C. E. Johnson & Co. v. Marsh

Citation15 A.2d 577,111 Vt. 266
Decision Date01 October 1940
Docket Number463
CourtVermont Supreme Court

May Term, 1940.

1. Construction of Instruments.---2. Profit-sharing as Partner.---3. Proportion of Profits to Non-partner.---4. Lease on Shares as Partnership.---5. Lease on Shares as Tenancy in Common.---6. Partnership by Estoppel.---7. Knowledge before Estoppel.---8. Notice Relation not Partnership.---9. Repudiation of Apparent Relations.---10. Knowledge Barring Liability.---11. Information Charging with Duty to Inquire.---12. Partnership Distinguishable from Joint Responsibility.---13. Joint Contractors not Necessarily Partners.---14. Joint Obligation Needs Joint Promise.---15. Scintilla of Evidence not Support Verdict.---16. Separability of Joint Verdict.

1. The construction of an instrument free of latent ambiguity which defines the legal relationship of the parties to it is a matter of law.

2. Ordinarily an agreement to share the profits and losses of an adventure is sufficient to constitute the parties partners but this is not the case when one party has not a specific interest in the business but only a stipulated proportion of the proceeds as compensation for his labor and services.

3. One may receive a stipulated proportion of the profits of an enterprise without being a partner in the enterprise.

4. A lease which provides the lessee shall pay the lessor as rent one-half of the net gain from the operation of a farm does not make them partners.

5. A lease which provides the lessee shall pay the lessor as rent one-half the net profits from the operation of the lessor's farm by the lessee creates a tenancy wherein the parties are tenants in common of the crops and the occupant has an interest in the land.

6. One who holds himself out or knowingly permits himself to be so held out as a partner is estopped from denying liability as such to one who extended credit in reliance thereon, even though no partnership really existed.

7. For one to be charged through estoppel with a partner's liability it must appear that the acts or statements relied upon have been made with the knowledge or assent of the person sought to be charged.

8. The circumstances of an alleged partnership may be such as to put a person dealing therewith upon inquiry and charging him with knowledge of such facts as a reasonably diligent investigation might have disclosed.

9. Where two parties had an agreement concerning the operation by the other of a farm owned by one of them, his paying a single grain bill charged to the other, or forwarding checks payable to the other to him for use in paying grain bills of the farm, prompt repudiation of his liability when he first had knowledge he was being charged and no knowledge of the other's representations as to his liability do not constitute evidence of so holding himself out as a partner to create estoppel.

10. A third party's knowledge that one partner can not, under the terms of the partnership, be charged with partnership debts by the other will relieve the one of liability therefor.

11. Information that there is an agreement of lease between one owning a farm and another who operates it and the representation by the latter that the former would pay the bills, is sufficient to put a third party upon inquiry as to the true nature of the contract and he is chargeable with knowledge of what such inquiry would have disclosed.

12. Partnership is not synonymous with joint responsibility.

13. Two persons may be liable as joint contractors though not liable as partners.

14. To hold persons liable as joint contractors it must appear that both of them joined in the promise.

15. Words put into the mouth of a witness amounting to no more than a scintilla of evidence are not sufficient to support a verdict.

16. A verdict for the plaintiff against two persons sued as joint contractors or partners is not affected as to one of them because there is not sufficient evidence to sustain the verdict against the other.

COMMON COUNTS IN ASSUMPSIT, with specification. Trial by Essex Municipal Court, September 7, 1939, E. J. Nelson, J Defendant Ufford moved for a directed verdict. He took exception to its being overruled. Verdict and judgment for the plaintiff. Defendant Ufford excepted.

The judgment against the defendant Marsh is affirmed. The judgment against the defendant Ufford is reversed and judgment is rendered that he recover his costs.

Lee E. Emerson for the defendant Ufford.

Raymond L. Miles for the plaintiff.



The defendant Frank P. Ufford, who lives in New York City, owns a farm in the town of Brighton, which he leased to the defendant Leon Marsh, on August 27, 1937, for the term of one year, together with stock and equipment thereon. The lease contained the following provisions: "the said lessee doth covenant * * * that he will pay the lessor, his heirs, administrators or assigns the yearly rent of one-half the proceeds and products of operating the farm, which aid lessee agrees to pay as received and produced, this lease being made on equal shares, the parties to share the income and each to pay his half of the expenses, but nothing herein shall authorize the lessee to obligate the lessor or to obtain credit in his name. The milk shall be sent to a creamery agreed upon by both parties and registered in the lessor's name and the proceeds after paying the grain bills shall be equally divided. The cost of seed grain, fertilizer, taxes and insurance shall be paid equally but the lessor shall not be chargeable with or pay the cost of any labor. * * * The lessee shall be entitled to half the increase of the stock after keeping good the present dairy, which he agrees to do, before any division." It was also provided that grain left at the end of the term should be divided equally, and that grain then on the premises should be an expense of operation and shared equally.

