Nutting v. Colt

7 N.J. Eq. 539

• Court: New Jersey Court of Chancery
• Decided: June 15, 1849
• Status: Published

Opinion

The Chancellor.

The question is, whether, under the article of agreement made between the parties, Nutting has any such rights as against Colt as entitle him, under the facts in other respects stated by the bill, to prevent Colt from receiving moneys due for goods sold from this establishment; and to have a receiver appointed to receive the same, and to take charge of the other property in the establishment.

There are cases in which, upon principles of policy, persons will be held to be partners in reference to third persons who as between themselves are not partners, and have not in reference to each other the rights of partners.

Whether, under the circumstances of this case, Nutting would as to third persons be held to be a partner and liable to debts, it is, perhaps, not neecessary to say.

As between him and Colt he is not a partner, but a person employed by Colt, at a salary of $500 a year and one-fourth of the profits. 4 Paige 148.

Nutting was to have his name used as a partner should Colt deem it advisable. Colt assumed the business name of “ Colt & Company.” If Nutting’s name had been used, and he thus held out as a partner, he might, under such an agreement for a fourth of the profits,'be held to be a partner as to creditors. Ibid.

And if, under such an agreement, Colt had thought it advisable to use Nutting’s name, and-had, by the use of it in connection with his, contracted debts for which Nutting thus became liable with him, there might be an equity even in favor of Nutting, as against Colt, that the property and assets thus brought into the establishment by the credit of Nutting’s name in connection with Colt’s, and at the expense of Nutting’s liability in connection with Colt’s, should, at Nutting’s instance, and as against Colt, though as between them they were not in reality partners, be held liable, in relief of Nutting, for the payment of the debt so contracted; and that Colt, if his conduct evinced a disposition, after the debts so contracted and for which Nutting thus become justly liable with him, to use and dispose of the property and assets in such way as to withdraw them from any application thereof to the payment of such debts, should be restrained from collecting the dues of the establishment &c, and that a receiver should be appointed.

But there is nothing in his case calling for a receiver on any such ground of equity.

Nutting consented to such a use of his name as would make him liable as a partner to third persons, and yet agreed to terms by which he was not a partner as between him and Colt. This necessarily carried the idea that Colt was to have the control of the property and assets of the firm. Nutting relied on Colt’s integrity and fidelity in the application of the assets to the payment of the debts that should be contracted.

There is no evidence that Colt, at the time of the application for an injunction and receiver, had betrayed Nutting’s confidence. The bill says that a large amount of debts was due ; it does not say payable ; and the answer and depositions show, that all the drafts and acceptances which had become payable were met as they became payable; and no sufficient reason is shown for concluding that Colt, had he not been stopped from collecting, would not have continued to pay the acceptances as they became payable.

I am of opinion that there is no sufficient ground for the appointment of a receiver.

As to the matter of account, the cause can proceed for the purpose of ascertaining what profits have been made, with a view to the complainant’s recovering his fourth part thereof.

The injunction, in this view, must be dissolved.

As to the attachment, no sufficient violation of the injunction has been shown.