Williams v. Biscuitville, Inc.

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253 S.E.2d 18 (1979)

40 N.C. App. 405

John H. WILLIAMS v. BISCUITVILLE, INC., and Pizzaville, Inc.

No. 7715SC1007.

Court of Appeals of North Carolina.

March 20, 1979.

*19 Manning, Jackson, Osborn & Frankstone by Frank B. Jackson, Chapel Hill, for plaintiff-appellant.

Vernon, Vernon & Wooten by John H. Vernon, III, and Jeffrey A. Andrews, Burlington, for defendants-appellees.

WEBB, Judge.

Plaintiff's Partnership Claim

In this state, we have the Uniform Partnership Act. G.S. 59-36 provides:

(a) A partnership is an association of two or more persons to carry on as coowners a business for profit.

G.S. 59-37 says in part:

In determining whether a partnership exists, these rules shall apply: * * * * * * (3) The sharing of gross returns does not of itself establish a partnership, whether or not the persons 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: * * * * * * b. As wages of an employee or rent to a landlord, . . . .

It appears from a reading of the statutes that in order for the plaintiff to prevail there must be evidence from which the jury could conclude that plaintiff and defendants agreed "to carry on as co-owners a business for profit." A partnership agreement may be inferred without a written or oral contract if the conduct of the parties toward each other is such that an inference is justified. Eggleston v. Eggleston, 228 N.C. 668, 47 S.E.2d 243 (1948). The plaintiff in this case may be said to have received a share of the profits in the form of keeping whatever part of the seventy percent of gross receipts that he was able to retain. This is "prima facie evidence that he is a partner in the business" unless he received this share of the profits as "wages of an employee." We conclude that all the evidence shows he did receive this compensation as "wages of an employee." Harold Hassenfelt, formerly a vice-president of Pizzaville, Inc. and plaintiff's supervisor, testified that the operations manual was presented to the managing partners, including plaintiff in early 1975, and told them that if they "accepted these responsibilities that they would be entitled to a secure job, fixed salary, a profit sharing plan and other fringe benefits of the company." Plaintiff testified, "As `Managing Partner', I was compensated through a weekly salary and *20 through profit sharing." We cannot find any evidence that the profit sharing feature of plaintiff's compensation was any more than a part of his salary. We hold the profit sharing of the plaintiff does not make a prima facie case of partnership. See McGurk v. Moore, 234 N.C. 248, 67 S.E.2d 53 (1951). The fact that plaintiff was designated managing partner is not of enough legal significance to require the case to be submitted to the jury. When all the evidence shows plaintiff was an employee, his job title alone cannot change the substance of his position.

Plaintiff's Breach of Contract Claim The plaintiff contends that the operations manual became a part of his employment contract because he was induced to stay with the company by the adoption of this policy which required one verbal and one written warning before the plaintiff could be discharged. He says that since he did not receive the required warnings it was a breach of his employment contract for him to be discharged.

The testimony of Mr. Hassenfelt was that the plaintiff had received a verbal and written warning, but we do not put the decision of this case on that ground. As we read provision for discharge after "one verbal and one written warning," it is not the exclusive way for discharging employees. It was a part of a policy which was unilaterally implemented by the employer and could be changed by it. The employer could discharge plaintiff by ways other than as set forth in the policy manual.


VAUGHN and ARNOLD, JJ., concur.

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