Summary
In Moore v. Harrison, 202 Ga. 814 (44 S.E.2d 551) (which followed the rule in Johnson v. Motor Contract Co., supra), it was held: "Where two or more defendants are sued on a joint cause of action and the case is dismissed as to one or more of the defendants in such joint cause of action, but is left pending as to one or more of the defendants, the judgment is not final, since the same cause of action is still pending in the court below."
Summary of this case from Stanley v. GreenfieldOpinion
15911.
SEPTEMBER 5, 1947. REHEARING DENIED OCTOBER 23, 1947.
Equitable petition. Before Judge Hendrix. Fulton Superior Court. May 14, 1947.
William G. McRae and Dan Duke, for plaintiff.
Barrett Hayes, for defendants.
J. C. Murphy, for persons at interest, not parties.
1. The motion to dismiss the bill of exceptions is denied.
2. It was error to sustain the demurrers of the defendants.
No. 15911. SEPTEMBER 5, 1947. REHEARING DENIED OCTOBER 23, 1947.
Mrs. Ann (R. P.) Moore brought an equitable petition against Mrs. Thelma Pace King, individually and as administratrix of the estate of J. B. King, E. P. Harrison, Fred A. Long, and other named defendants. In brief, the petition as amended alleged: The petitioner and King for many years prior to his death were copartners in certain businesses, the petitioner being a dormant or silent partner. Two liquor stores, one operated by Paul Harrison under a written agreement with King, and another operated by Fred A. Long under a written contract with King, were the property of the petitioner and King during his lifetime. Harrison and Long are each claiming to be the partner of King and the owner of a one-half interest in the business operated by him, under the contracts referred to, copies of which were attached to her petition as exhibits. The petitioner contends that Harrison and Long were merely employees of King; that, as the sole surviving partner of King, she is entitled to the control and possession of the assets of the businesses to the exclusion of the personal representative of the deceased for the purpose of concluding the affairs of the businesses and turning over to the administratrix the amount to which the estate of King may be entitled; and that an accounting, that Mrs. King, as from the defendants, Harrison and Long. She prayed for the appointment of a receiver and an accounting, that Mrs. King, as administratrix, and the defendants, Harrison and Long, be enjoined and restrained from paying out any funds belonging to the businesses, and for other equitable relief.
The contract between Harrison and King recites that Harrison has purchased the license of a named person for the retail sale of liquor, that King has contributed $32,389 to the business, $10,000 of which was for the purchase of the license by Harrison, $2000 for operating capital, and $20,389 for the purchase of merchandise. The contract further provides that Harrison shall contribute his full time to the business and shall receive therefor $300 per month; and that, after King has received $12,000 from the profits of the business, with interest, as repayment of his cash contribution to such business — King at all times owning $20,389 in the assets of the business — Harrison shall receive from the profits of the business an equal division, "except that the aggregate sum of all payments of $300 per month theretofore paid to First Party [Harrison], as set forth in paragraph 3 hereof, shall be deducted from First Party's pro rata of net profits prior to said division of profits."
The contract between Long and King provides: That in consideration of three notes, one for $15,000, covering license and good will, one for $2900, representing bank account, and one for $627, covering inventory, signed by Long and payable to King, due on demand, it is agreed that the business known as Cottage Liquor Store is owned by King, although the license and bill of sale is in the name of Long, and the business conducted by Long. It is further agreed that out of the profits Long is to repay King $15,000, "covering Key money," evidenced by a note, and $1080, advanced as rent; that, when this $16,080 is repaid and all other expenses of every nature are paid, additional profits thereafter are to be divided on an equal basis; and that, in the event of sale after repayment of the amount stipulated, Long is to have 25 percent of the proceeds "of the Key money," and in the event of sale of the lease, Long is to receive 50 percent of the proceeds and 50 percent of the sale of the inventory; provided further that, if Long withdraws an amount from the business not to exceed $300 in any one month, an equal amount is to be paid to King or credited to his account, and that King shall have access to examine the books during regular business hours.
The defendants, Long and Harrison, filed separate demurrers, both general and special, to the petition. The trial court passed an order sustaining the general demurrers of each demurring defendant and dismissing the case as to them. The petitioner, Mrs. Moore, brought her bill of exceptions to this court, naming Harrison and Long as defendants in error, and assigning error on the ruling sustaining the demurrers of these two defendants.
1. A motion was made to dismiss the writ of error on the ground that the only persons made defendants in error in the case in this court are Harrison and Long, although it appears that there were other defendants in the petition filed in the trial court, and these other defendants, and particularly Mrs. Thelma Pace King, are interested in sustaining the judgment of the lower court, and are necessary parties to the bill of exceptions.
The motion to dismiss involves two questions of practice. The first is, whether or not the order sustaining the demurrers of Harrison and Long was such a final judgment as might be excepted to directly while the case was still pending in the lower court against the other defendants.
Where two or more defendants are sued on a joint cause of action and the case is dismissed as to one or more of the defendants in such joint cause of action, but is left pending as to one or more of the defendants, the judgment is not final, since the same cause of action is still pending in the court below. See Johnson v. Motor Contract Co., 186 Ga. 466 (1) ( 198 S.E. 59). But if the defendants are only sued jointly, and the cause of action is several, then a judgment on demurrer dismissing it as to one or more of the defendants is final in its nature and may be brought to this court by the plaintiff while the case is still pending in the court below as to the other defendants. McGaughey Bros. v. Latham, 63 Ga. 67; Kollock v. Webb, 113 Ga. 762, 766, 767 ( 39 S.E. 339); Millers National Ins. Co. v. Hatcher, 194 Ga. 451 ( 22 S.E.2d 99).
