Kelly v. Gaines

24 Mo. App. 506 | Mo. Ct. App. | 1887

Hall, J.

It is established and settled law in this state that, “ a mere participation in the profits and loss-does not necessarily constitute a partnership ” between the parties so participating. Donnell v. Harshe, 67 Mo. 173; Philips v. Samuel, 76 Mo. 658; Musser v. Brink, 68 Mo. 242; McDonald v. Matney, 82 Mo. 365. In the-latter case it is said that, as between the parties themselves, “ it is a question of intention on the part of the-alleged partners, and is one which the triers of the fact will have to determine upon all the circumstances-proved. It would be difficult to state any one fact or stipulation which would be decisive of the question, except a stipulation expressed that they were partners-inter sese, and even this might be controlled by other stipulations, and the conduct of the parties in the relation to the business. Each case must be determined upon its own peculiar facts.” This statement has since been re-affirmed by the [Supreme Court of this state in Kellogg Newspaper Company v. Farrell et al. (88 Mo. 50), and in Clifton v. Howard (— Mo. -).

Parties, as between themselves, may not be partners, but as to third parties may be liable as partners. If Max Minter conducted and held himself out as a partner of Gaines, then he was Gaines’ partner as to the plaintiffs, if they sold the barrels under the belief that he was Gaines’ partner. Gates et al. v. Watson et al., 54 Mo. 591.

The question is, did the facts hypothetically stated' in the second instruction given for the plaintiffs, viz.: “ That Gaines was to furnish the mill, and Minter the corn, and that Minter was to have a certain amount on each car load of meal so furnished and ground, as his-share of the profits of such business, over and above the-cost or price of the corn so by him furnished,” alone, without more, constitute Minter, as to the plaintiffs, Gaines’ partner in the business, and render him liable-as such \

The question thus presented, as to what participation in the profits in a concern will render the one so-participating a partner in the concern, as to third parties dealing with the concern, is a vexed question, and it: would be impossible to reconcile the various authorities: upon the question. But there is, upon the question, a well settled rule in this state, established by the Supreme Court, and that rule we must follow.

The following statement by Mr. Story : “In short, the true rule, ex aequo et bono, would seem to be, that the agreement, or the intention of the parties themselves, should govern all cases. If they intend a partnership in the capital stock, or in the profits, or in both, then that the same rule should apply in favor of third persons, even if the agreement were unknown to them. And, on the other hand, if no such partnership were intended between the parties, then that there should be none as to third persons, unless where the parties had held themselves out as partners to the public, or their conduct operated as a fraud or deceit upon third persons” (Story on Part., sect. 49), has been approved as a correct statement of the rule on this question. Campbell et al. v. Dent, 54 Mo. 332. And in connection with the statement of the rule by Mr. Story the court said: “In order to constitute a communion of profits between the parties, which shall make them partners, the interests in the profits must be mutual; each person must have an interest in the profits as a principal trader. It is not enough that one shall receive a portion of the profits as a compensation for services, but he must have some in-Merest in the business, or property of the business, or trade, so as to give him a lien' on the property for the protection of his interests or profits, and a control over the same. The single circumstance, that he is to have a 'share of the profits, does not necessarily make one a partner so as to bind him by the acts or admissions of one who carries on the business.” In Kellogg Newspaper Company v. Farrell et al. (supra), it was sought to hold Farrell liable as his co-defendant’s partner, as to a third party, who had sold his co-defendant, Lindenberger, certain materials to be used in conducting a certain newspaper. Under an agreement between Farrell and Lindenberger the former had turned over to the latter a certain newspaper to be conducted by the latter as if he were the owner thereof. Lindenberger agreed to conduct the business in his own name, to pay all expenses attending the running thereof, and to pay one-half of the net proceeds of the concern to Farrell quarterly. Farrell reserved the right “to indicate the general and political policy of the paper, and, also, at any time to dispose of a one-half interest in the same.” It was held that, as between themselves, the parties to the agreement were not partners ; and it was also held that, even as to the party who had furnished the materials to be used in conducting the newspaper, the parties were not partners. The court, by Norton, J., said: “In the light of these expressions” (expressions of the agreement mentioned by us) “and construing the contract as an entirety, we regard the agreement to pay Farrell one-half of the net proceeds as simply measuring the compensation he was to receive for the use of the property turned over to Lindenberger; and not as giving a right to participate in the profits, as profits of the business.”

The expression “profits, as such,” used in.the case last cited and referred to, means profits before they are ascertained and divided, and not profits which, after they have been ascertained, make the fund for, and form the measure of, the payment to_ the alleged partner on account of Ms interest. Pars, on Part. (2 Ed.) chap. 6, sect. 2, p. 73.

Under the facts hypothetically stated in the instruction given for the plaintiffs, as constituting Minter a partner, he had no interest in the profits while accruing ; his interest began only when the profits had been ascertained; until then he had no interest in or control •over them. He had no interest in the profits as such ; he simply had an interest in the profits as constituting the fund out of which he was to receive the compensation of ten dollars on each car load of meal, guaranteed by Gaines. Such profits thus paid to him were paid to him as a compensation for furnishing the corn to Gaines, and were not paid to him as Gaines’ partner. There was no communion of profits between Minter and Gaines ; the interest in vthe profits was not mutual; Minter had no interest in the profits as a principal trader. Hence, under the rule laid down in Campbell v. Dent (supra), and approved in the very recent case of the Kellogg Newspaper Company v. Farrell et al. (supra), we hold that the facts stated in the instruction did not, without more, constitute Minter and Gaines partners.

The twelfth instruction asked by Minter and refused by the court, abstractly declared the law correctly. As applied to the facts of this case, it was objectionable, because there does not seem to have been any evidence tending to show that the parties were to share the profits equally, and because it ignored the evidence tending to show that Minter conducted and held himself ■out as a partner in the business. Modified in the two respects indicated, the instruction should have been given.

Plaintiff, J. K,. Kelly, was permitted to testify that Gaines told him that Minter was with Gaines in the business. Objection was then made, and is here renewed, to such testimony. Kelly, however, also testified that he called on Minter, before furnishing the barrels, to see about the matter; that he told Minter what Gaines said ; that Minter said, “that is all right, I will see that the barrels are- paid for.” The statement made by Gaines, in connection with other testimony, was competent.

Judgment reversed and cause remanded.

All concur.