Opinion
February 11, 1932.
1. PARTNERSHIP: Joint Enterprise: Pleading. A joint enterprise or joint adventure is in the nature of a partnership and is a limited, special or quasi-partnership; and consequently where the petition does not allege a general partnership, but only that the individual defendants and corporations engaged in business together in a joint enterprise and as partners, it is immaterial whether there is substantial evidence tending to show a partnership.
2. JOINT ADVENTURE: Analogy to Partnership: Definition: Elements. A joint adventure is analogous to, but not identical with, a partnership. It is defined as an association of two or more persons to carry out a single business enterprise for profit, and is usually but not necessarily limited to a single transaction, although the business of conducting it to a successful termination may continue for a number of years. The relation may be established without a specific formal agreement; it may be implied or proven by facts and circumstances. An agreement to share losses is not necessary, but that too may be implied.
3. ____: ____: Governing Rules. While the rights as between the adventurers are governed by the same rules that govern partnerships, the decisions defining and describing partnerships are not controlling upon the question whether the parties to the joint-enterprise agreement were joint adventurers.
4. ____: Evidence Considered. In an action to recover the balance due plaintiff for goods sold and delivered where the sale, delivery and the amount due are not questioned, and the allegations are that the individual defendants and the defendant corporations were members of a joint enterprise and as partners did business under a trade name and as such purchased the goods from plaintiff, the evidence to be considered in determining the question whether there was substantial evidence showing a joint enterprise is not all the evidence, but the substantial evidence viewed in the most favorable light for plaintiff.
5. ____: Corporations: Ultra Vires. A corporation may engage in a joint trade adventure if the purpose of the adventure is within its corporate powers.
6. ____: ____: ____: Estoppel. The defense of ultra vires is not open to a corporation if the contract for the goods sold and delivered was fully executed by the plaintiff suing for the purchase money.
7. ____: Jury Question: Instruction: Definition. It is not prejudicial error to submit to the jury the issue of joint adventure without defining it or hypothesizing all the facts upon which a finding can be based, where the facts set forth in the instruction include the substantial evidence tending to show a joint adventure. If the facts which the instruction required the jury to find constituted a joint adventure, and made the defendants liable as joint adventurers to plaintiff for the money sued for, it was not erroneous, but sufficient; and if defendant thought that it should have included all the facts "proven beyond dispute" they should have tendered an instruction of their own.
8. INSTRUCTIONS: Inconsistency. Instructions will not be held to be inconsistent unless some inconsistency in their wording or theory is pointed out.
Appeal from Circuit Court of City of St. Louis. — Hon. Claude O. Pearcy, Judge.
REVERSED AND REMANDED ( with directions).
Jourdan English and Harry Clymer for appellant.
(1) Where there is a scintilla of evidence to support an issue in plaintiff's favor plaintiff is entitled to have the jury pass on the evidence supporting such issue, even though it be conflicting and contradicted, and in passing upon the evidence part of the testimony of any witness may be taken as true and the balance disregarded. Schultze v. Steele, 69 Mo. App. 627; Vickers v. Arthur, 9 S.W.2d 813; Gould v. Railroad Co., 315 Mo. 713; Horine v. Clear, 2 S.W.2d 154. (2) The existence or non-existence of a partnership is one of fact to be submitted to the jury, and this issue may and should be submitted to the jury where there is evidence of profit-sharing between the alleged members of the firm and participation in the management of its affairs. R.S. 1919, sec. 1415; Torbert v. Jeffrey, 161 Mo. 645; Simmons v. Ingram, 78 Mo. App. 603; Schultze v. Steele, 69 Mo. App. 614; Goddard-Peck Grocer Co. v. Berry, 58 Mo. App. 665; Meyers v. Boyd, 44 Mo. App. 378; Loveland v. Chapman, 267 S.W. 73; Interstate Coal Co. v. Gordon, 216 S.W. 783; Goodyear Tire Rubber Co. v. Ward, 197 Mo. App. 286; R.S. 1919, sec. 5831; Horine v. Clear, 2 S.W.2d 154. (3) Those who the evidence shows or tends to show participate in a partnership venture or joint adventure may be held liable on the contracts made by one of them in connection therewith, the liability being joint and several. R.S. 1919, secs. 2155, 2158; Bagnell v. Railway, 242 Mo. 11. (4) A corporation may not plead nor rely on the defense of ultra vires where the contract sued on has been fully performed by the opposite party, especially where the corporation has benefited thereby. Schlitz Brewing Co. v. Poultry Game Co., 287 Mo. 400; Marshall v. Knights of Maccabees, 270 S.W. 418. (5) It is not ultra vires for a corporation to participate in a joint adventure. 14A C.J. 293. (6) An instruction cannot be held erroneous for failing to define words or phrases used therein. If the party complaining of such instruction desires that terms be defined the complaining party should offer instructions giving the proper definition. Block v. U.S.F. G. Co., 290 S.W. 439. (7) Where, in sustaining a motion for new trial, the trial court assigns alleged errors committed by the trial court, in the giving of instructions, or the lack of evidence warranting the submission of any issue to the jury, and where the court did not err in such instructions and where there was sufficient evidence to submit such issue to the jury, then the judgment should be reversed and the case remanded with directions to reinstate the verdict. Mooney v. Gasoline Oil Co., 317 Mo. 1255; Candee v. Railway Co., 130 Mo. 142; Karguth v. Coal Coke Co., 299 Mo. 580.
