Peed v. Peed - 72 N.C. App. 549, 325 S.E.2d 275 (1985)

Rule:

The determination of whether a partnership exists, and whether the parties are co-owners, involves examining all the circumstances. Not only may a partnership be formed orally, but it may be created by the agreement or conduct of the parties, either express or implied. A voluntary association of partners may be shown without proving an express agreement to form a partnership; and a finding of its existence may be based upon a rational consideration of the acts and declarations of the parties, warranting the inference that the parties understood that they were partners and acted as such.

Facts:

Plaintiff, Darlene Peed, married defendant W.L. Peed in 1995. Prior to their marriage defendant had been engaged in a farming and dairy operation. Defendant continued the operation after their marriage. At the time of the marriage, plaintiff contributed $ 3,000 in savings to the operation, and after marriage contributed part of her earnings from work at the Liggett and Myers Tobacco Company to the expenses of the dairy. In 1957 or 1958, the defendant, at his wife's insistence, jointly listed both their names on the registration certificates of certain cows in the dairy herd. The parties separated in 1977 and later divorced. In 1978, during the period of their separation, defendant sold the dairy cows, and the increase therefrom, for $ 38,000. He did not pay any of this to plaintiff, although she claimed one-half of it. After the parties’ divorce was granted in 1979, the plaintiff instituted the present suit, claiming one-half interest in the sale proceeds of the dairy herd, and in other property connected with the farming and dairy operation. A directed verdict was rendered against the plaintiff. Plaintiff appealed, arguing that the trial court erred by granting the defendant's motion for a directed verdict on the issue of whether or not the plaintiff and defendant were partners.

Issue:

Did the trial court err by granting the defendant's motion for a directed verdict on the issue of whether or not the plaintiff and defendant were partners? 

Answer:

Yes.

Conclusion:

The court ordered a new trial, holding that the wife presented evidence sufficient to carry the matter of partnership to the jury. Under the North Carolina Uniform Partnership Act, a "partnership" was defined as an association of two or more persons to carry on as co-owners a business for profit. N.C. Gen. Stat. § 59-36(a). The court held that the determination of whether a partnership existed, and whether the parties were co-owners, involved examining all the circumstances. Not only could a partnership be formed orally, but it could be created by the agreement or conduct of the parties, either express or implied.