Case Name: John B. Perry vs. Whitwell S. Randolph
Court: High Court of Errors and Appeals of Mississippi
Jurisdiction: Mississippi
Decision Date: 1846-01
Citations: 6 S. & M. 335
Docket Number: 
Parties: John B. Perry vs. Whitwell S. Randolph.
Judges: Clayton, J. gave no opinion, having been counsel.
Reporter: Mississippi Reports
Volume: 14
Pages: 335–344

Head Matter:
John B. Perry vs. Whitwell S. Randolph.
Where articles of partnership, with reference to a t*act of land, were lost, parol evidence of their contents is admissible.
Whatever the private agreements and contracts of persons, who conduct themselves before the world as partners, may be, with reference to debts contracted by them, and the responsibilities of the partners respectively, they will be equally and jointly liable to those dealing with the partnership, for all debts lawfully contracted.
In an action by P. against D. & R. as partners in a race-course, for work done on the course, it was in proof that D. & R. had signed articles to establish, carry on, and complete the race-course, at mutual expense and mutual profits, for five years, at the end of which time R. was to pay T>. for half the improvements, and be the sole proprietor; I). to superintend the course and the erection of the improvements ; hut the articles contained the clause, that “the instrument was not to he so construed as to make the parties partners in the contracting of debts D. employed P. to do the work on the course : Held, that the clause in the articles of agreement, about the contracting of debts, could not operate to the exoneration of R. from the payment of debts contracted by D. for the purposes of the partnership, and that he would be liable to P. for the value of the work done by him upon the course.
In an action by P. against D. & R. as the owners, in partnership, of a racecourse, for work done on the course, R. denied, under oath, the partnership; and, after proof of a written agreement between D. & R. for the construction of the course, at joint expense and profit, P. offered to prove that, though he was employed by D. to do the work, yet that R. was often present, giving orders and directions concerning it, and shared the profits of the course, after it was completed : Held,, that the proof was admissible, as tending to establish the partnership in the race-course between D. & R.', and their joint liability as partners, for the work done.
D. & R. being partners in a race-course, D. sold out his interest to G., who assumed to pay D.’s share of the debts due on account of the course ; in an action against D. & R. by P. for work done on the course, held, that G. was an incompetent witness to prove payment by D. to P. for the work done by P., and for the value of which he was suing.
In error, from the circuit court of Marshall county; Hon. James M. Howrey, judge.
John B. Perry sued Whitwell S. Randolph and Kenneth Dye,. as partners, for the sum of sixty-five dollars, for work done by Perry on a race-course, belonging to Randolph and Dye. Randolph plead non assumpsit, under oath, and payment. The plaintiff dismissed his suit as to Dye; and upon trial the jury found for the defendant.
From the bill of exceptions, signed on the trial, the history of the case appears to be as follows, viz.:
Gordentia Wait, on the part of the'plaintiff, proved that, in the spring of the year 1839, Randolph and Dye came to the office of the witness, Dye having in his hand an article of agreement in writing, between himself and Randolph, to establish a race-track near Holly Springs, on the land of Randolph ; the article of agreement was in the usual form of a partnership; Randolph refused to sign the article in its then form, and insisted on having another clause added, which the witness added, when the agreement was signed by both parties, and left with the witness for safekeeping, not to be recorded. That he kept the agreement until the previous term of that court, when he had produced it in court; but he had not seen it since, and did not know where it was. By the consent of the parties the witness stated the contents of the article of agreement, as nearly as he could. It bound the parties to establish a race-track on the land of Randolph; the copartnership was to continue for five years; each party was to bear one half the expense of completing the course, share the profits arising from the track equally, and at the end of the term Randolph was to pay Dye one half of what the improvements, were worth; that timber might be used off the land in the completion of the track, and Randolph might sell part of the land, if he could, before the five years had elapsed; that Dye was to superintend the track, the erection of the houses, and have the general care and management of the business. The stipulation added to the agreement was in these words: “This instrument is not to be so •construed as to make the parties partners in the contracting of •debts.”
