Case Name: Chaffraix & Agar vs. Price, Hine & Tupper. Morton, Bliss & Co., Intervenors
Court: Louisiana Supreme Court
Jurisdiction: Louisiana
Decision Date: 1877-03
Citations: 29 La. Ann. 176
Docket Number: No. 4691
Parties: Chaffraix & Agar vs. Price, Hine & Tupper. Morton, Bliss & Co., Intervenors.
Judges: 
Reporter: Louisiana Annual Reports
Volume: 29
Pages: 176–194

Head Matter:
No. 4691.
Chaffraix & Agar vs. Price, Hine & Tupper. Morton, Bliss & Co., Intervenors.
In tlio interpretation oí commercial contracts, this court will bo largoly influenced, and guided, by the law merchant of the United States, and the constructions of that law made by the Supremo Court oí the United States.
Whore a party shares in the profits oí a partnership, not as a principal, but as an agent, or employee, who receives a certain proportion of the profits in compensation oí his services, ho is not a partner.
j^PPEAL from the Sixth District Court, parish of Orleans. Saucier,
T. Gilmore & Sons and Lea, Finney & Miller, for plaintiffs and appellees.
Breaux, Fenner & Hall, for defendants.
Carleton Hunt and William H. Hunt, for intervenors.

Opinion:
The opinion of the court was delivered by
Morgan, J.
On .the twenty-eighth of December, 1872, plaintiffs brought this suit against the defendants, Price, Hiñe & Tupper, alleging that on tho-clay of December they sold to defendants seven hundred and eighty barrels of molasses, for the price of $19,170, payable cash on deliver}'; that tho delivery of the molasses, or a portion thereof, had been made within five days prior to the institution of their suit, and that they have a special lion and privilege on tho molasses, and that they fear the defendants will part with or dispose of it pending their suit. They prayed for a sequestration of the molasses; that Price, Hir.e & Tupper bo cited to answer their petition, and that they have judgment against them for $19,170, with special vendor's hen and privilege on the molasses for the payment thereof. The writ issued as prayed for.
On the fourth of January following, and before issue joined, plaintiffs filed a supplemental petition, in which they alleged that, through misapprehension of counsel, it was incorrectly stated that tho delivery of the molasses, or a part thereof, had been made " within tho last five days," and they averred that none of the molasses in qücslion was ever delivered to the defendants. They allege that in some manner, to them unknown, the defendants, without their (the plaintiffs') knowledge or consent, procured warehouse receipts to bo issued by the New Orleans Sugar Shed Company, and by one Kodd, for a considerable portion of the molasses, which had been removed from the levee by the wharfinger of the city because it was there in contravention of city ordinances, and placed in the charge of the said company and the said Bodd, and that as to the remainder of the molasses, for which warehouse receipts were not procured, the defendants took possession thereof without plaintiffs' consent or authority.
On the sixth of January Price, Hine & Tupper answered. They disclaimed any ownership of or interest in the property sequestered. They averred that, long prior to tho sequestration, the molasses had been sold and delivered to Morton, Bliss & Oo., and by them paid for, through their agents, J. B. Lafitte & Oo. They prayed that Morton, Bliss & Oo. be notified of these proceedings and cited, and that they, Price, Hine & Tupper, bo dismissed.
On the seventh of January Morton, Bliss & Oo. intervened. They claim to be the owners of the sequestered molasses, and aver that they were in possession thereof when tho sequestration issued, through their agents, J. B. Lafitte & Co. <
On the thirty-first of January plaintiffs answered the intervention. In this answer they aver that Price, Hine & Tupper, J. B. Lafitte & Oo., and Morton, Bliss & Oo. were, at the date of the sale mentioned in their original petition, commercial partners, dealing in molasses on joint account; that the molasses sold by them to Price, Hino-& Tupper was for account of this commercial partnership; that Morton, Bliss & Oo. are liable, in solido, with Price, Hine & Tupper and J. B. Lafitte & Co. toward them for the price thereof; that no delivery of the molasses was ever made by them (plaintiffs). And in this regard they substantially reiterate the allegations contained in their supplemental petition, from which we have already sufficiently drawn. They reconvene on Morton, Bliss & Co., and pray for judgment against them, in solido, for the full amount of the purchase price of the molasses.
