Chicago Die & Electric Co. v. Nathan

Mr. Presiding Justice Holdom delivered the opinion of the court. The determination of the liability of defendant for the indebtedness set forth in the bill of particulars depends upon the fact of whether at the time the goods were ordered defendant was a partner of J. C. Feldman, his co-defendant, who, however, not being served with process, is not before the court. A trial before the Municipal Court and a jury resulted in a verdict and judgment for $573.05 against the defendant. A new trial having been denied, this court made the writ of error sued out to operate as a supersedeas, and the record of the trial in the Municipal Court is before us for review. The relations of Feldman and Nathan, as shown by the evidence, were restricted to the following dealings. Feldman in 1906 invented a new kind of a “cigar price tag,” and being without funds to exploit his invention, applied to Nathan for assistance. Nathan acquired by purchase a one-half interest in the invention by advancing Feldman money with which to procure his invention to be patented and to have manufactured 25,000 of the tags. Under the agreement then made, the tags, when manufactured, were to be delivered to Nathan and sold under his direction, the proceeds to be applied to the payment of the money expended in procuring the patent and the making of dies and cuts and the manufacture of the tags. Feldman was to assist in marketing the 25,000 tags, and whatever money remained, if any, after Nathan was reimbursed for the expenditures above mentioned, was to be divided equally between Feldman and Nathan. Nathan sold the tags under the name of “Cigar Price Tag Co.” The patent expenses and the cost of the 25,000 tags were paid for by Nathan, according to the understanding. The plaintiff manufactured the 25,000 tags and was paid by Nathan with checks of the Chicago Brush Co., a business concern of which he was a member. The indebtedness sought to be recovered was contracted by Feldman subsequent to the foregoing transaction. There is no evidence connecting Feldman with the latter order at all. The tags lastly ordered were delivered to Feldman and bills made out and sent to him. With these last ordered tags Nathan had no concern. After plaintiff had unsuccessfully pressed Feldman for payment, it took his note for the whole amount, and not until1 after the maturity of this note and the failure of all efforts of plaintiff to collect the debt from Feldman did it make any claim that Nathan was obligated for payment of the debt as a partner of Feldman in the transaction. Plaintiff used the deposition of Nathan in support of his case, and is consequently bound by it. Nothing in the record overcomes Nathan’s statements as to the nature of his dealings with Feldman and their limitation, but on the contrary every material fact is consistent with Nathan’s testimony. The verdict of the jury is manifestly contrary to the probative force of the evidence and the judgment rendered thereon erroneous. The fact that Feldman and Nathan were jointly interested in the letters patent covering the tag is of no significance as affecting the question of partnership. They may each act independently of the other in exploiting the patented article, and no liability will result from one to the other or to third parties by so doing, in the absence of any express agreement of partnership to the contrary. Fraser v. Grates, 118 Ill. 99; Manufacturing Co. v. Wire Fence Co., 109 ibid. 71. Persons may be interested in a joint enterprise without necessarily becoming partners. A joint interest in a special project, limited in character as well as time, does not constitute a partnership. Special agreements for particular adventures and joint undertakings do not make a partnership. This rule has received apt illustration by Chancellor Kent in his Commentaries, vol. 3, p. 33. He says: “A person may be allowed in special cases to receive a part of the profits of a business without becoming a legal or responsible partner. ’ ’ A share of profits may be received as an equivalent for rent. A clerk may receive an agreed portion of profits in lieu of a fixed salary for services rendered. A factor a percentage of sales as compensation. A seaman may take a share of the profits of a whaling expedition by agreement, in lieu of wages. In none of these, or similar cases, will the responsibilities of partners flow from such special agreements. Collyer on Partnerships, 14; Story on Partnership, sec. 32; Parker v. Fergus, 43 Ill. 437. Neither Feldman nor Nathan at any time made any representation that they were partners, and as to a statement made by Feldman to third parties, out of the presence of Nathan, that they were partners, such statement, if made, would not be admissible against Nathan, to charge him with the liability of a partner. Lacking proof of partnership, the statements of Feldman made to others were inadmissible as evidence tending to charge Nathan as a partner with Feldman. Smith v. Hulet, 65 Ill. 495. The joint account dealings between Feldman and Nathan, are, so far as plaintiff’s rights are involved, restricted to the first order for 25,000 tags, the liability for which it is admitted Nathan discharged in full. The evidence does not develop that there was any holding out in any manner, to plaintiff or any one else, by Nathan, that he was a partner of Feldman. Defendant Nathan’s motion to instruct the jury to return a verdict in his favor should have been granted, as the proofs failed to establish any liability in Nathan for the debt sought to be enforced against him. The judgment of the Municipal Court is reversed. Reversed.