The second question is, whether or not the order sustaining the general demurrers of Harrison and Long inures to the benefit of all of the defendants.
In Tate v. Goode, 135 Ga. 738 ( 70 S.E. 571, 33 L.R.A. (N.S.) 310), it was held: "Where some of several joint defendants demur to the plaintiff's petition, and the demurrer goes to the substance of the whole petition and challenges the plaintiff's right to any relief, such demurrer inures to the benefit of all, though some may be in default." See also Peoples Loan Co. v. Allen, 198 Ga. 519 ( 32 S.E.2d 175), and cases cited. Where it appears that the demurrer filed by one of the defendants challenges the plaintiff's right to any relief, and the court sustains this demurrer, the demurrer inures to the benefit of all, and if the plaintiff brings a writ of error to this court, the other defendants are necessary parties to the case and, if not made parties, the case must be dismissed. Malsby v. Shipp, 177 Ga. 54 ( 169 S.E. 308). This rule does not apply, however, where the demurrer does not challenge the plaintiff's right to any relief, but attacks the petition as failing to set out a cause of action against the demurring defendant. Heath v. Miller, 197 Ga. 444 (3) ( 29 S.E.2d 416).
In the present case, the demurrers of Harrison and Long to the petition as amended had numerous grounds. Some of the grounds challenged the right of the plaintiff to any relief, and others contended that no cause of action was set out as to the demurring defendants. The court sustained the general demurrers, but dismissed the action only as to the demurring defendants. This order must be construed to mean that the court was sustaining only those grounds of the demurrers based on the contention that no cause of action was alleged against the demurring defendants.
Therefore, we conclude that the demurrers did not inure to the benefit of all of the defendants, and the action remained pending in the lower court against the defendants who had filed no demurrers. Since the case was not based on a joint cause of action, and the order sustaining the demurrers was a final disposition of the cause as to the demurring defendants, the plaintiff could review the judgment of the lower court by direct bill of exceptions to the order sustaining the demurrers, and other parties named defendants in the petition are not necessary parties in this court. McGaughey Bros. v. Latham, supra; Jones v. Hurst, 91 Ga. 338 ( 17 S.E. 635); Hibble v. Mutual Oil Co., 170 Ga. 698 ( 153 S.E. 771); Millers National Ins. Co. v. Hatcher, supra; Heath v. Miller, supra. The motion to dismiss the bill of exceptions is denied.
2. It is contended by counsel for the plaintiff in error that the general demurrers were sustained on the theory that the contracts between King and Harrison, and King and Long, were contracts of partnership, when in reality the contracts amounted to no more than contracts of employment, and that the general demurrers were, therefore, improperly sustained. Counsel apparently concede that, if Harrison and Long were operating their respective businesses as partners of King, the plaintiff in error would not be entitled to the rights claimed as sole surviving partner of King. Counsel for the defendants in error contend that the contracts were contracts of partnership, and not of employment, and that the general demurrers were properly sustained.
The intent of the parties is the true test as to whether or not a partnership relation is created, as between the parties themselves. Huggins v. Huggins, 117 Ga. 151 ( 43 S.E. 759); 40 Am. Jur. 156, § 43. In this case, the contracts do not state the relationship sought to be established. The contracts between King and Harrison, and King and Long, are lacking in the essentials of a partnership agreement, as to third persons. Neither contract is capable of a construction that the contracting parties have a joint interest in the property described therein; nor is either contract capable of the construction that the parties thereto have a joint interest in both profits and losses of the business to be conducted.
It is unnecessary that we should speculate as to the reason which may have prompted King to procure the defendants Harrison and Long to have liquor licenses issued in their respective names and to operate the businesses in their names. Each contract, however, is definite and clear that only money supplied by King is invested in the business. Neither contract makes any provision for Harrison or Long to be responsible for, or share in, any loss that might accrue in the operation of such business. Their participation in the assets of the businesses is to be determined if and when profits have accrued and King has been repaid under the terms stipulated in each contract.
The Code, § 75-102, provides: "A joint interest in the partnership property, or joint interest in the profits and losses of the business, shall constitute a partnership as to third persons. A common interest in profits alone shall not."
A contract whereby one of the contracting parties is to have an interest in profits alone in insufficient to establish a contract of partnership. See Falk v. LaGrange Cigar Co., 15 Ga. App. 564 ( 84 S.E. 93); Allgood v. Feckoury, 36 Ga. App. 42 ( 135 S.E. 314); Beard v. Oliver, 52 Ga. App. 229 ( 182 S.E. 921); Hannifin v. Wolpert, 56 Ga. App. 466 ( 193 S.E. 81); Lanier v. Shuman, 195 Ga. 246 ( 24 S.E.2d 55).
In holding that the contracts do not establish a partnership relation, we do not preclude a different result should the evidence upon a trial of the issues made authorize, or require, a jury to find that a partnership actually existed between the contracting parties.
The ground of demurrer that Mrs. Moore, if a partner at all with J. B. King, was a silent partner, which fact was unknown to the defendants, and that the petition, therefore, set forth no cause of action against them, is without merit. It has been held that a dormant or silent partner is liable to everybody dealing with the partnership for the contracts of the partnership so long as he remains a member thereof. See Phillips v. Nash, 47 Ga. 218. If a silent or dormant partner is liable for obligations, it necessarily results that the partnership is not to be denied its right of recovery of partnership assets merely because one partner may be a silent or dormant partner.
It was error to sustain the demurrers of the defendants.
Judgment reversed. All the Justices concur, except Wyatt, J., who took no part in the consideration or decision of this case.