Corporations

Brief

In Re Estate of Fenimore

Procedural History:

• The court concludes that a partnership did exist between Audrey Serge and Donald Fenimore as of November 6, 1989.

Facts:

• Donald Fenimore is insolvent and creditors are seeking to recover money owed.
• Mrs. Serge is also seeking to recover $20,000 from Fenimore contending that she is also a creditor.
• The story of Mrs. Serge
  • Donald Fenimore asked for money from her to get him out of some problems.
  • She therefore mortgaged the home she owed nothing on and lent him the money and most of her income now goes towards her mortgage.
  • She paid him mostly in cash except on one occasion wrote him a check for $10,000.
  • Mrs. Serge had Mr. Fenimore sign an agreement dated November 6, 1989 memorializing their agreement.
  • Villabona, the name given to the other creditors as a whole, argues that if the 1989 agreement is indicative of anything, it is a partnership between Mrs. Serge and Mr. Fenimore.
    • The agreement states that she advanced the money to Mr. Fenimore.
    • She is not described as lending him money, but in fact advancing it.

Issue:

• Was the relationship between Mrs. Serge and Mr. Fenimore in fact a partnership?

Holding:

• Yes.

Reasoning:

• “In determining whether a partnership exists, the following rules apply:
  • Refer to page 59.
  • In November 1989, the document clearly provides for a division of profits and a division of responsibility for debts.
  • Therefore, the language of the document compared to the statute would show that a partnership actually existed.
  • The court has taken the view that it is not essential to the existence of a partnership that all partners have the right to make decisions and a duty to share liabilities on dissolution, but at least one of the above factors must be present and there must also be an intent to share profits.
  • The existence of a partnership must be shown by a preponderance of the evidence.
  • There is a written declaration of the intent of the parties and specifically calls for the sharing of profits.
  • The money therefore referred to in the 1989 agreement amounts to an investment in the partnership.
    • Not a loan.