Mcmillan v. Gilmour
| Decision Date | 13 August 1934 |
| Docket Number | No. 23666.,23666. |
| Citation | 49 Ga.App. 400,175 S.E. 672 |
| Parties | McMILLAN. v. GILMOUR. |
| Court | Georgia Court of Appeals |
Syllabus by the Court.
1. In the instant action on an open account by a creditor against two alleged copartners, the court did not err in admitting in evidence, to prove partnership, the contracts by which the defendants jointly obtained an option to purchase from the owners of patents for machines or processes to manufacture iron pipe; or in admitting a contract between the defendants in which they expressly designated themselves as "copartners, " or other parol evidence; all tending to show that the defendants were joint owners of their interest in the patents and were jointly interested in their development, and to explain the relation and the intent of the parties under a subsequent contract, which was relied upon by the contesting defendant to show that the defendants were not partners. Under all the evidence, there was a partnership, and the court did not err in directing a verdict for the plaintiff against the plea of no partnership.
2. The court did err, however, except as to $170, in directing a verdict for the plain tiff for all of the $1,429.24 sued for, less an admitted set-off of $1,000. While the evidence showed the existence of a partnership, it not only authorized but demanded a finding that the partnership was dissolved early in May or on May 14, 1929; and that the contesting defendant, on May 24, 1929, notified the plaintiff by letter of his nonliability. Consequently, as to $1,039.24 of the account, incurred by the plaintiff for his own salary and for moneys advanced after that date, the defendant was not liable. As to $522.58 of this $1,039.34, the defendant was not liable for the further reason that the uncontradicted evidence shows that it was incurred after June 25, 1929, when the defendant by letter informed the defendant that there was no partnership. Nor as to $259.28 of the $1,039.44 was the defendant liable, for the still additional reason that this was incurred on August 31, 1929, after the plaintiff on July 15, 1929, had resigned his connection with the work of the defendants, and had so informed them. As to $220 of the total amount of $1,429.24 sued for, incurred from May 5 to 25, 1929, the oral testimony and documentary evidence are not entirely clear and undisputed as to whether and when during this period the defendant by his attorney in fact first orally notified the plaintiff by telephone to the effect that the defendant had ended his connection with the partnership, and it was for the jury to say as to what part, if any, of this $220 was incurred after such notice, if they found that it was given. Thus, as to this amount, while the jury could have found for the plaintiff, the direction of the verdict was error. As to $170 of the directed principal, which was incurred before May 5, 1929, while the partnership continued and before any alleged notice to the plaintiff, a verdict was properly directed; the defendant being entitled, however, to the $1,000 admitted setoff.
Error from City Court of Floyd County; W. J. Nunnally, Judge.
Suit by C. H. Gilmour against D. W. McMillan and another. Judgment for plaintiff, and named defendant brings error.
Reversed.
Maddox, Matthews & Owens, of Rome, for plaintiff in error.
Wright & Covington, of Rome, and John A. Dunaway and Y. C. Mitchell, both of Atlanta, for defendant in error.
1. The line of demarkation between an employment and a partnership, where one of the parties contributes services rather thancapital, and is merely to receive a share in the profits, is close and often depends on differences in the particular facts rather than rules of law. Doss v. Ragan, 135 Ga. 850, 70 S. E. 662; Brandon & Dreyer v. Conner, 117 Ga. 759, 45 S. E. 371, 63 L. R. A. 260; Callaway v. Waxelbaum Co., 128 Ga. 508, 57 S. E. 762; Sankey v. Columbus Iron Works, 44 Ga. 228, 234; Buckner v. Lee, 8 Ga. 285; Clegg v. Lyons, Harris & Brooks, 30 Ga. App. 482, 485, 118 S. E. 432; Allgood v. Feckoury, 36 Ga. App. 42, 43, 135 S. E. 314; Sauls v. Scott, 46 Ga. App. 243 (1), 244, 167 S. E. 311; Nellis & Co. v. Green & Stallworth, 36 Ga. App. 684, 688, 137 S. E. 843; Hall & Ham v. Stone, 11 Ga. App. 269 (1), 75 S. E. 140. But a joint interest in the partnership property together with a joint interest in the profits constitutes a partnership as to third persons. Civil Code 1910, § 3158; Floyd v. Kicklighter, 139 Ga. 133, 138, 76 S. E. 1011; Smith v. Hancock, 163 Ga. 222 (2, a), 231, 136 S. E. 52; Gray v. Blasingame, 110 Ga. 343, 345, 35 S. E. 653. The fact of partnership may be established by parol. The intention of the parties may be disclosed not only from the language of a particular writing, but from the facts and circumstances of the entire course of dealing between the parties. Atlantic Orchard Corp. v. Caldwell, 41 Ga. App. 205 (2), 152 S. E. 298; Falk v. LaGrange Cigar Co., 15 Ga. App. 568, 84 S. E. 93.
