Case Name: Gill and others against Kuhn
Court: Supreme Court of Pennsylvania
Jurisdiction: Pennsylvania
Decision Date: 1821-01-01
Citations: 6 Serg. & Rawle 333
Docket Number: 
Parties: Gill and others against Kuhn.
Judges: 
Reporter: Reports of cases adjudged in the Supreme Court of Pennsylvania (Sergeant & Rawle)
Volume: 6
Pages: 333–339

Head Matter:
Gill and others against Kuhn.
Monday, January 1.
If parties as-sine'ss in* such tVinake'them partners with thh^persons, exPresfy agree that a partnership notSt’ l,artl,ei's as between adLmvíedgc? «°v^ectcredits and x Recountf taken ^om a le.dSe.r> which were™ h^own ha'ndwriting, but at the same time deny his pay^he°haianee, alleging the existence of a ship between himself and the plaintiffs, this is not sufficient to charge him apon an insimul com« putassent.
In Error..
IN the District Court for the city and county of Philadelphia, William Bill, Benjamin Canonge, and Peter A. Canonge, lately trading under the firm of Gill, Canonge Co. brought an action for the use of their assignees, against George K. Kuhn, in which they declared in assumpsit for goods sold and delivered, on a quantum valebant, and on an account stated. 1 1 On the trial they gave in evidence, that the defendant had admitted the correctness of the charges, both on the credit and debit side of an account copied from the ledcrer hereafter . . r ° mentioned, in which a balance of 411 dollars 94 cents .peared to be due from the defendant to the plaintiffs, on the 2d February, 1818, but denied that he was bound to pay same, on the ground of liability, as a partner of the plaintiffs, and of ascertain Peter Kuhn. The plaintiffs further gave in evidence a ledger, in which the account so admitted was stated, and proved by a witness to be nearly all in the handwriting of the defendant, though some charges were not posted in their regular order.
The defendant, in support of his case, produced the following article of agreement, bearing date 3d June, 1816: ^
“ Whereas, Peter Kuhn, auctioneer, and William Gill, Ben-jam\n Canonge, and P. A. Canonge, trading under the firm Gill, Canonge fc? Co. commission merchants, agree to promote each others interest by transacting their several occupations in concert in the same establishment, without forming, nevertheless, any copartnership, which it is expressly agreed and declared shall not exist, on the following terms and conditions, viz. 1st. That the said Gill, Canonge & Co. shall and will, within three months, furnish a capital of ten thousand dollars, free of interest, for the purpose of making advances on goods deposited for sale, or for goods sold, interest to be allowed upon any additional requisite sum which may be furnished by the said Gill, Canonge £s? Co. 2d. All the transactions relating to the said auction and commission business shall be duly entered in books of acdount, for that purpose to be provided and kept; and the said books shall be balanced every three months, and the profits, if required, •shall then be divided in the proportions hereafter mentioned. Sd. The profits arising from the auction and commission business, after deducting the quarterly payment of duties, and all expenses of rent, clerk’s wages, printing, &c., are to be divided in the following manner, viz. two-fifths to be passed to the credit of Peter Kuhn, and three-fifths to the credit of Gill, Canonge Co.; but neither of the contracting parties are permitted to receive more than the following sums per month, viz. Peter Kuhn, two hundred dollars, and Gill, Canonge Co., three hundred dollars, until it be ascertained that the profits of the business will admit of a greater deduction. 4th. The sole and entire management and direction of the funds shall be confided to Gill, Canonge & Co., who shall, in consideration thereof, take upon themselves all responsibility and risk as to reimbursements of advances and solidity of purchasers. P. Kuhn to be free from every liability. 5th. All goods, the property of either party, sold at public or private sale, to pay the usual commission. 6th. P. Kuhn to have the privilege of taking into partnership with him his son, George K. Kuhn; his share of the profits is not tobe increased on that account. 7th. This agreement shall continue in force for the term of one year, and as much longer as the parties shall consider it advantageous, it being considered that at least three months notice shall be given by any party desirous of its termination, after the expiration of the year.
“This instrument to take effect from Monday, June 10th, 1816 ??
