Court Opinion

ID: 3954388
Source: CourtListenerOpinion
Date Created: 2016-07-06 10:15:58.642577+00
Date Added: 2024-06-11T07:43:37.226135
License: Public Domain

On Motion for Rehearing.
Appellee Schnackenberg with much earnestness insists that we were in error in holding that the evidence conclusively showed that W. G. Eustis had a partnership interest with J. G. Eustis in the 160 acres in controversy at the time he executed the deed to J. S. Martin on the 4th day of June, 1881, and as between him and J. G. Eustis he had authority as such partner to convey to J. S. Martin equitable title to the property described in that deed without any written power of authority authorizing the same. The decision principally relied upon to support that attack is the case of Buzard v. First National Bank of Greenville, 67 Tex. 83,2 S.W. 54, 60 Am.Rep. 7.
In that case it was held that the fact that Pennington was to receive one-half of the profits of the business for his services in the cattle business, for which Buzard furnished the capital, did not make him a partner, since the evidence showed that what Pennington was to receive was by way of a salary for services and not as a principal in the joint undertaking. The case was distinguished from opinions of the same court in Goode v. McCartney, 10 Tex. 193, and Cothran v. Marmaduke  Brown,60 Tex. 370, by reason of that difference in the contract between the parties. And to show that difference, excerpts from the opinion in the Cothran Case were quoted in part as follows: "The true distinction is this: Where a clerk or agent by agreement is to receive a fixed portion of the profits as compensation for his time or labor, that he does this as clerk or agent and not as principal; for the partnership fund or effects may be legally used in paying such clerk or agent for his time and services."
In the case of Tinsley v. Dowell, 87 Tex. 23, 26 S.W. 946, cited in support of the motion, it was held that Dowell, a real estate broker with whom real estate had been listed for sale and who was to receive 2 1/2 per cent. commission on the amount realized by the sale for a price fixed by the owner, and for all over and above the price so fixed which might be realized from the sale, could not recover from Tinsley who had failed to carry out his contract of purchase for what the broker would have realized had the sale been consummated; the conclusion reached by the court being as follows: "Dowell having shown only an interest in the proceeds of the sale not made, did not show an interest in the property, and could not recover against Tinsley."
Judge Brown, who wrote the opinion in that case, also wrote the opinion in Kelley Island Lime  Transport Co. v. Masterson, 100 Tex. 38,93 S.W. 427, 430. In that case it appeared that Masterson furnished the capital to enable Downey and Kelley to carry out their contract with the city of Beaumont for certain public improvements. We quote from that opinion as follows:
"Downey and Kelley agreed to give their time and skill to the prosecution of the work, and, when all debts were settled and 8 per cent. interest paid to Masterson for the money furnished by him, the net profits, if any, were to be divided by first giving to Masterson $12,500, then to Downey and Kelley $25,000 if there should be so much profit on the contract. If the profits exceeded $37,500, then Downey and Kelley were to receive two-thirds of the excess. To state the facts leads to the conclusion that Masterson was a partner in that enterprise. Each of them participated in the net profits of the business, and neither of them received it for services rendered as the agent of the other.
"This case is distinguishable from Buzard v. Bank, 67 Tex. 83,2 S.W. 54, 60 Am.Rep. 7, in these respects: Buzard employed Pennington and furnished him with money to buy cattle, and, for his services, Pennington was to receive a part of the profits of the business. Pennington was distinctly an agent of Buzard. Masterson put his credit and money into the Beaumont contracts against the skill and services of Downey and Kelley, who proceeded as contractors with Beaumont to construct the work. Downey and Kelley were under no obligation to repay to Masterson the money advanced by him. Masterson took the chances on success for the return of his money and interest thereon. Downey and Kelley were to receive each $100 per month as advances, to be deducted from their share of the profits. Masterson was not to receive his share of the *Page 271 
profits as compensation for the use of his money, nor were Downey and Kelley to receive their share as payment for services; but each received the profits as fruits of the joint enterprise — that is, as profits — which made them partners."
Quoting further from the first portion of the opinion in that case: "`If one person advances funds, and another furnishes his personal services and skill in carrying on the business and is to share in the profits, it amounts to a partnership. It would be a valid partnership, notwithstanding the whole capital was in the first instance advanced by one partner, if the other contributed his time and skill to the business, and although his proportion of gain and loss was to be very unequal. It is sufficient that his interest in the profits be not intended as a mere substitute for a commission, or in lieu of brokerage, and that he be received into the association as a merchant and not an agent.' Goode v. McCartney, 10 Tex. 193; Ball v. Britton, 58 Tex. 57."
