Opinion ID: 1726225
Heading Depth: 1
Heading Rank: 3

Heading: Living expenses advanced.

Text: At various times during the life of the joint venture, Randolph made deposits from his personal funds to the accounts of the Schrecks in the sum of $11,000. He also gave a new automobile to each of their wives at Christmas. The status of the $11,000 is now in dispute. Randolph says it is a joint venture obligation, in effect an advance draw; Schrecks say it was a gift and that in any event, if it was a debt originally, it was later forgiven by Randolph. No claim is made by Randolph that the cars were not gifts. The cash payments were made at times when the venture could not provide an adequate living for the Schrecks, and they were used by them for living expenses. During the approximately two and one-half years of the joint venture, the Schrecks received no other distributions from it. The cash payments made to them were apparently not made from joint venture funds because they were not sufficient. Randolph claims that as between joint venturers, it would not be reasonable to conclude these were gifts. The law requires that in an equity case, proof of the intent of a donor to make a gift must be established by clear, convincing and satisfactory evidence, while at law such intent need only be proven by a preponderance of the evidence. Meredith v. Cockshoot, 235 Iowa 213, 220, 16 N.W.2d 221, 225 (1944). It is not likely that cash payments between business partners were intended to be anything other than advances against joint venture distribution, but in any event, appellees' evidence of a gift falls short of being clear, convincing and satisfactory. Schrecks contend, in the alternative, that if it was a debt to Randolph, it was forgiven by him. Forgiveness of the debt would also be a gift, and subject to the requirement of proof as set out above. Testimony of the Schrecks furnished the only evidence of forgiveness of the debt. On one occasion, after they had notified Randolph of their intention to terminate the venture, they went to his office to discuss matters pertaining to business. Dennis Schreck testified as follows: A. We went into his office to discuss, you know, matters of different things. Q. Excuse me. Who is he? A. My brother and I. Q. All right. A. Different matters, and wethis was one of the subjects that we asked about, about this $11,000 and he says, oh, forget it. He says don't worry about it. We got more important things, or something of this nature. Randolph denies an intent to forgive the debt, claiming that it was only an advance to be paid eventually out of profits. The trial court concluded it was either a gift, or if a debt, that it was forgiven. In this equity case, we are not bound by its findings, although we give weight to them. Even accorded such weight, however, we conclude the evidence of forgiveness of debt also falls short of establishing intent to make a gift and that these amounts should be considered advances against joint venture distributions to the Schrecks. Computation of interest on these advances has been made, from the time they were made until date of termination of the joint venture on December 31, 1970, and the total is $490.26. Randolph shall therefore receive credit on distribution for $11,490.26.