Steed v. Rees

1. The facts and circumstances of this case were sufficient to authorize the jury o draw the conclusion that by mutual consent there had been a dissolution of the partnership.

2. Although the averments in an answer may not warrant the introduction of certain evidence to establish a certain defense, yet, in it be introduced without objection, it is proper for the court to charge the jury as to its effect.

3. There was no abuse of discretion in refusing a new trial.

No. 13688. APRIL 15, 1941. T. B. Steed filed his petition against L. E. Rees, alleging, in substance, that plaintiff and defendant had conducted a partnership for the past ten years, up to the filing of the suit in December, 1939, it being an undertaking business; that this partnership was begun in 1929; that previously the business was owned, operated, and controlled by the complainant; that when formed in 1929 the partnership was conducted in the name of Rees Steed; that the complainant contributed to the partnership, when it was formed, about $5000 in fixtures, etc., all free from debt or encumbrance except about $1500; that the defendant contributed nothing at that time, but several years later did execute notes in the amount of some $1350 for the payment of partnership debts, and that these notes were paid out of partnership funds; that it was an equal partnership as to profits and losses, and so continued until about a year before the filing of this suit, when the defendant, without the consent and over the objection of complainant, assumed custody and control of said partnership business, and seized and took possession of the partnership's books and accounts, goods, fixtures, and hearses, and has kept possession of the same and conducted the partnership business of Rees Steed, and withheld from petitioner the right to participate in its affairs, and has excluded complainant from all rights therein; that because the books and accounts are in the defendant's possession the complainant is wholly unable to give accurate figures, facts, and dates, and has been denied the privilege of inspecting the records. He prayed, that the assets of the partnership be marshaled, an accounting rendered, that he recover of the defendant his share of the assets and profits, and that a dissolution of the partnership be decreed.

The defendant answered, denying that the partnership was formed in 1929, but that in 1919 he purchased the one-half partnership interest of a named person in the business; denied the allegation that complainant contributed the amount alleged by him; denied that he assumed entire control of the business without the consent of the complainant, but averred that on August 1, 1935, through no fault of defendant, the plaintiff abandoned the partnership; denied that complainant had been refused permission to examine the books and accounts, as alleged; and averred that at the time of plaintiff's abandonment of the partnership business the same was heavily involved, and the liabilities amounted to more than the assets; and alleged that the books were kept in the possession of the plaintiff until he abandoned the partnership.

Steed amended his petition by alleging that the business conducted by the partnership had built up good will among the people of the value of $5000 or more, and prayed that he have judgment against the defendant "for such sums as may be due him from the partnership assets, consisting of notes, accounts, stock of goods, equipment, and good will." The defendant amended his answer by setting forth four items of loans which he made to the plaintiff, aggregating $450, and prayed for judgment against the complainant for that amount. He alleged also insolvency of the plaintiff.

The court charged the jury: "If you believe, under the evidence, facts, and circumstances of this case that there was a dissolution of this partnership by mutual consent between Mr. Steed and Mr. Rees in August, 1935, why then I charge you that you would stop right there and render a verdict in favor of Mr. L. E. Rees, the defendant." In his motion for new trial the plaintiff contends, first, that such a charge was improperly given, because neither the plaintiff nor the defendant contended in their pleadings that there had been a mutual consent to dissolve the partnership; and second, that there was no evidence to the effect that there was such mutual consent to dissolve. The plaintiff testified: "I bought the white hearse in the fall of 1927, and gave $2600 for it. . . In 1934 we bought a new hearse. I did not trade the old one. I paid $2500 for the new hearse; that hearse is now at my house. I kept both hearses at my house. I kept both hearses at my house, as I did the work; and the hearse was left at my house when he [Rees] decided he did not want me in his business. I was not left with any other assets. I have a lot in my name — a little lot of Mr. Miles Smith that he paid on his wife's funeral. I allowed him $100 on it. . . I did not buy any after 1936. Mr. Rees did the buying after that time. I don't know who paid the bills in 1938 and 1939 . . . I kept the books until 1935. I have not had access to the books since 1935."

The defendant testified: "I took over this business in June or July, 1935, or August. . . I told Mr. Steed I was going to take it over to get it out of debt. Since that time I have paid the partnership out of debt. . . Mr. Steed has not in any way helped me to pay up the indebtedness. . . T. B. Steed and I were in partnership in the undertaking business in Lincolnton from 1919 until 1935. . . Bill Hammond helped me since 1935 until he got this job with the State, and then Harold McKinney. Bill Hammond started with me in 1935; and after he left, Harold McKinney took Bill's place, and John Way has helped me. Mr. Steed has helped me if it was convenient . . . When Mr. Steed wanted to attend a funeral I let him go. I did not pay him anything."