Were Morton, Bliss & Co. commercial partners of Price, Hiño & Tupper in December, 1872, and, as such, responsible for their commercial obligations toward Chaffraix & Agar in regard to the molasses purchased from them ?
On the twenty-sixth of October, 1872, J. B. Lafitte & Co. wrote from New Orleans to Morton, Bliss & Co., at New York, the following letter:
"We have been speaking for some months past with Messrs. Price, Hiñe & Tuppor about prime and choice molasses, and we would call your attention to the inclosed letter from their Mr. Tupper.
" Messrs. T. Tupper & Sons (father and brothers of the writer of the inclosed) were for nearly thirty years large receivers of sugar and molasses direct from the plantations of this State, and the writer recollects that Mr. Tupper mentioned, some four or five years since, that he had never known New Orleans molasses bought in December to fail to pay a handsome profit. The only grades to.operate on are prime and above, as there is no loss from leakage, and those grades never ferment. The quantity produced of those grades during the two last seasons has been about forty thousand barrels each year. The advance has nbt been stimulated in any year by any attempt to control prices by buying up largely by one or two parties, but has been the natural result of the course of trade. Wo think by controlling one-half of the whole product an additional advance might be secured. '
" Messrs. Price, Hiñe & Tupper stand very"well in every respect, and are quite familiar with all the details of the business, as they have made sugar and molasses their specialty for a great many years.
"The proposition is to ship part of our purchases to New York, Philadelphia, Baltimore, and Charleston, and hold a part, say one-half, here. They can raise a portion of the amount needed, but as money is stringent here it would be impossible to carry so large a quantity in that way. If you will furnish the capital, we propose to allow you one-half of the profits upon the whole transaction, including the shipments as well as the portion held hero. Wo would, of course, hold the warehouse receipts and keep it fully covered by insurance. The total amount needed would not exceed one hundred and fifty thousand dollars, if so much, and the greater portion would probably be needed for less than thirty days, and the whole transaction would certainly be closed within sixty or ninety days. We have been considering this matter ever since the writoi's ro turn, and we feel fully convinced that it will pay a very handsome profit upon the investment.
" Please inform us as soon as possible if you are disposed to take hold •of the matter."
The letter which Lafitte & Co. inclosed t<? Morton, Bliss & Co. was a letter directed by Tupper to Lafitte & Co., and refers in no manner to Morton, Bliss & Co. It appears, however, from the testimony of Hine, a witness for Morton, Bliss & Co., that negotiations had been pending between all the parties during the summer (Mr. Tupper representing Price, Hine & Tupper) in New York, the negotiations to be consummated by Mr. Lafitte in New Orleans.
To the letter from Lafitte Morton, Bliss & Co. answered by telegraph: " Consult French fully when you see him in- regard to proposed molasses operation." French was an agent of Morton, Bliss & Co.
From the testimony of Hine and from the foregoing correspondence it results, we think, that a project had been started between Morton, Bliss & Co., Lafitte & Co., and Price, Hine & Tupper by which the parties were to operate in molasses here, the arrangements to be consummated by Lafitte. Their plans were arranged by Lafitte, as he tells us in his testimony, and the agreement and mode by which it was to be carried out is explained by him as follows:
" Price, Hine & Tupper wore to buy the molasses in their own name. We (J. B. Lafitte & Co.) were not to be known in the transaction at all. When they bought the molasses, they were to put it in the sugar-shed in our name or ship it to New York in our name. When they handed us the receipts we were to pay them the money — the approximate amount— as soon as the bills should come in. It was at first expected that when the receipts came in the bills would come in; but of course the bills took a little time to make out, and, as I explained, the cash payments always enabled them to buy to better advantage. Upon giving me the receipts, I gave him the money. It was distinctly understood that I was always to hold the receipts. I explained to Mr. Tupper that Messrs. Morton, Bliss & Co. were willing that we should check on them without any security in their hands, but they always required that we should hold possession of the properry before we paid for it. The understanding was that Price, Hine & Tupper wore to charge us for the molasses, at the price they paid, and they were to charge in addition all expenses that they paid. They were to charge nothing for their services, but -receive one-fourth of tho profits as compensation for their services."
