Quinn v. Stuckey

• Decision Date: 19 January 1959
• Docket Number: No. 5-1697,5-1697
• Citation: 229 Ark. 956,319 S.W.2d 839
• Parties: Bessie Sisson QUINN et al., Appellants, v. Fred STUCKEY, Administrator, et al., Appellees.
• Court: Arkansas Supreme Court

Page 839

319 S.W.2d 839

229 Ark. 956

Bessie Sisson QUINN et al., Appellants, v. Fred STUCKEY, Administrator, et al., Appellees.

No. 5-1697.

Supreme Court of Arkansas.

Jan. 19, 1959.

Bruce Ivy and James E. Hyatt, Jr., Osceola, for appellants.

J. G. Waskom, Marked Tree, John S. Mosby, Lepanto, for appellees.

McFADDIN, Justice.

The Trial Court sustained a demurrer to the complaint and dismissed the case. The plaintiffs (appellants) have appealed; and the sole issue is whether the complaint stated a cause of action.

The plaintiffs, as the heirs at law of Esther Lidell Sisson Goodin, brought this suit against the defendants, who together constitute all those interested in the estate of Joe Dean Goodin. The complaint alleged that Joe Dean Goodin, the husband, and Esther Lidell Sisson Goodin, the wife, were married on December 18, 1930; that they each then had only a very small estate; that at or shortly after the marriage, the said husband and wife entered into an oral agreement to form a partnership, for the purpose of acquiring lands and other properties and operating the same under the name and style of J. D. Goodin; that by the terms of said agreement, each of the parties was to and did contribute to the said partnership all of his or her property, capital, labor, and services, and each was to share jointly in the profits of the partnership; that all of the property was to be held and used for their mutual benefit during their joint lives.

We now copy certain of the germane allegations of the complaint, against which the demurrer was sustained:

'* * * that at the time of their marriage the said Esther Lidell Sisson Goodin and Joe Goodin entered into an oral agreement to form a partnership or joint adventure for the purpose of acquiring lands and property and operating farms in Poinsett County, Arkansas, under the name and style of Joe Dean Goodin or J. D. Goodin. By the terms of said agreement, each of said parties was to and did contribute to said partnership or joint adventure all of his or her property, capital, labor, and services, and each was to share equally in the profits, income, increments, losses, and labor of said partnership or joint adventure; that all of the property, profits, income, and increments acquired and held by said partnership or joint adventure was to be, and was, held and used for their mutual benefit during their life time; that upon the death of either partner or joint adventurer, the survivor would hold and have the full use and benefit of all of said partnership or joint adventure property until his or her death, and upon the death of the survivor, the partnership or joint adventure would terminate, and all of said property (be) divided equally, one-half to the heirs of the said Joe Dean Goodin and one-half to the heirs of the said Esther Lidell Sisson Goodin.'

The complaint further alleged that the partnership had assets of realty and personalty into the hundreds of thousands of dollars; that the wife, Esther Lidell Sission Goodin died on October 9, 1944; and that the husband, J. D. Goodin, remained in control of the partnership assets pursuant to the agreement; that he died on January 11, 1957; and that his death terminated the partnership agreement. The plaintiffs claimed that under the partnership agreement they were entitled to one-half of all the partnership assets. To the complaint the defendants filed general demurrers, which, as heretofore recited, were sustained, and the case was dismissed, when the plaintiffs elected to stand on the complaint.

At the outset it is well to state the rule for testing a case on demurrer. In Tyler v. Morgan, 214 Ark. 667, 217 S.W.2d 606, 608, we said:

'Appellees demurred to this complaint on the ground that it did not state facts sufficient to constitute a cause of action. The trial court sustained the demurrer and this appeal followed.

'The question presented is: Treating all allegations in the complaint, which are well pleaded, as true, and construing them liberally in favor of the pleader, as we must, was a cause of action stated? We hold that there was. 'It is not necessary that the complaint should state a cause of action in every particular, for if it contains the substance of a cause of action imperfectly stated, the presumption would be that the defects in the complaint were cured by the proof at the trial.' Clow v. Watson, 124 Ark. 388, 187 S.W. 175.'

After a careful study we reach the conclusion that the demurrer should have been overruled in the case at bar; and here are our conclusions as against the matters claimed to be defects in the complaint:

(1) The complaint alleged that the husband and wife formed a partnership. It is true that the case of Gilkerson-Sloss Commission Co. v. Salinger, 56 Ark. 294, 19 S.W. 747, 16 L.R.A. 526, held that a husband and wife could not be partners in a commercial venture; but that case was decided in 1892 and its effect was overcome ¹ by Act No. 159 of 1915 and by Act No. 66 of 1919, both as now found in § 55-401, Ark.Stats. We have recognized the partnership status between husband and wife in these cases: Williams v. Williams, 186 Ark. 160, 52 S.W.2d 971; Price v. Price, 217 Ark. 6, 228 S.W.2d 478; and Reed v. Reed, 223 Ark. 292, 265 S.W.2d 531.

(2) The complaint alleged that the partnership agreement was oral, and that the partnership was to engage in acquiring and holding lands. But in Russell v. Williams, 197 Ark. 1086, 126 S.W.2d 614 we held that the statute of frauds did not apply to an oral contract of partnership formed for the purpose of buying and selling land.

(3) The complaint alleged that the partnership would continue to be operated after the death of one of the partners. But we cannot say that the bare allegation was demurrable. In 40 Am.Jur. 327, 'Partnership', § 287, the holdings of many jurisdictions are summarized: 'Where, as is often the case, the articles provide that the partnership shall not be dissolved by the death of a partner, such provision will be given effect by the courts'.

(4) The complaint alleged that the surviving partner would have a life estate in the interest of the deceased partner, the allegation to such effect being, '* * * that upon the death of either partner or joint adventurer, the survivor would hold and have the full use and benefit of all of said partnership or joint adventure property until his or her death * * *.' This allegation did not make the complaint fatally defective on demurrer. The matter of one partner making disposition of his interest in the partnership upon his death is not a matter unknown to this Court. In Alexander v. Sims, Executor, 220 Ark. 643, 249 S.W.2d 832, 835, we had such an agreement before us, which was copied in full in the footnote ² to that opinion. We held that the agreement in that case was obtained by fraud and was, therefore, void; but in discussing the agreement we said:

'Absent any question of consideration, testamentary nature, or fraud on a partner or his creditors, spouse, heirs, etc., some courts have upheld a partnership agreement in which each partner agrees that the survivor will receive all of the assets of the partnership, but such an agreement is always subjected to the closest scrutiny to see if the utmost good faith was observed.'

(5) The complaint alleged that after the death of the surviving partner, '* * * the partnership or joint adventure would terminate, and all of said property (be) divided equally, one-half to the heirs of the said Joe Dean Goodin, and one-half to the heirs of the said Esther Lidell Sisson Goodin'. This allegation has given us most serious concern, as it may be testamentary in character and not executed in the form and solemnities required of a will. In 40 Am.Jur. 347 the text reads: 'A provision in a partnership agreement that on the death of one of the partners his interest in the partnership shall become...