Hodges v. Dawes & Co.

| Ala. | Jan 15, 1844

. GOLDTHWAITE, J.

We were strongly inclined at first, to consider the witness in this cáse and the defendant, jointly liable as partners, to the plaintiffs for the price of the goods purchased by the former in the name of the latter; and that as a consequence of his liability as a partner, the witness was not competent to fix a liability on another in the same relation. [Lewis v. Post & Main, 1 Ala. Rep. N. S. 65; Ripley v. Thompson, 12 Moore, 55; Marquand v. Webb, 16 Johns. 89" court="N.Y. Sup. Ct." date_filed="1819-01-15" href="https://app.midpage.ai/document/marquand-v-webb-5474110?utm_source=webapp" opinion_id="5474110">16 John. 89.] But, subsequent reflection has satisfied us that he is not in any manner liable to the plaintiffs, at least, that he is not so from any thing disclosed on the record.

There is much difficulty in ascertaining the precise condition of the law in England, or rather, the exact state of decision upon the liability of parties to third persons, in consequence of a supposed participation or right of participation in the profits of a business. It is certain, there is much difficulty in reconciling all the decisions, even if there is not an absolute disagreement between them. The case of Gaddis v. Wallace, [2 Bligh. 270,] does not seem to differ in any material respect from the case before us.— Lord Eldon, though strongly opposed to the doctrine himself, concedes it to be settled, that if a man stipulates, that as the reward of his labor, he shall have not a specific interest in the business, but a given sum of money, even in proportion to a given quantum of the profits, that will not make him a partner; but if he agrees for a part of the profits, as such, giving him the right to an account, though having no property in the capital, he is as to third persons, a partner. [Ex parte Hamper, 17 Vesey, 404.] The American cases, though here, too, there is a contrariety ofdecision, in the main advance the same doctrine which is conceded by Lord Eldon, and in many cases present a state of facts not readily distinguishable from those which arose here. [Perrine v. Harkerson, 6 Halst. 181; Rice v. Austin, 17 Mass. 197" court="Mass." date_filed="1821-03-15" href="https://app.midpage.ai/document/rice-v-austin-6404968?utm_source=webapp" opinion_id="6404968">17 Mass. 197; Turner v. Bissell, 14 Pick. 192; Baxter v. Rodman, 3 Pick. 435; Loomis v. Marshall, 12 Conn. 69" court="Conn." date_filed="1837-06-15" href="https://app.midpage.ai/document/loomis-v-marshall-6575051?utm_source=webapp" opinion_id="6575051">12 Conn. 69; Vanderburg v. Hall, 20 Wend, 70.] Mr Chancellor Kent says, that to be a partner (as to third persons) one must have such aninterestin the profits,as will entitle him to an account, and give him a specific lien or preference in payment over other creditors. [3 Kent’s Com. 4 ed. 25, n. b.] And Mr Justice Story, after a very able examination of the whole subject, concludes, that where one party is stripped of the powers and r.ghts of a partner, and clothed only with the more limited powers and rights of an agent, it seems harsh, if not unreasonable, to crowd upon him the duties and responsibilities of a partner, which he has never assumed, and for which he had no reciprocity of reward or interest. [Story on Part. 74.]

A fair interpretation of the contract between the witness and the defendant, will not justify us in considering him in any other relation than a mere agent, and the stipulation that he should be compensated by half the profits upon the business carried on by him as agent, which he says were his commissions, invests him with no community of interest in them. lie has no right to control them in any manner, and in the event of the bankruptcy of the defendant, ho would be entitled to no preference over any other creditor. [Smith v. Watson, 2 B. & C., 401.] It is certainly true, that an agreement to share in the losses, has been considered, and probabiy is, inconsistent with the idea of the profits being allowed as a mere compensation. [Waugh v. Carver, 2 Hen. Black, 235.] But nothing more can reasonably be inferred from what was said between the parties when considered in connexion with the agency, than that the losses were fobededuct-edfrom the profits, and one half the residue paid to the witness. It was upon this basis that their settlement was made, as it seems to us, in entire accordance with the law of the case. Wo conclude then, that the witness was merely the agent of the defendant, and that on this part of the case, no objection can be sustained to his competency.

On the other points made, it may be said that no liability appears upon the record on account of the drawing of the bill, and as to his liability as a purchaser, without disclosing his agency, that is not sustained by the proof, inasmuch as it shows the par-chase was made in the name of the defendant.

Judgment affirmed.