Case Information
*1 OFFICE OF THE AlTORNEY GENERAL OF TEXAS AUSTIN
flOnOMblo c. R. xil;l@l’
QOQQlSS~OtlBP
ialan OS this D,par8- sa4wm of yrw8eat oh0 WeoQ4 p#t in the OmploJ- part uadsr the nploymmt a08 on &?P%l 1, liw?
Hon. C. R. Miller, p4g4 2
oontraot wa6 l xeoutob Dooember J,, 1937, and oontlnued in exlstonoo until April 1, 1939. 'he rtfldavlt of C. A. KoAdm that the subsequmt contract betwoeatiimand Doahsr rt~ter oontained the mm previslcna PII tho ilrst oontmct arentioned. The meatmndum of agreement merko& Exhibit IA’ ir the original ocntraot oxeoutcd by Strnnge,~ noAd4n and De&w. $fldavltr subalttrd disoloae praotloeo vhloh acre not in aword w%th the term4 of oontraot batwren pnrtlea; this being an inquiry into the rslatlenshlp betveon the parties, YO think it neoesmry to look to the aontract and to ?aatr boferr WJ.
Art&cl6 522lb,.Seotion 17 (4) reader 'Employing unit' mans a4 ladividual or typo t? organirattoa, lnaludlw any prartaor6Up, . . .
Artlolr 5221b, Seotlon 17 (g) (11 readso '(8) (1) ' mployaent ‘ subJoe to the ether OS this nubaaotion, aednt awvloo, In- prorlrIon8 asrvioe in lntsrrtats ao4meror,.p~rtorm4d 0iuahg for wag45 or under any contract of hire, urltten or oral, expriar or lapllod, provided that any awvloes psricrsed by an lnd~vldual for uagm shall doomed to be employment rubJo& to thla Abet unless and until it la shown the ratlsfaotlon or the Comaia6lon t;hrt suah individual bar bean mad till oontlnue to be free Srom oontrol or dlrsa- tloa over the parfornanae of auoh ~onloes both under him contract of rervlos and ln isat;* Artlalo 522lb;,seotlen 17 (0) rradr: "(0) 'sragor' mar& a11 reamoration payable for ~;ersonal rerviass, lnaludlug oommlrelonr and bonurrcr and the cash valoo all remuneratloa payable in any eedlum ether fhsn oash. . .I The aentrsat oubalttrtl lndloatos that there 1s an *sreploylng unit* in th%r Lnatrnos. The nfatutery d4flaItlen of vngat Is brorrd enough to laaluda the veekly vag4 *id to ‘C-
lion. C. R. Miller, page 5
Doshsr and aleo ineludrr hi4 oolnrlrrlon4. Lot ue now dotor- Alne if ths ocntreot is eno for rervloer or 14 a partnornhlp agroeasnt.
Referring to the artlol4s of agreement the oon- traot between them partlea, we notlas th4t in the flrat paragrrph P. L. 3trang4, Sr. pad Charler A. MoAdan reelts that they hro ths parties of the firmt part and that they era ovr~4rs of rsstaunnts in LboL4nxmn, War%4 And Beur Countl44. The r44taurant undor qu44tion 14 ia 84x~r county.
In paxngmph ?fe. 2 of the aontrtot the part144 of the flrrt 4gr44 to aealgn to party a? ths araond prrt on-third 4hemo in not profltr of the busln444 and to pay him a w44kly ulary of 820.00 per rook ma long a4 ha devotes hlr tire and attentlan to mid burlao44 aa aanager thsruof. In the mama paragraph it i4 proridod that Amy pmpo44d ohm@4 in polloy 4nd aenduot of thr burlnsrs mat be qpWd UpOA by ono of the partlss of the first part; ?urthrr that party of the 4secPnd part is bouod to carry out tho purpo444 AA~ de- sign4 of the part%48 of first part IA marmgsmsat of the buSlA444; that h4 (Do4hsr) hre no authority to make aBd enter into oentraetr of 4~y k,lna that will blndlng upoa pwtls8 of the flmt part without first Obta%Ahg their oon4oat IA vrltM$; whllo h4 is In o,ontrol of burl- n444, ha must prorptlp drpo4lt ill funds in the South Texas Biatlonrl Bank of %a Antonko, Porsa, to tho are&U the Chlokan Ijhak uid operate tho buslalrsr vlth f&are a~& oautlon, having duo regard for th4 vl4b44 and poliay of tho part108 sf the flrrt part, aad bolng fuilia,r wlth th4 aaMor an4 foam %A t&lab 4uah burlnsrs o aratsd h4 adhere to 8~4, ana not es4k to altar or ahsags f: n my way without the OOA- sent noaorrary as heroin utAt4d. IA paragraph No. 3 of thlc oontrrat it 14 pm%dod:
*All help must meet ulth approval of elth4r e? the prrtltr of the flrrt part,, oth4rwine the 4ald H. W. Oooh4r rlll t~edlctsly dleuhnrgo 4nld sA~loy494 and vi11 44~~18~ part188 mooting with the approvrtl of All ooncerA4d.Y Parrgraph rl of the aontraot pmvldaa pmty of eeaond pa-t vi11 use the aoaountlng 6Yet4A rpeolthsd by partlas a? the iirst pmt.