To this agreement the following memorandum was added :
“It is understood, thatall compensations or interest received on goods to be sold at public or private sale, or for advances for goods sold, shall'be for the benefit of the joint interest. Should Gill, Canonge Co. guarantee payments for sales, to be at their own risk, and the compensation thereof, for their own benefit; such compensation not to constitute any part of the commission for sales.”
It was stated by Peter Kuhn, who was examined as a witness, that, at the commencement of the business, he took his son, the defendant, into partnership, of which he gave the plaintiffs notice on the 11th June-, 1816 ; and further, that he considered the books of the concern as particularly belonging to him, as he was the public officer, or auctioneer. Jasper Ducomb, another witness, deposed, that the ledger above referred to, was the ledger of the concern, which consisted of Gill, Canonge cs’ Co. and Peter Kuhn & Son. William Bunce, a third witness, testified, that the books of the concern were unsettled. The defendant further gave in evidence a receipt book, and certain invoices and bills of.lading, tending to shew that a joint business was carried on by the plaintiffs and Peter Kuhn Son, and also a printed circular letter, dated June 9th, 1816, signed, “ Peter Kuhn & Son, autioneers, Gill, Canonge Ss? Co. commission merchants.5’
Upon the evidence above stated, the Court charged the jury, that Peter Kuhn was a partner with the plaintiffs, and that the defendant was a partner both with Peter Kuhn and with the plaintiffs; that this action, therefore, could not be sustained by the plaintiffs, whose proper remedy was an action of account render, and that if Peter Kuhn was a partner, he ought to have been joined as a co-plaintiff.
To this opinion, a bill of exceptions was tendered by the plaintiffs, and the verdict being for the defendant, it came up with the record on a writ of error.
Randall, for the plaintiffs in error, made four points :
That although Gill, Ganonge EÍ Co. and P, Kuhn might be considered partners with respect to strangers, they were not partners between- themselves'; to which he cited Watson on Partnership,l4.(Etig.ed.') Hoarev.Dawes,lDoug.371. Waugh v. Carver, 2 II. Bl. 235. Hesketh v. Blanchard, 4 East, 144. Tea v. Ellworthy, 14 East. 210. Drey v. Boswell, 1 Camp. 329. Alderson v. Pope, 1 Camp. 404. (note.) Wilkinson v. Frasier, 4 Esp. 182. Muzzy v. Whitney, 10 Johns. 226. Livingston v. Roosevelt, 4 Johns. 251. Holmes v. United Insurance Company, 2 Johns. Cas. 331. Coope v. Eyre, 1 ■ H. Bl. 43. '
' 2. That if Peter Kuhn was a partner of Gill, Canonge Es? Co., the defendant, who came in under a sub-contract with him, was not their partner ; in support of which he referred, to Watson, 21. 27. Coope v. Eyre, 1 H. Bl. 37.
3. That the defendant could not take advantage of Peter Kuhn’s not being joined as a plaintiff, even if he was a partner. Leveck v. Shaftce, 2 Esp. Rep. 468. Ross v. Deey, 7 D. Es? E. 36l. (note C.) 1 Chitty on PI. 8.
4. The Court ought to have submitted to the jury whether or not there was an account stated, and explained to them the law on the subject. Ozeas v. Johnson, 1 Binn. 193. Holmes v. D’Camp, 1 Johns. 36.
For the defendant in error," C. J. Ingersoll and P. A. Browne, argued,
1. That this was not a case of a stated account, the defendant having denied his liability, and alleged the existence of a partnership at the time he admitted the correctness of the debits and credits in the account. On this point they cited Watson, 292. 396. Foster v. Allanson, 2 D. & E. 479.
2. That if Peter Kuhn was a partner, he ought to have been namedas a plaintiff. Eccleston v. Clipsham, ISaund. 154. Id. 291. (note f. g.) Rice v. Shute, 5 Burr. 2611. Max v. Roberts, 5 Bos. Es? Pull. 454.
3. That a partnership existed, they said, was fully proved by the evidence, independently of the written agreement, and if so, the declaration of the parties contained in that instrument could not make it otherwise. Peter Kuhn Es? Son remained liable for all the debts of Gill, Canonge Es? Co. and ought to be exonerated before either of them is compelled to pay a debt due to that concern. They referred to Watson, 1. Act of 23d September, 1780. Turd. Dig. 46. Widdifield v. Widdifeld, 2 Binn. 245. Moravia v. Levy, 2 .D. A. 483, (note.) Cowan v. M-Gowan, Wallace’s Rep. 66.