During the term of the lease Marsh purchased from the plaintiff grain, hay, seed, staples, salt, phosphate and molasses to the amount of $ 361.83, which the latter seeks to recover in this action from both defendants. Trial was by jury, with verdict against the defendants jointly for the amount of the plaintiff's claim. Marsh interposed no defense, but Ufford contested his liability and the cause comes before us upon his exceptions.

At the close of all the evidence, Ufford moved for a directed verdict, which was overruled, subject to his exceptions.

There seems to be little, if any, real conflict in the testimony, but, resolving all possible discrepancies in favor of the plaintiff, this is the fair purport of the evidence: In September, 1937, shortly after he had gone upon the farm under the lease from Ufford, Marsh desired the plaintiff to furnish some grain to him. Since Marsh was a stranger, the plaintiff inquired concerning the payment and Marsh informed him that he had rented Ufford's farm; that the milk checks were going to Ufford; that Ufford had agreed to see that the bills were paid, and that, after that, the balance was to be divided. The plaintiff then sold the grain, charging it on his records to Marsh. He made no request to see the lease, and no inquiry as to the authority of Marsh to bind Ufford. About January 1, 1938, Ufford asked Marsh to obtain an itemized statement of the grain purchased since the preceding September. Marsh did so, telling the plaintiff that Ufford had asked for it. The statement was made out in the name of Marsh and given to him. He sent it to Ufford in New York, and the plaintiff received a check for the amount, $ 72.96, from Ufford. Later, in the spring, Ufford told Marsh to buy some seed, specifying no particular dealer, but instructing him to purchase it where he could obtain the best price. Marsh bought it from the plaintiff. It came to $ 13.25, and the bill was made out, and delivered, to Marsh who sent it to Ufford. The latter sent Marsh a check payable to him, which he gave to the plaintiff. In June Ufford authorized another purchase of seed, which came to $ 36.91, and here the bill was made out and delivered to Marsh, and paid by Ufford's check to the order of Marsh, later given by him to the plaintiff. On February 12, 1938, Marsh paid $ 8. in cash for a purchase from the plaintiff, and on June 13, received a credit for $ 17.50 for phosphate returned.

The account in suit was started soon after the payment of $ 72.96 in early January, and originally was for grain only. Late in March, 1938, Marsh wanted to buy hay, but the grain bill had reached such an amount that the plaintiff was unwilling to extended further credit to him, and asked him who would pay. Marsh said that Ufford would see to it, and the plaintiff sold the hay relying upon this statement. He testified that he sold the grain and other items on the same reliance and that he expected that it was a joint obligation. All the slips recording the sales were made out in the name of Marsh ("for identification," as the plaintiff put it) but at some unspecified time after the deliveries, and before bringing this action, the plaintiff changed them by adding the words "and Ufford." About June 1, 1938, Marsh told the plaintiff that Ufford wanted a statement of the merchandise theretofore delivered to Marsh and on June 11 the plaintiff sent Ufford a bill containing the items for which recovery is sought. This statement was made out to Marsh alone and, not being paid, the plaintiff sent another statement to Ufford on September 9, which was in the names of Marsh and Ufford, and this was the first intimation to the latter that he was being charged with or was expected to pay the bill. On September...

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2 cases
  • Chariton Feed and Grain, Inc. v. Harder, 83-983
    • United States
    • Iowa Supreme Court
    • 19 Junio 1985
    ...and do not signal an attempt to control the operation. See Anderson, 256 Iowa at 1326, 131 N.W.2d at 526; Johnson & Co. v. Marsh, 111 Vt. 266, 15 A.2d 577 (1940). Milk proceeds were received every month. Obviously the parties concluded Harder would receive his rent monthly, in the form of r......
  • Enosburg Grain Company v. Wilder And Clark
    • United States
    • Vermont Supreme Court
    • 13 Mayo 1941
    ... ... his liability to those who had extended credit in reliance ... thereon, under the rule stated in Johnson and Co. v ... Marsh et al., 111 Vt. 266, 271, 15 A.2d 577, 580, ... and cas. cit. Since this motion is the same in nature and ... substance as a ... ...

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