Case Name: EDDINGSTON et al. v. ACOM
Court: Texas Courts of Civil Appeals
Jurisdiction: Texas
Decision Date: 1924-02-15
Citations: 259 S.W. 948
Docket Number: No. 1048
Parties: EDDINGSTON et al. v. ACOM.
Judges: 
Reporter: South Western Reporter
Volume: 259
Pages: 948–957

Head Matter:
EDDINGSTON et al. v. ACOM.
(No. 1048.)
(Court of Civil Appeals of Texas. Beaumont.
Feb. 15, 1924.
On Rehearing, March 29, 1924.)
I. Partnership @=5»6 — One loaning money to rice growers for one-third net proceeds, with transfer of personalty as security, held not a partner.
One contracting to loan not exceeding $4,000 to rice growers in consideration of one-third the net profits of the crop, with conveyance of their fixtures, etc., as security, did not thereby become a partner, though he advanced more than $4,000, and refused to permit the growers to farm separately, since he had no control over transactions between them, and merely interfered to preserve his security.
2. Partnership @=344 — Terms of contract giving share of net profits of a venture held mere presumptive evidence of partnership.
• “The net profit rule” is not law in Texas, and terms of a contract, giving an interest in net profits of a venture to one contracting to furnish financial aid, held merely presumptive evidence of partnership as to him.
3'. Evidence @=5575 — Testimony of maker of note that defendant assumed debts sustained finding of assumption where defendant withheld evidence.
In an action on a note alleged to have been assumed by defendant who refused to produce a bill of sale,' on demand by plaintiff, to prove defendant’s assumption of the maker’s debts, though admitting that his lawyer had it, testimony of one of the makers that defendant hdd so agreed sustained a finding of such assumption of debts.
4. Pleading @=248(6), 420(2) — Amended petition, pleading ownership of claim sued on instead of title, held not a variance, and sufficient in absence of exception.
Where, after instituting suit for the price of goods, the seller went through bankruptcy, later repurchasing the claim, his amended petition specially pleading; not his title, but consideration which was sustained by the proof, and by an independent paragraph alleged his legal and equitable ownership, demand, etc., there was no variance, and in the absence of special exception the allegation of ownership was sufficient.
5. Pleading @=>21 — Alternative allegations of partnership or assumption of debts not antagonistic.
Alternative allegations, in a petition on a note, basing defendant’s liability on the theory of partnership or assumption of maker’s debts, were not antagonistic, since a court findings on one would not negative the other.
On Rehearing.
6. Appeal and error @=53891 — In absence of diligence, affidavits not considered for first time on appeal. |
In the absence of proof of diligence to procure affidavits for presentation at the trial, the appellate court cannot consider them on appeal.
7. Appeal and error @=53-197(4) — Defendant’s conduct held to preclude objection on appeal to variance.
In an action on a note against one alleged to have assumed it, defendant could not complain on appeal of variance between allegations of a written assumption and proof of an oral one, where he was not misled, pleaded no surprise, though the case had been pending for many months before trial, and without objection proceeded with his defense.
8. Appeal and error <©=>930(I) — Evidence and pleadings considered most favorably to party having verdict.
In determining an appeal, whether the evidence or pleadings support the jury findings, the court must consider them most favorably to the party obtaining the verdict.
O’Quinn, J., dissenting on rehearing.
Appeal from District Court, Jefferson County.
Action by O. H. Acorn against A. T. Ed-dingston and others. Judgment for plaintiff, and defendants appeal.
Affirmed.
E. A. McDowell, Jno. M. Conley, and P. D. Renfro, all of Beaumont, for appellants.
Smith, Crawford & Sonfield, B. E. Pye, and J. M. Cormack, all of Beaumont, for appellee,
Writ of error dismissed for want of jurisdiction April 30, 1924.

Opinion:
WALKER, J.
On the 1st day of January, A. D. 1919, appellant on the one part and G. O. Daniels and L. L. Eden on the other entered into the following contract:
"United States of America, The State of Texas, County of Jefferson.
"Articles of agreement between A. T. Ed-dingston, G. O. Daniels, and L. L. Eden, all of Jefferson county, Tex-, witnesseth:
"That, whereas, the said G. O. Daniels and L. L.'Eden áre desirous of raising and selling, and are desirous of entering the art and trade of such business, but have not the means and money so to do; and
"Whereas, the said A. T. Eddingston, in consideration of the hereafter presents, has agreed to give the aforesaid parties financial aid with which to. carry on said business;
"Now, therefore, it is mutually agreed by and between the parties hereto that the said G. O. Daniels and L. L. Eden are to engage in the art, trade, and business of raising and selling rice, on a tract of land lying in, Chambers county, Tex., on the Anuhuac Canal, containing five hundred acres more or less, which said tract they have leased from C. C. Rush of said county, the rental of which being one-half (½) of the rice, gross, raised on said land per year, the said C. C. Rush to furnish water, seed, and two-thirds of the fertilizer.
