Court Opinion

ID: 9853381
Source: CourtListenerOpinion
Date Created: 2023-09-24 05:47:33.983204+00
Date Added: 2024-06-11T09:22:46.480365
License: Public Domain

JOHNSON, Judge.
Summary judgment is proper only when the pleadings, depositions, answers to interrogatories and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law. G.S. 1A-1, Rule 56(c); Singleton v. Stewart, 280 N.C. 460, 186 S.E. 2d 400 (1972); Lee v. Shor, 10 N.C. App. 231, 178 S.E. 2d 101 (1970). When a motion for summary judgment is made, the court must look at the record in the light most favorable to the party opposing the motion. Patterson v. Reid, 10 N.C. App. 22, 178 S.E. 2d 1 (1970). The question presented by this appeal is whether there is a genuine issue of material fact as to whether the parties formed a limited partnership by the execution of the Agreement and Note. By alleging that plaintiff was a limited partner, defendants have raised the issue of whether there was a limited partnership agreement between the parties. Since the only document produced by the parties which evidences an agreement between them is the Note, we assume defendants mean to offer the Note itself as a limited partnership agreement.
The requirements for forming a limited partnership are set out in G.S. 59-2(a), which states that two or more persons may form a limited partnership by executing a certificate stating the name of the partnership, the character of the business, its principal location, and the name and residence of each partner, with each partner being designated as a general or limited partner. The certificate must also state the term for which the partnership is to exist, the amount of cash or other property, and its agreed value, contributed by each limited partner, the circumstances under which additinal contributions are to be made, the time, if *676agreed upon, when the contribution of each limited partner is to be returned, the share of the profits or other compensation to which each limited partner shall be entitled, and certain other designated rights, if given. Secondly, the certificate must be filed in the office of the register of deeds in the county where the principal place of business is located. A limited partnership is formed if there has been substantial compliance in good faith with these requirements. G.S. 59-2(b).
The Note executed by the parties does not on its face appear to be a limited partnership agreement because it is not so titled and the parties are not designated as being either general or limited partners. But it does contain many of the characteristics of a limited partnership agreement and much of the information required by G.S. 59-2(a). For example, in the Note, plaintiff agreed to invest a stated amount of money in the business, which was to be established and operated by defendants, in return for a share of the profits, which is characteristic of limited partnership agreements. Further, plaintiff is not to perform any services in the business; his contribution is repeatedly limited to, and characterized as an investment. While the Note does not contain all the information required by statute, it arguably does contain sufficient information for it to be considered in substantial compliance with the statute. While it does not appear from the record that the Note was ever filed in the office of the register of deeds, this is not fatal as the failure to record a certificate does not affect the existence of a limited partnership insofar as the parties inter se are concerned. 60 Am. Jur. 2d, Partnership, § 376, p. 259 (1972).
If plaintiff was a limited partner in the business, then his right to recover his investment would be governed by G.S. 59-16(a)(l) which provides that a limited partner shall not receive any part of his contribution until all liabilities of the partnership have been paid or there remains sufficient property of the partnership to pay such liabilities. Defendants alleged that their business failed and that there were no assets left to pay off the limited partner. If defendants’ allegations are taken as true, as they must be at this point, then plaintiff is not entitled to relief.
In our opinion, when the evidence is considered in the light most favorable to the defendants, there appears to be a material *677issue of fact as to whether the parties formed a limited partnership by the execution of the Note. Therefore, summary judgment for plaintiff was improper, and the judgment of the court must be
Reversed.
Judge Eagles concurs.
Judge WHICHARD dissents.