Opinion
No. 6984.
August 25, 1952.
APPEAL FROM THE CIRCUIT COURT, STODDARD COUNTY, JAMES V. BILLINGS, J.
Bradley Noble, Kennett, for appellant.
McHaney McHaney, Kennett, for respondent.
This is an action to recover real estate commissions alleged to have been earned under a partnership contract. The action was filed in Dunklin County, Missouri, transferred, by change of venue, to Stoddard County, where, on the 16th day of May, 1950, it was tried before a jury resulting in a verdict and judgment for plaintiff for $1665.00. From this judgment defendant appealed.
Plaintiff's amended petition states that on or about June 1st, 1948, he and defendant entered into a partnership agreement for a period of twelve months; that, by the terms of this contract, defendant was to pay all office and advertising expenses, transfer all lands in Missouri listed with him to the partnership; that plaintiff was to spend his full time in obtaining listings and showing lands to prospects and closing sales; that defendant was to offer for sale lands listed in Missouri to Arkansas customers and assist plaintiff in obtaining listings of lands in Missouri to be offered to such customers; that it was agreed that all commissions on lands sold in Missouri were to be split equally between plaintiff and defendant upon the consummation of each sale.
Plaintiff pleads that he complied with the terms of this agreement; that four tracts of land in Missouri were sold during said partnership agreement and that the commissions earned amounted to $3,788.50, of which plaintiff was entitled to $1,894.25; that said commissions were collected by defendant and that plaintiff had demanded his half of such commissions of defendant, which defendant refused to pay.
Defendant's amended answer denies the allegations in plaintiff's petition.
Appellant was the defendant below and respondent was plaintiff and, in this opinion, we will refer to the parties as plaintiff and defendant, being the positions they occupied in the lower court.
Defendant's first assignment of error complains of the sufficiency of the evidence to support the verdict.
The law governing this issue was stated by this court in Johnson v. Thompson, Mo.App., 236 S.W.2d 1, 7, from which we quote as follows:
"The law governing the sufficiency of evidence is very ably stated in Ford v. Louisville N. R. Co., 355 Mo. 362, 196 S.W.2d 163, 167.
"`"It is no answer to say that the jury's verdict involved speculation and conjecture. Whenever facts are in dispute or the evidence is such that fair-minded men may draw different inferences, a measure of speculation and conjecture is required on the part of those whose duty it is to settle the dispute by choosing what seems to them to be the most reasonable inference. Only when there is a complete absence of probative facts to support the conclusion reached does a reversible error appear. But where, as here, there is an evidentiary basis for the jury's verdict, the jury is free to discard or disbelieve whatever facts are inconsistent with its conclusion. And the appellate court's function is exhausted when that evidentiary basis becomes apparent, it being immaterial that the court might draw a contrary inference or feel that another conclusion is more reasonable."'
* * * * * *
"In considering the sufficiency of the testimony, the evidence of the plaintiff is to be taken as true and all reasonable inferences that can be drawn therefrom and any evidence offered by the defendant that supports the plaintiff's case. Young v. Wheelock, 333 Mo. 992, 64 S.W.2d 950."
Under sub-sections 1 and 2 of defendant's first assignment of error it is contended that plaintiff failed to prove the contract of partnership relied upon.
Defendant cites Bussinger v. Ginnever, Mo.App., 213 S.W.2d 230, 235, which states the law thus:
"We agree with plaintiff's view that partnership rests on the intention of the parties and that each case must be determined upon its own particular facts, and that the primary criterion to be applied in determining the issue of partnership vel non is that of the intention of the parties. Temm v. Temm, 354 Mo. 814, 821, 191 S.W.2d 629, 632; Schneider v. Schneider, 347 Mo. 102, 107, 146 S.W.2d 584, 588.
