Please ensure Javascript is enabled for purposes of website accessibility
Home / Opinion Digests / Partnerships / Partnerships – Contract – Real Property – Division of Profits

Partnerships – Contract – Real Property – Division of Profits

Even though the parties have not strictly adhered to the terms of their written 1979 partnership agreement, this does not support the master-in-equity’s finding that no partnership existed.

We affirm the master’s holding that plaintiff and defendant Fanning (defendant) each own an undivided one-half interest in the parcel in question, but we reverse the finding that a partnership never existed. We remand for dissolution of the partnership, the partition of the parcel post-dissolution, and an accounting of common expenses, rents and profits.

It is undisputed that the parties intended to enter into, created, signed, and adhered to (albeit inconsistently), a written contract that outlined their rights and restrictions associated with their mutual control and use of the real property parcel in question. The agreement specifically stated that the parties “desire to continue their partnership regarding the real estate and trailer park located [on the parcel] and desire to reduce their agreement to writing.”

Among other conditions, the agreement restricted the conveyance of the real estate without the other’s consent, restricted any changes to the property without consent, and purported to equally divide all rents, profits, liabilities, maintenance, taxes, and insurance regarding the property. Both parties complied with certain aspects of the agreement by sharing the costs of taxes and insurance on the property and payments for common spaces.

Furthermore, both parties repeatedly relied on the agreement’s terms to support their arguments against and for partition, entitlement to rents and profits received, and restriction of the sale of the property without the other’s consent. Additionally, in his proposed contract to rent the shop on the parcel and to sell his one-half interest in the parcel, defendant specifically noted that the sale of his interest in the property was subject to the terms of the agreement. These actions reinforce the agreement’s validity and the existence of a partnership.

While S.C. Code Ann. § 33-41-210 requires that co-owners carry on business for profit, it does not necessarily require that partnerships must equally share profits. Although the sharing of profits and losses is traditionally used as prima facie evidence of the existence of a partnership, it is not a dispositive requirement when the intent of the parties to create a partnership by an express agreement can be ascertained through the plain language and substance of the agreement.

Affirmed in part, reversed in part, and remanded.

Massey v. Fanning (Lawyers Weekly No. 012-008-23, 6 pp.) (Per curiam) Appealed from York County (Teasa Kay Weaver, Master-in-Equity) James Boyd for appellant; John Martin Foster for respondent. S.C. App. Unpub.

Leave a Reply

Your email address will not be published. Required fields are marked *