Kelly v. Gaines

• Decision Date: 08 February 1887
• Citation: 24 Mo.App. 506
• Parties: J. R. KELLY ET AL., Respondents, v. W. A. GAINES ET AL., Appellants.
• Court: Kansas Court of Appeals

24 Mo.App. 506

J. R. KELLY ET AL., Respondents, v. W. A. GAINES ET AL., Appellants.

Court of Appeals of Missouri, Kansas City.

February 8, 1887

APPEAL from Jackson Circuit Court, HON. JAMES H. SLOVER, Judge.

Reversed and remanded.

Statement of case by the court.

This was an action instituted by the plaintiffs against the defendants as partners for the purchase price of certain barrels alleged to have been sold by the former to the latter.

The defendants are W. A. Gaines and Max Minter, and the question in the case was, were they partners in the purchase of the barrels?

W. A Gaines owned the Central Mills in Kansas City, and had been operating them prior to February, 1885, under the name of W A. Gaines & Company, having had, during the four years prior to said date, several different partners. Just prior to said date said mills were injured by fire, and Gaines had no means with which to continue the operation of the mills. About said date Gaines received several large orders for meal from parties in the south. Being without money to buy the necessary corn in order to fill the orders, he called on Max Minter to make an arrangement with him for the purpose of obtaining the corn. Max Minter and his two brothers, under the firm name of Minter Brothers, were engaged in the grain business in Kansas City. An arrangement was made between Gaines and Max Minter. As to what the arrangement was, there was a conflict of testimony.

The plaintiffs furnished barrels to Gaines after he and Minter entered into the arrangement, whatever that arrangement was.

There was evidence tending to show that Max Minter had conducted and held himself out as a partner of Gaines, and that, on the credit of such supposed partnership, the plaintiffs furnished the barrels in suit. As to this, however, there was also a conflict of testimony.

Gaines as a witness, testified in behalf of the plaintiffs, as to what the arrangement was. His testimony, as shown by the record, is not very clear or satisfactory. It is difficult to say from his testimony what were the exact terms of the agreement between Gaines and Minter. It does appear clearly, however, that Minter was to furnish the corn required by Gaines to fill the orders already referred to, and that Gaines was to grind the corn into meal and fill the orders. Minter was to furnish nothing but the corn. According to Gaines' statement it was agreed that Minter should receive a profit of ten dollars on each car of meal made from the corn so furnished, over and above the cost of said corn, which said profit Gaines guaranteed. As to this point, Gaines' statement is a little confused, and not altogether consistent. In one place he is made by the record to state, " and I told him that I would guarantee about twenty dollars a car profit." At another place, in reply to the question: " the agreement was, then, he was to have at least ten to twenty dollars profit," he says: " Yes, sir, we figured on that profit." Again, the statement is made: " Well, I suppose Mr. Minter was to have ten dollars. If it went above that I was to have the profit on the meal. I don't know how Mr. Minter understood it. I told him I would guarantee ten to twenty dollars profit on the meal. I meant the profit on a car of meal would be that." Further on he says, " and I supposed if the profits were over ten dollars we were to divide the profits, and if it only went to ten dollars he was to have it. There was nothing said about that at all at that time. I expected the profits to be over ten dollars a car." Finally, in reply to the question: " In regard to this surplus of over ten dollars, what was your agreement with Minter as to what was to be done with that?" he says: " There was never any agreement about it." The testimony, taken altogether, must, we think, be regarded as stating, in effect, what we have just said, viz.: that Minter was guaranteed by Gaines a profit of ten dollars on each car of meal made from the corn supplied by Minter, over and above the cost of said corn. Minter, on the contrary, testified that he agreed for his firm, Minter Brothers, to furnish the corn to Gaines for a commission of ten dollars on each car of corn.

The court gave for the plaintiff, among others, the following instruction:

" 2. If you find from the evidence that plaintiffs sold the barrels sued for in this action at the date of sale of barrels to defendant Gaines, and that at the time of sale defendant Gaines and Minter were mutually interested in the grinding of meal in Kansas City, Missouri; that Gaines was to furnish the mill and Minter the corn, and that Minter was to have a certain amount on each car load of meal so furnished and ground as his share of the profits of such business, over and above the cost price of the corn so by him furnished, then you will find for plaintiffs against both the defendants."

