310 Mass. 134 | Mass. | 1941
This is a bill in equity in which the plaintiff originally asked for an accounting with the defendant Bowles, alleged to be his partner, and that the defendant The Republican Publishing Company, hereinafter referred to as the Company, and the defendant Hartfield Realty Company be ordered to release certain attachments alleged to have been made. Allegations of an amendment to the bill are to the effect that Bowles owed the partnership for goods sold and delivered to the Company at his request; that the Company had advanced money to the partnership; and that Bowles had caused the Company to bring the action in which the attachment was made for the purpose of “putting the partnership out of business.” The suit was referred to a master, whose report was confirmed by interlocutory decree, and a final decree was entered from which the plaintiff, Bowles and the Company appealed.
Three questions only are presented by the parties for decision: 1. Was there a partnership? 2. Were the sums received by the plaintiff as a “drawing account" received as a partial distribution of profits or as compensation? 3. Can the Company, on the pleadings, be found indebted to the partnership?
1. The master found that in 1928 the plaintiff and Bowles entered into an oral agreement in California whereby they became partners for the purpose of manufacturing and selling neon signs in Springfield, in this Commonwealth, “such finding being based upon other findings hereinafter contained." Accordingly, it is for us to draw our own inferences and conclusions from the subsidiary facts found as to whether a partnership existed. Busteed v. Cambridge Savings Bank, 306 Mass. 9, 13. In substance, the “other findings" are that Bowles purchased, in California, certain equipment that was shipped to Springfield “as part of the partnership agreement.” He agreed to furnish all the necessary financial backing, and the plaintiff was to receive $60 per week, “which was termed to be a ‘drawing account.’ Boyer [the plaintiff] and Bowles agreed ‘to go 50-50.’ " Bowles furnished the plaintiff sufficient cash to enable him to come to Springfield, where he arrived early in July. In September or October, 1928, shortly after the business began to function, the plaintiff and Bowles selected the name of New England Neon Sign Company, under which the business was conducted. As the business progressed, Bowles acted as salesman on several occasions, on each of which the parties would discuss the prospective customers and prices, and “their business dealings with reference to such sales were the same as would be normally found between partners." In 1929, when some question arose over patents, the plaintiff and Bowles signed an agreement for the sign company. This agreement did not refer to them as partners, nor did it state that the sign company was a corporation, partnership or other entity, but “they
“A partnership is an association of two or more persons to carry on as coowners a business for profit .... There must be a voluntary contract of association for the purpose of sharing the profits and losses, as such, which may arise from the use of capital, labor or skill in a common enterprise, and an intention on the part of the principals to form a partnership for that purpose.” Mitchell v. Gruener, 251 Mass. 113, 123. Seemann v. Eneix, 272 Mass. 189, 194. See Beatty v. Ammidon, 260 Mass. 566, 576. Subject to any agreement between partners, each shall share equally in the profits, and must contribute toward the losses, whether of capital or otherwise, sustained by the partnership according to his share in the profits. Lavoine v. Casey, 251 Mass. 124, 127. See Kavanaugh v. Johnson, 290 Mass. 587, 596.
We are of opinion that the subsidiary findings of the master warrant the conclusion that a partnership was formed. The facts as to the plaintiff's dealings and relations with the Company and the fact that he stated that he did not know exactly the status of the sign company, when considered with the representations of Bowles to him, are not conclusive against the finding of the partnership relation, nor is the failure to file a business name certificate. See Crompton v. Williams, 216 Mass. 184, 187.