Jeffries, Simpson Plummer for respondents O.G. Roeder, Paul F. Plummer and Edwin A. Schmid, as Trustees of and the Last Board of Directors of Black River Tie Timber Company.
(1) A partnership does not exist in the absence of an intention to form it. Chapin v. Cherry, 243 Mo. 407; Hughes v. Ewing, 162 Mo. 298; Freeman v. Bloomfield, 43 Mo. 391; Fuel Co. v. Brady, 202 Mo. App. 551; McDonald v. Matney, 82 Mo. 358; Mining Co. v. Swope, 204 Mo. 48. (2) In the absence of written articles of association or of copartnership between the supposed partners, the fact of partnership is to be inferred only on direct proof of a positive intention to form that relation. Fuel Co. v. Brady, 202 Mo. App. 551; Hughes v. Ewing, 162 Mo. 261. (3) A mere participation in profits and loss does not necessarily constitute a partnership, since each case must be determined upon its own peculiar facts to arrive at the intention of the parties. Fuel Co. v. Brady, 202 Mo. App. 551; McDonald v. Matney, 82 Mo. 358. (4) A corporation is prohibited by law from becoming a member of a partnership. Aurora State Bank v. Oliver, 62 Mo. App. 390; Franz v. Dry Goods Co., 132 Mo. App. 8; State ex rel. v. Lee, 288 Mo. 698. (5) In order to hold persons liable on the theory that they are members of a joint adventure, the proof must show such a relationship between them as creates mutual agency, right of control, division of profits, etc., to the same extent as if an actual partnership existed between them. Fuller v. Laws Easter, 219 Mo. App. 342; Schaefer Constr. Co. v. Jones, 3 S.W.2d 288; Darling v. Budd, 1 S.W.2d 169; Loomis v. Abelson (Vt.), 144 A. 379. (6) In the absence of an intention between persons to obligate themselves as members of a joint adventure no such relationship exists. Cases cited under Point 5. (7) If an agent contracts on behalf of an undisclosed principal, the opposite party has his election to hold either the agent or the undisclosed principal, but cannot hold both. Sessions v. Block, 40 Mo. App. 569; Provenchere v. Reifess, 62 Mo. App. 50; Anchor Warehouse Co. v. Mead, 181 S.W. 1060; United States Wood Preserving Co. v. Paving Co., 245 S.W. 351; Squire v. Drozda Realty Co., 288 S.W. 992. (8) Instruction I given at the request of plaintiff left a question of law to the jury in that it left them to find whether or not a partnership or joint adventure existed between the defendants without defining either of said relations or hypothesizing the facts from which the jury could find its existence. The instruction was, therefore, erroneous. 1 Thompson on Trials, sec. 1132, p. 948; Dulany Co. v. Elford Dargan, 22 S.C. 304; Croce v. Ins. Co., 260 S.W. 760; Anderson v. McPike, 86 Mo. 293.
Leahy, Saunders Walther and J.L. London for respondent J. Grodsky, O.A. Palmer and Sam E. Grodsky, as the Last Board of Directors and Trustees of Commerce Financial Corporation.
