Norman v. Montgomery Wholesale Lumber

678 So. 2d 1110, 1996 Ala. Civ. App. LEXIS 3, 1996 WL 13967
CourtCourt of Civil Appeals of Alabama
DecidedJanuary 12, 1996
Docket2940743, 2941218
StatusPublished

This text of 678 So. 2d 1110 (Norman v. Montgomery Wholesale Lumber) is published on Counsel Stack Legal Research, covering Court of Civil Appeals of Alabama primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Norman v. Montgomery Wholesale Lumber, 678 So. 2d 1110, 1996 Ala. Civ. App. LEXIS 3, 1996 WL 13967 (Ala. Ct. App. 1996).

Opinion

MONROE, Judge.

Montgomery Wholesale Lumber sued Michael Norman for failure to pay for lumber he had purchased. In November 1993, five months after the complaint was filed, Michael Norman filed a notice of bankruptcy. Montgomery Wholesale Lumber then amended its complaint to add Max Norman, Michael’s father, and Barbara Norman, Michael’s wife, as defendants, alleging that they were part of the partnership, joint venture, or common business known as Norman Builders. Michael contended that he was the sole proprietor of Norman Builders. After a trial, the trial court, as the finder of fact, found that Norman Builders was a partnership consisting of Michael, Max, and Barbara, and entered a judgment against Max and Barbara for $40,051.65.

After the trial court entered the judgment, Montgomery Wholesale Lumber filed a motion for an amended judgment, seeking an attorney fee and costs of collection. The motion was denied by operation of law under Rule 59.1, Ala.R.Civ.P. Max appeals from the judgment against him. Montgomery Wholesale Lumber cross appeals from the denial of an attorney fee and costs.

Max Norman contends that the trial court erred in finding that Norman Builders was a partnership consisting of Michael, Max, and Barbara Norman. In support of his argument, Max points out that each of the Normans testified (1) that there was no partnership; (2) that there was no partnership agreement; and (3) that neither Barbara nor Max shared in the profits, losses, or management of Norman Builders. Checks paid to Max on the Norman Builders account, Max argues, were for debts Michael owed to Max, who helped out when Michael was having financial difficulties.

The trial court heard ore tenus testimony in this case.

“The standard of review applicable to judgments based on ore tenus evidence is well established. Where a trial court has heard ore tenus testimony, as in this case, its judgment based on that evidence is presumed correct and will be reversed only if, after consideration of the evidence and all reasonable inferences to be drawn therefrom, the judgment is found to be plainly and palpably wrong.’ Mclnnis v. Lay, 533 So.2d 581, 582 (Ala.1988) ... Furthermore, ‘[t]his Court ... will affirm the trial judge’s decision if, under any reasonable aspect, it is supported by any credible evidence.’ Chism v. Hicks, 423 So.2d 143, 144 (Ala.1982) ... (emphasis added). Finally, ‘this court cannot overturn [the] finding[s] of fact by the lower court unless the decision is unsupported by the evidence ... and is plainly and palpably erroneous.’ ”

Humphries v. Whiteley, 565 So.2d 96, 101-02, (Ala.1990); Meadows v. First National Bank of Ashford, 568 So.2d 303, 304 (Ala.1990).

Section 10-8-20, Ala.Code 1975, sets out the rules for determining whether a partnership exists. It reads:

“In determining whether a partnership exists, these rules shall apply:
“(1) Except as provided by Section 10-8-55, persons who are not partners as to each other are not partners as to third persons.
“(2) Joint tenancy, tenancy in common, tenancy by the entireties, joint property, common property or part ownership does not of itself establish a partnership, whether such co-owners do or do not share any profits made by the use of the property.
“(3) The sharing of gross returns does not of itself establish a partnership, whether or not the persons sharing them have a joint or common right or interest in any property from which the returns are derived.
[1113]*1113“(4) The receipt by a person of a share of the profits of a business is prima facie evidence that he is a partner in the business, but no such inference shall be drawn if such profits were received in payment:
“a. As a debt by installments or otherwise;
“b. As wages of án employee or rent to a landlord;
“c. As an annuity to a widow or representative of a deceased partner;
“d. As interest or other payment on a loan, though the amount of payment varies with the profits of the business; or
“e. As the consideration for the sale of the goodwill of a business or other property by installments or otherwise.
“(5) An express agreement among the partners, or between business associates, that a person, who would otherwise be deemed a partner under this chapter, will not personally be hable for partnership obligations is not, in itself, evidence that such person is not a partner; provided, that such agreement shall not be effective as against third parties unless such person is a limited partner under the laws of Alabama governing limited partnerships.”

