Fulmer v. Uhler

90 Pa. 143, 1879 Pa. LEXIS 213
CourtSupreme Court of Pennsylvania
DecidedMay 7, 1879
StatusPublished

This text of 90 Pa. 143 (Fulmer v. Uhler) is published on Counsel Stack Legal Research, covering Supreme Court of Pennsylvania primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Fulmer v. Uhler, 90 Pa. 143, 1879 Pa. LEXIS 213 (Pa. 1879).

Opinion

Mr. Justice Paxson

delivered the opinion of the court,

This case presents but a single question. On the one hand, the appellant claims that the profits should be divided between the partners in the proportions of their respective contributions to the expense of building the furnace and working the same; while on the other hand, the appellees contend that the profits should be divided equally between them, as decreed by the court below.

The first step in this investigation is to ascertain what the parties agreed to do. On the 30th of October 1869, Henry Fulmer, appellant, Peter Uhler, now deceased, and whose executors are the appellees, and John D. Wágener, entered into a partnership for the purpose of building an anthracite hot-blast furnace, and manfacturing pig iron at Glendon, near Easton, Pennsylvania. ■ On July 2d 1870, Mr. Wagener sold out to the two others, and transferred all his right, title and interest to them for the sum of $1425, which was paid by Fulmer. The business was then continued by Fulmer and Uhler until November 1st 1872, at which time the partnership was dissolved by its own limitation.

By the agreement of partnership it was stipulated that the money necessary to build the said furnace, and to carry on the said business, should be advanced by said parties in equal proportions, in instalments, whenever it should be required; in other words, each partner was to advance one-third of the necessary capital. This, .without more, would have made them equal partners, and each would be clearly entitled to one-third of the profits as the partnership [145]*145originally stood. After the withdrawal of Mr. Wagener, the proportion of the two remaining partners would be one-half each. But the agreement referred to contained this further provision, that “The aforementioned parties shall be entitled to the clear net gains and profits arising from the said trade or business of the said co-partnership in the several proportions which their several interests bear to the total amount then paid in.” The proper construction of this last clause is the principal contention here. It is not altogether free from obscurity, yet we think its meaning is sufficiently apparent. To hold that it contemplated an equal division of the profits, without regard to the amount of capital paid in, would be to treat it as surplusage and expunge it from the agreement. It was not needed to produce equality; that, necessarily, resulted from what had, already been said in the articles. We think the manifest object of the clause referred to was to qualify the prior language of the agreement, and to make the interest and share of each partner depend upon his contribution to the capital of the concern. This view is the more reasonable when we look at the position of the parties at the time .they embarked in this enterprise. The amount of capital to be paid in was not fixed, and probably was not known to them at the .commencement with any degree of certainty. That it would require a very largo sum must have been clear to each. No one of them could know with certainty that his partners would be able from time' to time to furnish their respective shares. It was doubtless intended that in case a partner made* default and failed to furnish his share of the capital, that his interest should be correspondingly diminished. This is the more probable from the absence of any provision in the agreement for charging a defaulting partner with interest on any advances made by the other partners to cover his default.

At the time the partnership was dissolved, it was conceded Fulmer, the appellant, had advanced considerably more than Mr. Uhler, and he claimed a corresponding increase in his share of the profits. This claim was resisted by the appellees, who contended that the alleged excess of Mr. Fulmer’s advances were the result of bad faith to Uhler; that the latter had always been ready and willing to contribute his share, and that he had been purposely kept in ignorance by Fulmer of the extent of the payments made by the latter.

The business appears to have been conducted in a manner altogether peculiar. Mr. Fulmer kept the books of the concern, and the court below finds that “ he had all the books and papers, kept them under his special care and supervision, under lock and key, and carried the key in his pocket.” The learned judge further states that “ the plaintiff (Fulmer) seems to have looked upon the defendant as a subordinate, who had no, or very little, voice in the management of the business; and that when he desired information or opportunity for inspection of the books, he must wait the entire [146]*146pleasure and convenience of the plaintiff.” There was no book kept in which the contributions of the respective parties were entered. Instead of each partner paying into the firm regular instalments at stated periods, and claiming and receiving a proper credit therefor on the books, they appear to have divided the bills and expenses between them in an informal way, each paying such as suited him, and keeping his own account. The result was that at no time were they precisely equal. On the 5th day of August 1871, the day the furnace went into blast, and the manufacture of iron commenced, Eulmer had advanced $1408.39 more than Uhler, being $704.19J inore than his share of the aggregate advancements made to that date. It will be noted, however, that the amount paid for Wagener’s interest, $1425, is included in the advances of Mr. Fulmer, and if stricken out would leave him a few dollars in arrear. It is at least doubtful how far money voluntarily advanced by Fulmer to Uhler for the purchase of Wagener’s interest can be regarded as a contribution of money to build the furnace and carry on the business of manufacturing iron, within the meaning of the articles of partnership. Be that as it may, the difference in their contributions, at the time the manufacture of iron commenced, was very small. It was. between that time (August 5th) and the 16th of November that Fulmer advanced the most of his excess of his contributions. It appears that during this period the firm had considerable iron on hand, which Uhler desired sold for the purpose of paying off the debts. He insisted upon not paying any more money until the iron on hand had been sold. Fulmer refused to sell, and advanced the money required. The court below says upon this point: “ The plaintiff objected to have the iron shipped, and actually stopped the loading, declaring that iron should not be shipped until he said so; that he was boss; that he had paid pretty near all in that had been paid, and could pay Uhler all he had in in five minutes.” There was no time fixed when the payment of the instalments or contributions should cease. The reasonable construction of the agreement is, that they should not be required after the business commenced to be self-supporting. It appears to have been so from the time the furnace went into blast. It was the right of Uhler to have the iron sold to defray the expenses. He was entitled to as much voice in the business as Fulmer. The latter had no right to hold the iron against the wishes of his copartner, and by advancing his own money for expenses which the firm had the means to pay, deprive his weaker partner of a portion of his interest in the business.

The iron, as before stated, was not sold, and both parties continued to make contributions, Fulmer making his last payment on August 23d 1872, and Uhler his last payment on August 1st 1872. After these payments, Fulmer’s contributions amounted to $58,761.43; Uhler’s to $49,045.63. Looking at these transactions [147]

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90 Pa. 143, 1879 Pa. LEXIS 213, Counsel Stack Legal Research, https://law.counselstack.com/opinion/fulmer-v-uhler-pa-1879.