Court Opinion

ID: 9448026
Source: CourtListenerOpinion
Date Created: 2023-08-03 23:20:24.71564+00
Date Added: 2024-06-11T17:31:15.533570
License: Public Domain

JOSEPH C. HUTCHESON, Circuit Judge
(dissenting).
As I read the opinion of the majority, I have no quarrel with its statement of the facts of this case. I think, though, its conclusion that there was a partnership between United States Cold Storage Corporation and United Foods, Inc. and that the district judge, in holding and adjudging the contrary, was wrong, is a complete non sequitur. It seems indisputable to me under the facts as found by the district judge, indeed under the undisputed facts, that there is no basis for finding a partnership, and, therefore, for setting aside and reversing the judgment of the district court.
Read the facts as set out in the district court’s findings and in the majority opinion as one will, there is, in my opinion, no basis for any other finding and judgment than that the district judge gave. In short, this is just another “partnership” label case in which the question of partnership vel non is debated in artificial terms, with the result that the debater, here the majority, is led by a technical definition to apply a certain name and then to deduce consequences which have no relation to the grounds on which the name or label “partnership” could properly be applied. Batman v. Commissioner, 5 Cir., 189 F.2d 107. Cf. Guy v. Donald, 203 U.S. 399, 27 S.Ct. 63, 51 L.Ed. 245.
In support of this view, I put forward three positive reasons, not only sustained but required, by the record and the law of partnership.
The first is that the question of whether or not a partnership is created depends entirely upon the intent, of the parties to the agreement, to create a partnership, 32 Tex.Jur., “Partnership”, Sec. 13, 233; Luling Oil & Gas v. Humble Oil & Refining Co., 144 Tex. 475, 191 S.W.2d 716. Cf. U. S. Truck Lines v. Texaco, Inc., Tex.Civ.App., 337 S.W.2d 497; not, however, their secret subjective intent but the intent manifested in what they agreed to, and did, do. Here there was no such indication whatever of such an intent on the part of either United States Cold Storage or United Foods, Inc.
Second, in Texas it is settled law that “In order for there to be a partnership, the parties must not only participate in the profits but they must have an interest in the profits, as profits, and share *585them as joint otoners or principals of the business or venture, as distinguished from having an interest therein as compensation under a profit sharing agreement.” (emphasis added). LeBus v. LeBus, Tex.Civ.App., 269 S.W.2d 506, 511. Here there was no agreement between United States Cold Storage and United Foods, Inc., that they should go into any kind of business together to share the profit thereof. The agreement was specifically that the United States Cold Storage, in connection with its warehousing business would lend money to United Foods and the money loaned would be paid back to United States Cold Storage at all events, primarily out of the special account provided for in the agreement, if there was accumulated enough in it to pay it, with the further understanding, however, that there was a chance that after the loan, with interest, was paid back by United Foods, there would be additional compensation to United States Cold Storage out of one-half of the special account, if there was a balance left in it after paying the proper expenses chargeable against it.
Third, a separate and insuperable ground against finding a partnership in this case is that, in Texas, corporations may not enter into partnerships, 32 Tex. Jur., “Partnership”, Sec. 25, and, while there have been eases where a corporation has been held estopped to plead ultra vires, under the general principle disqualifying corporations from being partners, the finding and conclusion, that they intended to be, and took some action which made them, partners, would be legally inconceivable since it would find an intent to do something forbidden by, and contrary to law, and there are no facts whatever to support such a finding.
But over and above these three insurmountable obstacles, there is the added one that, except in a case of estoppel or a holding out, a court should not strain, through a finding of partnership, to hold a person, who did not contract a debt, liable for it.
In my opinion the findings and conclusions of the district judge, a long time Texas lawyer of wide business and legal experience, correctly set out the facts and the legal principles governing here, and I concur fully in his findings and conclusions. I, therefore, dissent from the contrary conclusions of the majority opinion, that there was a partnership.
I respectfully dissent.