Ellis v. Brand

• Decision Date: 05 July 1913
• Citation: 158 S.W. 705
• Parties: ELLIS v. BRAND et al.
• Court: Missouri Court of Appeals

158 S.W. 705

ELLIS v. BRAND et al.

St. Louis Court of Appeals. Missouri.

July 5, 1913.

1. PARTNERSHIP (§ 55) — EVIDENCE.

Evidence, in an action to charge defendants as partners in operating a sanitarium, held not to warrant a finding that the partnership relation existed between defendants.

2. PARTNERSHIP (§ 41) — EXISTENCE OF RELATION — IMPERFECT CORPORATE ORGANIZATION.

Persons who, intending to organize a corporation, omit to take essential steps to that end and proceed to do business and contract obligations in the name of the intended corporation incurred liability as partners with respect to third persons.

3. EVIDENCE (§ 471) — TESTIMONY — CONCLUSIONS.

Evidence that a certain business was a partnership business is not a statement of fact but a legal conclusion of the witness.

4. PARTNERSHIP (§ 30) — EXISTENCE OF RELATION.

The relation of partnership arises from an agreement of the parties showing an intention to enter that relation, and evidence that defendant was to pay half the expenses and receive half the profits was not evidence of facts necessary to show the existence of a partnership.

5. PARTNERSHIP (§ 12) — EXISTENCE OF RELATION — PROFITS AND LOSSES.

Mere participation in profits and losses does not of itself constitute a partnership between the participating parties.

6. PARTNERSHIP (§ 44) — EVIDENCE OF RELATION.

Any presumption of partnership arising from an agreement to share in profits and losses is dissipated by proof of the contract between the parties showing that no partnership relation was intended.

Appeal from Circuit Court, St. Louis County; G. A. Wurdeman, Judge.

Action by Anna W. Ellis against Charles Brand and another. From a judgment for plaintiff, defendant named appeals. Reversed, with directions to enter judgment against the unnamed defendant only.

P. A. Griswold and England & England, all of St. Louis, for appellant. Albert E. Hausman, of St. Louis, and B. L. Mathews, of Clayton, for respondent.

ALLEN, J.

This action was begun before a justice of the peace and was instituted upon the following assignment: "Aug. 7/09. I, the undersigned, for twenty dollars of lawful money of the United States, received by me from Anna W. Ellis, do assign my wright to the wages due me, from Brand and Ellis, (sic) to Anna W. Ellis, said wages amounting to twenty dollars, for five weeks work, as nurse at Ta-Ka-Rest Park, Prospect Hill, performed in July, 1909. [Signed] Mrs. B. Bailey."

Upon the filing of the above assignment with the justice of the peace, a summons was issued against the defendants, Brand and Allen, for it appears that by the above assignment the intention was to assign wages claimed to be due Mrs. Bailey from Brand and Allen instead of from "Brand and Ellis." Plaintiff had judgment in the justice court against both defendants, and Brand duly perfected his appeal therefrom to the circuit court. The cause was tried de novo before the court without a jury, again resulting in a judgment for plaintiff against both defendants. From that judgment defendant Brand has duly perfected his appeal to this court.

The theory upon which plaintiff's action proceeds is that the appellant, Chas. Brand, and his codefendant, Dr. Thomas E. Allen, were partners engaged in starting a sanitarium at what the witnesses term "Ta-Ka-Rest Park," at Prospect Hill, in St. Louis county. It appears that appellant owned the real property in question and that an arrangement was entered into between him and Dr. Allen by which the latter was to erect and conduct a sanitarium upon the premises. Work of construction was begun thereupon, and Mrs. Bailey, the assignor of the claim here sued upon, was employed by defendant Allen "as nurse and cook," in which capacity she rendered services for the five weeks immediately prior to August 3, 1909, and for which she was to receive $4 per week and board; the action proceeds against the appellant upon the theory that he was a partner with his codefendant Allen in the enterprise mentioned and liable as such for the partnership debts.

We may say at the outset that there is no testimony in the record showing that the appellant held himself out, or permitted himself to be held out, to the assignor of this claim as a partner, whereby he could be held liable as a partner by estoppel. There was testimony by plaintiff, the assignee, that appellant had said to her that he was a partner, which appellant denies. However, it appears that appellant had nothing to do with employing Mrs. Bailey, and the evidence does not disclose that he in any way held himself out to her as being a partner, or did aught whereby he would be estopped as to her to deny that he was a partner.

Touching the question of the existence of a partnership inter sese, defendant Allen on direct examination testified that it was a partnership business; that appellant was to pay half of the expenses of the enterprise and receive half of the profits; and that the partnership relation existed up to August 5, 1909, at which time it ceased. The evidence disclosed, however, that on or about March 1, 1909, these defendants entered into a written agreement as follows: "This memorandum of an agreement made and entered into this 1st day of March, 1909, by and between Chas. A. Brand and T. E. Allen, both of the city of St. Louis, state of Missouri, witnesseth: That the said parties are contemplating the organization and conducting a health resort at Prospect Hill in St. Louis county. That the said Brand proposes to put in about ten acres of land at said Prospect Hill and the said Allen proposes to put in some cash and personal property, said land, cash and personal property to be conveyed to the World's Health Institute, a corporation. That said Allen and Brand are to have an equal voice in the management of said business and each to own the same number of shares of stock in said corporation. That if the property put in by said Brand exceeds in value the property put in by said Allen said corporation is to give back to Brand a deed of trust on its property for such excess. That if said Allen shall afterwards put in any additional property or cash, said Brand shall put in a like amount or make a corresponding credit on said deed of trust. That before said Brand or Allen shall convey any property to said corporation, this agreement shall be drawn up more in detail and signed by each. [Signed] C. Brand. T. E. Allen."

On cross-examination of defendant Allen, he testified to the effect that the parties did not operate under the foregoing agreement, but had agreed to abrogate it, and that the work of construction which was done was under an oral agreement between the defendants whereby he (Dr. Allen) was to pay for the improvements thus to be erected upon the property of appellant Brand, and that he was to operate the sanitarium, and that all the profits of the business were to be paid to him until he had been thus reimbursed for the money so expended by him, and that then some new arrangement was contemplated. According to the testimony as abstracted, this defendant testified: "When I got the money I put in there, if he wanted me to leave the whole place, I was not to have anything beyond that unless we made a separate agreement. Up to the 5th of August my own understanding was that I was to put in the money and get it back out of the profits, and, after the money I had put in there had come back to me, then there would be another agreement made, but not in accordance with the original agreement. The agreement that I originally signed was that he was to put in ten acres of land, to make a permanent institution, but he refused to do that, and then I had a subsequent agreement that I would get my money out of it. That was only a verbal agreement. All I wanted was the money that I placed in there. I wanted my money back out of the profits, and that is all I wanted, and that is the agreement I had. Then, after I got that back, there would be another agreement."

The appellant testified that defendant Allen had come to him saying that he was looking for a place of five or ten acres upon which to build a sanitarium, and said, "You have a good place and I would like to build out here;" that the above contract was executed, and thereafter defendant Allen wanted him to sign another paper which he refused to sign, and that thereupon it was agreed that Dr. Allen would lease the...