"That the said A. T. Eddingston is to advance this day the sum of one thousand ($1,000.00) dollars, or thereabouts, the same being one-half of the price of the purchase price of two Fordson tractors, the price of which being twenty-two hundred dollars, and to advance, to the parties aforesaid, in addition to the above sum or sums as may be needed for the purchase of other implements needed on said farm for the rice business, which is estimated with the above will amount to twenty seven hundred dollars, and such other and further advances as may be needed from time to time, such as money for wages for labor, groceries, feed for mules, etc., but in no event are such advances to exceed the sum of four thousand ($4,000.00) dollars, nor are the above piarties to make demand on said A. T. Eddingston in excess of said amount, nor will be liable to them in excess of said amount.
"That it is hereby agreed by and between the parties hereto that the said A. T. Edding-ston is to be secured in the amount of his advances to the said G. O. Daniels and L. L. Eden, and it is agreed by the parties hereto that he has a lien upon all the tools, implements, machinery, fixtures, belongings to the said parties and the rice raised by them.
"That it is further agreed by and between the parties hereto that the said G. O. Daniels and L. L. Eden, shall as soon as the rice is harvested, threshed, sacked and sold, reimburse and repay the said A. T. Eddingston the sum or sums of money or moneys advanced by him to the said G. O. Daniels and L. L. Eden for the operation of the herein business and as .herein set forth, it being agreed by the parties hereto that the said money is to be repaid to the said A. T. Eddingston as soon as can be done and during the first year of this contract.
"It being further agreed by and between the parties 'hereto that after the payment to the said A. T. Eddingston of what is due him for advances, at the time of the 'selling the first crop and the first year of this contract, and after the payment of the land rent due the landlord, O. O. Rush, which is one-half of the rice crop, gross, per year, the balance in three (3) parts among the parties hereto, one-third being allowed to the said A. T. Eddingston as a consideration for his loan and financial assistance herein to the said parties G. O. Daniels and L. L. Eden, it being agreed and understood that the said A. T. Eddingston is to receive said one-third share during the life of this contract, of the rice crops and other crops raised during the years 1919 and 1920, in recognition and acknowledgment of his financial assistance herein, and it is expressly understood and agreed by and between the parties hereto, that under no circumstances is the said A. T. Eddingston to make any advances or give any financial assistance to said other parties herein after the first year, but that the business for 1920 must be operated solely at the expense of the said G. O. Daniels and L. L. Eden.
"It is further agreed by and between the parties hereto that the said G. O. Daniels and L. L. Eden are to devote all their time, energy, experience, skill and good will to said business of growing rice on said farm, and the said G. O. Daniels is to receive the sum of seventy-five ($75) dollars per month, salary for his services in the said business, and the said L. L. Eden, the sum of fifty ($50) dollars per month, salary, for his services, and that they shall not and will not at any time hereafter, during the period above named, exercise or follow the said business, or any other, to their private emolument or advantage, but shall and will from time to time, and at all times during said period, use their utmost endeavors, to the best of their skill and ability, carry on and pursue and operate said farm and business as their skill and experience in the rice business will permit, and that if one or the other of the said parties should at any time become discouraged and for any other cause leave said business, he thereby forfeits his right to any of the profits herein, and shall have no' demand upon the others whatsoever.
"It being agreed by and between the parties hereto that the said G. O. Daniels and U. L. Eden, shall keep during the said life of this contract and operation of the aforesaid business perfect, just and correct book accounts, wherein either of the parties hereto may have access thereto, showing all expenditures by the said parties and the moneys received by them, in fact every business transaction of the rice business, and shall render or cause to be rendered each to the other a statement of the condition of the business at the end of each year's rice business, or sooner, if required by either of the parties hereto.
"It is further mutually agreed by and between the parties hereto, and to all whom these presents may come, that the aforesaid agreement is not a partnership agreement, nor is the said A. T. Eddingston recognized as a partner herein, but this agreement is drawn for the purpose of protecting the said A. T. Eddingston in his loan and financial assistance to the said G. O. Daniels and D. L. Eden, and of securing him in his loan to the others, and of agreeing to a mortgage lien therefor, and of agreeing of the aforesaid G. O. Daniels and L. L. Eden of showing their appreciation and acknowledgment of said loan to them, by allowing the said A. T. Eddingston a recompense therefor of one-third as aforesaid, and until the said loan is paid to the said A. T. Edding-ston, we, the undersigned, G. O. Daniels and L. D. Eden, as a security to the said A. T. Eddingston, hereby grant, sell, and convey to the said A. T. Eddingston all of the personal property by us owned and to be owned in said rice business, to wit, all Eordson tractors, implements, tools, machinery, etc., and the rice crop and all other crops of every kind and nature to be by us raised during the years 1919 and 1920 on the aforesaid five hundred acre tract of land leased from O. O. Rush.
