Lacotts v. Pike

• Decision Date: 07 June 1909
• Citation: 120 S.W. 144,91 Ark. 26
• Parties: LACOTTS v. PIKE
• Court: Arkansas Supreme Court

120 S.W. 144

91 Ark. 26

LACOTTS v. PIKE

Supreme Court of Arkansas

June 7, 1909

Appeal from Arkansas Chancery Court; John M. Elliott, Chancellor affirmed with modification.

Decree affirmed.

H. A Parker, for appellant.

1. Since partition cannot be had until all accounts are adjusted, this action, and not a suit for partition, is the proper remedy. George on Partnership, 303; 82 Hun (N. Y.) 238; Bates on Partnership, § 975; 95 U.S. 401. However if the court found that an action to settle the partnership affairs was not a proper remedy, he should have caused the proceedings to be changed, rather than to dismiss the bill. Kirby's Dig. §§ 5980, 5991.

2. The facts establish a partnership. 63 Ark. 518; 87 Ark. 412.

J. M Brice, for appellees.

1. The test of partnership is whether or not the parties share in the profits of the business. At any rate, the absence of sharing in the profits is conclusive evidence that a partnership does not exist. And there is no partnership, even if there is joint ownership, where one of the joint owners rents or agrees to take a certain amount for the use of his interest in the business. 54 Ark. 384; 22 Am. & Eng. Enc. of L., 2d Ed. 22; 44 Ark. 423; 74 Ark. 437.

2. A suit to establish a partnership and to wind up a partnership business and partition cannot be joined or maintained where the lands are held adversely or the title is in dispute. 47 Ark. 236; 40 Ark. 155; 56 Ark. 370.

OPINION

FRAUENTHAL, J.

The plaintiff, John LaCotts, instituted this suit on December 14 1904, in the Arkansas Chancery Court against the defendants, who are the widow and children of J. F. Pike, deceased. In his complaint he alleges that he formed a partnership with said J. F. Pike on September 1, 1888, and that the contract of partnership was evidenced by a deed of that date executed by J. F. Pike to him by which said Pike conveyed to him an undivided one-half interest in certain land and a saw and grist mill, gin stand, press and machinery located on the land; that there had never been any settlement of the partnership; and he seeks an accounting of the partnership business and a division of the partnership assets. Subsequently, the administrator of J. F. Pike was made a party defendant. The defendants denied the existence of a partnership at any time between plaintiff and J. F. Pike, and specifically denied each allegation of the complaint; they also denied that plaintiff had any interest in or title to any of the property; and they pleaded laches and limitation against the alleged claim of plaintiff. John A. Bower filed an intervention, in which he alleged that J. F. Pike had executed to him a mortgage upon the property involved in the suit to secure certain indebtedness owing by Pike to him; and he asked for a foreclosure of this mortgage.

Upon the trial of the cause the chancery court entered a decree in which it dismissed the complaint for want of equity, and dismissed the intervention of Bower without prejudice. From that decree the plaintiff appeals to this court.

The evidence by which the plaintiff seeks to establish the alleged partnership between himself and J. F. Pike consists of a deed in ordinary form executed by J. F. Pike to the plaintiff on September 1, 1888, by which said Pike conveyed to plaintiff an undivided one-half interest in a certain tract of land and the above-mentioned personal property. The plaintiff testified that by virtue of said deed there was a partnership between them, but he did not make any other statement relative to the partnership. He did not state that they should share in the profits, or that they should be liable for the losses of the alleged partnership business; nor did he state the nature and extent of the business contemplated or intended by the alleged partnership. On the contrary, the plaintiff testified that J. F. Pike paid him $ 50 rent per year for certain years for his interest in the property; and the undisputed evidence is that J. F. Pike replaced all the personal property from time to time with other property of a similar kind, and that he purchased all said property upon his sole and individual account. During all the years from 1888 until the death of J. F. Pike in September, 1903, the property was in the possession of said Pike, and all transactions relative thereto with third persons were had and made in the sole and individual name of J. F. Pike. The evidence tended also to prove that in December, 1888, the plaintiff executed to one Merritt a mortgage upon his undivided interest in the land, and that this interest in the land was sold in 1894 under a decree of foreclosure of said mortgage, and in 1894 after confirmation of said sale a deed therefor was executed by the commissioner in chancery to one J. W. Crockett, trustee. The plaintiff testified that after the conveyance of said interest in the land to said Crockett he considered that the partnership between himself and Pike was thereby dissolved. In 1900 J. W. Crockett, trustee, for $ 50 conveyed this interest in the land to plaintiff.

In order to constitute a partnership, it is necessary that there shall be something more than the joint ownership of property. A mere community of interest by ownership is not sufficient. This creates a tenancy in common, but not a partnership. Oliver v. Gray, 4 Ark. 425; Haycock v. Williams, 54 Ark. 384, 16 S.W. 3; Harris v. Umsted, 79 Ark. 499, 96 S.W. 146.

The test of a partnership between the parties themselves is largely a question of intention, but before there can be a partnership between the parties themselves there must be an agreement from which a community of profit and loss arises. There is no presumption of a partnership from a mere joint ownership of the property. Neill v. Shamburg, 158 Pa. 263; St. John v. Coates, 63 Hun 460, 18 N.Y.S. 419.

It is ordinarily considered that an agreement to share in the profits is an essential element of every partnership, and yet because one shares in the profits this does not necessarily constitute him a partner. But if there is an absence of a sharing in the profits, then there is no agreement by which it can be said a partnership exists. Between the parties themselves, it is essential that they shall share in the profits...