The case of Frank v. Gaffney (Tex.Civ.App.) 2 S.W.2d 885, 887, is also cited in support of the motion. In that case it appeared that Frank and the defendant Gaffney entered into a contract for the purpose of buying and selling certain real estate in the city of Houston. Gaffney was to furnish the money necessary to make the purchase, the title to be taken in his name. It was agreed that one-half of the property was to be held by Gaffney in trust for the plaintiff Frank. It was further alleged that after the property was purchased it was subdivided into lots and through the efforts of Frank certain portions were sold and the proceeds of such sale were turned over to the defendant. The case was brought upon the theory that the property so acquired in the name of Gaffney and the proceeds arising there-from were impressed with a trust in plaintiff's favor. Upon that theory the decision was in Frank's favor for one-half the net proceeds realized from the sales so made. In the opinion the following was said: "While it is true, as contended by appellee, that, where one buys land, and agrees that another shall sell it, the compensation of the latter to be derived from a share of the profits, such agreement does not constitute a partnership, yet it is equally true that, when there has been a partial or full performance of the agreement by one party in such case, and as in the present case, such performance operates as a sufficient consideration, and renders the contract binding upon the other party."
However, the statement so made in the opinion, to the effect that the agreement in that case did not constitute a partnership, was foreign to the theory upon which the suit was instituted. It was a mere passing reference and without citation of any authority to support it, and for that reason the case is distinguishable from the present suit.
The undisputed testimony of W. G. Eustis showed a joint undertaking on the part of himself and his brother J. G. Eustis to buy and sell land in Texas, and that W. G. Eustis was to share in the profits from those transactions, not as a salary for his services, but as one of the principals in the joint enterprise, and therefore we adhere to the conclusion expressed in our opinion upon that issue. In further support of this conclusion, we quote the following from 20 R.C.L. § 66, p. 859: "Where real estate is acquired in partnership business, and for its purposes, it is partnership assets, though the legal title be taken in the name of one of the partners." See, also, same volume, §§ 38, 39, p. 834; § 62, p. 855; §§ 71, 72, p. 862.
We quote the following from 20 Tex.Jur., § 85, p. 293: "The statute of frauds does not affect an agreement to share profits arising from the purchase and sale of real estate. Nor does it apply to a contract for the acquisition of property by the parties jointly or an agreement to pay a proportional part of the moneys expended in the purchase of real estate."
The conclusion we reached that the evidence showed a partnership between W. G. and J. G. Eustis was for the purpose of showing authority in W. G. Eustis to bind J. G. Eustis by the deed executed to Martin. But even though it could be said that such a partnership was not effected by the agreement, still the evidence shows conclusively oral authority from J. G. Eustis to W. G. Eustis to buy and sell the land in controversy, by virtue of which an equitable title was in fact conveyed to Martin by the deed in his favor, referred to above. 20 R.C.L. § 118, p. 906; Frost v. Wolf, 77 Tex. 455, 14 S.W. 440, 19 Am. St. Rep. 761.
And since the evidence upon the issue of agency was undisputed, the force to be given to it was a question of law, *Page 272 
available to appellants in the absence of any specific finding by the trial court on that issue or any request for such a finding. Electric Express  Baggage Co. v. Ablon, 110 Tex. 235, 218 S.W. 1030.
If under article 5521, Rev.Civ. Statutes, it must be conclusively presumed that Martin later paid any consideration he might have owed for the land deeded to him, then any testimony to a contrary effect would be incompetent. And therefore the authorities cited in support of the contention that a specific performance of the contract evidenced by the deed to Martin could not be decreed in the absence of proof of payment of the full consideration are not in point.
Without reviewing the evidence at length, we adhere to the conclusion reached that the evidence was insufficient to show that either Schnackenberg or any person through whom he claimed title held adverse possession of the interests of plaintiff in the land in controversy for a sufficient length of time to sustain the defense of the five years' statute of limitation. And we will add that we do not believe that the petition in trespass to try title in a former suit, later dismissed, noted in the trial court's findings, was admissible in evidence as an admission against interest to support that defense. That petition was in the form prescribed by the statutes for recovery of title to real estate or to remove a cloud on the title of plaintiff even if he is already in possession.
For the reasons stated, the motion for rehearing is overruled.
MARTIN, J., not sitting.