Kaufman-Brown Potato Co. v. Long
United States Court of Appeals for the Ninth Circuit
182 F.2d 594 (1950)
- Written by Heather Whittemore, JD
Facts
Gerry Horton and J. D. Althouse (defendants) were partners in the business of growing potatoes. Charles H. Kaufman and Albert H. Brown, as the Kaufman-Brown Potato Company (Kaufman-Brown) (plaintiff), distributed potatoes. In 1944 Kaufman-Brown formed an agreement with Horton and Althouse. Horton and Althouse agreed to plant and grow potatoes for Kaufman-Brown to purchase and distribute. Kaufman-Brown would supply capital for upfront costs, and Horton and Althouse would supply their labor. Once Kaufman-Brown were repaid for their initial investment, profits and losses related to the endeavor would be shared between the parties. During the year, Horton and Althouse focused all their potato production on the agreement made with Kaufman-Brown. Kaufman-Brown lent Horton and Althouse $43,000 for production costs. Horton and Althouse went bankrupt and were unable to repay Kaufman-Brown. Kaufman-Brown filed a claim for the debt in the bankruptcy proceeding, arguing that it was a creditor of Horton and Althouse. The district court held that Kaufman-Brown was a partner of Horton and Althouse rather than a creditor and disallowed Kaufman-Brown’s claims in the bankruptcy proceeding. Kaufman-Brown appealed.
Rule of Law
Issue
Holding and Reasoning (Stephens, J.)
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