Opinion:
Gibson, J.
delivered the opinion of the Court.
This is a plain case. The plaintiffs, trading under the firm of Gill, Ccinonge if Co., enter into articles with Peter Kuhn, an auctioneer, in which the parties agree to follow their several occupations in concert, in the same establishment, but without any co-partnership, which it is expressly agreed shall not exist. The plaintiffs are to furnish 10,000 dollars, free of interest, for the purpose of making advances on goods deposited for sale, and also whatever additional sum may be necessary to carry on the business, but for all above the 10,000 dollars they are to be allowed interest. The produce of the money advanced on goods,is to be for the benefit of the concern ; where the plaintiffs, at their separate risk, guarantee payment for goods sold, the compensation is to be for their separate benefit. The direction of the funds is to be exclusively confided to the plaintiffs, who take upon themselves all risk as to reimbursement of advances and the solidity of purchasers, Kuhn being free from all responsibility. The nett profits are to be shared in the proportion of three-fifths to the plaintiffs and two-fifths to Peter Kuhn, or Peter and George K. Kuhn, (the defendant), in case the latter should be taken into partnership by his father, under an authority purposely reserved in the articles. The defendant was, in fact, so taken into partnership ; and the question is, whether these parties are to be taken to have been partners as between themselves, notwithstanding their express agreement to the contrary. To third persons, they would undoubtedly be held responsible as partners from the' circumstance of their carrying on a joint business, and all participating in its profits ; but their relation towards each other, depends on other and very different considerations. That there is a distinction between partnership as respects the public, and partnership as respects the parties, is an elementary principle of this branch of the law, so plain that its only difficulty is in its application to particular cases. Where the agreement is silent, there is often room to doubt as to the precise relation in which the parties stand to each other, and then a joint interest in the stock is considered a discriminatj vR circumstance but where they explicitly declare there is to be no partnership, it is, unnecessary to inquire further; for among themselves the law permits them to determine their respective interests by their own stipulations : it is a maijter with which third persons have no concern. Here, however, there was not even a joint interest in the stock ; for the plaintiffs were to furnish the whole capital; and the interest of the defendant and his father was to be confined to the profits. There is, therefore, no single feature of partnership in the case. But if there were, what could be the policy of a rule which would control their agreement and make them partners against their will ? The contracts of men are laws prescribed by themselves to. govern their transactions with each other, which, as long as they 'interfere not with morality, or the interests of third persons, are of conclusive obligation on the immediate parties to them. Hence the invoices, bills of sale, circular letter, and receipt book, given in evidence to prove that a joint business had been carried on, which would have a decisive influence on a question of liability to third persons, must be laid out of the case here ; the exact position of the parties in relation to each other, must be determined by their agreement. There was no evidence of what it is contended subsequently took place, a parol agreement, sufficient, if believed, to constitute a partnership in every sense-of the word. DucomVs proved nothing like it; and the evidence of Peter Kuhn that the books were kept in the name of the firm, is so entirely consonant to the scope of the articles, that it would have been very extraordinary if they had been kept in any other way.
This decision of the general question makes an end of all the subordinate questions. Assumpsit is the proper form of action.- If the original parties to the articles had been partners as between each other, and the defendant were considered as standing in the relation of a third person by reason of his having come in under a sub-contract (in which case assumpsit would still be the proper action) the non-joinder of Peter Kuhn as a plaintiff, might, as he could not well be viewed as a dormant partner, have been fatal; but, on the ease shewn, the plaintiffs would have been very seriously embarrassed by a plea in abatement that he was not joined as a defendant, if, however, there had been a partnership inter se, the plaintiffs could not, as they contend they could, have recovered as. for the balance of an account stated. The defendant's account copied from-the ledger, and almost all of it by himself, even if he had acknowledged the justness of each entry, as well as the justness of the balance struck, was not, (independent of his having made those acknowledgments coupled with an assertion that his father was also liable) evidence to charge him on the count for an bisimul computassent;.because the parties had not computed together, and the striking of the balance was not the act of both parties.
Judgment reversed, and a venire facias de novo awarded.