The examination then proceeds as follows:
" Question — Your house to receive another quarter, and Morton, Bliss & Co. one-half?"
"Answer — Yes, sir, for furnishing the capital."
" Question — Suppose there had been a loss, Mr. Lafitte, what was the understanding ?"
"Answer — Each one should have borne his share, sir."
The agreement between the parties having been thus perfected, operations commenced and large transactions resulted.
It is out of one of the transactions carried on in conformity with this agreeihent that the present litigation springs. As we have seen Chaffraix & Agar sold to Price, Hine & Tupper seven hundred and eighty barrels molasses. The terms were cash. The price was not paid. Six hundred barrels, were sequestered. It is not disputed that the molasses which was sequestered forms part of the molasses sold by Chaffraix & Agar to Price, Hine & Tupper. It was in the possession of Morton, Bliss & Co. when the sequestration issued. Morton, Bliss & Co. claim it as their property. Chaffraix & Agar claim that Morton, Bliss & Co. were the commercial partners of Price, Hine & Tupper, and responsible to them for the entire price of the molasses. They also claim a privilege upon the property.
We see nothing in the agreement or in the course of trade between these parties which made Morton, Bliss & Co. the partners of Price, Hine & Tupper.
Partnership is a contract made between two or more parties for the mutual participation in the profits which may accrue from property, credit, skill, or industry furnished in determined proportions by the parties. C. C. 2801. It is based upon the consent of the contracting parties. Hero we see no consent on the part of Morton, Bliss & Co. to enter into a partnership with Price, Hine & Tupper. Their agreement was with J. B. Lafitte & Co. that they were to furnish Lafitte & Co. with the amount of money necessary to purchase a certain quantity and quality of molasses, the molasses to be selected by Price, Hine & Tupper, and to be paid for when the same should have been delivered to Morton, Bliss & Co. Here was no contract whatever between Morton, Bliss & Co. and Price, Hine & Tupper. Chaffraix & Agar sold to Price, Hine & Tupper. They had no dealings with Morton, Bliss & Co. Their property was delivered to Price, Hine & Tupper, and not to Morton, Bliss & Co. Price, Hine & Tupper delivered it -to Lafitte & Co. for Morton,, Bliss & Co., and received the money therefor. The title passed by delivery from. Chaffraix & Agar to Price, Hine & Tupper, and from Price, Hine & Tupper, by delivery, to Morton, Bliss & Co. It was, therefore, Morton, Bliss & Co.'s property when it was sequestered.
But it is further contended that inasmuch as the profits and losses of such purchases of molasses as Price, Hine & Tupper should make were to be divided between Morton, Bliss & Co., Lafitte & Co., and Price, Hine & Tupper, therefore Morton, Bliss & Co. were the partners of Price, Hine & Tupper, and bound for the debts contracted by them on account of such purchases. The participation in profits and losses is an element of partnership, but it does not, of itself, constitute a partnership in the .sense that all the parties to such an agreement are commercial partners, and bound in solido each for the debts contracted by the other. If a party comes to me and says: " I think there is money to be made in the purchase of a certain grade of cotton; let me have the money with which to buy it, and we will share the losses or divide the profits;" and I give him the money required, this does not make me his commercial partner. If I give him the money, and he buys the cotton, but does not pay for it, I am not bound in liis stead.
