Case ID: misc_95/html/0692-01.html
Source: Caselaw Access Project
Author: {"author": "Rodenbeck, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Ludwig Philip Heck, Plaintiff, v. Carl Voelkle, Defendant.
    (Supreme Court, Monroe Trial Term,
    June, 1916.)
    Contracts — written agreements— partnership — actions — evidence.
    A written agreement under which, plaintiff took charge of the restaurant, part of defendant’s business in consideration of which he was to receive as compensation a certain percentage of the net earnings of the entire business, the amount to be paid plaintiff for services to-be determined upon an accounting each month, does not create a partnership between the parties, plaintiff having no financial responsibility in connection with the business or title to any of the stock or fixtures used therein.
    The fact that an action on contract seeks an accounting does not make it an equitable one requiring determination at the Special Term and the ease should be sent to the Trial Term.
    While the fact that the parties held themselves out as partners erecting an electric sign with their joint names thereon might be evidence to create a liability of both parties to creditors such acts did not change the contractual relation from one of employment to one of partnership.
    Action on contract.
    William J. Baker, for plaintiff.
    John A. Bernhard, for defendant.
   Rodenbeck, J.

This action is brought to recover upon a contract made between the parties which plaintiff claims is a partnership agreement and defendant claims is an employment agreement. The contract is in writing and provides among other things that the ‘ ‘ party of the first part [defendant] agrees to employ, and does hereby employ the party of the second part [plaintiff] to take charge of the restaurant part of said business and to attend to all the details of cooking, preparing and serving meals and lunches in the said business ’ ’ and 1‘ as the agent of the party of the first part to make all necessary purchases for said lunch and meal portion of said business by and under the direction always of the party of the first part, etc.,” for which the plaintiff was to receive one-half (%) the actual net earnings of the entire business including the sale of liquors as well as one-half of the profits derived from the meals and lunches so served; it being expressly understood however that such sharing in the profits shall not make and constitute the party of the second part a co-partner of the party of the first part but that the relation shall be that of employer and employee; the party of the second part being at all times subject to dismissal by the party of the first part ’ ’ and the plaintiff ‘1 shall in no way be liable for any obligations incurred in connection with said business, nor shall he be deemed the owner of any stock or fixtures in connection therewith. ’ ’ The contract further provides for an accounting on the first day of each month at which time there was to be determined ‘‘ the amount to be paid to the party of the second part for his said services.” This contract did not create a partnership between the parties. It expressly provides that the plaintiff is the employee of the defendant; all purchases were to be made by the plaintiff as the agent and under the direction of the defendant; he had no financial responsibility in connection with the business and acquired no title to any of the stock or fixtures used in the business. The terms of the contract make it an employment rather than a partnership contract. The plaintiff was interested in the profits of the business as a means of compensation for services rendered which would not make him a partner. Cassidy v. Hall, 97 N. Y. 159, 168; Smith v. Bodine, 74 id. 30, 33. To constitute a partner-f hip, parties must have a proprietary interest in the business and in its profits. Magovern v. Robertson, 116 N. Y. 61, 65. A person making advances and sharing the profits as a means of compensation is not a partner. Richardson v. Hughitt, 76 N. Y. 55. A stipulation for a salary and a share of the profits as a further compensation does not constitute a partnership. Lee v. Washburn, 80 App. Div. 410. The action therefore being on an employment contract is not properly on the Special Term calendar and should be sent to the Trial Term for disposition. The fact that the action seeks an accounting does not make it an equitable one requiring determination at Special Term. Lindner v. Starin, 128 App. Div. 664; Lee v. Washburn, 80 id. 410; Smith v. Bodine, 74 N. Y. 30, 32. The parties held themselves out in some respects as partners, erecting an electric sign with their joint names thereon, but these acts in the face of their written contract while it might be evidence to create a liability on the part of both of them to creditors did not change the contractual relation between them from one of employment to one of partnership. Cassidy v. Hall, 97 N. Y. 159, 169.

Judgment accordingly.