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months after they acquired the 40 acres, Briggs and Daniell sold
it for substantially more than they paid for it. Most of the 40
acres was sold to Towers Development, which then proceeded to
build and sell town house units.
Pursuant to the joint venture agreement as memorialized in
the April 25, 1986, written agreement, Briggs, Mr. Morris, and
Daniell controlled all decisions relating to any business
activity of the joint venture, including the Gulf Highlands
project. On the basis of all the evidence, we conclude that
Towers Development acted as the joint venture’s agent in carrying
on the joint venture’s trade or business of acquiring,
developing, and selling real estate. This conclusion is
bolstered by the fluid nature of the formal ownership
arrangements, whereby Towers Development was nominally owned by
Briggs and Mrs. Morris, the 60 acres was nominally owned by
Towers Development, and the 40 acres was nominally owned by
Briggs and Daniell, even though the joint venture agreement
clearly contemplated that Briggs, Mr. Morris, and Daniell were to
own equal profits interests in all activities relating to these
properties.
We are convinced that the joint venture intended from the
outset to develop or sell the 40 acres in the ordinary course of
its trade or business, pursuant to the terms of the joint venture
agreement as memorialized in the July 20, 1985, letter agreement
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