The jury returned a verdict in favor of the defendant; whereupon the court entered up judgment against the plaintiff for the costs of court and "ordered further that said partnership be and the same is hereby dissolved." The plaintiff's motion for new trial was overruled, and he excepted. The plaintiff is asking that a court of equity dissolve a copartnership, and as a sequence that he have a recovery of his share of the assets, after an accounting is had. In effect, the answer avers that at the time of the filing of the suit there was no partnership, it having been dissolved some years previously. It was insisted by the plaintiff that there had never been any dissolution, but that what happened was that by the illegal acts of his partner he had been excluded from any share in the partnership assets. the defendant did not plead dissolution by mutual consent, and the plaintiff complains that the judge charged the jury that if they believed that under the evidence, facts, and circumstances of the case there was a dissolution by mutual consent in 1935, they should go no further, but render a verdict in favor of the defendant.

1. In 47 C. J. 1110, the text reads as follows: "No particular form of agreement is necessary to dissolve a partnership by consent, but dissolution may be evidenced by acts of all the partners showing their intention that the partnership between them shall cease, or by acts, participated in or assented to by all the partners, which are inconsistent with a continuation of the partnership between them. It is, however, necessary that the agreement of the partners, or their acts relied on as showing an agreement, should be such as clearly to evidence a meeting of the minds of all the partners that an actual dissolution should take place." Words are not the only means available to express an intent. Conduct may be just as expressive. Indeed, actions speak louder than words. Smith v. Jones, 185 Ga. 236, 241 (194 S.E. 556). In Kenney v. Porter, 109 N.Y. 526 (17 N.E. 426), the Court of Appeals of New York held that the fact that the firm had stopped making purchases was in itself most convincing evidence that the partnership theretofore existing had been dissolved. In Lindley on Partnership (9th ed.), 677, it is stated: "A dissolution of a partnership at will may be inferred from circumstances — e. g., a quarrel — although no notice to dissolve may have been given." It is laid down in the case of Bayer v. Bayer, 215 App. Div. 454 (214 N.Y. Supp. 322 (6)), that intent of partner or mutual consent of partners to dissolve may be shown by conduct as well as words. In Middleton v. Newport, 6 Cal.2d 57 (56 P.2d 508), authorities are cited for the proposition that it is entirely possible that an abandonment or dissolution of a partnership may take place by conduct inconsistent with its continuance, in spite of the fact that liquidation is not completed or that some appearances of partnership continue. In the statement of facts preceding this opinion we have not attempted to summarize all of the testimony pro and con relating to this issue, but only enough to show that in our opinion the circumstances and conduct of the parties were such as to justify the court in submitting to the jury the issue as to whether there had been a dissolution by mutual consent. We so hold.

2. But it is insisted that it was error so to charge, for that it was not pleaded that there had been a dissolution by mutual consent, the plea being that a dissolution had occurred because Steed had abandoned the partnership. The answer to this contention is that the testimony as to these facts and circumstances was not objected to on the ground that there was no pleading to justify it. Had there been, the defendant could have so amended as to make it admissible; and in such a case the evidence will be looked to, not only in order to ascertain whether or not the verdict is supported by the evidence, but to determine whether the charge complained of was erroneous. The rule in such case is that although the allegations of a petition or answer may not warrant the introduction of certain evidence to establish a claim on the part of the plaintiff, or a defense of the defendant, yet if it be introduced without objection, and relate to the same cause of action, it is not improper for the court to charge the jury as to its legal effect. GeorgiaRailroad v. Lawrence, 74 Ga. 534. See Ocean Steamship Co. v. Williams, 69 Ga. 251; Savannah, Florida WesternRailway v. Barber, 71 Ga. 644; Central Railroad BankingCo. v. Attaway, 90 Ga. 656 (16 S.E. 956); Rocker v.DeLoach, 178 Ga. 480 (173 S.E. 709); Gainesville Northwestern Railroad Co. v. Galloway, 17 Ga. App. 702 (87 s.E. 1093); Napier v. Strong, 19 Ga. App. 401 (91 S.E. 579). As pointed out by Judge Jenkins in the case last cited, the reason for the rule is, that had objection been made, the party tendering such evidence might have amended his pleadings so as to conform thereto.

3. This court will not interfere with the judgment of the trial judge in exercising his discretion in the appraisal of the comparative value of the testimony of the witnesses whose testimony was delivered in the presence and hearing of the court, and, by his denial of the motion for new trial, in stamping with his approval the verdict of the jury, there being sufficient evidence to sustain the verdict.

Judgment affirmed. All the Justices concur.