Kellogg v. Griswold

The opinion of the court was delivered by Williams, Ch. J. — But one question is presented in the case, that is, whether the plaintiff can maintain this action of assumpsit. The referee decided that the claims of the. parties could not be adjusted in this action of assumpsit, on the ground that they were partners. The decision was correct if they were partners inter se, as the respective claims of partners must be adjusted in the action of account or a bill in equity. In a partnership, the parties are tenants in common of the joint stock and effects, and mutually participate in profit and loss. As it depends on their agreement, on their mutually associating together in a cofnmon or joint undertaking, whether they shall be partners, so by their agreement, although they conduct and appear as such and may be held accountable by others who deal with them, they may not, in fact, be partners. They might mutually stipulate that business should be carried on in their joint names, and on the credit of both, but that one should receive a stipulated sum [295] for, his services and incur no risk of loss. In such a case they would not be partners, though liable as such to others. Questions have frequently arisen as to what should be' deemed a partnership; but it has been, usually, at the suit of third persons, creditors, and as to them, it has been settled, that if there is a participation in the profits, inasmuch as it takes the fund, or a part of the fund to which the creditors have a right to look for the payment of their debts, the persons participating in such profits, shall be liable to them as partners. This was the doctrine of the leading case of Waugh v. Carver, 2 Hen. Bl. 235, where two ship agents were held liable as partners, although they had stipulated that neither should be liable for the acts or losses of the other. In that case, it was said by the Chief Justice, they were not partners inter se. The distinction between partners as to creditors and partners inter se, is sufficiently and definitely settled. But even as it respects third persons, it is sometimes difficult to draw the line between that class of cases where a person is to be treated as a partner, or merely an agent. In the case before us it appears the plaintiff was to furnish the capital and pay the expenses of transporting the leather to market. The defendant had no interest in the hides, when purchased, but was to perform the labor and to be allowed his expenses in purchasiug the hides and carrying them to market, and, as a reward for his labor, was to have twenty five per cent, of the avails. We think this does not make them partners, between themselves, but that the defendant was only an agent. Considering him as an agent, an action of account may be maintained against him, or an assumpsit upon an express promise to account if not upon an implied one. This seems to be the result of the authorities, although a dictum to the contrary may be found in some nisi prius cases. The decision of the referee was wrong, and the judgment of the court, accepting the report and rendering judgment for the defendant, must be reversed.