Law School Case Brief
Minute Maid Corp. v. United Foods, Inc. - 291 F.2d 577 (5th Cir. 1961)
If the parties enter into a contract from which it is clear that the parties contemplate joining in a common business for their common benefit to be operated for their joint account and in which they as owners each of an interest are entitled to share as principals in the profits as such, they are partners.
Appellant Minute Maid Corporation filed an action against appellees, United Foods, Inc. and United States Cold Storage Corporation, seeking to jointly recover from appellees for the purchase price of commodities sold by Minute Maid to United Foods. The district court entered judgment in favor of Cold Storage after a non-jury trial, and Minute Maid sought review.
Is there a legal partnership between United Foods and Cold Storage, thus, they could be held equally liable for the debts of their joint enterprise?
The United States Court of Appeals reversed and remanded the decision of the district court. The Court held that a legal partnership or joint enterprise existed between appellees United Foods and Cold Storage because they had entered into a written contract providing that that would join in a common business for their common benefit, and because each possessed joint control over the enterprise. The Court held that appellees, as partners, could be held equally liable for the debts of their joint enterprise and, therefore, the district court erred when it concluded that appellant Minute Maid was not entitled to recover against Cold Storage. Further, the Court rejected appellees' claims that a partnership could not exist where there was no agreement to share losses, holding that even an express stipulation between appellees that one should not be jointly liable was ineffectual as against third parties.
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