"However, the status of partnership being a matter of contract between the parties who are alleged to have become partners, the burden was on plaintiff, who alleged the partnership, to establish such partnership by a preponderance of the evidence, which must show — not only the intention of one of the parties to create a partnership — but must go farther and show a mutual intention and a meeting of the minds of all the parties to agree to the partnership relation. Of course, a party may so conduct himself in his dealings with others as to be estopped to deny that he intended to create a partnership, but we have no such evidence in this case.
"A contract or an agreement of partnership may be in writing or it may be verbally expressed or implied from the acts and conduct of the parties themselves. Ordinarily, from the fact that profits are shared, an inference of the existence of a partnership may be drawn. Schneider v. Schneider, supra; Torbert v. Jeffrey, 161 Mo. 645, 61 S.W. 823, but such an inference is far from conclusive, and this is particularly true where the parties, although agreeing to divide profits, do not agree to share any possible losses. Gill v. Ferris, 82 Mo. 156.
"* * * We do not say that the absence of an agreement concerning losses alone necessarily means that there was no partnership, but that fact, taken along with the other facts and circumstances in evidence, to which we shall presently refer, together afford the basis from which the inference is inescapable that one of the parties, namely defendant, clearly had no intention of forming a partnership with plaintiff but intended that plaintiff should continue on in the service as an employee, and that plaintiff should receive for his services a share of the profits with a prospect of a division of any increased inventory coming to the business by virtue of plaintiff's services. * * *"
It will be noted that the case above cited was an equity action which, under the law, was tried de novo before the court and that while the court was duty bound to give due deference to the findings of fact by the trial court, yet, it made its own final decision upon both facts and the law, while, in the case at bar, the issues were tried by a jury and we are bound by the findings of the jury as to the facts if there is probative evidence or, as we sometimes say, substantial evidence to support the jury's findings.
In Chapin v. Cherry, 243 Mo.Sup. 375, 147 S.W. 1084, 1091, the court states the law thus:
"The primary question, therefore, presented for determination, is, Did a partnership relation exist between them at the time the land was purchased by the appellant? If so, it must be because a partnership agreement between them must have been entered into prior to the date of said purchase. That is self-evident, and, before there could have been such a contract, the minds of all the parties thereto must have agreed to the same thing in the same sense and at the same time. This mutual assent of the parties must embrace all the propositions of the parties, and, so long as any matter forming an element of the contract is left open, the contract is not complete, and therefore not binding upon any of the parties. * * *
"* * * before a contract is completed or binding upon the parties thereto, there must have been a definite proposal made on the one hand, and an acceptance thereof on the other, and that such acceptance must have been unequivocal, unconditional, and without variance between it and the proposal made. * * *
"A partnership contract as defined by 30 Cyc. p. 349, and supported by all of the authorities, is: `A contract of two or more competent persons to place their money, effects, labor and skill, or some or all of them, in lawful commerce or business, and to divide the profits and bear the losses in certain proportions.' * * *"
In Schneider v. Newmark, 359 Mo. 955, 224 S.W.2d 968, decided in 1949, the court held where a partnership was not for a definite duration, it could be dissolved upon notice by either partner. The court then made the following statement of law, 224 S.W.2d on page 971 of its opinion:
"It has been said the primary basis of a partnership is the intention of two or more competent parties manifested by a contract with each other to become partners by contributing their money, effects and skill, or some portion thereof, to a lawful business in the conduct of which each shall not only act for himself, but as the agent of all, and wherein each shall share to some extent in the profits and losses as such. * * *"
We think the principle of law governing this case is clear. The evidence must show a voluntary contract between plaintiff and defendant to place their money or effects, labor or skill, or some or all of them in lawful business with the understanding that there be a communion of profits thereof between them. The fact that the profits were to be divided equally raises an inference of partnership but such inference is not conclusive, especially where there is no agreement to share the losses. There can be no question that the burden of proof to show a partnership agreement was, and is, upon plaintiff.
To determine the issue of whether there was an oral partnership of contract as alleged in plaintiff's petition, we must examine the whole record, taking as true the evidence offered by plaintiff touching upon such issue and such of defendant's evidence as supports plaintiff's case, and, if there is substantial evidence to support the finding of the jury, it is the duty of the court to uphold the verdict.