The plaintiff then offered to prove, by William Arthur, that Dye, in the summer of 1839, employed the plaintiff to work on the race-course, in building the stables, &c., and that Randolph was frequently on the track, ordering and directing the work in which the witness was engaged, under the employment of Dye ; and also to prove by the witness, that Randolph shared the profits of the course after the work was done. The court refused to permit the examination, on the ground that Dye and Randolph were tenants in common of the land, and not partners, and the clause in the agreement, prohibiting the parties from contracting debts as partners, discharged Randolph from liability for such debts contracted by Dye; Randolph being liable only for the debts contracted by himself.
The court afterwards permitted the witness to testify as to the work having been done by the plaintiff, and also to a conversation between the plaintiff, Randolph and one William Gift, to whom Dye had sold out his interest in the race-track; in which conversation, while Randolph denied his liability as a partner, yet he expressed his willingness to pay one half the debts due by the race-course, of which the plaintiff’s demand was admitted to be one.
This was all the plaintiff’s testimony.
The defendant read the deposition of the said William Gift to the jury, the plaintiff’s objection to it on the score of his interest in the event of the suit having been overruled. Gift proved that he became the purchaser of one half the tract from Dye, and assumed to pay Dye’s debts. At the time of the purchase he was in immediate want of some young men to take charge of the property ; that the plaintiff was recommended to him, whom he hired for that purpose. When he hired the plaintiff he loaned the witness two hundred dollars. , The witness having agreed to pay Dye’s debts, and anxious to secure the plaintiff, asked him what was his situation with reference to Dye; the plaintiff replied that Dye owed him nothing; that the two hundred dollars he had just loaned the witness, was the money which he had received at some of the public gates or stands, and after he received the money he held on to it till the race was over, when he paid to Dye all but his own claim; for he said that it was going to be squally times, and that Dye was a rascal, and he did not consider Randolph bound.
The court instructed the jury, at the instance of the plaintiff, 1. That a partnership may be formed in relation not only to commercial business, but to all other lawful occupations and employments. 2. That there may be also a partnership in some cases touching interest in lands, or in a single tract of land, which will be governed by the ordinary rules applicable to partnerships in trade or commerce. 3. That partners are all bound for articles purchased for the benefit of the firm, though the vendor does not know of the existence of the firm, and though he supposes himself dealing with, and gives credit to, an individual partner, by charging him alone on his book. 4. That if several persons become partners, and agree among themselves that neither shall make any contracts to charge the other, such agreement, between the partners," will not affect strangers having no notice of it. 5. That the rule of law is, he who shares the profits of a partnership is a partner. At the instance of the defendant the court further instructed the jury: “In this case, if Randolph was the owner of the land, and by the contract or agreement it was stipulated that Dye was to have the use and occupation of it jointly with him for five years, or any longer time than one year, for the purpose of using it as a race-tr.ack during the time, it was stipulating and contracting for such an interest in land between the parties as should be in writing, signed by the parties, or some one legally authorized for them. If the contract relate to an interest in land within the statute of frauds, then the writing between the parties is, alone, eyidence of this contract; and the parties themselves, and also third persons, are bound by its terms, stipulations and conditions.”
To this charge the plaintiff excepted, and his motion for a new trial having been overruled, he prosecuted this writ of error.
The following causes of error were assigned :
1. The court erred in excluding that portion of the testimony of the witness, William Arthur, which is set out in plain tiff’s first bill of exceptions, as testimony which he offered to introduce, but was excluded from the jury, on the motion of defendant.
2. The court erred in overruling the objection made by the plaintiff to the deposition of William Gift, offered by the defendant.
3. The court erred in giving to the jury the instruction asked for by the defendant.
4. The court erred in overruling the motion of the plaintiff for a new trial.
Lucas, Watson, and Clapp, for plaintiff in error.
