Floyd v. Kicklighter

• Decision Date: 12 December 1912
• Citation: 76 S.E. 1011,139 Ga. 133
• Parties: FLOYD v. KICKLIGHTER et al.
• Court: Georgia Supreme Court

76 S.E. 1011

139 Ga. 133

FLOYD v. KICKLIGHTER et al.

Supreme Court of Georgia

December 12, 1912

Syllabus by the Court.

An equitable petition alleged in part as follows: Plaintiff and defendant entered into "a partnership agreement" for the purpose of buying and selling a certain tract of land. Defendant represented that he had an option upon the land, or could buy it; the purchase price being approximately $15,000. He agreed to endeavor to perfect the option and to use his time and efforts therefor, and to sell the property for a greater price; there being a purchaser to whom it was contemplated it could be thus sold. Plaintiff agreed to advance the purchase price, namely, $15,000, or such sum as might be necessary for that purpose. When the property should be sold, the proceeds were to go first for the repayment of the purchase price advanced and all expenses incurred in connection with the purchase and sale, and the remainder was to be divided equally between the two parties. They were to be jointly liable for expenditures, and whatever expense was incurred by the defendant in connection with the purchase and sale, and likewise interest on the sum advanced by the plaintiff, or used in the purchase of the property, for the time it was actually used for the benefit of the parties, was to be charged against their joint account. The plaintiff was to render such assistance as he might be able to do in perfecting the transaction, and the defendant agreed to conduct all negotiations for the purchase and resale. Held, that such allegations sufficiently stated a case of partnership to withstand a general demurrer.

If a contract forming a partnership specifies no time for its commencement, it commences immediately.

A contract of the character described in the first headnote was not invalid for want of mutuality.

If two persons form a partnership for the purpose of buying and selling a particular tract of land which it is estimated will cost $15,000, and one of them agrees to furnish that sum or the amount necessary to effectuate the purchase, such an agreement is not invalid on the ground of indefiniteness as to the amount which may be necessary for such purpose.

The petition was not subject to general demurrer.

Error from Superior Court, Fulton County; Geo. L. Bell, Judge.

Suit by James S. Floyd against H. K. Kicklighter and others. From a judgment of dismissal, plaintiff brings error. Reversed.

James S. Floyd filed a petition against H. K. Kicklighter and others, seeking, among other things, the dissolution of an alleged partnership, and the recovery of a judgment against Kicklighter for one-half of the profits of the partnership. The presiding judge dismissed the case on general demurrer and the plaintiff excepted. The petition as amended alleged among other things, the following: About March 1, 1910 plaintiff and Kicklighter "entered into a partnership agreement under and by virtue of the terms whereof the parties agreed as follows": Kicklighter claimed to have an option, or that he could purchase, certain property known as the Turner property, containing 72 acres, more or less the purchase price of said property to be approximately $15,000, and "said Kicklighter agreeing to endeavor to perfect said option and right of purchase, use his time and efforts therefor, and, when said property was purchased, to endeavor to sell the same at a greater price than that which was to be paid for said property--that is to say, at a profit. Petitioner herein agreed to finance the proposition; that is to say, he agreed to advance the purchase price of said property, to wit, $15,000, or such other sum as might be necessary to purchase the same, and when said property was resold or should be resold the proceeds should go first for the payment of said $15,000, or the purchase price and all expenses incurred in connection with the purchase and sale of the same, and the remainder thereof to be divided, share and share alike, between defendant and said Kicklighter. That said Kicklighter represented and claimed and stated at said time that he could dispose of said property to the United States government for $25,000. It was also agreed and understood that the parties were to be jointly liable for the expenditures in connection with the purchase and sale of said property, and that whatever expense was incurred by Kicklighter in connection with the purchase and sale of said property should be charged against the joint account of the said parties, and likewise interest, without specifying the per cent. per annum, should be charged to their joint account and paid to plaintiff on whatever amount or sum of cash plaintiff advanced or was used in the purchase of said property from the time said money was actually being used for the benefit of said parties. Petitioner shows that said agreement was consummated, and that as a part of said partnership agreement he agreed to advance the sum herein specified, to render such assistance as he might be able in perfecting said deal, and, on the other hand, the said Kicklighter agreeing to conduct all negotiations for the purchase and resale of said property."

