St. Paul Machinery Mfg. Co. v. Bruce

• Decision Date: 13 April 1918
• Docket Number: 3887.
• Citation: 172 P. 330,54 Mont. 549
• Parties: ST. PAUL MACHINERY MFG. CO. v. BRUCE et al.
• Court: Montana Supreme Court

172 P. 330

54 Mont. 549

ST. PAUL MACHINERY MFG. CO. v. BRUCE et al.

No. 3887.

Supreme Court of Montana

April 13, 1918

Appeal from District Court, Lewis & Clark County; R. Lee McCulloch Judge.

Action by the St. Paul Machinery Manufacturing Company against A. C Bruce, F. C. Parker, and F. J. Edwards, copartners doing business under the firm name and style of the Confederate Creek Farm. Judgment for plaintiff, and defendants appeal. Reversed and remanded.

C. W Wiley, of Ft. Benton, and Edw. Horsky, of Helena, for appellants.

Day & Mapes, of Helena, for respondent.

SANNER J.

Action by the respondent against "A. C. Bruce, F. C. Parker, and F. J. Edwards, partners doing business under the firm name and style of the Confederate Creek Farm," to recover the contract price of a certain tractor sold by the respondent to the Confederate Creek Farm. Bruce and Parker were not served, but issue was joined by the defendant Edwards, who denied the partnership, and alleged that the tractor was so deficient as to amount to failure of consideration and to such breaches of warranty as would defeat the right to recover the price. The court directed a verdict for the respondent and against Edwards, and he appeals from an order denying him a new trial. It is to be noticed that, since the verdict upon which the judgment stands was a directed one, the question is not whether the inferences necessary to maintain the respondent's case were from the evidence permissible, but whether they were necessary.

1. To support the issue of partnership the respondent presented these facts:

(a) On April 11, 1912, Edwards executed a deed conveying to Bruce and Parker an undivided one-sixth interest in and to certain real estate in Broadwater county, and signed a mutual option contract by which he should be privileged to repurchase said interest or they should be privileged to acquire an additional interest in said property up to "40 per cent." thereof. At the same time an agreement was entered into which recites the existence of said property, the ownership by Bruce and Parker of an undivided one-sixth interest therein, and by Edwards of an undivided five-sixths interest therein, the existence upon the land of certain personal property similarly owned, a purpose on the part of "all the owners *** to develop such property and *** to farm said lands in a farmerlike manner," and stipulates that the money "necessary for the contemplated development and operation of said property" shall be borrowed, or raised on mortgage to be executed by Edwards and wife; that all the obligations incurred in such "development and operation" shall be paid before there is any division of profits; that such "development and operation" shall be in charge of Parker, who shall give all his time and best efforts to the enterprise and receive a monthly compensation to be charged to the cost of such "development and operation"; that all machinery, implements, and personal property bought for the "development and operation" of said real estate shall belong thereto and be owned by the parties in proportion to their respective interests therein; that after all obligations are paid, the remainder of the proceeds or profits shall be divided, one-half to Edwards and one-half to Bruce and Parker.

(b) The sum of $6,000 for the carrying out of the project was borrowed from the Union Bank & Trust Company of Helena, upon notes signed by Edwards, Bruce, and Parker. Thereafter it was ascertained that additional funds to the extent of $2,000 would be needed, making in all $8,000, and it was then agreed that Edwards should obtain the total sum from the Montana Life Insurance Company on mortgage of the real estate executed by Edwards and wife, with which moneys the notes to the Union Bank & Trust Company should be taken up and the balance applied to operating costs, all of which was done. Bruce and Parker had by this time paid the consideration for the deed, but apparently the latter had not been delivered, for the agreements and the deed were on July 22, 1912, placed in escrow with the stipulation that the deed should be delivered upon payment of the mortgage obligation to the Insurance Company.

(c) The moneys procured for the development and operation of the property were carried in an account at the Union Bank in the name of the Confederate Creek Farm. Parker repaired to the lands and proceeded to carry on operations, plowing, seeding, buying machinery, and otherwise going forward with the work. Payments for current expense were made by check in the name of the Confederate Creek Farm, by Parker as manager. On two occasions Edwards, at Parker's request, participated in the conduct of the concern, at one time buying seed potatoes, and at another buying a packer.

(d) On July 24, 1912, Bruce and Parker ordered from the respondent a tractor, agreeing in the name of the Confederate Creek Farm to pay for it. The tractor was sent, tried, and retained, but not paid for. The development of the property did not prove a success, and neither Bruce nor Parker returned to the premises after December 19, 1912.

That we have here sufficient of the indicia of partnership to permit the inference of its existence cannot be doubted; but whether they command that inference is a different matter, especially when viewed in the light of all the evidence. No one who has not held himself out as a partner is liable as such unless he is partner in...