Hayes-Thomas Grain Company v. A. F. Wilcox Contracting Company

• Decision Date: 05 July 1920
• Docket Number: 93
• Citation: 223 S.W. 357,144 Ark. 621
• Parties: HAYES-THOMAS GRAIN COMPANY v. A. F. WILCOX CONTRACTING COMPANY
• Court: Arkansas Supreme Court

223 S.W. 357

144 Ark. 621

HAYES-THOMAS GRAIN COMPANY v. A. F. WILCOX CONTRACTING COMPANY

No. 93

Supreme Court of Arkansas

July 5, 1920

Appeal from Pulaski Chancery Court; John E. Martineau, Chancellor reversed.

Decree reversed and cause remanded.

Mehaffy Donham & Mehaffy, for appellant.

1. As to the liability of the Vinsant Company, the matter is settled by the case of 93 S.W. 427. The contract was one of partnership. Ib. It was a joint enterprise with a division of profits and clearly a partnership. 211 S.W. 148; 93 Id. 427; 80 Ark. 23; 87 Id. 412; 63 Id. 518; 44 Id. 427; 145 U.S. 611; 64 S.W 1007; 9 Leigh 424; 45 S.E. 371; 22 N.W. 809; 89 F. 140; 48 S.W. 548. The Vinsant Company was clearly liable. 93 Ark 346; 107 Id. 118; 46 Id. 132; 49 Id. 457; 121 Id. 705-711. It was not only a partner engaged in the joint enterprise, but it finally took charge of the business and all the property and thereby made itself liable. 136 J. 243; 233 F. 231; 142 U.S. 396; 170 F. 240. See also 2 Ark. 370; 19 Id. 671; 26 Id. 360; 31 N.E. 44; 68 S.W. 936; 113 N.E. 337; 2 Elliott on Cont., § 1358; 13 C. J. 714.

2. There is really no contention as to the right of the equitable garnishee in this case as the garnishment was improper. 31 Ark. 387; 22 Minn. 452; 56 Ark. 476; 90 Id. 236; 107 Id. 189. The garnishment and attachment should be sustained.

D. K. Hawthorne, for appellee, Vansant Company.

1. The contract did not create a partnership, and the court below properly so held. 211 S.W. 148; 54 Ark. 384; 207 Id. 221; 63 Ark. 518; 80 Id. 23; 87 Id. 412.

2. The contracting company being a corporation, could not form a partnership with the construction company. 95 Ark. 1; Ib. 368. See also as to no partnership. 54 Ark. 384; 44 Id. 423. Mere participation in the profits is not sufficient to create a partnership. Ib. It is a question of intention, and there must be an agreement from which a community of profit and loss arises. 91 Ark. 26; 30 Cyc. 372-3; 18 L. R. A. (N. S.) 975-1055.

OPINION

MCCULLOCH, C. J.

Appellee A. F. Wilcox Contracting Company, a foreign corporation domiciled at Kansas City, Missouri, entered into a contract with a street improvement district in Little Rock to construct the improvement authorized by the organization of the district. Appellees J. R. Vansant and A. J. Rector are copartners doing business under the trade name of J. R Vansant Construction Company, and they entered into a contract with appellee A. F. Wilcox Contracting Company (hereinafter referred to as the Contracting Company) which recited the contract between the Contracting Company and the improvement district and which provided in substance, that the Construction Company would finance the Contracting Company in the performance of said contract and assist the latter by furnishing bond to guarantee performance of the contract and to advance such sums of money to pay all bills incurred during the progress of the work for labor and materials; and the Contracting Company agreed to indemnify the Construction Company against losses in the performance of said contract, and further agreed to diligently construct the improvement in accordance with the contract with the district.

The clause of the contract providing compensation reads as follows: "For and in consideration of the Construction Company advancing said money and assuming the risks and obligations connected hereto and to the extent as hereinafter stated, and to aid and assist in performing said work as hereinafter designated, the corporation agrees to pay the Construction Company all the net profits accruing from said work up to and including the sum of $ 3,000, and it is further agreed that if the net profits from the performance of said work shall equal or exceed $ 9,000, then the Construction Company shall have and receive one-third of the entire profits accruing therefrom."

There is another provision in the contract which defines the net cost of the work and the profits, by specifying that the following items should be considered as a part of the cost of construction:

"First: The actual cost of labor employed on the job, exclusive of any overhead expenses.

Second: The actual cost of material used on this job.

Third: The actual cost of indemnity and maintenance bond and employer's liability.

Fourth: Reasonable up-keep and necessary repairs of the equipment made on the job. It being further understood by all parties hereto that the equipment now owned and intended to be used by the corporation on said job shall be and is now in good serviceable condition.

Fifth: The freight and labor necessary to transport the equipment to the place where said work is to be performed. It being understood that if the equipment referred to herein is used for other jobs in the vicinity of the work contemplated by this contract and the Construction Company has no interest therein, then there shall be a proper adjustment of the freight and labor items herein mentioned and a proper refund made to the Construction Company. It being further agreed that if the equipment is shipped back to Kansas City upon the completion of this job, that the freight and labor necessary so to do shall be charged as an item of expense against said job.

Sixth: The lump sum of $ 1,600 which represents and is intended to cover the overhead charges of the corporation in the performance of said work.

Seventh: The sum of $ 200 which item represents the overhead charges of the Construction Company on said work.

The last two items are to be paid to the respective parties only upon the completion of the work. The above items of overhead expenses have been arrived at with the understanding and agreement that the work required of the corporation can be fully performed in a period of six months from the time said work actually began. If, however, the contract of the city shall be altered in such a manner as to require a longer period than six months for the full performance of said work, then said items of overhead expense shall be increased in proportion to the time actually required for the full performance of said contract."

There is a further provision that A. F. Wilcox should give his personal attention to the supervision of the job of work specified in the contract with the improvement district and that the Construction Company "shall have the right to inspect the books of the corporation at all times, insofar as they refer to this work and shall have the right to investigate working conditions of the men, purchase of material, employment of labor and shall have the right to be fully informed as to all sub-contracts and be kept at all times fully acquainted with the conditions of said work and shall be kept fully informed as to the manner in which said work is being discharged and said contract is being fulfilled. Should the Construction Company be able to purchase material and labor at a lower price or suggest methods of handling the work more economically, said suggestions are to be taken into consideration and acted upon by the corporation."

This contract was entered into between the parties on December 12, 1917, and the Contracting Company proceeded with the construction of the improvement.

During the months of July, August and September of the year 1918, appellant, a corporation engaged in the grain and feed business in the city of Little Rock, sold feed to the Contracting Company while the latter was proceeding with the performance of its contract with the improvement district; and this is an action instituted by appellant to recover a balance of $ 396.45 due on the account. The feed stuff was delivered to the Contracting Company, and, according to the testimony, was used in feeding live stock which constituted a part of the equipment used in the construction of the improvement.

On September 9, 1918, the Construction Company filed a complaint in the Pulaski Chancery Court against the Contracting Company and the board of commissioners of the street improvement district and a bank in Little Rock where the funds were deposited, setting forth their contract with the Contracting Company, alleging that the latter had violated the terms of the contract and asked an injunction prohibiting the board of commissioners of the improvement district from paying any further money to the Contracting Company. Subsequently under an order of the chancery court entered in that action by consent, the Construction Company was authorized to take charge of the work of constructing the improvement, and the commissioners were directed to make all...