The evidence shows that at the time of the alleged partnership agreement plaintiff and defendant were real estate brokers licensed to do business in Missouri and defendant was also licensed as a real estate broker in Arkansas and had his office in Blytheville. Plaintiff resided in Kennett, Missouri, and had been for twenty years connected with the real estate department of the Missouri State Life Insurance Company and its successor, the General American Life Insurance Company. Plaintiff's work with the insurance company, which owned some 15,000 or 20,000 acres of land in southeast Missouri, had provided him with knowledge of land and land values in this section of the state. Plaintiff's employment with the insurance company terminated May 1st and plaintiff testified that on May 10, 1948, he was informed that defendant wanted to see him; that a few days thereafter he went to Blytheville where defendant made a proposition to him to sell lands in Missouri. At that time plaintiff was a licensed real estate broker in Missouri.
Plaintiff testified that defendant wanted him to sell real estate in Missouri and stated he would put an office in Kennett; that he believed 1948 would be a big year. He stated he would keep his office in Blytheville and would send all Missouri prospects to plaintiff and they would get listings on lands in Missouri together. He stated that he, plaintiff, was to furnish all his time and his car but that defendant was to help make listings. He stated he was to get fifty per cent of the commissions on sales in Missouri but was to receive no commissions on sales made in Arkansas.
Plaintiff testified there was no agreement reached at that time but, a few days thereafter, defendant came to the insurance office in Kennett and, there, re-stated the proposition of the partnership agreement and they agreed on the contract. Plaintiff testified that Mr. Duncan's secretary, Geraldine Bennett, was present at the time of the contract; that the agreement was not in writing. Plaintiff testified that his friends urged him to get a written contract and that he went to his attorney, related the terms of the oral agreement made with defendant, and had a written contract prepared. This written agreement was introduced in evidence as plaintiff's exhibit No. 4. He stated this agreement contained all the terms of the oral contract made with defendant and, from the exhibit, he pointed out the exact terms of the oral contract agreed upon which, in substance, were that each party was to furnish his own car; that the office and advertising expenses were to be paid by defendant; that all the commissions on sales of real estate in Missouri were to be divided fifty-fifty; that plaintiff was to furnish full time and defendant was to offer for sale Missouri farms to Arkansas customers. Plaintiff testified that there was nothing in the oral agreement as to the termination of the contract or of its duration and the partnership name was not agreed upon. The testimony shows that plaintiff took this written agreement to defendant's office and gave it to him but that defendant never consented or objected to it.
Plaintiff testified that he and defendant went together, under the terms of this contract, to secure listings of land for sale in Missouri; that they went in plaintiff's car. He stated he and defendant, together, secured listings of 5,176.45 acres; that Mr. Riales, separately, got 472 acres and plaintiff, separately, got 7,408.65 acres. Plaintiff testified he paid the traveling expenses.
Plaintiff testified that defendant sold four tracts of land in Missouri, as set out in plaintiff's petition. He stated defendant did not tell him about these sales; that he learned of them from defendant's books while defendant was in the hospital. He said he talked to defendant and defendant told him that the Ted Johnson sale was his and there was due plaintiff $500.00 on this commission but that defendant stated he would not give his mother the other $750.00 commission.
We think there is no dispute about the proof as to the commissions collected on the tracts alleged in plaintiff's petition and, therefore, will not set out the proof as to this matter.
Plaintiff testified that his broker's license to sell lands in Missouri terminated in June, 1948; that he then applied for a salesman's license in both Missouri and Arkansas.
Exhibit "B", offered by defendant, shows that application for salesman's license to the Missouri Real Estate Commission was made in June, 1948.
Norvel Duncan testified for plaintiff that the defendant came to his office and told him that he and plaintiff were going to open an office and he was to pay the expenses; that defendant inquired of him where he could secure an office; that defendant stated he and plaintiff were to split the commissions but mentioned nothing about a partnership. He stated it was his understanding that defendant said the commissions were to be split on Missouri lands.