The plaintiff arranged for the money which he was to advance. From time to time he made inquiries of Kicklighter as to the sta tus of the transaction, and the latter by his "acts and words" led the plaintiff to believe that he was continuing to negotiate for the purchase of the land. Finally, hearing from indirect sources that the trade was being consummated, plaintiff again approached Kicklighter to ascertain the status of affairs, and was told by Kicklighter that he did not intend to recognize the plaintiff as being entitled to any of the profits in the transaction, and that he would refuse to pay any to the plaintiff, and said that he might take such action as he saw proper. In fact, Kicklighter made some arrangement with another person to procure the money, the details of which the plaintiff does not know. Kicklighter bought the land and sold it to the same purchaser contemplated in the agreement between plaintiff and defendant, at a profit of $10,000. The purchaser was the federal government, and its agent has not yet paid over the purchase price. Kicklighter and the other person with whom he negotiated for the loan of money were made parties, and it was prayed that such third party be allowed to set up any bona fide claim he might have to any part of the purchase price; that the partnership between plaintiff and Kicklighter be dissolved; that an accounting be had; that plaintiff have a judgment against Kicklighter for $5,000; that an injunction be granted; that a receiver be appointed to hold the purchase money, and for general relief and process.

Moore & Pomeroy, of Atlanta, for plaintiff in error.

L. C. Hopkins and John L. Hopkins & Sons, all of Atlanta, for defendants in error.

LUMPKIN, J. (after stating the facts as above).

1. Frequent efforts have been made to formulate a definition of "partnership," which would be at once brief and comprehensive; but, owing to the great variety of partnership agreements, this has been found difficult, if not impossible. Lord Lindley has collected, discussed, and criticised a number of them. Lindley on Partnership (7th Ed.) 10 et seq. His criticism on some of them has in turn been criticised by Mr. Clement Bates. 1 Bates on Partnership,§ 1. A definition which has been often quoted in this country is that contained in Story on Partnership (7th Ed.) § 2, as follows: "Partnership, often called copartnership, is usually defined to be a voluntary contract between two or more competent persons to place their money, effects, labor, and skill, or some or all of them, in lawful commerce or business, with the understanding that there shall be a communion of the profits thereof between them." It has been said, however, that partnership is not strictly the contract itself, but the relation arising from the contract.

Many efforts have been made to declare some test or tests which could be applied to the determination of whether a partnership existed or not; but, as in the effort to define a partnership, the result has not been entirely satisfactory. Certain indicia of the existence of a partnership or its nonexistence have been found; but the ingenuity and variety of agreements of contracting parties have made it difficult to provide an invariable test, especially as between the parties themselves. In earlier English cases an agreement to share net profits, as such, was said to make the contracting parties partners as to third persons, though not necessarily so inter se. But various exceptions arose, such as measuring the compensation of a mere agent or employé by a sum equal to a share in the profits (which readily drifted into the less exact form of agreeing to pay him for his services with a given share in the profits, though he had no interest therein or control thereof as owner), agreements as to voyages, tenants in common, etc. So a suggestion of mutual agency as a test has been met with the criticism that, if there is a partnership, mutual agency results, but may be regulated and controlled, as between the partners themselves, by agreement; that this is not properly a test; and that in such cases agency is deduced from partnership, rather than partnership from agency. Still it is an incident or indicium pointing toward partnership.

In 1860 the decision of the House of Lords, in Cox v. Hickman, 8 H. L. Cas. 268, brought about a great change in the view previously entertained, made the determination of whether a partnership existed as to third parties (except where there was an estoppel by the holding out of one to the world as a partner) very similar to the determination of the same question between the...