1st. In support of the error first assigned, it is insisted that, by the testimony of the witness Wait, a partnership in the race-course was established between Randolph and Dye. The written agreement between them was substantially a partnership agreement, and the clause inserted by the witness Wait, at the instance of Randolph, did not change the character of the agreement as to third persons. The law on this subject is stated by the lord chancellor, in the case of Hamper, ex parte, (17 Yesey, 412,) in these words: “ If a man agrees for a part of the profits, as such, giving him a right to an account, though having no property in the capital, he is, as to third persons, a partner; and in a question with third persons, no stipulation can protect him from . loss.” In the case of Weaver v. Tapscott, 9 Leigh, 424, Parker, J. says : “ The reason why the partner taking a part of the profit is liable to creditors, is this: he takes a part of the fund on which they rely for payment.” See also Robinson v. Wilkinson, 3 Price, 538; Savi.lle v. Robinson, 4 T. R. 720; Watson on Partnerships, 168, 169 ; Brown's Executor v. Higginbotham Co., 5 Leigh, 583. This last case referred to sets out the doctrine in full.
The partnership in the race-course, between Randolph and Dye, having been established, it was certainly competent for the plaintiff to prove this account by proof that he was employed by Dye to do work and labor for the purposes of the partnership; and that this work and labor he did perform. Now, the testimony excluded went directly to these points. The error committed by the court, in ruling out a portion of the testimony of the witness Arthur, was not cured by that portion of his testimony afterwards admitted, because the testimony admitted was much less full and satisfactory than that excluded.
2d. It is a well-settled rule of evidence, that no person who is directly interested in the event of the suit is a competent witness; and the law looks upon a witness as interested where there is a certain benefit or disadvantage to the witness attending the consequence of the cause one way. 1 Phil. Ev. 55; 2 Starkie, 744; Jones v. Raine, 4 Rand. 386. In this case the position of the witness Gift was this: he was bound by contract to indemnify Dye against the liabilities which he had incurred on account of the race-course. The plaintiff was asserting by his action a demand of this character against Randolph and Dye; and a demand, which, if established, would, to the extent of a moiety at least, become the debt of the witness, as between himself and Dye; and which, if unsuccessfully prosecuted, would exempt the social assets and the witness from all liability on account of such claim.
Under these circumstances, the witness Gift, at the moment of giving his testimony, had a direct interest in proving that the plaintiff’s account had been paid, and thereby defeating the plaintiff’s action; because, in that event, he would stand exempted from a liability which would necessarily have been thrown upon him by a verdict against the defendant. See the opinions of Cabell, J. and Tucker, Pres, in the case of Wilson etal. v. Alexander, Sheriff.\ 9 Leigh, 459; also 9 Cowan, 128; 2 Marsh. 508.
3d. The instruction given to the jury by the court, on the motion of the defendant’s counsel, grossly misstated the law of the case. It was in proof that the partnership agreement between Randolph and Dye was reduced to writing. Proof of the loss of the agreement, and of its contents, placed the case before the jury precisely upon the ground upon which it would have stood had the agreement itself been produced. And had the •written agreement itself been in evidence before the jury, the only legal question that could have arisen between the parties on this branch of the subject, would have been as to the effect of the restrictive clause inserted by the witness Wait. The subject-matter of this clause certainly was not within the operation of the statute of frauds; and this clause, it is insisted, was controlled by the well-settled principle, already stated, that an individual cannot form a connection with another, for the purpose of carrying forward any lawful business, upon an agreement to share the profits of such business, without subjecting himself to all the liabilities of such general partnership, whatever may be their agreement and stipulations into’ se. Watson on Part. 124; 17 Yes. 412; 5 Leigh, 683; Opinions of Parker and Tucker, in 9 Leigh, 427 -431.
