Farmers' Exchange v. J. D. Brown

• Decision Date: 04 January 1934
• Citation: 169 A. 906,106 Vt. 65
• Parties: FARMERS' EXCHANGE v. J. D. BROWN ET AL
• Court: Vermont Supreme Court

169 A. 906

106 Vt. 65

FARMERS' EXCHANGE v. J. D. BROWN ET AL

Supreme Court of Vermont

January 4, 1934

November Term, 1933.

Partnership---Sharing in Profits and Losses as Essential, but Not Conclusive---Furnishing Share of Capital or Property Not Essential to Relationship---Distinction between Agreements Constituting Partnership and Those Where Portion of Profits are Paid for Services---Consideration of Evidence as Whole Rather than Piecemeal---Jury Question---Trial---Inconsistent Instructions---Estoppel---General Exception.

1. An agreement to share in profits and losses of an adventure is essential element of partnership, and, ordinarily, is sufficient to constitute parties to such agreement partners but such agreement is not always decisive of existence of partnership, as between parties.

2. To constitute partnership it is not necessary that each party furnish share of capital or property which is to become stock or subject-matter of business, or be joint owner of it, since capital of association may vest and remain in one of members but indispensable constituent is that parties shall be jointly interested in profits and affected by loses of venture.

3. Agreement whereby parties have specific interest in profits as profits constitutes partnership, but agreement which gives person sought to be charged as partner stipulated proportion of proceeds as compensation for his labor and services does not constitute partnership.

4. Testimony is not to be considered piecemeal, and apart from context, but as whole, together with reasonable inferences to be drawn therefrom.

5. In ACTION OF CONTRACT, where defendants were, respectively owner of farm and person operating farm under verbal agreement that each should receive half proceeds therefrom and pay half expenses, and evidence showed that during continuance of arrangement plaintiff had supplied grain for use on farm on order of defendant operating farm, which was charged to both defendants, one-half thereof having been paid by owner of farm and suit being for balance of account, held that question whether terms of contract made defendants partners, or merely provided that operator of farm was to receive as compensation for his labor and skill one-half income from farm, and to pay one-half of expenses, should have been left to jury under proper instructions.

6. Error of court in giving binding instruction to jury that partnership existed, held not cured by subsequent portion of charge asking jury to find whether there was partnership, nor by instruction that sharing profits and loses were two of principal elements of partnership.

7. Where two inconsistent instructions are given by court it will be assumed that jury felt at liberty to follow either of them.

8. Under facts in case, persons sought to be charged as partners held not to have so held themselves out as partners to plaintiffs as to estop themselves from proving true nature of contract.

9. Exception to failure of court to charge as requested in each of several requests, where a series of requests to charge had been presented, held too general to require attention.

ACTION OF CONTRACT. Plea, general issue. Trial by jury in Franklin municipal court, Albert W. Butler, Municipal Judge presiding. Verdict for plaintiff, and judgment thereon. Defendant J. D. Brown excepted. The opinion states the case.

Judgment reversed, and cause remanded.

Webster & Webster for the excepting defendant.

P. C. Warner for the plaintiff.

Present: POWERS, C. J., SLACK, MOULTON, THOMPSON, and GRAHAM, JJ.

OPINION

MOULTON

Brown and Pelkey entered into a verbal agreement whereby Pelkey was to operate Brown's farm "to halves." The only testimony concerning this agreement was given by Brown, on examination by plaintiff's counsel, as follows:

"Q. And did you, during the years 1925-1926 have a farm in Franklin which was carried on by a man named Henry Pelkey? A. Yes, sir.

Q. What arrangement did you have with Mr. Pelkey with respect to carrying on this farm? A. We took it to halves.

Q. When you say took it to 'halves,' do you mean that you received half the milk checks? A. Yes, sir.

Q. Half of all the produce raised on the farm? A. Yes, sir.

Q. And how about the expenses? A. He was to pay half, of course.

Q. That is, he was to participate equally in losses and profits? A. Yes, sir."

During the continuance of this arrangement, Pelkey purchased from the plaintiffs, on credit, certain quantities of grain for use on the farm. The purchases were charged to Brown and Pelkey. Brown paid half of the account, and this action was brought against both parties to recover the balance. The verdict and judgment were for the plaintiffs, and the case is here on Brown's exceptions.

The court instructed the jury that the agreement, as given in the testimony above quoted, constituted a partnership between the defendants. This instruction is challenged by an exception.

An agreement to share in the profits and losses of an adventure is an essential element of a partnership, and, ordinarily, is sufficient to constitute the parties to such agreement partners. Brigham v. Dana, 29 Vt. 1; Noyes v. Cushman, 25 Vt. 390, 396; Duryea v. Whitcomb, 31 Vt. 395, 398; Chapman v. Devereux, 32 Vt. 616, 619; Styles v. Shanks, 46 Vt. 612, 616. It is not necessary that each party shall furnish a share of the capital or property which is to become the stock or subject-matter of the business, or be a joint owner of it. The capital of the association may vest and remain in one of the members. The indispensable constituent is that the parties shall be jointly interested in the profits and affected by the losses of the venture. One may furnish the capital or stock and another contribute his labor and skill. Brigham v. Dana, supra, page 10; Griffith v. Buffum, 22 Vt. 181, 184, 54 Am. Dec. 64; Duryea v. Whitcomb, supra; Styles v. Shanks, supra.

But sharing in the profits and loss of the business is not always decisive of the existence of a partnership, as between the parties, because it may be merely an arrangement with a view to compensation for services rendered by one to the other, the amount of which is to be dependent upon the success of the business. Morgan v. Stearns, 41 Vt. 398, 405.

There is a clear distinction between agreements whereby the parties have a specific interest in the profits qua profits and agreements which give to the person sought to be charged as partner, not a specific interest in the business or profits, but a stipulated proportion of the proceeds as compensation for his labor and services. The former constitute a partnership; the latter do not. Clark v. Smith, 52 Vt. 529, 532; ...