Coward v. Clanton

California Supreme Court Nov 26, 1898 No. Sac. No. 399Published

Before: Temple

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Holding. The court held that the mischaracterization of a contract as a partnership does not preclude recovery if the facts stated in the complaint entitle the plaintiff to relief, and that the evidence supported the finding that the plaintiff had performed his contractual obligations.

Issues

Whether the mischaracterization of a contract as a partnership in the pleadings defeats a plaintiff's right to relief.
Whether the court has jurisdiction to compel an accounting in the absence of a formal partnership.
Whether the evidence supports the finding that the plaintiff performed his contractual obligations to sell the land.

Disposition. affirmed

Quotations verified verbatim against the opinion

“The fact that the relation is wrongly averred to be -that of partners is not material. If a case is stated which entitles the plaintiff to relief, it matters not that the contract- which is correctly set out is wrongly called a contract of partnership.”

“I do not understand the suggestion that the court has no jurisdiction to compel an accounting unless a partnership was created.”

“The order and judgment are affirmed.”

Synopsis

Partnership—Agency for Sale of Land—Payment from Conventional Profits.—A contract between the owner of a tract of land, who had subdivided it fdr sale, and a real estate broker, that the latter should sell the subdivided tracts, at prices to be fixed by the owner, and when all the land was sold, there should be paid out of the proceeds of the sales the cost of the land, with interest, and the expense of selling, and that the residue, if any, should be divided equally, does not constitute a partnership, but is an agreement to share conventional profits with the broker, as a mode of compensation for his services as an agent in selling land in which he owned no interest.

Id.—Profit-sharing not a Test of Partnership.—Profit-sharing is not made a test of partnership by the code, which requires “the association of two or more persons for the purpose of carrying on business together,” as a distinguishing feature of a partnership.

Id.—Agent’s Eight to an Accounting—Misnomer of Relation Immaterial.—The real estate agent, having an interest in the conventional profits realized from the sales of the land, is entitled to an accounting thereof, irrespective of any partnership relation between the parties; and the fact that the relation is wrongly averred to be that of partners is not material.

Id.—Jurisdiction of Accounting—Equity.—If a plaintiff has a cause of action of which the superior court has jurisdiction, and it is necessary to have an accounting to determine his rights, such accounting may be had in that court, regardless of whether the facts would have given jurisdiction to a court of equity. The superior courts afford the remedies to which the facts may show the parties entitled, whether legal or equitable.

Id.—Performance of Contract by Agent—Accepted Purchasers—Risk of Loss.—Evidence tending to show that purchasers for the entire tract, who were acceptable to and accepted by defendant, and with whom satisfactory contracts were made, were found by the plaintiff as his agent, notwithstanding conflicting evidence to the contrary, is sufficient to sustain a decision that plaintiff had performed the contract on his part; and plaintiff is not required under the contract to share in the risk of loss from the fact that some purchaser on credit might fail to complete his purchase.

TEMPLE, J. This is an action for an accounting. It is averred in the complaint that plaintiff and defendant, in 1882, formed a partnership for the purchase and sale of real es<tate. Clanton was to furnish all the funds and moneys for investment and to purchase real estate for plaintiff to sell. Plaintiff was to furnish the skill and perform the labor of selling all or as much of said real estate as could be sold. From the proceeds, if any, there should be paid: 1. The cost of the land, with interest; 2. The expense of selling; and 3. The residue, if any, was to be divided equally. The plaintiff was to furnish office and the necessary clerks.

It is averred that in December, 1882, defendant purchased with his own funds a tract of land called the Harlan tract, containing one hundred and sixty acres, which the parties subsequently caused to be divided into five acre tracts, and all of which plaintiff has negotiated and sold at a profit of $4,156.50. It is charged that defendant has received to his own use all the proceeds of the sale, including the purchase price and interest stipulated, the costs and expense of sale, and retains $2,-312.51 profits in excess of his share, and that plaintiff has paid certain sums as expenses, and the exact amount due plaintiff cannot be ascertained without an accounting.

The defendant denies all the allegations of the complaint, hut admits and avers that he employed plaintiff as a real es[453]tate broker to sell the Harlan, tract, and agreed that when all the land was sold at prices to be fixed and agreed to by the defendant, and the cost of the land with eight per cent per annum interest was paid from such proceeds, and the expenses incurred in subdividing and selling were paid, plaintiff was to have one-half of the remainder, if any there was, for his services; but that plaintiff has not sold all the land, but abandoned his contract and refused to perform the same.

The findings are for the plaintiff and against the contention of the defendant, except that it is found that the sales resulted in an advance of $4,155 over the purchase price; that the current rate of interest was eight per cent; and after deducting interest and expenses there remained in the hands of Clanton $3,457.23 profits to be divided between plaintiff and defendant, one-half of which belonged to plaintiff.

Plaintiff, therefore, recovered judgment for $1,725.61, with interest and costs.

Coward v. Clanton

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