D. C. Glenn, for defendant in error.
The first clause of the charge objected to is only a reiteration of our statute of frauds. H. & H. 370. The latter is a simple assertion of a principle settled time out of mind,-that parol evidence is inadmissible to alter, vary or add to such an agreement. See Rob. on Frauds, 11, note and authorities. The charge was correct in law, and the next question is, did the statute properly apply? Now what case is made out in proof? He proves that he drew up the instrument; that Randolph refused to enter into a partnership; that it was an agreement to establish a race-course on Randolph’s land; it was stipulated that Dye should have the use of it fox jive years ; should erect buildings and cut timber, and do all other acts of a limited ownership. It was a lease to him for five years of Randolph’s land, for which Randolph was to have a part of the proceeds of the tract, and Dye to make his improvements on his own responsibility, and at the end of the term an allowance to be made him for his improvements. This proof clearly shows there was no partnership; but a lease for five years of land, constituting them joint tenants or tenants in common, and, as such, creating an interest in land within the statute of frauds, of course not binding unless in writing. This shows the first charge was proper, and, if so, the second was an inevitable corollary. There was, then, no error in the charges. The next error is the exclusion of Arthur’s testimony. Keeping in view the facts above stated, the propriety of so doing is easily seen. The materiality however, is slight. He only proved that Randolph was occasionally at said course, ordering and looking over improvements, which Dye had employed him to perform, and that Randolph shared the profits of the course. This was rejected, as attempting, in the face of the written instrument, to fix a contract on Randolph, which he had not-expressly sanctioned or authorized. With the instrument before the court this could not have been done.

Opinion:
Mr. Justice Teacher
delivered the opinion of the court.
Writ of error to the circuit court of Marshall county.
Perry instituted an action of assumpsit against Randolph and Dye, as copartners, to recover the value of work and labor alleged to have been performed for them. Randolph pleaded that he was not a partner, and also a plea of payment; and the suit having been dismissed as to Dye, a verdict and judgment were rendered for Randolph.
The evidence introduced on the trial below, on the part of the plaintiff, was to the effect that in the year 1839, Randolph and Dye mutually signed articles of agreement, in the usual form of copartnership articles, to establish and carry on a racecourse on the land of Randolph for the term of five years, to share the expense of completing the course, to share equally the profits therefrom, and, at the expiration of the term, Randolph was to pay Dye the value of one half the improvements upon the course, and become the sole proprietor. The articles contained the clause that "the instrument was not to be so construed as to make the parties partners in the contracting of debts." Dye was to superintend the course and the erection of the improvements. The articles were not produced upon the trial, but were proved to have been lost. It was also offered to be proved on the behalf of the plaintiff, that although Dye employed him to do the work upon the course, Randolph was fre quently present and giving orders and directions concerning it; and that Randolph did share the profits arising from the course after its completion. This testimony, was ruled out by the circuit court upon the trial.
Although it be true, that all who participate in the profits need not necessarily be considered as partners, in respect to the concern from which the profits arise, yet parties, when no partnership exists, may. still have so conducted themselves as to have induced others to give credit under the belief that such a partnership existed. Such cases are impositions by delusive appearances of a copartnership, and the parties are not to be protected by any private agreement of theirs that one shall not be held answerable for the other. The mere circumstance that in the copartnership agreement there is collaterally included a contract in relation to land, does not alter the nature or object of the main agreement, although it may show that as to the land alone, the parties might by the contract have constituted themselves joint tenants, or tenants in common. In other respects, they might still be partners. It is competent, also, to prove the existence of a copartnership by the production of its articles of agreement, if any exist; but where they cannot be produced for any sufficient cause, proof of their contents is admissible, and proof of the conduct of the parties is likewise admissible to show the nature, extent, and terms of the copartnership as it really existed.
The evidence offered was legitimate, for if it did not show the existence of an actual copartnership, it evolved circumstances tending to establish a state of things which had subjected the defendant to the liability of a copartner.
The deposition of William Gift, a witness, was objected to on the ground of his possessing an interest in the result of the suit. The deposition was permitted to be read, and went to show the payment by Dye of the debt sued for in the action. It appeared that Gift had bought out Dye's interest in the racecourse, and had made himself liable for his share of the debts of the concern.
There was an issue of payment before the jury, as well as the issue respecting the partnership, and if the latter issue failed for the defendant below, then it was for Gift's interest to show that the account in suit had been settled. This deposition was therefore improperly admitted in evidence.
Judgment reversed, and new trial granted.
Clayton, J. gave no opinion, having been counsel.