F. W. Johnson testified that he listed lands with Fyock or Riales and may have informed either of them of lands for sale; that he had seen plaintiff and defendant together; that his brother, Ted Johnson, had dealings with defendant but not plaintiff.
Ted Johnson testified that he paid defendant $2500.00 commission for the sale of two farms; that this property was listed with defendant who produced a buyer and that plaintiff had nothing to do with the sale that he knew about.
Jessie Lynch testified that defendant sold his farm in July, 1948; that he did not know plaintiff.
Geraldine Bennett testified that she worked for the insurance company, in the same office where plaintiff worked, and her desk was a yard and a half from plaintiff's desk; that she heard the alleged oral agreement, made between plaintiff and defendant, which was some time in the middle of the summer, 1948, around the middle of July. She testified the parties were talking of a real estate partnership; that they agreed to divide the commissions on lands sold in Missouri. She gave this answer: "A. Well, Mr. Riales and Mr. Fyock were to divide one-half of commissions in Missouri and Mr. Riales was to keep all Arkansas. Mr. Fyock was not to come in on Arkansas at all." She stated both parties were to get listings on lands and were to let each other have the list. She stated they discussed office space in Kennett for the partnership but did not come to an agreement on that. She testified that after the date of this contract defendant came into the office several times but she did not hear their conversations. She stated they left the office and went out together to get listings; that this occurred about August. She testified plaintiff would go alone to get listings but when defendant came in they went together and that this connection continued through the fall of 1948.
On cross examination she stated she did not know whether they definitely mentioned partnership but that, because they were to split the commissions equally, she considered it a partnership.
Victor Downing testified that in the summer of 1948, he and plaintiff sold 40 acres of land and received a commission of $400.00; that one-half of this commission was turned over to plaintiff. He testified he saw plaintiff and defendant together around the gin and talked to them about the sale of real estate; that they were getting land to sell.
There is no testimony that there were ever any printed letterheads or writings listing any partnership name and, from the evidence, there never was any office established.
Defendant gave the following testimony:
"Q. You did not enter into the agreement that Fyock says you entered into? A. I did only as a salesman. You can have as many salesmen as you want and the salesman gets fifty percent of the commission on what he sells.
"Q. Did you have any conversation with this man Fyock about entering into any kind of agreement with him? A. Yes, in my office at Blytheville.
"Q. About when was that? A. About the middle of June."
We find from the evidence that both parties admit that on or about June 1st, the defendant states the middle of June, they made an agreement relative to the sale of real estate. Plaintiff testifies that the agreement was made in the office of the General American Life Insurance Company at Kennett, Missouri, and he testifies that the terms of the agreement were that he and defendant were to get listings of lands located in Missouri for sale and that he, plaintiff, was to furnish all his time and the use of his car in securing such listings. He testified that defendant was to secure listings in Missouri and turn them over to him or to the partnership and defendant was to show these lands to customers of the defendant from Arkansas and to make sales thereon and that the commissions on all Missouri lands, sold by plaintiff or defendant, or both together, were to be divided equally.
It is true that plaintiff's testimony does not show that anything was agreed to about the name of the partnership or the period of time it was to continue in operation but plaintiff's testimony does show that, after the date of said oral agreement he testified about, he and the defendant did proceed to go among landowners and secure listings for sale; that plaintiff was with defendant at the time he talked to Ted Johnson about his lands and there is no dispute that defendant did sell the four tracts of land described in plaintiff's petition and collect the commission thereon, and that he did not pay any part of the commissions to plaintiff.
Plaintiff testified that defendant admitted that one commission of $1,000.00 was plaintiff's sale and that he owed plaintiff $500.00 but that he refused to pay any part of the other commissions received.
Plaintiff further testified that he, with another real estate broker, sold one tract of land and that plaintiff's part of the commission was $200.00; that he remitted, by check, one-half of that commission to defendant. We think it is admitted that defendant received and cashed the check.