"To have and to hold the same until said amount or amounts advanced are paid, giving him such power and authority in the premises to enforce his loan as the law directs.
"Witness our hands in triplicate, at Pt. Arthur, Texas, this 1st day of January, A. D. 1919. A. T. Eddingston.
"G. O. Daniels.
"L. L. Eden."
The parties to this contract undertook to perform its conditions in raising the / rice crops. Daniels and Eden became heavily involved, and because of the fall in the value of rice were made wholly insolvent. In raising the crops they bought supplies from appellee, evidenced by an open account in the sum of $2,416.20, and by a promissory note executed to appellee by Daniels and Eden in the sum of $2,905.87. After Daniels and Eden had failed to pay the debts against them incurred in raising the rice crops, they sold and assigned to appellant certain tools, machinery, and grain, etc., executing to him a bill of sale therefor. On the trial of this ease appellee demanded of appellant the production of this bill of sale, but he refused to produce the same, though admitting that it was in the possession of his attorney. After appellant had refused to produce the written bill of sale, G. O. Daniels testified as follows as to the contents of same:
"We gave Mr. Eddingston a bill of sale to the rice and implements and to the mules and everything, and he was to assume whatever debts that, we owed; we gave him a list of what we owed, and I went to Batson, and went to work in the oil field, and didn't hear any more about it.
"At that time there was also an arrangement with Mr. Eddingston whereby he assumed liability for those debts; he said that he was going to have to pay them, or was going to pay them.
"I will state the terms of that bill of sale as near as I can — the best I can remember about it is — it just described the property and where it was located; that bill of sale included the rice; there was not any property retained by Mr. Eden and myself that we did not put into that bill of sale.
"That equipment cost us right around in the neighborhood of $13,009."
In the execution of the original contract, as set out above, nothing was done by appellant not contemplated by the terms of the written contract, except he advanced Daniels and Eden large sums of money in excess of his contractual obligation, but the novation in the contract in relation to this fact did not vary its legal effect. When 'Daniels and Eden failed to meet their obligations to appellee, after due demand, he instituted suit thereon against Daniels, Eden, and this appellant on the theory that appellant was a partner under the terms of the contract, and alternatively, on the ground that appellant had assumed and agreed to pay the obligations of Daniels and Eden in consideration .of their transfer to him of the tools, machinery, grain, etc. At the time this property was sold to appellant by Daniels and Eden, he held a mortgage against it to secure him in the sum advanced under the terms of the contract. After appellee filed this suit, he became a bankrupt, but by a legal chain of title reacquired, through the bankrupt court and the purchaser thereof, the title and possession of the claims involved in this suit. After appellee reacquired the account and note, he filed an amended petition, alleging the consideration for the note and account as he had alleged in his original petition, and in a separate paragraph further alleged that he was the legal and equitable owner and holder thereof, and that due demand had been made for the payment thereof, as he had alleged these matters in his original petition. Also, he alleged appellant's liability alternatively, as in his original petition; that is, he first alleged liability on the theory of partnership, and then, alternatively, on the theory that appellant had assumed and agreed to pay the account and note.
Upon a trial to the court without a jury, judgment was entered in favor of appellee against appellant, which, as appears from the court's conclusions of fact and law, and based on findings that appellant was a partner with Daniels and Eden, under the terms of the original contract, and that he had assumed the indebtedness as a consideration for the transfer to him of the property as described in the bill of sale.
The court erred in holding appellant liable as a partner. That relation was not created by the terms of the contract, neither as between the parties thereto nor as it affected third parties. Appellant was not given any control over the transactions between Daniels and Eden, nor did he, in the execution of the contract, participate as a partner. True, the record shows that Daniels and Eden at one time agreed among themselves to operate separately in raising rice, and appellant required that they work as provided by the contract, but in doing this he was only in the exercise of his judgment as to what was necessary to protect his funds jointly advanced to Daniels and Eden, and that his interference was not that of a member of the partnership. "The net profit rule" is not the law of this state. The terms of the contract giving appellant an interest in the profits of the venture at most was only evidentiary on the issue of partnership— presumptive evidence, as said by the Commission of Appeals in the well-considered case of Fink v. Brown, 215 S. W. 846. Again, in reviewing the effect of a stipulation providing for a division of profits, Judge Randolph has recently said, in Harding v. Giddings (Tex. Civ. App.) 256 S. W. 305, quoting the syllabus:
"In passing upon the question whether a contract created a partnership, the court must, if possible, give effect to the intention of the parties, having regard for the rule that parties may intend no partnership and yet form one."