Hon. G. R. Miller, pege 4
Paragmph S prorldee tfiat It Is *underetooa end agreed that et any the perty of eecond part ehould leere employment of partlee of the first part br QIUOO of diemiee81, dleo!u%rge or death or party or eeoond then he or his heirs ehell be paid in oeeh end proper aooountlag mede thereof or hIe one-third Interest in operatlon or eald buri- neee. . .*
It oannot dleputed under the terms of this ooatreot Doeher Ir not rree rrom control or the partier oi riret part.
There are many 6erlnltIone of pcrrtnerehlpe, both by the oourte and uthore. There Are ilao dlrrereat emen- Wale whloh have bean held to be the teet or the exletenoe of A partnerehip relAtioneMp. some oourta hers Applied the prorite aad lome test; others look to the oontrol or buel- neer, together with other eurrouad~ng raote. The Intention or the partlee ir the test uead in my Inrt~npnoer. oourte or Taxes hare reruee4 to oonalude Supreme a partnership. The oonntitute Court or Texas In the
ehrlng in the prorttr net mrrloient to [18] surlneen or ci~ne or Freeman TA. Huttlg s~eh ~na Door Comprny, 153 3. Y. 182, rrkee the relatloa asame by pArtier the aritor%on partnership and reoogulsee that profit-eharlag Is oae teat or that rel8tlon.
Upon thle eubjeot 38 Pexar JurIeprMerme p. 844 ha8 thle to 6~:
The mt 0s profit-ehdrlng ie not alone drth3nt to eetrblleh the exlatenoe of e partnerahlp relation It In only en evlbentlw feet; among the tirers; other aleeats muot oonouT And be aonetbere~d. Ae between third persona And AIYI alleged pArtnerrhlp, prorlt-sharing lo evlaenoe of partnerrhilp, where88 as betueen themeeltea the l otual lntetit or partiiu be or riot to be partner6 determines. . .*
We think we aan SArSiY ray that the exletenoe 0r
the ounerehlp or one-third ar net profltu the buelneeo in this Ineteaue, together with the one-third ownerahlp IA the Atock an hand boor not conrt%tute Doeher &partner. The lease, the ‘butlblng, mm3 rIxturee Are the property or the
Beet. C. R. IIlller, )#tSe 5
partlea of the first md omerehlp a066 not +*8t In tRe t&se oontmotlng parties. %a mtoek on hand In this Iaetsnse rupreeento gerlrhsbls roods rlmoet eroluelvel~.
In 20 R. C. L. p. 831, us find t&I8 rtatementr
‘The partiaular test as the exlrteme oi the partnership relstlon vhioh Is rort wlbely so- aepted today and vhIoh Ie 9@lorble specially es betueen the psrtlss tbereelvea IrrerpeetIve of tha rights of third person8 is th*t II partnersM 18 rormefl end exlmta only when it ~88 the bntea ion oi F the partiem that ther shauld partners. . . . On other hand, tf the tame oi the oontraot exI8E llrg betwem the perties &o:not oonetltate a part- norsUp, nene r%lZ be deolme4, sven thou@ the parties In rortla osll the amaugment one. . .' 4W DoeRor et0 rb In this aontract uRat, rIgRt 0r th8 bu8Ine86, to eontract ror the b lae88, the polloiee to oomtrol the bu8Ino88 aad ulse thr ultimate d*ol*I om % 9, tRe pereonnel or the ?m818e88? 0r tRe rimi part vere 08rorul to et&a The prrtier
la the oontraot that ther vvre th8 morr or the plsee o? bu8lneee In t?sn Antonlo; thmt ill propo8ecl ehangea 113 policy rad oonduat of b~abesa mart be agree6 upon bf thee8 that the party or tRe second pas% hsd no autherlty to MkS or enter into am oontraotr 0r any kind; sill hs19 mat moot with the rpproval or the partlea or tIr8t p&rt;~ e&A kind o? saaounting 8yntem WLO epeoliied br partler or the rirrt part.