The status of partnership is created by contract between the persons who become the partners. Such contract may be oral. It may be verbally expressed or implied from the acts and conduct of the parties themselves. The determining criterion is that of the intention of the parties. Schneider v. Schneider, 347 Mo. 102, 146 S.W.2d 584, 588; Prasse v. Prasse, Mo.Sup., 77 S.W.2d 1001; Torbert v. Jeffrey, 161 Mo. 645, 61 S.W. 823; Troy Grain Fuel Co. v. Rolston, Mo.App., 227 S.W.2d 66.
Here the relationship, as shown by the evidence, arises out of contract expressed or implied where the parties engaged in a common enterprise each contributing services and each sharing in the profits. There is an admission of a contract or a relationship established between the parties for the purpose of selling real estate. Defendant contends that this relationship consisted only of employing plaintiff as a salesman. Plaintiff contends that the relationship is that of partners.
Where the profits of a business are equally divided such evidence constitutes prima facie evidence of the existence of a partnership. Willoughby v. Hildreth, 182 Mo.App. 80, 167 S.W. 639.
In Troy Grain Fuel Co. v. Rolston, supra, the court makes this statement of law:
"* * * While an agreement to share profits in such a venture is not conclusive proof of the existence of a partnership, it is prima facie proof thereof and raises a presumption of partnership. If such presumption is not overcome by other evidence tending to prove that, in fact, the parties intended there to be no partnership, such prima facie proof of the existence of a partnership becomes conclusive. Torbert v. Jeffrey, 161 Mo. 645, 655, 61 S.W. 823; Lengle v. Smith, 48 Mo. 276, 277; Whitehill v. Shickle, 43 Mo. 537, 544. It is true that there was no direct proof that the partners were to share the losses accruing in the venture, nevertheless their agreement to share profits implies a sharing of loss; and that presumption can only be overcome by evidence tending to prove the contrary. * * *"
From the evidence that plaintiff was an experienced real estate salesman of twenty years and having a broker's license to make such sales and that he surrendered this license and agreed to act under a salesman's license, by which he could not complete a sale of lands alone and collect a commission, would strongly indicate that there was a partnership agreement herein. If the facts were as defendant contends — that plaintiff was merely an employee of his and each sale of lands made in Missouri by plaintiff would entitle plaintiff to one-half the commission and plaintiff was to receive no part of the commissions earned under sales made by defendant, plaintiff would suffer a loss for he could have retained his broker's license and received all the commission on the sales he made.
We think there was sufficient evidence to make a submissible case to the jury on the ground of a partnership agreement and that the jury had substantial evidence upon which to base its verdict finding that such a partnership agreement existed and we find against defendant on his first assignment of error.
Defendant's second assignment of error complains that trial court erred in giving instruction numbered 1 in behalf of plaintiff, first, because a party cannot sue on one contract and recover on another; secondly, because the instruction is not supported by the evidence, and thirdly, because the instruction is in conflict with instruction No. D-7 given on behalf of defendant.
Instruction No. I reads as follows:
"The court instructs the jury that if you find and believe that on or about June 1, 1948, plaintiff R. T. Fyock and defendant Russell E. Riales entered into a partnership agreement whereby it was mutually agreed between them that each partner was to furnish his own automobile free of expense to the partnership, if so, and that defendant was to transfer all listings in Missouri real estate then listed with him for sale to the partnership firm referred to above, if so, and that plaintiff R. T. Fyock was to give full time in obtaining new listings, showing lands to prospective customers and in closing sales of Missouri real estate, if so, and that defendant was to offer the real estate listed for sale with the aforesaid partnership, if any, to Arkansas customers and would assist the plaintiff in obtaining additional listings of Missouri real estate, if so, and that all commissions received for the sale of said lands were to be split equally between plaintiff R. T. Fyock and the defendant Russell E. Riales, if so, and if you further find that thereafter plaintiff did furnish his automobile for the partnership business herein referred to without charge to said partnership and that plaintiff did spend his full time in obtaining listings, showing lands to prospective purchasers and closing sales for the said partnership, if so, and if you further find that thereafter either plaintiff or defendant, or both plaintiff and defendant, jointly or severally, obtained purchasers of lands mentioned in evidence and so listed for sale with said partnership, if any, and while said partnership, if any, continued, if so, that defendant Russell E. Riales has received commissions for the sale of said lands, if any, for which the plaintiff has not been paid, if so, then in such event you are instructed your verdict herein shall be in favor of plaintiff for such sum as you may find and believe from the evidence the plaintiff is entitled, if any."
