Johnson v. Gill

Annotate this Case

68 S.E.2d 788 (1952)

235 N.C. 40

JOHNSON v. GILL et al.

No. 531.

Supreme Court of North Carolina.

February 1, 1952.

*791 Elbert E. Foster, Richard M. Welling, and Robert D. Potter, all of Charlotte, for plaintiff appellant.

Tillett, Campbell, Craighill & Rendleman, and McDougle, Ervin, Horack & Snepp, all of Charlotte, for defendant appellee.

WINBORNE, Justice.

This is the pivotal question on this Appeal: Is the evidence elicited and offered by plaintiff as shown in the record of the case appeal, taken in the light most favorable to her, as we must do in considering a motion for judgment as in case of nonsuit, sufficient to take the case to the jury upon an issue as to the existence of a partnership between defendant Dan Gill and defendant Zeb Mattox at the time of, and in respect to the operation by Gill of the truck of Mattox which struck and injured plaintiff as alleged in the complaint?

The ruling of the trial judge in granting the motion of defendant Mattox for judgment as of nonsuit furnishes a negative answer. And after careful consideration of the evidence, in such light, the opinion of this Court is accordant therewith.

At common law the liability of members of a partnership for a tort committed in the course of its business is joint and several. Hall v. Younts, 87 N.C. 285; Mode v. Penland, 93 N.C. 292. Annotations 175 A.L.R. 1310. See also Dwiggins v. Parkway Bus Co., 230 N.C. 234, 52 S.E.2d 892.

And the common-law rule of joint and several liability of partners for a tort committed by one of the members of the partnership is incorporated in the Uniform Partnership Act, adopted by the General Assembly of this State. See P.L.1941, Chap. 374, now Article 2 of Chap. 59 of the General Statutes.

This Uniform Partnership Act declares that every partner is an agent of the partnership for the purposes of its business, and the act of every partner for apparently carrying on in the usual way the business of the partnership of which he is a member ordinarily binds the partnership, G.S. § 59-39; that where by any wrongful act or omission of any partner acting in the ordinary course of the business of the partnership or with the authority of his copartners, loss or injury is caused to any person, not being a partner in the partnership, or any penalty is incurred, the partnership is liable therefor to the same extent as the partner so acting or omitting to act, G.S. § 59-43; and that all partners are liable jointly and severally for everything chargeable to the partnership under G.S. § 59-43. See Dwiggins v. Parkway Bus Co., supra.

Therefore, if defendants Gill and Mattox were partners, and plaintiff suffered injury by the wrongful act or omission of Gill acting in the ordinary course of the business of the partnership, or with the authority of his copartners, Mattox, as a partner, would be liable jointly and severally therefor.

In this connection, the Uniform Partnership Act defines a partnership as "an association of two or more persons to carry on as co-owners a business for profit". G. S. § 59-36(1). See also Dwiggins v. Parkway Bus Co., supra; McGurk v. Moore, 234 N.C. 248, 67 S.E.2d 53.

The Uniform Partnership Act further provides that in determining whether a partnership exists, these rules apply: G.S. § 59-37 "* * * (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: (a) As a debt by installments or otherwise, (b) As wages to an employee or rent to a landlord * * *, *792 (e) As the consideration for the sale of a good will of a business or other property by installments or otherwise". G.S. § 59-37 (3), (4) (a), (b), (e), as applied in McGurk v. Moore supra. Compare Eggleston v. Eggleston, 228 N.C. 668, 47 S.E.2d 243.

"To make a partnership, two or more persons should combine their `property, effects, labor, or skill' in a common business or venture, and under an agreement to share the profits and losses in equal or specified proportions, and constituting each member an agent of the others in matters appertaining to the partnership and within the scope of its business." This definition given by Hoke, J., in the case of Gorham v. Cotton, 174 N.C. 727, 94 S.E. 450, 451, as containing the substantive features of definition of the term is approved and applied in numerous cases in this State, as in Fertilizer Co. v. Reams, 105 N.C. 283, 11 S.E. 467, and Mauney v. Coit, 86 N.C. 463, 464. See also Rothrock v. Naylor, 223 N.C. 782, 28 S.E.2d 572.

However, the principle is well settled in this State that "while an agreement to share profits, as such, is one of the tests of a partnership, an agreement to receive part of the profits for his services and attention, as a means only of ascertaining the compensation, does not create a partnership". Kootz v. Tuvian, 118 N.C. 393, 24 S.E. 776. See also Rothrock v. Naylor, supra [223 N.C. 782, 28 S.E.2d 575.], and cases there cited.

Also in this State it is provided by statute, G.S. § 42-1, that "No lessor of property, merely by reason that he is to receive as rent or compensation for its use a share of the proceeds or net profits of the business in which it is employed, or any other uncertain consideration, shall be held a partner of the lessee". See Perkins v. Langdon, 231 N.C. 386, 57 S.E.2d 407, and cases cited.

In the present case, if it be conceded that defendants Sam White, Dan Gill and Mike Grate, were partners in the business of yard landscaping, as to which the evidence is not clear, and that the tractor was acquired for use in this business, the evidence relating to the transaction between Sam White and defendant Zeb Mattox, as to the tractor, tends to show that the tractor was either sold by Mattox to White for "ten hundred dollars", payable one hundred dollars per week, or that it was leased by Mattox to White on rental basis of one hundred dollars per week. And though it appears that the money White paid to Mattox was money received by White from the landscaping business, no inference arises therefrom that Mattox was a partner in the business. This is true under the provisions of the Uniform Partnership Act above quoted, whether the transaction as to the tractor be a sale or a lease. And the evidence offered is not susceptible of the inference that Mattox was a partner in the landscaping business with Sam White, Dan Gill and Mike Grate, or with either of them. Nor may such inference arise upon the evidence as to the rental value of a tractor of the kind in question.

And as to the truck here involved, all the evidence tends to show that it was merely borrowed by White from Mattox, and used in White's landscaping business. This is not sufficient to create an inference that Mattox thereby became a partner in the business.

Hence the judgment from which appeal is taken is