(1) Before plaintiff can recover, it must show a partnership. National Bank of Commerce v. Francis, 296 Mo. 169; Darling v. Buddy, 1 S.W.2d 167; Fuel Co. v. Brady, 202 Mo. App. 551; Green v. Whaley, 271 Mo. 636; Pioneer Lbr. Co. v. Van Cleave Lbr. Co, 279 S.W. 241; Horine v. Clear, 2 S.W.2d 154. (2) Instruction 1 submits issues of law and leaves it for the jury to determine for itself the material facts. 1 Thompson on Trials, 948, sec. 1132; Simmons v. Ingram, 78 Mo. App. 608; Davis v. Tel. Co., 236 S.W. 407; Anderson v. McPike, 86 Mo. 298; Croce v. Insurance Co., 260 S.W. 760; Hughes v. Ewing, 162 Mo. 261; National Bank of Commerce v. Francis, 246 S.W. 332, 30 Cyc. 592; Dulany Co. v. Elford Dargan, 22 S.C. 304; Coody v. Shawver, 161 S.W. (Tex.) 935. (3) Instructions 1 and 2, given at the request of plaintiff and defendant Cordia, although undertaking to cover the case, fail to cover the defenses of the defendants and are erroneous. Carroll v. Ins. Co., 249 S.W. 691; Thornton v. Mersereau, 168 Mo. App. 9. (4) The instruction cannot be broader than either the pleading or the proof, and to recover plaintiff must rely upon the theory set out in its petition, and the instruction must include every element necessary to plaintiff's right to recover. State ex rel. People's Bank v. Melton, 251 S.W. 447; Llywelyn v. Lowe, 239 S.W. 535; Keppler v. Wells, 238 S.W. 425; Ross, etc., v. Lbr. Co., 253 S.W. 119. (5) The court erred in permitting witnesses to testify to agency before establishing a partnership, which was never established. Makinson Co. v. Fish Oyster Co., 241 S.W. 959; Minks Bros. v. Gilloiz, 256 S.W. 516; Colt v. Watson, 247 S.W. 493. (6) A partnership is either a matter of contract or is created by estoppel. No estoppel is claimed in this case, and plaintiff must establish an intention to become partners and a contract of partnership. Cases cited under Point 1; 30 Cyc. 385. (7) A corporation has no power to become a partner. Thompson on Corporations, 2421; Aurora State Bank v. Oliver, 62 Mo. App. 391; Moreheads v. United Railways, 119 Mo. App. 623; 14A C.J. 293.
Action to recover a balance due plaintiff for railroad ties. The sale and delivery of the ties and the amount due are not questioned.
Plaintiff alleged that the individual defendants and the defendants Commerce Financial Corporation and Black River Tie Timber Company (Missouri corporations) were members of a joint enterprise and as partners did business under the trade name of E.F. Cordia Land Lumber Company. It further alleged that defendants doing business as members of said enterprise purchased the ties from plaintiff.
The corporations were dissolved prior to the institution of this suit. In this situation, plaintiff sued certain defendant persons as constituting the last board of directors and trustees of said corporations. It did so thereby seeking to subject assets of the corporations in the custody of said directors and trustees to the payment of the balance due plaintiff. The petition was not challenged by demurrer or motion.
The answers denied the existence of a joint enterprise and partnership. Further answering, the defendants (last board of directors and trustees of said corporations) pleaded that said corporations could not legally engage in a joint enterprise and partnership or become liable as members of a joint enterprise and partnership. The replies were general denials, with pleas that said corporations and persons received the ties from plaintiff, sold and received payment for them and were thereby estopped, and consequently the defendants as trustees are estopped, to plead the defense of ultra vires.
It was admitted that O.G. Roeder, Paul F. Plummer and Edwin A. Schmid were the last board of directors of the Black River Tie Timber Company and that J. and Sam E. Grodsky and O.A. Palmer were the last board of directors of the Commerce Financial Corporation.
The court directed a verdict for the individual defendants, M. and J. and Sam Grodsky and O.A. Palmer. Thereupon plaintiff dismissed as to O.G. Roeder, as an individual defendant. The jury returned a verdict for $9,292.42 in favor of plaintiff and against E.F. Cordia and the defendant directors and trustees of said corporations. The motion of defendant Cordia for a new trial was overruled, and the motions of the defendant directors and trustees were sustained. Plaintiff appealed from the order granting a new trial to defendant directors and trustees.