And this, it seems to us, is what Morton, Bliss & Co. did. They gave the money to Price, Hine & Tupper to pay for the molasses purchased by them, but they did not give it until the molasses had been put in their possession. And this was in conformity with their agreement. They were in no case to give the money until the. property was in their posses.,sion and under their exclusive control. After delivery to them, Price Hine & Tapper had no interest in it further than the profit which it 'might make. This doctrine is well laid down, and the difference between partners and participations in profits, and explained by Bedaride in Ms treatise Dos Sociótás, vol. 2, p. 27á. He says:
" D'associó a associé obligation respective de se faire raison de l'aehat et de la vente de la marchandise, de partager les benefices ou de contribuer a la perte dans les proportions convenues; en conséquence, action pour contraindre á rendre compte, á restituer la part des benefices ou a payer la perte. Dono, entre associós, il existáit une sociétó róelle et incontestable.
" Des participants aux tiers rien de ce qui resulte d'une societó ordinaire. Notamment, absence complete d'obligations, et surtout de solidante active ou passive. Ainsi le vendeur de la marchandise, ne connaissant que Tacheteur, ne pouvait demanden qu'a lui seul le paiement du prix, n'intenter que contre lui toute autré action relative a Pexistence, •aux conditions du marchó, a son execution. De son cote, l'achetour, h'ayant a faire qu'a son vendeur, et ne pouvant étre actionnó que par lui, se libérait valablement éntre ses mains.
" En ráalitó, done, dans ses rapports avec les tiers la participation ne constituait pas -une societó. Cette conséquence ótait surtout due a ce qu'elle n'en avait pas l'apparence. Chaqué participant traitant en son nom et'personnellement, les tiers ne pouvaient prétendre avoir eté induits en erreur, ou avoir comptó sur des garanties autres que celles offertes par colui avec qui ils avaient traite." -
" Maxima est differentia, inter socium et participem, et sic cliversi in. jure produountur effeótus, quorum prcecipui sunt wt participes non teñe antur, nisi ad ratam capitalis pro quo participant in negotio. Ñeque ipsi agere possunt contra debitores societatis, ñeque conveniri valent a creditoribws." Casaregis, Dix. 39, Nos. 30, 31, 32.
" Contra participen nulla datur actio, ñeque interet regula ut obligatio contracta per socium official consocium. Creditori alia non datur actio, nisi obliqua ex persona propria ac direcii debitoris, cujus dicitur legalis procurator, ejus que jura exercere potest, et pro ut ipsi debitori competunt;secus autem'si non competat." Luca, Dix. 88, Nos. 4,31.
And so in the case before us. Chaffraix & Agar sold their property to Price, Hine & Tupper. They did not know Morton, Bliss & Co. in the transaction; they had no dealings with them. The property had been transferred to Morton, Bliss & Co., who had paid their money for it, when it was sequestered. Morton, Bliss & Co. had it in their possession. It was not liable to seizure to pay Price, Hine & Tupper's debt.
It is a very hard case on the plaintiffs, for they have certainly been defrauded out of their property. But it must not be lost sight of that Chaffraix & Agar sold their property for cash, and allowed Price, Hine & Tupper to get possession of it without the cash being paid; -that they did not record their privileges against it, and brought no suit to recover it until some eight days had elapsed after the sale. In the meanwhile, it had passed out of the possession of Price, Hine & Tupper, into the possession of Morton, Bliss & Co., who paid their money for it. Chaffraix & Agar can only recover now from Morton, Bliss & Co. upon the ground that they were commercial partners of Price, Hine & Tupper, and this, we think, they were not.
It is therefore ordered, adjudged, and decreed that, as regards Morton, Bliss & Co., the judgment of the district court be avoided, annulled,, and reversed, and that there be judgment in their favor, and that the sequestration herein issued be set aside.