Duffield v. Reed et al.
| Decision Date | 20 May 1919 |
| Parties | Duffield v. Reed et al. |
| Court | West Virginia Supreme Court |
The voluntary association of two or more persons for the purpose of uniting their means, skill and labor to carry on a legal business, or perform a legitimate work, constitutes them a partnership. (p. 289).
A partnership, as to the parties thereto, springs from their intention, which need not be expressed in writing, but may be by oral agreement, or may be implied from their conduct and dealings with one another. (p. 289).
A partnership being established, the presumption is that the partnership agreement is in accordance with the general rules otf partnership law, and casts the burden of proof on that partner who asserts that another partner's interest in the profits of the business is not determinable according to such rules. (p. 289).
A new member may be taken into an existing partnership with the consent of all its members. (p. 289).
One partner cannot make a secret contract with a third person disposing of a portion of the prospective profits of the joint enterprise for his own private benefit, which will bind the partnership. (p. 290).
Appeal from Circuit Court, Kanawha County. Suit for an accounting by E. E. Duffield against K. E. Reed and others. Decree for plaintiff and defendant Reed appeals.
Affirmed.
A. M. Belcher, for appellant. Linn & Byrne, for appellee.
Claiming to be a partner with P. T. Board and K. E. Reed in the work of grading twelve miles of railroad in Tyler county for the Tyler Traction Company, a corporation, E. E. Duffield brought this suit for an accounting and for his share of the profits of said work. The circuit court of Kanawha county gave him a decree for $4,288.51, payable out of a fund of $5,000 which had been deposited in the hands of L. V. Koontz by Board and Reed to be held subject to this controversy, and the defendant K. E. Reed has appealed.
The contract for the work was made with the traction company by Board and Reed, Board agreeing to furnish one-half the outfit and money necessary to perform the work, and Reed the other half. Reed associated plaintiff with himself, with Board's consent. The contract with the traction company required a bond of the contractors in the penalty of $15,000 to insure the performance of the work. This bond was signed by P. T. Board, L. V. Koontz and Forsythe Stephenson. The contract further provided that, as the work progressed, 10% of the amount due the contractors was to be retained until the work was completed. Reed contends that the plaintiff was not an equal partner with himself, but was entitled to only one-fourth of the profits less the percentage withheld and that he, Reed, had agreed with Forsythe Stephenson to give him one-fourth of the percentage in consideration of Stephenson's signing the bond as surety and agreeing to lend him such sums of money as he would need to carry on his part of the work. Whether such contract with Stephenson is binding on plaintiff is really the only question in the case. Reed does not pretend that it is binding on Board. He swears he notified plaintiff of his agreement with Stephenson at the time he took him in as a partner in the work. But plaintiff denies this, and swears he never heard of it until after the work had been completed and they had attempted to settle. Board also swears he never heard of it until after the work was finished. Plaintiff and Reed, as equal partners, had just completed a piece of work at Buffalo Creek in Clay county, and were looking for other work when Board learned of the Tyler county job. When he received an invitation to bid on the Tyler county work Board says he first went to see Duffield, that he was out of town and he then went to see Reed, and thinks he told him that he had been to see Duffield, and, his recollection is, that Reed replied they could go ahead and begin the work and, if Duffield wanted an interest in it, he could get it. He also mentioned the same matter to Reed when they went to Sistersville to sign the contract, and Reed then said he could arrange it with Duffield afterwards.
Board, Duffield and Reed were all practical railroad construction men, and while no two of them seem to have been general partners in all their work, Reed and Duffield had been associated as partners at other times on other jobs, one on Loup Creek and later on the Buffalo Creek job which was begun about a year before the Tyler county work was undertaken. The Loup Creek work was not completed when the Buffalo Creek job was undertaken, and Duffield says he and Reed sublet the Buffalo Creek work to himself and Mr. Widen at 10% less than he and Reed were to get for the work, with the understanding that Reed was to remain on the Loup Creek work and he to take charge of the Buffalo Creek job, and they were to share equally in the profits of both jobs. Before completing the Buffalo Creek work, he says Reed got a job in South Charleston and he advanced him money to start it; that they made some money on this job and shared equally in the profits. Duffield and Reed then bid on the job of grading the car line from Charleston to Dunbar and their bid was accepted. In the meantime Duffield says he had gone to examine a piece of work on the Coal & Coke Railway at Gilmer station, and when he returned to Charleston found a letter from Reed to him advising him not to sign any contract on any work, as he and Board had gone to Sistersville to bid on twelve miles of work, '' and if they got it it would be all the work we (meaning himself and Duffield) could handle." On the following day, when Reed and Board returned from Sistersville, Duffield says they all met at the Washington Hotel and talked over the price at which the work had been bid in, and they all thought, while the prices were low, they could make a little money, and that Reed then told him he hadn't put his name in the contract because he didn't have the authority to do so, but said "Mr. Board wanted half of the work and for us (Duffield and Reed) to take the other half." Duffield further says he told Reed that if he didn't want him to go in with him on the Tyler county job he thought he could get the Gilmer station work without opposition, and that Reed replied, they (meaning Duffield and himself) didn't have much outfit and to divide it up between them wouldn't give him anything to put on the work and he woudn't be able to handle the half of it with his part of the outfit, and insisted on his taking a fourth interest in the work at Sistersville. Duffield then went to Clay Court House and got a certified check for $2,000 on the fund from the Buffalo Creek work, and delivered it to Board and Reed to be mailed to the Tyler Traction Company as evidence of their good faith, until the required bond could be given. He also says he was personally on the Tyler county job from its inception to its completion, a period of about fourteen months, except about one week when he was looking for men to work on the job. Duffield's testimony is sustained by a number of, other witnesses. Mr. Board says, just after his and Reed's return from Sistersville, when all three of them met at the hotel, they discussed the matter and all agreed they would be making a fair profit on the job if they could clear the 10% which was to be withheld until its completion, and further says, according to his recollection, that Reed told him Duffield was to have as much interest in the contract as he (Reed) had.
I. C. Trout, the...
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