Case ID: serg-rawl_15/html/0137-01.html
Source: Caselaw Access Project
Author: {"author": "Gibson, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

[Philadelphia,
    January 17, 1827.]
    MILLER, surviving Partner of VAN BEUREN, against BARTLET and another.
    IN ERROR.
    Agreement between B. and H., that H. should give his attendance and services in the grocei'y store, then carried on by B., and for such services B. should pay II. a salary of one thousand dollars per annum, as well as to pay and allow him a commission of seven per cent, on the profits arising from goods sold, after deducting the said salary and rent of store, which agreement was carried into effect: Held, not to constitute II. a partner.
    The plaintiff in error, John Miller, who survived Jibraham Van Beuren, late partners under the firm of Miller and Van Beuren, was also plaintiff below, and instituted this action in the District Court for the city and county of Philadelphia, against the defendants below and defendants in error, John Bartlet and John Harding, jr. It was tried by jury, on the general issue, and a special verdict found, on which the court below rendered judgment for the defendants, and the judgment and proceedings were removed to this court by writ of error.
    ■ The special verdict found that John Bartlet made four promissory notes, which were regularly entered in his books of trade, in favour of the plaintiff, dated in October, November, and December, 1822, which were due at the commencement of the suit, and remained unpaid, amounting to upwards of nine hundred dollars. By an agreement in writing between Bartlet and Harding, in July, 1821, it was stipulated that Harding agreed on his part to give- his services and attendance in conducting the grocery business, then carried on by Bartlet, at No. 17, South Water Street, and for his services so rendered, Bartlet agreed to pay Harding a salary of one thousand dollars per year, as well as to pay and allow him a commission of seven per cent, on the profits arising from goods sold, &c. after deducting therefrom the above sum of one thousand dollars and rent of store; and, by entries in the books of Bartlet, in the handwriting of Harding, it appeared that he received credit accordingly, for his said salary and commission. Bartlet became insolvent, and the object of this suit was to make Harding liable as a partner.
    
      Peters, for the plaintiff in error.
    The single point'is, whether one who receives a salary as clerk, and also a commission, of seven per cent, on the profits of the partnership, be a partner. There was no limitation to the amount of profits on which the defendant was to receive a commission. The responsibility of a secret partner arises from his receiving a share of the profits, no matter how great or how small the share.. He who partakes of profits is a partner, because he takes part of the fund on which the creditors rely for payment. Coope v. Eyre, 1 Hen. Black. 37. 1 Mont. Part. 5, 6. Gow on Part. 14, 15, 16, 18, 19. Grace v. Smith, 2 W. Black. 998. Waugh v. Carver, 2 H. Black. 243, 17 Vez. 40. Wat. Part. 11. Hesketh v. Blanchard, 5 East, 143. 17 Vez. 404.
    
      Lowber and Binney, contra.
    It is necessary that one should have a distinct interest in the profits, in order to make him a partner. He must have a property in certain proportions of the profits as such, not merely a right to look to the profits for payment of a debt. The owner of a share of profits may take the share specifically from the partnership fund, or he may have his action of account render. Harding could not support account render for his commission on the profits. There may be various other kinds of interests which do not make one a partner. Suppose a creditor attaches the interest of one of the.partners, or that he takes it in execution: Harding was not interested as owner, but had a right to a compensation in nature of wages payable out of profits. It is certain no partnership was intended by the parties. The principle is established by various authorities. Gow, 19, 20. Ex parte Rowlandson, 1 
      Rose, 89. Ex parte Watson, 19 Vez. 461. 5 Taunt. 74. Benjamin v. Porteus, 2 H. Black. 490. Wilkinson v. Frazer, 4 Esp. N. P. C. 182. Dry v. Boswell, 1 Camp. 329. Wish v. Small, 1 Camp. 331. Ex parte Langden, 18 Vez. 301. Ex parte Gellier, 1 Rose, 297. Cheap v. Crammond, 6 Serg. & Lowb. Ab. 556. Murray v. Whitney, 10 Johns. 226. Rice v. Austin, 17 Mass. 197.
    
      Reply.
    
    All who share profits are partners as to creditors, whatever may be their agreement, among themselves. As to commissions on profits, the distinction is this: a commission' on profits to a certain amount, is not a'partnership; but a commission on the whole profits, whatever they may be, is a partnership. And no case can be produced showing that a commission on the whole profits is not a partnership.
    Rogers, J., and Huston, J., not having heard the argument, took no part in the judgment.
   The opinion of the court was delivered by

Gibson, J.

Where the acts of the parties bring them within any rule of law by which the relation of partnership is produced, it is of no importance that a contract of partnership was not intended. The rule which declares that all who participate in the profits shall be held liable as partners, is founded in public policy, and it is particularly strange that it should have been relaxed in cases like the present. How a commission on profits can be distinguished from an interest in the profits, as such, I am at a loss to comprehend. The profits cannot be ascertained before the partnership account is settled, and then a party, under a claim to commission, is entitled to what? To a compensation equal in amount to so many hundredths of the sum of the profits. He is said not to have a specific interest in the profits as such. He has indeed no lien or specific demand on a particular fund as a corpus; but neither has a partner who is admitted to be so; profits being an incorporeal essence, and without specific existence before they are received and enjoyed. It is impossible to discover any difference but what is found in the terms, between a dividend and a commission: yet this difference, flimsy as it is, seems to be firmly established. In Ex parte Hamper, 17 Ves. 404, Lord Elpon admits a distinction, while he regrets it; .and-the cases cited on the part of the defendant, establish its existence in the English courts beyond the possibility of contradiction. Ought we then to follow the English courts, or, the point being of the first impression here, establish a rule for ourselves, on the foundation of what we may justly suppose to be reason and common sense ? In an ordinary case, we ought not to hesitate; but although the law of merchants be usually considered as a part of the common law, and this notion Receive countenance from the fact that certain commercial usages prevail in particular countries, yet Mr. Marshal is of opinion (Treatise on Ins. 18,)' that not being founded in the institutions of any particular country, but in general convenience, as respects the dealings of merchants with each other in all countries, it may be consiclered as a branch of public law. In Luke v. Lyde, 2 Burr. 887, Lord Mansfield declares that the maritime law is of no particular country; but that it is the general law of nations; and this opinion is fortified by writers of great authority. 4 Com. Dig. 67. Emerigon, 21. If so, we are bound by the decisions of foreign courts on commercial questions, as firmly as we are by our own. It seems, then, that however we may be dissatisfied with the conclusion at which the English courts have arrived, yet the question proposed to the court below, is no longer open to debate; and we are satisfied that there is no error in the record.

Judgment affirmed.