2. We are of opinion that the sums received by the plain
The real question is to ascertain, in so far as possible, the intention and understanding of the parties. In the absence of an express agreement, the rule that no compensation is to be allowed precludes it, unless the other agreements as to the business to be done and the mode of conducting it show that compensation was intended. If this intention is doubtful, the subsequent course of dealing and conduct of the parties may be considered in determining whether there is such an implication in favor of the allowance of compensation as is tantamount to an express agreement. Hoag v. Alderman, 184 Mass. 217, 219. The importance of the agreement “to go 50-50” cannot be overlooked. It is true that there is no reported fact that these words have acquired a fixed meaning in business transactions, but we think that it is good sense to understand the words as meaning the division into halves of something that was under discussion by the parties at the time. In our effort to,give
The plaintiff was a glass blower, and was recommended to Bowles as one who was familiar with, and had the ability to build, neon signs. The purpose of the partnership was to manufacture and sell such signs. Bowles was to furnish the “necessary financial backing,” and it is a reasonable inference that the plaintiff, in turn, was to devote himself to the manufacture, at least, of the signs. Under such an arrangement, and the specific agreement “to go 50-50,” neither partner would be entitled to compensation for services in the absence of an express or implied agreement. It is to be observed that there is no specific agreement that the plaintiff should receive any salary, as such. It has been said that a drawing account is a well recognized modern business method of furnishing the employee with means of maintenance while engaged in a service from which wages and commissions are to accrue. Packard Motors Co. of Alabama v. Tally, 212 Ala. 487, 489. See Holland v. Lange, 113 Misc. (N. Y.) 469, 470, The plaintiff came from California, where it would seem that he was employed, and he then was contemplating going into the neon sign business himself in Texas. In fact, he said that he was then busy procuring equipment for that purpose. In the circumstances, it is reasonable to infer that he might require something by way of his maintenance when he came here, although it would also seem that, if he set up business for himself in Texas, he would have to depend upon his own efforts or resources for it there. In any event, he did not stipulate, in terms, for the payment of any salary. He was merely to receive a weekly amount, termed a “drawing account,” from a partnership that was upon a “50-50”
3. The master found that Bowles violated the partnership agreement, and “in concert with and through the instrumentality of the . . . Company, has taken possession of all of the partnership assets, including its good will, away from the partnership and the new organization is using said assets.” He also found that the Company participated in Bowles’s violation of his fiduciary duties “both in the institution of said action at law, and in appropriating to its own use certain partnership assets.” The trial judge found that both Bowles and the Company are responsible for the seizure of the partnership assets valued at $10,000 and that the Company was indebted to the partnership in the sum of almost $13,800, and the decree establishes this indebtedness and orders these sums to be paid.
The only contention of the defendants in this respect is that this part of the decree was not within the scope of the bill, and we are of opinion that this is so. See National Rockland Bank of Boston v. Johnston, 299 Mass. 156, 157. It is apparent, however, that the issue was tried before the master. At the very outset of his report, he states one of the issues as being what indebtedness, if any, did the partnership owe to the Company, and also, as involved in this issue, what offsets, if any, exist in favor of the partnership against the Company. But where, as here, the issue was tried, it ought not to be tried again, and the plaintiff should be allowed to amend his bill for the purpose of presenting formally on the record the issues that were, in fact, tried. Albano v. Puopolo, 309 Mass. 501, 511.
It seems apparent that the final decree does not take into account an item of $230 collected by the plaintiff on account of the partnership receivables. In addition to this sum, he received $15,671.44. The master, making his computa-tians, found that the plaintiff was accountable for the total of these two sums, but the decree does not charge the plain
The final decree contains no reference to the suit brought by the Company against the partnership, in which the attachment made has never been dissolved. We are of opinion that the Company should be enjoined from proceeding further with that action, but without prejudice, however, to whatever rights the deputy sheriff, who made the attachment, may have against ,fhe Company.
It is to be observed that the final decree, among other things, orders Bowles and the Company to pay $10,000, the value of the assets of the partnership. This does not amount to the imposition of a double liability and a payment by one would discharge the other. Gross-Loge des Deutschen Ordens der Harugari v. Cusson, 301 Mass. 332, 335.
If, within thirty days after rescript, an appropriate amendment to the bill is allowed by the Superior Court, then the final decree modified in accordance with this opinion is affirmed. If no such amendment is allowed, then, and without containing any order for payment by the Company, the final decree, modified in accordance with this opinion, is affirmed.
The plaintiff is to have his costs.
Ordered accordingly.