The court refused to give for the defendant Minter, among others, the following instruction:

" 12. If the jury believe, from the evidence, that defendants Gaines and Max Minter entered into an agreement, by the terms of which Minter was to furnish corn, at his own expense, and Gaines was to grind it, barrel it, and ship it at his own expense, and each to be entitled to an equal share of the profits arising out of the subject matter of the contract, this would not constitute them partners, and make them both liable for expenses incurred by either of them in the performance of his part of the contract."

Defendant Gaines does not appear, from the record, to have filed an answer.

Under the instructions, the jury found a verdict in favor of the plaintiffs, and from a judgment accordingly entered defendant Minter has appealed to this court.

JOHN F. WATERS, and CRITTENDEN, MCDOUGAL & STILES, for the appellants.

I. The court erred in giving plaintiffs' instructions. It has always been held in this state that a mere interest even in general profits, was not sufficient to constitute the parties partners. Stoalings v. Baker, 15 Mo. 481; Campbell v. Dent, 54 Mo. 325; Donnell v. Harshe, 67 Mo. 170; Gill v. Ferris, 82 Mo. 156; Clifton v. Howard, -- Mo. ____. There was no intention between the parties themselves that there shonld be a partnership; their contract did not make them partners, and this the plaintiffs are presumed to have known. Denny v. Cabot, 6 Met. (Mass.) 82; Loomis v. Marshall, 12 Conn. ___. In this state there is no partnership unless each partner has the right to manage the whole business and dispose of the whole property. Donnell v. Harshe, 67 Mo. 170, 173; Ashby v. Shaw, 82 Mo. 76, and cases cited. Parties become partners by contract, by intent, by estoppel, or by construction of law, the most important element being the mutuality of agency. Beecher v. Bush, 45 Mich. 188; Harvey v. Childs, 28 Ohio St. 319; Eastman v. Clark, 53 N.H. 276; Wilson v. Whitehead, 10 Mees. & W. 503. Here all these elements of partnership were lacking. There was no concealment of facts, and the mere statement to plaintiff by defendant, Max Minter that, " I will see that the barrels are paid for," does not make defendants, Minter Brothers, partners with Gaines. See authorities above cited.

II. From the authorities above cited, it will be apparent that the instructions asked by defendant Minter, and refused by the court, should have been given. Taken as a whole, they correctly state the law under the facts proven. The tenth, especially, should have been given. Donnell v. Harshe, supra. And it was reversible error to refuse the eleventh, which is in the exact language of a declaration of law approved in Lucas v. Cole (57 No. 143, 145).

III. The court erred in admitting proof of statements made to plaintiffs by defendant Gaines, no partnership having been proven. Campbell v. Dent, 54 Mo. 325, 331; Filley v. McHenry, 71 Mo. 417.

CHASE & POWELL, for the respondents.

I. The court did not err in giving plaintiffs' instructions. The instructions given for the plaintiff simply declare the law of partnership applicable to the evidence of this case, viz.: that Gaines and Minter were mutually interested in grinding the meal, Gaines furnishing the mill and Minter the corn, and to share the profits from manufacture of the meal, which profits Minter attempted to make as large as possible by his supervision, and management, and acts. That Minter conducted himself toward plaintiffs, and the business, by his acts and interest in, and control and authority over, the business, and is liable to Kelly Brothers as a partner. " All declarations, by word or act, the rights exercised, and every circumstance, may be proved, and must be considered in determining whether there is partnership as to third persons." Pierson v. Steinmeyer, 4 Richardson L. (S. C.) 309; Summers v. Post, 1 Ala. 65. While Gaines and Minter seem never to have talked of losses (we presume losses were not deemed possible), yet a participation in profits implies a participation in losses, and there is no special contract for losses necessary to make one a partner. The profits were uncertain, and depended largely on the efforts of Minter as well as Gaines. Lengle v. Smith, 45 Mo. 276; Pierson v. Steinmeyer, supra.

II. It is not necessary to prove particular terms of partnership, if defendant, by his acts, held himself out to the world and plaintiffs, as partners. Rippey v. Evans, 22 Mo. 158; Gates v. Watson, 54 Mo. 591.

III. The instructions under thirteen and fourteen, given for defendants, embody all the law applicable to the evidence in this case for the defendant, and it is not error to refuse instructions multiplied ad infinitum, that...