In granting the new trial the court ruled that there was no substantial evidence tending to show a partnership. The petition did not allege a general partnership. It alleged that the persons and corporations "were engaged in business together in Partnership. a joint enterprise and as partners." That is, they engaged in a joint enterprise and did so as if partners. A joint enterprise or joint adventure is in the nature of a partnership and is a "limited," "special," or "quasi-partnership." [4 Words Phrases 3d p. 587.] It follows that the question of partnership may be put aside.
Even so, defendant directors and trustees contend that there was no substantial evidence tending to show a joint adventure. There was no written contract of joint adventure, and plaintiff did not seek recovery on the theory of estoppel to deny a joint adventure. It charged the existence of a joint adventure and further charged that the defendant Cordia and the corporations were members of said adventure. Thus the principal questions are reduced to a consideration of the issue of joint adventure.
As stated in Denny v. Guyton, 327 Mo. 1030, 40 S.W.2d 562, l.c. 571, there is an abundance of case law on the subject of joint adventure. It is said to be analogous to, but not identical with, a partnership, and is defined as an association Joint of two or more persons to carry out a single business Adventure. enterprise for profit, and is usually but not necessarily limited to a single transaction, although the business of conducting it to a successful termination may continue for a number of years. [Elliott v. Murphy Timber Co., 244 P. 91, 93.] The relation may be established without a specific formal agreement; it may be implied or proven by facts and circumstances, and an agreement to share losses is not necessary; it also may be implied. In this contention it should be stated that while the rights as between the adventurers are governed by the same rules that govern partnerships, the decisions defining and describing partnerships are not controlling upon the question of whether the parties to the agreement were joint adventurers. [Denny v. Guyton, supra; Keiswetter v. Rugenstein, 48 A.L.R. 1049, l.c. 1059.]
We now consider the facts to determine if there was substantial evidence of a joint adventure. Defendants seek to have the question determined from a consideration of all the Evidence evidence. We are without authority to do so. The Considered. evidence must be viewed in the light most favorable to plaintiff. There was evidence tending to show the following:
E.F. Cordia was in the tie, timber and lumber business under the trade name of E.F. Cordia Land Lumber Company. He owned timber land and controlled other such land from which ties and lumber were produced for the market. In financing the business he borrowed money from the Commerce Financial Corporation on assigned invoices covering material sold by him. He Substantial continued to finance the business in this manner for Evidence. quite a period of time and until he was indebted in a large sum to said corporation. At this time and on this account it was agreed between Cordia and J. Grodsky and O.A. Palmer, owners of the stock of said corporation and its controlling officers, that said corporation would advance to E.F. Cordia Land Lumber Company a certain sum of money, take charge of its office and attend to the clerical side of the business in St. Louis, thereby permitting Cordia to devote all of his time to the business "in the field." It was further agreed that Cordia and the corporation would share equally the profits from the business. On said agreement, O.G. Roeder, an employee of said corporation, took charge of said office and the books, accounts and records of the E.F. Cordia Land Lumber Company, and Cordia proceeded to and did attend to the timber, tie and lumber business of the company out in the State. Roeder continued in charge of the office of the Commerce Financial Corporation and was paid by said corporation for, his services to the Cordia Land Lumber Company. The business was conducted under this agreement and in the name of E.F. Cordia Land Lumber Company until September, 1923. At that time the parties interested decided to form a corporation. They did so under the name of the Black River Tie Timber Company. One-half of the stock was owned by E.F. Cordia; one-fourth of the stock was owned by J. Grodsky, and one-fourth of the stock was owned by O.A. Palmer. Thereafter the business was conducted under the name of the Black River Tie Timber Company or the E.F. Cordia Land Lumber Company. Contracts were outstanding under the name of the E.F. Cordia Land Lumber Company and said trade name was considered of value on the market. Roeder, employee of the Commerce Financial Corporation, continued in charge of the office, kept the accounts under the names of the Black River Tie Timber Company and the E.F. Cordia Land Lumber Company, and kept separate bank accounts under those names. Cordia continued to attend to the business out in the State. At this time the contracts of the E.F. Cordia Land Lumber Company included a contract for one hundred thousand ties sold by E.F. Cordia Land Lumber Company to one Jacobs, who was under contract with the Terminal Railroad Association of St. Louis for said number of ties.
