Emmons v. Newman

38 Ind. 372
CourtIndiana Supreme Court
DecidedNovember 15, 1871
StatusPublished
Cited by11 cases

This text of 38 Ind. 372 (Emmons v. Newman) is published on Counsel Stack Legal Research, covering Indiana Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Emmons v. Newman, 38 Ind. 372 (Ind. 1871).

Opinion

Buskirk, J.

The appellant has assigned three’ errors; first, that the court erred in overruling the demurrer to the Complaint; second, that the court erred in refusing to give [373]*373certain instructions asked by the appellant; third, that the court erred in overruling the appellant’s motion for a new trial.

It is necessary to a proper understanding of the first assigned error that we should set out the complaint, which was as follows:

“Thomas Newman, plaintiff, complains of Alden Emmons, defendant, and says that on the first day of May, 1870, the said plaintiff and defendant entered into a co-partnership in the purchase and sale of clocks, watches, jewelry, notions, and all things in that line ofmerchandise, including silversmithing and repair of watches, clocks, and jewelry, in the city of Crawfordsville; that the said plaintiff being a practical silversmith, and the said defendant being entirely ignorant of the business, it was agreed that the said defendant should furnish the capital to purchase the stock in trade, and should attend and manage the sale of the clocks, watches, jewelry, etc.,, of the concern, and should thereby keep up the stock at his own cost and charges; and the said plaintiff was to do the repairs of the work brought to the shop, and was to receive for the work so done the amount charged therefor as and for his part of the profits of the firm, and in compensation for the labor performed.

“And the said plaintiff avers that the said defendant only put into the partnership about two hundred and fifty dollars, and instead of paying for the goods purchased at the time of purchase, he bought them in the name of the firm, upon time, and would pay along as sales could be made, until his purchases amounted to some eighteen hundred dollars, purchased in the name of the firm, a portion of which purchases are still unpaid. And the said plaintiff would further aver that he put in the concern in goods fifty dollars and in cash twenty-seven dollars, and that the value of the work done by him, the proceeds of all of which went into the firrA and into the possession of said defendant, amounted to the sum of six hundred dollars. And the said plaintiff would further aver that the said defendant, without any just [374]*374cause, on the 8th of September, 1870, forcibly took possession of all of the said partnership property, including the books, notes, accounts, cash, clocks, watches, jew;elry, notions? etc., and refused to allow said plaintiff possession or- use of any part of the same, to the great injury of the said plaintiff; wherefore,” etc.

Did the court err in overruling the demurrer to the complaint? It is earnestly maintained that the facts stated in the complaint failed to show that the plaintiff and defendant were partners. Various objections are urged to the sufficiency of the complaint, but the one most relied upon by counsel in argument is, that as the plaintiff was to receive the amount received for the work done by him, he was not a partner; that there was no mutuality, as the plaintiff was to receive for his compensation the amount received for work by him performed, without reference to whether there were profits or losses. It is insisted by the appellant that the facts stated show that the plaintiff was a mere workman.

It is, on the other hand, claimed by the appellee that the facts stated show that there was a partnership, but that if they fail in showing a partnership, they snow the value of the services rendered by the plaintiff, and that the proceeds went into the hands of the defendant; and that it makes no difference whether they were partners or the defendant the owner of the establishment and the plaintiff the employee working for wages; and that if they were partners, then the plaintiff should recover according to the terms of the partnership; and if they were not partners, the plaintiff would be entitled to recover the - value of his work and the price of the property that was taken possession of by the defendant.

Do the facts stated in the complaint constitute the parties partners? The agreement between the parties is stated as follows: “ It was agreed that the said defendant should furnish the capital to purchase the stock in trade, and should attend and manage the sale of the clocks, watches, jewelry, etc., of the concern, and should thereby keep up the stock ai [375]*375his own cost and charges, and the said plaintiff was to do the repairs of the work brought to the shop, and was to receive for the work so done the amount charged therefor as and for his part of the profits of the firm, and in compensation for the labor performed.”

The precise question under consideration was considered and decided by this court, adversely to the appellee, in Macy v. Combs, 15 Ind. 469.

The rule of law was well stated, in Loomis v. Marshall, 12 Conn. 69, where it was said: “A community of interest in land does not of itself, constitute a partnership; nor does a mere community ofinterest in personal estate. There must be some joint adventure, and an agreement to share in the profit of the undertaking. Green v. Beesley, 2 Bing. N. C. 108; Fereday v. Hordern, Jacob, 144; Porter v. M’Clure, 15 Wend. 187. This community of profit is the test to determine whether the contract be one of partnership; and to constitute it, a partner must not only share in the profits, but share in them as a principal; for the rule is now well established, that a party who stipulates to receive a sum of money in proportion to a given quantum of the profits, as a reward for his labor, is not chargeable as a partner.”

Reference is then made to a large number of adjudged cases, from which the court deduces the following rule: “The rule which these and other cases establish is founded on the distinction which has been taken between agreements by which the parties have a specific interest in the profits themselves, as profits, and such as give to the party sought to be charged as a partner, not a specific interest in the business or profits, as such, but a stipulated proportion of the profits as a compensation for his labor and services.”

The authorities on this point are not uniform. It was said by Lord Eldon, in Ex parte Hamper, 17 Ves. 494: It is clearly settled, though I regret it, that, if a man stipulates, that, as the reward of his labor, he shall have, not a specific interest in the business, but a given sum of money, even in proportion to a given quantum of the profits, that will not [376]*376make him a partner; but if he agrees for a part of the profits, as such, giving him a right to an account, though having no property in the capital, he is, as to third persons, a partner.”

Prof. Parsons, In his work on partnership, admits the existence of the distinction and rule above stated, but contends that the distinction is not very reasonable or useful, and presents the authorities maintaining the opposite doctrine; but he lays down the rule to be as stated by Lord Eldon, that where a person is to receive a sum of money in proportion to a given quantum of the profits, he is entitled to an account.

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Bluebook (online)
38 Ind. 372, Counsel Stack Legal Research, https://law.counselstack.com/opinion/emmons-v-newman-ind-1871.