On the question of partnership in this suit, the instrument of December 4, 1928, which is relied upon by the contesting defendant as showing that no partnership existed, but that the parties merely agreed to form a partnership in the future upon the performance of a condition or the happening of a contingency, provided that the contesting defendant would furnish "an additional sum of" $10,000 to complete the erection, building, and demonstration of a machine for manufacturing high-pressure centrifugal cast-iron pipe; that the other defendant would personally supervise this work, which was to be completed within three to six months; that if that defendant failed to do this, the defendant furnishing the money would be under no obligation to furnish other funds, and the machine and equipment acquired with his moneys would belong to him; but if the other defendant completed the machine as required, the machine and equipment would be "owned jointly by the parties in the same proportions as their respective interests in and to the profits derived from the sale or other disposition of the said Beatty high-pressure pipe process or Beatty patents." Although this instrument provided that the party not furnishing the money for the machine would have only a contingent or conditional joint interest in the "machine and equipment, " it expressly recognized that the parties already owned "respective interests in and to the profits" from their joint interest and ownership in the patents. The writing expressly refers to the "option" on the patents, which the defendants had jointly acquired. The reference to "an additional sum of $10,000" also indicates that the contesting defendant, who furnished this amount, had already expended other moneys in the joint enterprise. Since the instrument obviously neither created nor covered the entire course of dealing between the parties, the court did not err in admitting in evidence the original option contract of March 14, 1928, by which they jointly acquired their interest in the patent rights; or the later agreements extending the time of the option; or the parol evidence, which explained the transaction. Nor did the court err in admitting the contract signed by the defendants, dated April 7, 1928, in which they expressly stated that they "are copartners in agreement with [the patent owners] for the outright purchase of the soil pipe rights * * * covered by the Beatty patents on the manufacture of centrifugal pipe, " that by reason of the furnishing of funds by the defendant contesting the partnership he was to receive a 60 per cent. "interest, " and by reason of the rendering of valuable services by the other defendant, he was to receive a 40 per cent. "interest." If "the parties, in a joint undertaking, mutually regard their arrangement as a partnership, the law will take them at their word, and apply the rules applicable to that relation." Huggins v. Huggins, 117 Ga. 151 (2), 155, 43 S. E. 759. The defendant denying partnership, however, contends that this contract was immaterial, because it referred only to "soil" or sewer pipe, and not to high-pressure water pipe, such as was dealt with in the last contract of December 4, 1928. Although the contract of April 7th does refer to "soil-pipe rights" under the patents, it refers also to the "agreement" with the owners of the "patents on the manufacture of centrifugal pipe." Only one option contract was in evidence, and that contract, by which the defendants acquired their joint interest in the subject-matter and the profits, expressly covers a "high-pressure centrifugal machine" and process, does not limit the joint interest of the parties to "soil" or sewer pipe, and uses almost the same language as the contract of December 4, 1928, in describing the pipe therein dealt with as "high-pressure centrifugal cast-iron pipe." The contract of April 7th is also the only instrument in evidence to show what were the "respective interests" of the parties, whichare referred to in the last contract. That contract being ambiguous, the prior writings and other parol evidence explanatory of its meaning and of the intent and relation of the parties were admissible. See National Manufacture & Stores Corporation v. Dekle (Ga. App.) 173 S. E. 408.
Moreover, the evidence was also admissible, or the defendant cannot be heard to complain of its admission, because of the averments in his own answer. While the answer denied any...
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