We cannot agree with defendant's first contention, that is, that the theory of plaintiff's cause of action is changed. Plaintiff's petition is clearly based upon the theory of a partnership agreement and we think that, from the reading of the instruction, that theory was presented to the jury. When all of the instructions are read together there can be no doubt in our minds that the theory of contract relied upon by plaintiff for recovery was presented to the jury.
We cannot agree with the second contention made by defendant that the instruction is erroneous because it is not supported by the evidence. All the essential elements submitted in this instruction, necessary for recovery, were supported by substantial evidence.
Likewise, we cannot agree with the third objection made by defendant that instruction numbered 1 is in conflict with instruction D-7 given on behalf of defendant.
Instruction D-7 tells the jury that plaintiff seeks to recover on the ground that at the time the commissions were collected, as mentioned in the petition, plaintiff and defendant were partners by virtue of a partnership agreement made on or about June 1, 1948. The instruction then sets out the elements of this contract as follows: That each of the partners was to furnish his own car; that defendant was to pay all office and advertising expense; that defendant was to transfer all lands listed with him for sale in Missouri to the partnership; that plaintiff was to spend his full time in obtaining listings, showing lands to prospects and closing sales; that defendant was to offer for sale Missouri lands listed with the firm to Arkansas customers and assist plaintiff in obtaining Missouri listings to be offered to Arkansas customers; and that it was agreed that all commissions were to be split equally upon the consummation of each sale. Then this instruction states that the jury are instructed that partnership relation is created by contract and does not arise by operation of law; that to establish partnership relation plaintiff must show that both he and defendant intended to and did agree on all of the above terms and unless the jury does so find, their verdict must be for defendant.
An examination of Instruction No. 1 clearly shows that the court required the jury to find that a partnership agreement was entered into between the parties; that each party was to furnish his own automobile; that defendant was to transfer all listings of Missouri real estate to the partnership; that plaintiff was to give his full time in obtaining listings, prospective purchasers of land and in closing sales of Missouri real estate; that defendant was to offer real estate listed for sale with the aforesaid partnership to Arkansas customers and that the commissions should be divided equally on sales of Missouri lands; that the instruction required the jury to find that plaintiff complied with his part of the partnership; that defendant sold the lands mentioned in plaintiff's petition during the term of the partnership and received the commissions sued for, then their verdict should be for plaintiff.
We submit there is absolutely no conflict in these two instructions. Certainly; plaintiff's instruction numbered 1 does not mis-state the law and, under the law, all of the instructions are to be read together and if, from all of the instructions, the case is properly presented to the jury, there is no error. Where the jury are required to find more than is necessary in reaching its verdict there can be no error. In other words, because defendant's instruction D-7 required plaintiff to show that defendant was to pay all office and advertising expenses, defendant contends that it is error because instruction No. 1 made no such requirements. Defendant could, in no way, be harmed by such a finding as it was wholly unnecessary for recovery in this case and, certainly, when defendant's instruction D-7 is read it will clearly appear that the jury was fully advised as to the law in this case.
It will also appear that defendant offered further instructions which fully advised the jury of every phase of the law that could be raised in this case. Therefore, we find against defendant on this allegation of error.
Judgment affirmed.
VANDEVENTER, P. J., and BLAIR, J., concur.