P & M Cattle Co. v. Holler

• Decision Date: 03 February 1977
• Docket Number: No. 4657,4657
• Citation: 559 P.2d 1019
• Parties: P & M CATTLE COMPANY, Appellant (Plaintiff below), v. Rusty HOLLER, Appellee (Defendant below).
• Court: Wyoming Supreme Court

Page 1019

559 P.2d 1019

P & M CATTLE COMPANY, Appellant (Plaintiff below), v. Rusty HOLLER, Appellee (Defendant below).

No. 4657.

Supreme Court of Wyoming.

Feb. 3, 1977.

Michael E. Warren, Sawyer, Sawyer & Warren, Torrington, signed the brief and appeared in oral argument on behalf of appellant.

Morris R. Massey, Brown, Drew, Apostolos, Barton & Massey, Casper, signed the brief and appeared in oral argument on behalf of appellee.

Before GUTHRIE, C. J., and McCLINTOCK, RAPER, THOMAS and ROSE, JJ.

RAPER, Justice.

In the district court, the plaintiff-appellant, a partnership, sought and was denied recovery for losses incurred in 1974 under an alleged 'oral joint venture agreement' to purchase, lease and sell livestock. Defendant-appellee, an individual, was given judgment for $2,219.40 on a counterclaim. We will affirm.

While the plaintiff sets out the issues as multiple, ¹ it appears that the only real issue is whether the parties to this appeal were parties to a joint venture or partnership agreement to share losses as well as profits from a cattle purchase, feed and sell operation.

In 1971, the defendant was looking for someone to pasture cattle on the defendant's land at $3.00 per head per month. One of two partners in the plaintiff partnership expressed an interest and invited defendant to talk. As a result, the following written agreement was entered into:

'2-23-1971

'Contract-Rusty Holler (60 Bar Ranch)-L. W. Maxfield and Bill Poage

'Rusty to furnish grass for est 100 yr st and 21 heifers--

'Maxfield & Poage to furnish money for cattle plus trucking & sale-and max of $300.00 per month for labor

'Rusty to take cattle around May 1st and cattle to be sold at a time this fall agreed upon by all parties involved

'Cost of cattle plus freight-salt and labor to be first cost

'Net money from sale of cattle less first cost to be split 50-50 between Rusty (1/2) and Maxfield and Poage (1/2) (death loss to be part of first cost)

'/s/ L. W. Maxfield

'/s/ Bill Page

'LM

'/s/ Rusty Holler'

The 1971 agreement was orally renewed for the years 1972, 1973 and 1974. Plaintiff and defendant each realized substantial returns in the first three years but in 1974 there was not enough realized from the sale of cattle to pay first costs and a loss resulted. Plaintiff insists that the defendant is bound to pay it $44,500.00 representing one-half of the total cash loss in the sum of $89,000.00. The defendant personally expended first costs for expenses (salt) over and above the amount received from sale of cattle in sum of $3,967.76. Through an admitted error of defendant's counsel, along with a misunderstanding by defendant, only one-half of those expenses were claimed by defendant. When the error became apparent at or near the close of evidence, they elected not to amend the defendant's claim first made. The contract clearly states that plaintiff was to 'furnish money for * * * salt.' ²

The parties never discussed nor is there any mention in the contract of what would happen if the cattle sold at a loss. Nor was any mention made of reimbursement or credit to the defendant for the value of his services and pasture or grass he contributed, in the event cattle sold at a loss.

A broad overview of the entire record suggests that this case involves only a contract in which plaintiff agreed to put up the money and defendant agreed to put up grazing land and grass, along with services, with a view to profit to both, each to bear their own losses. Before confirming that position, we must examine the law of joint ventures.

In Wyoming, a joint adventure partakes of the nature of a partnership and is governed substantially by the same rules of law, the principal distinction being that a joint adventure usually relates to a single transaction, though it may be continued over a period of years. Eblen v. Eblen, 1951, 68 Wyo. 353, 234 P.2d 434. Even though a joint adventure and a partnership are not identical, the relationship of co-adventurers is controlled largely by the law of partnership. Goldberg v. Miller, 1939, 54 Wyo. 485, 93 P.2d 947, reh. den., 96 P.2d 570; Hoge v. George, 1921, 27 Wyo. 423, 200 P. 96, 18 A.L.R. 469; Wood v. Western Beef Factory, Inc., 10 Cir. 1967, 378 F.2d 96. A concise distinction between joint venture and partnership is drawn in 1 cavitcH, busineSs organizations, § 13.05(2), pp. 677-678:

'It is apparent that the comparatively modern legal concept of joint adventure is intended to identify business ventures which, but for their limited scope and duration, would be partnerships. To date, however, there is no discernible legal difference between the two types of associations. As a result, the courts have held that the joint adventure is subject to the same rules of law which are applied to partnerships, especially when determining the rights of the parties inter se.'