For some time the Black River Tie Timber Company continued under this contract the delivery of ties from its timber lands. On inspection many of them were rejected and Jacobs was complaining of slow delivery. This condition caused a meeting of E.F. Cordia, J. Grodsky and O.A. Palmer to consider the matter. At this meeting Cordia announced that he could buy ties on the market to complete the delivery under the contract. It was agreed that he should do so, and that Grodsky and Palmer would share equally with him the profits. Of this Cordia informed Jacobs. He agreed that Cordia might undertake delivery from the market upon the guaranty of the Black River Tie Timber Company that the ties would be delivered. He also agreed to discount invoices on ties billed direct to the Terminal. Thereafter the E.F. Cordia Land Lumber Company purchased from plaintiff the ties in question. The ties rejected by the Terminal were taken to the yards of the Black River Tie Timber Company in Madison, Illinois. Thereupon Roeder credited to the E.F. Cordia Land Lumber Company said rejected ties. In paying for accepted ties, Jacobs made the checks payable to either the Black River Tie Timber Company or the E.F. Cordia Land Lumber Company. If payable to the Black River Company, Roeder indorsed the check to the E.F. Cordia Land Lumber Company. During all this time, Roeder had charge of the office of these persons, corporations and company. He signed the checks, attended to most of the correspondence, had charge of the books, kept the records of the business, and his salary was paid by the Commerce Financial Corporation.
From this evidence it may be inferred that E.F. Cordia and the Commerce Financial Corporation intended to and did enter upon a joint adventure. It may also be inferred that said relation continued under the names of the Black River Tie Timber Company and the E.F. Cordia Land Lumber Company and existed at the time plaintiff sold the ties and during the time it delivered the ties. Other facts and circumstances in evidence tended to show no joint adventure. In this situation the question was for the jury.
In this connection defendants contend that said corporations were without authority to engage in a joint adventure. A corporation may do so if the purpose of the adventure is within its corporate powers. [Denny v. Guyton, supra, l.c. 572.] The Black River Tie Timber Company was authorized by its Ultra charter to engage in the timber, lumber and tie business. Vires. The Commerce Financial Corporation was not so authorized, but the contract for the ties was fully executed by plaintiff, and for that reason the defense of ultra vires was not open to said corporation. [Schlitz Brewing Co. v. Poultry Game Co., 287 Mo. 400, l.c. 407, 229 S.W. 813.]
Defendants next contend that it was prejudicial error to submit the issue of joint adventure without defining it Jury Question: or hypothesizing the facts to the jury upon which Instruction. a finding of joint adventure could be based.
In a brief of defendants certain facts are set forth as "proven beyond dispute." These facts include all the facts above set forth as substantial evidence tending to show a joint adventure, except the evidence tending to show that Grodsky and Palmer would share equally with Cordia the profits from the purchase of ties on the market to complete the Jacobs contract. On this record the failure of the court to require the jury to find these facts "proven beyond dispute" could not have been prejudicial. The instruction required a finding that if plaintiff sold the ties to one or more of certain persons and corporations and that said person or persons and corporations were doing business jointly in a joint enterprise under the name of E.F. Cordia Land Lumber Company, and that whoever was doing business under said name authorized the agent of the joint enterprise to order the ties from plaintiff for those engaged in the joint enterprise, and that said ties were delivered, then those found to have been engaged in said joint enterprise were liable to plaintiff for the balance due on said ties.
We think the facts found by the jury under this instruction with the facts "proven beyond dispute" were sufficient basis for a finding of joint adventure. If defendants did not think so, they should have tendered a more definite and specific instruction.
Defendants next contend that instruction numbers one and two are inconsistent. Instruction number one was given at the instance of plaintiff, and instruction number two was given at the instance of defendant Cordia. They contend Inconsistent that instruction number two proceeds upon the Instructions. theory of an undisclosed principal. They direct attention to no word or words in the instruction submitting the theory of an undisclosed principal, and an examination of the instruction discloses no such theory.
The judgment should be reversed and the cause remanded, with directions to set aside the order granting a new trial, reinstate the verdict and enter judgment thereon for the plaintiff. It is so ordered. All concur.