The Hawaiian gazette. [volume] (Honolulu [Oahu, Hawaii]) 1865-1918, 1870-02-02

AdnfntSfTdtO4, tcttt TIE wa dHHered, OF 4 ne
ophilu, Mstcalf, deceased
HARTwELI- J.
The papers present some complication, but
there are few unsettled points of law involved in
the case, which require the judgment of the Court
The first point is whether Tucker and Waller were
Metcalfs partners, or his agents only, to be re-
munerated by shares in the profits. There has
been series of decisions in the Erglish and
United States Courts. commencing with the lead
ing case of Waugh vs.. Carver, 2 II. Bl, 235. in
l7S9 to the effect that parties might become liza
BILE for each Others acts as partners, contrary to
their own intention or expressed agreement. If
A and agreed that B carry on work for A.
| for share Of profits. B was held liable for the
debts contracted for that work, notwithstanding
he NAV have expressly stipulated that he should
not be liable as partner. provided the creditor
was not aware of such stipulatlons. Varions rea-
sons were given in support of this doctrine that
partnership could thus be created merely by
operation of law 1t was said that taking profits
"as rrofts," and not as wages, indicated part
nershp between the parties as far as they were
themselves concerned, as well Of course as far as
Others were entitled to regard them. As the de-
crease of the partnership fund by liens for profits
is the loss of private creditors. it was argued
that any person having such lien must be a
partner. But this is assuming what should be
proved by a species of petitio priacipii or beg
eing the question" If there is no partnership.
creditors care nothing whether their debtor has
paid his agent with money ''as profits or "as
wages" If the debtor undertakes illegally to
prefer claims. they may be contested but it is
hard to see why prior agreement that the agents
claim shall be preferred. must of necessity create
partnership and impose liability never intend
ed Courts often objected to this doctrine. Lord
Eldon was reluctant to accept SO thin" distnc-
ton as a conclusive test. Judge Story regretted
while he ad ntted its necessity, G. j. Gibson, of
the Supreme Court of Pennsylvania was desrous
of throwing off the authority of Waugh VS., Car
yer as having been made subsequently to the
American Revolution, but was unable to take the
responsibility. Miller vs. Bartlett, l5 S. & R., l57;
Hazard VS. Hazard, l Story, 81 Story's Part,
2 35 et passim.
Except in few instances, as in the Supreme
Court of New Hampshire (see Bromley vs. Elliot,
39 n. H., 287) the doctrine referred to was re-
garded as law, until recently when its authority
has been successfully attacked and overthTown.
"A series of cases has decided that the law of
partnership is branch Of the law of agency !;
that the test to determine the liability Of one
sought to be charged partner, is whether the
trade is carried on in his behalf; and that par
ticipation in the profits is not decisive of that
question: except SO far as it is evidence OF the re-
latlOn of principal and agent between the person
taking the profits and those actually carrying on
the business" Grays notes ON Story's Part, 40.
The decisions last referred to are Cox VS.. Hick-
man, 8, House Of Lords cases 266; Kilshaw vs..
Jukes. B. & s., S47; Buen Us. Sharp, Law
Reports. G, p, Sc.
The reasoning of the Court in the recent Eng
lish cases has special significance. In Bullen VS..
Sharp, Mr.. Justice Blackburne referring TO the
rule in Waugh VS.. Carver, says: This decision
had never been overruled7when more recent
ly it was common opinion, In which for one
participaled) that the doctrine had become so in-
veteraey part of the law of England, that it
would require legislation to reverse it. In Cox
VS.. Hickman the creditors OF trade had agreed
that their debIors trade should be carried on for
the purpose Of paying them their debts out of the
profits and the composition deed, to which they
were parties, secured to them a property in the
profits The rule laid down in Waugh VS.. Car
yer, if logically carried out, led to the conclu-
sion that all the creditors who assented to this
deed, and by SO dUng agreed to take the profits,
were individually liable partners but when it
was sought to apply the rule to such an extreme
case, it questioned whether the rule itself
was really established In the result. the House
Of Lords consisting OF Lord Campbell c., and
Lords Brougham, Cranworlb. Wensleydale and
Chelmsford-unaniHonsly decided that the credi-
tors were not partners. Lord Cranworth
says: d" 1t was argued that. as they would BIZ
interested in the profits. therefore they wonld be
partners But this fallacy. This no doubt, is
in general. sufficiently accurate test" | think
that the ratio decidendi is, that the proposition
cpaiion in the profits of business does Of ITSELF
by operation of law constitute partnership Ii
not correct statement Of the law of England
the test being in the language of Lord Wens.ey-
dale, whether it is such participation Of profits
as to constitute the relation of principal aud
agent between .he person taking the profits and
those actually carrying on the business" l Law
Rep. 1868 lO7.
In Holmes vs.. Old Colony R. R. Corp,
Gray So firm had leased a hotel of the Corpo-
ration for $500 an one half net proceeds bu;
it was held that no partnership existed, the Court
Dewey j. saying that it is no longer true that
receiving profits, net profits, must produce that
result but that all the circumstances must be
considered.
In the following cases it was held that there
was no partnership: Case of ferry which A
leased to B, the latter to pay expenses. and have
one half the gross earnings. Heimstreet vs.
HoWland. DEMO, 6s. Agreement that A
furnish with wool 10 make into satinets Tor A.
for forty per cent on sales Turner vs. BisseIl.
II Peck 1872 and see Dennis VS. Cabot 6 Met.
So Bradley vs.. White, 10 Met, 303; Pratt vs.
Lang1on. IL Allen, 544 Hi IS VS.. Ellis, IL
Gray, 449. Agreement that : furnish B with
books to sell for share in the profits. Newman