In paragraph 5 c)ontmot 6etLnitely mbkee pro- vI8lon ror the llqulilstion 0r Darher*o Interest ln tR e l +ent @r •d18~I~8~l dleohmrge.* The inteutlon or the prrtlea In tRle oontraot appears olelr to 08. Tha Intention of Ma&lea A& 2btrmge war to e~m9loy A manager 0r their buelaesa in San Antonio giving him M tnteFert la tlm net PIWilt in order to promote hla psrsonsl Intrreet ud beet &fort8 in management of the bn8Iae88.
Mr.' Zosher doe8 ~~equIr* ~3 intermvt In the net 9rn- rits ot the burtnors un43er &hi8 oontxwat but a8 oolpensstIaa for hts asrvlcres; he doss not hare oontrol over the huslne88 nor doea hs hrva ownership In permanent aaeets Cd th8 burinese. Tha oontx%at does not evLdan@s A true intsntion or the oontmoting parties to f0Pa a paxrtn6rehIp.
ILon. c. R. Wlller, page 6 atithorltlear oi other Stater mapport our par%-
tion that one rso4~Ivlag I). rhare of the profit8 0r a buslneer as compeaeatloa for srrvice~ Ir not thereby made a partner. see Brsinig v. sparrow, 80 1. E. S7; Bond v. W 78 3. t. 37; In Re Clorenor 300tt C. C. El. Unmploymeat Y* rmirano* ~ervlcm, 8. X. page 35566; klagnsr v. Bottle@, 139 U. *. 4215.
In Wirconrln In the cam of Yagner t. Bhttlo8, 139 B. V. 425, the court raid that deflnitlon of partnwrhip Ir eluolve and dlffloult of applIoatIon beoauret WWC~ Lt l p pur r that one should Juro In the profits oi an enter- prim am oompanratlon for mmvioes, property, or opportunity fuu;;ahed by him In rid of the beelneme, no putnorrhlp M- Be muot share In the pmfltm as muoh m&d not m oo~- pmuilon Sor rmvlo~ or property* or the pwtlu net beooee partners.*
biter reablng auly mthorltlu in thla Stat0 upon the 8ubJmt or pmtnnmhlps @ad the oama Y8lker-Brlth Cotplny ~(1. Roan, 43 8. fi.
V8. Bank 0r OrmntI110, e 8. Y. 84; nurmy Qianlq strtu Co. em. Exchange Nations1 Bank, 61 P. Y. 806, md moat rooent reported drol,rlon upon thla sabjoot fouad In In Rer Zoitr, m opinion of the Appallate Court of Indlum redored January 23, 1941, aot yet we 8re oomInca4 reported, the oontcaot did not oonrtltute & partnercrhip between aoatrmting parties prior to Apr%l 1. 19SQ.
The affidavit of Hr. NoAbe reolter ~0th tmot use tbs arcmftar the mbangs in oostrmtiag part%ea on April 1, 1939; hojrsvsr, a oopf of the orrtiiioate oi a8- mamrd name fllrd in Bexar County, rexam. OQ the 11th day of Oecmmber, 1938, llstr both #sAdan aad Dasher ae partnOF@.
a oontraot or memorandum of
Iota hare eubeItte& indloots a brparture frOn The affldrarlts uubmltted terms of the oontraot Ia a f6w inrrtan0u. Tim vsrlanoe,
in our ~pln.iOa, 1s Aqt #bUifi0ient to pr*0lude the ~nmployRWt a0ibtp6nsati0n COIWIISSIO~ rr0n ding l rimi:Dg tht mmhrr 18 not irea from ooatrol or dlrretlos under hlq aontraot mad ln *7 Hon. C. R. Miller, page 7
raat . On&or the deflnltion of l aploymsnt quoted onpge 2 of thI8 opinion the burden of Mti8iylzig the CoamInslon of ths freeborn of aontrol or dlreotlon la upon the party aerrertlng 8uoh freedom. Your ComaIsslon should determine from all of the faotr If that burden ha6 bemn dl*oharge&
A8 it Is adaltted that the teras of the oontraot exlrtlng botveen the putls8 aftcsr April 1, 1939, remalaod new oontraot areated 8 the 8~0, we do not think prrtnerahlp.
Xour8 tory truu ATT0IW.X OE1ERAL OF TEXAS