Upham v. Hewitt

Cole, J. We are inclined to bold that tbe agreement dated 17tb of October, 1871, which was offered in evidence, constituted tbe parties to it partners inter sese in tbe logging adventure. There are doubtless expressions in tbe contract which militate against tbis construction; but, looking at tbe whole instrument, we think tbis tbe better and more reasonable interpretation to place upon it. Tbe learned counsel for Hyde and Hewitt insists that tbe contract does not make bis clients partners with tbe other defendants, but only gives each party a share of tbe profits, if any, as compensation for capital or services, which, be says, does not necessarily constitute a partnership. And he suggests various considerations and inferences drawn from tbe agreement, in support of that view. But there are several clauses which negative tbis construction.' Hedges, Garfield and Warwick agreed to take charge of tbe logging camps of Hyde and Hewitt, to be started at such points in Shawano county as the latter should direct; hire men to run the same; cut, haul, bank, and run to Oshkosh, all the pine logs they could get out during the coming fall and winter, and “ do all said work in a good and suitable manner, and for the best interests of all the parties hereto.” Hyde and Hewitt agreed to pay the stumpage upon all the logs so cut; pay for all hired help, teams and supplies necessary for getting outrunning and booming the logs; and [95] they also retained the right to sell the same. When the logs were sold, all the money paid out and expended by Hyde and Hewitt was to be first deducted from the proceeds of the sale, and “ the balance, and all teams and supplies remaining, * * shall be divided between the parties hereto in equal portions, that is, one portion or share to the parties of the first part, and one portion to the party of the second part.” It was a case where labor and skill were contributed to the business on one side, and capital on the other. There was necessarily a communion of profit and loss; for, if there were no profits or the business proved a losing one, Hedges, Garfield and Warwick would lose their labor expended in getting out and marketing the logs, while Hyde and Hewitt would lose on their advances or capital. But the profits of the business, that is, the excess in the value of the returns over the advances, and all teams and supplies, were to be divided between them. The parties were therefore interested in the profits themselves, as profits. It is true, for their security for advances made, Hyde and Hewitt reserved the right'to themselves to sell the logs, as was done by Ludington in Whitney v. Ludington, 17 Wis., 141. But this stipulation might well be made, and still the parties intend to create, and in fact create, a partnership in the business. So, while the stipulation was that the logs were to be sold only by Hyde and Hewitt, it is plain, we think, that the title to the property was not in them alone, but in all the partners. And if the logs had been injured or destroyed while being run to market, an action 'for damages against the wrongdoer would necessarily have been brought in the name of all the partners in interest. ' The agreement in this case may not be essentially different from the contract before the court in Braley v. Goddard, 49 Me., 115, which was held not to constitute a partnership between the parties. There the plaintiff had not the unqualified, right to dispose of that portion of the lumber belonging to him by the contract, after all prior claims were dischai’ged, [96] and no authority to dispose of any further portion on any terms whatever; The court say such a stipulation was entirely inconsistent with the rights of a member of a copartnership, who has the power to make contracts, incur liabilities, manage the whole business, and dispose of the whole property of the partnership for its purposes, in the same manner and with the same power as all the partners could, acting together. There is no doubt that ordinarily each partner possesses full power and authority to dispose of the partnership property for partnership purposes, unless restricted by the articles of agreement. Rut, “ whenever there are written articles or particular stipulations between the partners, these will regulate their respective powers and authorities inter sese, although not, if unknown, in their dealings with third persons.” Stoiy on Part., § 101. The power reserved by Hyde and Hewitt to dispose of the logs does not have the effect to destroy the legal character of the instrument as we have construed it. Indeed, the case seems strictly analogous to that of Whitney v. Ludington, supra. It follows from these views that Hyde and Hewitt are liable with their codefendants for the goods sold and supplies furnished by the plaintiffs for the partnership business. On the other appeal, we think the court was right in deducting from the plaintiffs’ bill the amount of supplies furnished to run the McCord logs. That was a matter entirely outside the scope of the partnership business. The goods were not charged to the partnership, nor does it appear that they were sold on the faith and credit of the partnership agreement, which the plaintiffs had examined. Hyde and Hewitt had not agreed to pay for supplies furnished to run any logs except those got out under the contract. They had nothing whatever to do with the McCord logs; and we fail to perceive upon what principle it can be successfully claimed that, they are liable to pay for supplies furnished for running them. By the 0ourt. --Those portions of the judgment appealed from in each case are affirmed.