The excerpt is excellently footnoted.

Since joint adventures, also frequently referred to as joint ventures, are a species of and governed by the law of partnerships, we must go to the Uniform Partnership Act, § 17-195, et seq., W.S.1957, C.1965, adopted by the Wyoming State Legislature in 1917. Section 17-200(1), W.S.1957, C.1965, defines a partnership as follows: 'A partnership is an association of two or more persons to carry on as co-owners a business for profit.' (Emphasis added.) Section 17-201, W.S.1957, C.1965, lays out the criteria for resolving the question as to whether a partnership obtains:

'In determining whether a partnership exists, these rules shall apply:

'(1) Except as provided by section 16 (§ 17-210) persons who are not partners as to each other are not partners as to third persons;

'(2) Joint tenancy, tenancy in common, tenancy by the entireties, joint property, common property, or part ownership does not of itself establish a partnership, whether such co-owners do or do not share any profits made by the use of the property;

'(3) The sharing of gross returns does not of itself establish a partnership, whether or not the person sharing them have a joint or common right or interest in any property from which the returns are derived;

'(4) The receipt by a person of a share of the profits of a business is prima facie evidence that he is a partner in the business, but no such inference shall be drawn if such profits were received in payment:

'(a) As a debt by installments or otherwise,

'(b) As Wages of an employee or rent to a landlord,

'(c) As an annuity to a widow or representative of a deceased partner,

'(d) As an interest on a loan, though the amount of payment vary with the profits of the business,

'(e) As the consideration for the sale of the good-will of a business or other property by installments or otherwise.'

(Emphasis added.)

As can be seem from § 17-201, an agreement to share profits is far from decisive that a partnership is intended.

As in any contractual relationship, the intent of the parties is controlling. The parties must intent to create the relationship of joint adventure or partnership. National Supply Co.-Midwest v. Weaver, 1926, 35 Wyo. 224, 248 P. 353. Superimposed upon the rule of intent, it is frequently held that where there is no express agreement to form a partnership, to question of whether such a relation exists must be gathered from the conduct, surrounding circumstances and the transactions between the parties. Presutti v. Presutti, 1973, 270 Md. 193, 310 A.2d 791; Holman v. Dow, Tex.Civ.App.1971, 467 S.W.2d 547; Freese v. United States, 10 Cir. 1972, 455 F.2d 1146, cert. den., 409 U.S. 897, 93 S.Ct. 85, 34 L.Ed.2d 134. There is no automatic solution to the question of the existence of a partnership but it turns upon the facts and circumstances of association between the parties, Bernstein, Bernstein, Wile & Gordon v. Ross, 1970, 22 Mich.App. 117, 177 N.W.2d 193. No single fact may be stated as the complete and final test of a partnership. Jenkins v. Brodnax White Truck Company, Tex.Civ.App.1969, 437 S.W.2d 922. Even a written agreement, designating the parties as partners and providing for a sharing of the profits, is only evidential and not conclusive of the existence of a partnership. Fenwick v. Unemployment Compensation Commission, 1945, 133 N.J.L. 295, 44 A.2d 172.

In the case before us there was no express agreement to form a partnership. True, there was an agreement but nowhere in that document is there anywhere mentioned the term partnership. Nor is there anywhere mentioned any sharing of losses, which is normally concomitant with a sharing of profits in a partnership. ³ While § 17-201(4) creates an inference, that inference is not conclusive. See the many cases annotated in 6 U.L.A. (Master Edit. 1969 with pocketpart), Uniform Partnership Act, § 7, note 47.

We find in Wyoming two cases which reflect the usual holdings that division of profits has little significance by itself. In Dunn v. Gilbert, 1927, 36 Wyo. 249, 254 P. 121, it was held that the use of the expression 'fifty-fifty' and an understanding to split the profits do not necessarily mean a joint advanture but such expression must be construed in the light of surrounding facts and circumstances. In State v. Bemis, 1926, 34 Wyo. 218, 241, 242 P. 802, 809, the principal witness put up the money to buy and pay shipping costs of a carload of apples. The defendant was to share in the profits by arranging their sale. They sold at a loss and defendant kept all the money. In a prosecution for embezzlement, the defendant claimed a right to retain the funds by reason of a partnership. This court spoke approvingly of the principle that when a business is limited to a single venture, there must be pretty clear evidence of an intent to create a partnership relationship and an understanding for division of profits may only be considered in connection with the whole transaction.

Since we cannot look at the face of the instrument here and determine...