascertainable from the acts of the parties. Wyatt v. Brown, 39 Tenn.App. 28, 281 S.W.2d 64, 67 (1955). Although a contract of partnership, either express or implied, is essential to the creation of partnership status, it is not essential that the parties actually intend to become partners. Wyatt, 281 S.W.2d at 67. The existence of a partnership is not a question of the parties' undisclosed intention or even the terminology they use to describe their relationship, nor is it necessary that the parties have an understanding of the legal effect of their acts. Roberts, 779 S.W.2d at 795-96. It is the intent to do the things which constitute a partnership that determines whether individuals are partners, regardless if it is their purpose to create or avoid the relationship. Wyatt, 281 S.W.2d at 67. Stated another way, the existence of a partnership may be implied from the circumstances where it appears that the individuals involved have entered into a business relationship for profit, combining their property, labor, skill, experience, or money. ³

Creation of a business partnership was recognized by the Supreme Court of Washington in a case involving facts similar to those presented in the present case. In In re Estate of Thornton, 81 Wash.2d 72, 499 P.2d 864 (1972), Lucy Antoine and Ray Thornton lived together continuously in a family relationship from 1953 until 1969. 499 P.2d at 865. The couple began raising cattle and, from the profits of that operation, purchased additional property on which a prosperous cattle raising business was started. The property and assets of the business were titled solely in Ray Thornton's name, and he controlled all monies "received and expended on the farming operation through a checking account upon which he alone could draw." Id. Antoine participated in the decisions concerning both the farm's management, and in the day-to-day operations thereof. Furthermore, she would write checks needed for the operation of the business, although Thornton would sign the checks. Id. When Thornton died in 1969, Antoine asserted a claim, alleging the existence of a partnership interest in the business.

The Supreme Court of Washington stated that the issue was "whether the surviving member of a couple living in a meretricious relationship may prove the existence of a partnership or joint venture agreement involving business property, ostensibly or seemingly owned by the deceased partner, by showing the surrounding circumstances and the acts of the couple, rather than by proving the existence of an express contract of partnership." Id. at 865. In finding that Antoine had established a prima facie case of implied partnership, the court noted that she worked hard in the cattle raising project over a period of 16 years and that her efforts significantly contributed to the success of the business venture. The court explained that "[s]he and Ray Thornton...