In addition, the Supreme Court has held that there is no settled test for determining the existence of a partnership. “That determination is made by reviewing all the attendant circumstances, including the right to manage and control the business.” Vance v. Huff, 568 So.2d 745, 748 (Ala.1990) (citing § 10-8-20, Ala.Code 1975, and McCrary v. Butler, 540 So.2d 736 (Ala.1989)).

The record shows that while some evidence presented to the trial court supports Max’s contention that Norman Builders was not a partnership, other evidence is to the contrary. For example, Preston and Mary Watts, whose home was built by Norman Builders, testified that Max was present during negotiations for the building of their house, that Max was the person responsible at the building site when Michael was not there, and that Max negotiated with subcontractors and materialmen. John James, whose home also was built by Norman Builders, testified that Max supervised at the building site; that after James had trouble with Michael’s not paying the bills, Max took on the role of negotiator for future work and took control of the money; that when Michael had surgery, Max had the sole responsibility as contractor; and that Max and Barbara both conducted business and signed contracts as Norman Builders. Other testimony showed that Max often paid the debts of Norman Builders and paid for equipment used by the business.

There is also some evidence that Max and Barbara, neither of whom was an employee of Norman Builders, shared in the profits of the business. For example, Barbara said that Norman Builders regularly put money in amounts up to $2,000, into her savings account. Norman Builders provided Barbara and Max with cellular telephones. Norman Builders also paid the down payment and closing costs for a home that was purchased in the name of Max and Barbara Norman, as husband and wife. Michael testified that Norman Builders bought the home for the benefit of Max and Barbara.

Credible evidence shows that Max Norman participated in the control of Norman Builders, and from that evidence one could reasonably infer that he shared both debts and profits from the business. Under the ore tenus rule, we cannot say that the trial court erred in finding that Max Norman was a partner in Norman Builders and holding that Max was liable for the debt of the partnership.

Max also contends that the trial court erred in awarding Montgomery Wholesale Lumber a judgment of $40,051.65. Paul Windham, owner of Montgomery Wholesale Lumber, testified that that was the total amount Norman Builders owed for the purchase of lumber.

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Related

Meadows v. FIRST NAT. BANK OF ASHFORD
568 So. 2d 303 (Supreme Court of Alabama, 1990)
Vance v. Huff
568 So. 2d 745 (Supreme Court of Alabama, 1990)
Chism v. Hicks
423 So. 2d 143 (Supreme Court of Alabama, 1982)
McInnis v. Lay
533 So. 2d 581 (Supreme Court of Alabama, 1988)
Anderson v. Lee
621 So. 2d 1305 (Supreme Court of Alabama, 1993)
McCrary v. Butler
540 So. 2d 736 (Supreme Court of Alabama, 1989)
Boles v. Steel
264 So. 2d 191 (Court of Civil Appeals of Alabama, 1972)
Pitman v. FLANAGAN LUMBER CO., INC.
567 So. 2d 1335 (Supreme Court of Alabama, 1990)
Humphries v. Whiteley
565 So. 2d 96 (Supreme Court of Alabama, 1990)
Lanier v. Moore-Handley, Inc.
575 So. 2d 83 (Supreme Court of Alabama, 1991)
Boles v. Steel
264 So. 2d 194 (Supreme Court of Alabama, 1972)
Mapes v. Prickett
644 So. 2d 478 (Court of Civil Appeals of Alabama, 1994)

Cite This Page — Counsel Stack

Bluebook (online)
678 So. 2d 1110, 1996 Ala. Civ. App. LEXIS 3, 1996 WL 13967, Counsel Stack Legal Research, https://law.counselstack.com/opinion/norman-v-montgomery-wholesale-lumber-alacivapp-1996.