Davis v. Spengler

• Decision Date: 06 March 1957
• Citation: 93 So.2d 348
• Parties: Leonard H. DAVIS, Appellant, v. Charles W. SPENGLER, a/k/a C. W. Spengler, Appellee.
• Court: Florida Supreme Court

Page 348

93 So.2d 348

Leonard H. DAVIS, Appellant, v. Charles W. SPENGLER, a/k/a C. W. Spengler, Appellee.

Supreme Court of Florida, Special Division B.

March 6, 1957.

John E. Mathews, Jr., Jacksonville, for appellant.

J. Edwin Gay and Bedell & Bedell, Jacksonville, for appellee.

ROBERTS, Justice.

The parties hereto, Davis and Spengler, were partners doing business under the firm name of 'S & D Sales Company.' A controversy arose as to the division of the partnership profits, and the instant suit was filed by the appellant Davis against the appellee Spengler for an accounting and a dissolution of the partnership. The Chancellor heard the evidence and entered a decree in favor of Spengler, finding that Davis had already received more of the partnership profits than he was entitled to 'under the principles of law which justice and equity dictate should be applied,' and that there was nothing more due and owing to him from the partnership or from Spengler. He awarded the entire remaining cash assets of the partnership (some $7,900) to Spengler and dissolved the partnership. Davis has appealed.

The partnership was formed early in 1949 for the principal purpose of selling an awning manufactured by the W. L. Rives Company, a corporation in which Davis and Spengler each had a small interest. Through the joint efforts of Davis and Spengler, a sales outlet for this awning through Sears Roebuck stores was obtained; and in May of 1949, a contract was entered into between the Rives Company and the S. & D Sales Company, designating the partnership as 'the only recognized sales organization authorized to sell and promote the Rives awning' and declaring that 'a real and vested interest accrues to both parties by this relationship'. The contract provided for the payment of a sales commission to the partnership at the rate of 15 percent of the net invoiced amount of sales made to Sears stores, and 20 percent of such amount on others. The partners orally agreed to divide the commissions equally after the payment of sales expenses, and in October of 1949 a written agreement to this effect was executed by them.

No useful purpose would be served in recounting in detail the operations of the partners in their partnership and 'sideline' activities. For the purpose of this discussion it is sufficient to say that, until August of 1951, substantially equal amounts of time and effort were contributed by the partners in promoting the awning sales; and they jointly engaged in another partnership venture during the remainder of 1951 and the first two months of 1952. Davis became ill sometime prior to June of 1952 and in that month was hospitalized for an operation. Thereafter, Davis contributed little or nothing to the partnership venture. He and Spengler continued to see each other frequently, on the golf course and on social occasions; and at the end of each year Spengler (who kept the partnership records at his home and made the partnership income tax return) would advise Davis of the amount of partnership profit to show on his own personal income tax return--which in each year 'happened' to be exactly one-half of the amount remaining in the partnership bank account at the end of the tax year, plus previous amounts paid to Davis.

In 1954, Davis attended a stockholders' meeting of the Rives Company and discovered that the commissions paid by the Rives Company to S & D Sales Company far exceeded twice the amount of the partnership profits received by Davis. It was stipulated that from August 17, 1950 (the date when the partnership bank account was set up) until August 31, 1954, Spengler had withdrawn or been paid $45,650 from the partnership bank account, compared with $24,388.73 withdrawn by or paid to Davis during this period. Spengler admitted that, after Davis went to the hospital and thereafter withdrew from active participation...