Opinion ID: 2452292
Heading Depth: 1
Heading Rank: 3

Heading: Existence of Partnership

Text: The Uniform Partnership Act is codified at Ark.Code Ann. § 4-42-101 et. seq. (Repl.1994). A partnership is defined as an association of two or more persons to carry on as co-owners a business for profit. § 4-42-201(1). However, as we recognized in Zajac v. Harris, 241 Ark. 737, 410 S.W.2d 593 (1967), the term partnership is not easily elucidated: The business association that is known in the law as partnership is not one that can be defined with precision. To the contrary, a partnership is a contractual relationship that may vary, in form and substance, in an almost infinite variety of ways. 241 Ark. at 738, 410 S.W.2d 593. Thus, we have said that the primary test of a partnership between the parties is their actual intent to form and operate a partnership. Gammill v. Gammill, 256 Ark. 671, 510 S.W.2d 66 (1974); Brandenburg v. Brandenburg, 234 Ark. 1117, 356 S.W.2d 625 (1962). See also Purser v. Kerr, 21 Ark.App. 233, 730 S.W.2d 917 (1987). The existence of a partnership need be proved only by a preponderance of the evidence. Brandenburg v. Brandenburg, supra . In his brief, Mitchell asserts that we must determine whether there was substantial evidence to support the chancellor's findings. This is not the correct standard of review. We review chancery cases de novo, and will reverse only if the chancellor's findings of fact are clearly erroneous. Sunbelt Exploration Co. v. Stephens, 320 Ark. 298, 896 S.W.2d 867 (1995); Hercules, Inc. v. Pledger, 319 Ark. 702, 894 S.W.2d 576 (1995). The facts before us are distinguishable from those in Morrow v. McCaa Chevrolet Co., 231 Ark. 497, 330 S.W.2d 722 (1960), which Boeckmann cites in his brief. In Morrow , the appellant sought to establish that a partnership existed, yet admitted that an employer/employee relationship existed between himself and the appellee. Morrow also testified that he considered himself to be a sharecropper rather than a partner. His position was simply that because he received half of the profits from the business, he should have been declared a partner. We rejected appellant's argument on the well-established principle that the sharing of profits alone does not make one a partner. 231 Ark. at 500, 330 S.W.2d 722. In the case before us, there was more evidence offered than the mere sharing of profits, and Mitchell denied that an employer/employee relationship existed. While Boeckmann offered testimony that no partnership agreement was ever made and that he put Mitchell's name on the loan to help his credit, the chancellor, who was in the best position to determine the credibility of the witnesses, evidently concluded that Mitchell was the more credible witness. In making her ruling, the chancellor specifically referred to the documentary evidence and to the testimony of the banker, Rick Phillips. In light of this evidence, we cannot conclude that the chancellor's findings were clearly erroneous. Affirmed and remanded.