And again:
"The sharing of profits and losses does not have the effect of establishing a partnership."
And again:
"A contract denominated a 'lease,' providing for participation in profits and losses in the handling of cattle, held not to create a partnership as between the parties."
While the granting of an interest in the profits is presumptive evidence of the existence of a partnership, yet in this case, construing the instrument as a whole, the theory of partnership is excluded, and when we go to the execution of the contract, as already stated, there is no evidence making appellant a partner.
But, while not liable as a partner, the court made the following conclusions:
"I find that on or about the 1st day of February, 1921, that the defendants G. O. Daniels entered into a contract and agreement with the defendant A. T. Eddingston, by the terms of which the defendants L. B. Eden and G. O. Daniels agreed to and did transfer and convey to defendant A. T. Eddingston all of their interest in the rice crop raised during the year 1920, farming implements, Fordson tractors, tools, machinery, and equipment, as well as all their interest in all other property of the partnership to defendant A. T. Eddingston, and as a part consideration therefor the defendant A. T. Eddingston assumed and agreed to pay off all of the indebtedness incurred in planting, raising, and harvesting the rice crops mentioned in said contract, including the account and note of the plaintiff sued upon in this cause.
"I conclude that defendant A. T. Eddingston by having accepted a transfer from defendants L. L. Eden and G. O. Daniels of all of their interest in the 1920 rice crop, afid of all their interest in the other partnership property in addition to his liability as a partner under and by virtue of the terms of said contract, dated on or about January 1, 1919, assumed and agreed to pay off all of the indebtedness, including the amount of plaintiff's account and note sued upon in this cause incurred in raising and harvesting the rice crops mentioned in said contract."
It was shown that the bill of sale between appellant and Daniels and Eden was in appellant's possession, and that he refused to produce it, after due dem'and had been made therefor. Under' these circumstances, we think the testimony of G. O. Daniels, as given above, not only raised the issue of assumption and promise on the part of the appellant to pay appellee the amounts involved in this transaction, but sufficiently sustains the same. It has been held in this state in McCown v. Schrimpf, 21 Tex. 26, 73 Am. Dec. 221:
"[1] A promise upon sufficient consideration, made to one to pay the debt he may be owing to another, is sufficient to entitle the party to whom the promise is made to recover of the promisor. [2] In our courts the creditor for whose benefit the promise is made may maintain the action thereon in his own name."
See, also, Strictland v. Higginbotham Bros. (Tex. Civ. App.) 220 S. W. 433; Denman v. Standard S. & L. Co. (Tex. Civ. App.) 200 S. W. 1109; Brannin v. Richardson, 108 Tex. 112, 185 S. W. 562; Hill v. Hoeldtke, 104 Tex. 594, 142 S. W. 871, 40 L. R. A. (N. S.) 672; Beitel v. Dobbin (Tex. Civ. App.) 44 S. W. 299; Spann v. Cochran, 63 Tex. 240.
There was no variation between the allegations and proof either as to ownership or liability. When this suit was instituted, appellee was the owner of the cause of action, by reason of having sold the goods to Daniels and Eden. Subsequently he was adjudged a bankrupt, and in process of administering his estate title to the note and the account passed to Galveston Dry Goods Company, who resold it to appellee, thus vesting in him the complete legal and equi table title. Subsequent to this transfer, ap-pellee filed his amended petition, in which he specially pleaded, not his title, bat the consideration for the note and account, which the proof sustained, and in an independent paragraph alleged that he was the legal and equitable owner and holder thereof, demand, etc. In the absence of a special exception to this allegation of ownership, it was sufficient to admit proof of all the facts offered. Ap-pellee pleaded two grounds of recovery against appellant, one on the theory of partnership, which the trial court sustained and, alternatively, on the theory that appellant had, for a valuable consideration, assumed his debt and was obligated to him to pay the amount thereof. The trial court also found facts to sustain this allegation. These pleas were not antagonistic, but both state of facts could exist; that is, appellant could have been liable as a partner, and could have assumed their indebtedness. The findings by the court of one state of facts would not negative the other. For that reason, Saner-Ragley Lumber Co. v. Spivey (Tex. Civ. App.) 255 S. W. 205, has no application to the facts of this case.
There is no merit in appellant's contention that no demand for payment was made before the institution of this suit. Even if a demand were necessary, the facts raised the issue that such a demand was made.
@=>For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes
other cases see same topic and KEY-NUMBER m all Key-Numbered Digests and Indexes