Court Opinion

ID: 7191531
Source: CourtListenerOpinion
Date Created: 2022-07-24 16:57:26.89114+00
Date Added: 2024-06-11T16:16:10.887512
License: Public Domain

The opinion of the court was delivered by
Marr, J.
In November, 1872, an arrangement was concluded between Morton, Bliss & Co., bankers, of the city óf New York, and two New Orleans Arms, John B. Lañtte & Co., cotton buyers, and Price, Hine & Tupper, dealers in sugar and molasses, to this effect:
Price, Hine & Tupper were to buy molasses of a certain grade in their own name, to warehouse or ship it in the name of John B. Lañtte & Co., and to deliver the warehouse receipts or bills of lading to Lañtte & Co. On receipt of these commercial evidences of title and possession Lañtte & Co. were to pay Price, Hine & Tupper in cash, the cost of the molasses, and the expenses of the purchase; and Lañtte & Oo. were to draw on Morton, Bliss & Co. for the money. Payments were to be made to Price, Hine & Tupper only on delivery of the warehouse receipts or bills of lading to Lañtte & Co.; and Lañtte & Co. were authorized to draw on Morton, Bliss & Co. only when the property was thus in the *632possession of Lafltte & Co. for account of Morton, Bliss & Co. Price, Hiñe & Tupper were to make no charge for their services; but they were to receive one fourth, Lafltte & Co. one fourth, and Morton, Bliss & Co. one half of the profits; the losses to be shared in the same proportions. The names of Morton, Bliss & Co. and Lafltte & Co. were not to be used, and their connection with the business was not to be known, _ because the appearance of such heavy buyers in the market would have tended to enhance prices, and to diminish the profits of the adventure.
Price, Hiñe & Tupper made large purchases from time to time; and on delivering the warehouse receipts or 'bills of lading to Lafltte & Co., the cost and expenses of each purchase were promptly paid to them by Lafltte & Co. All the purchases were made by Price, Hiñe & Tupper for cash; but in some instances they obtained negotiable warehouse receipts, which enabled them to control and deliver the molasses, without having actually paid the price; and they finally failed, leaving a large amount unpaid, although they had delivered the evidences of title and possession to Lafltte & Co. and received the money from them.
Our predecessors decided, two of the judges dissenting, that there was no partnership between Price, Hiñe & Tupper and Morton, Bliss & Co.; and that Morton, Bliss & Co. were entitled to the molasses, which Ohaffraix & Agar had seized under conservatory process in limine on the failure of Price, Hiñe & Tupper. A rehearing was granted by the same court; and, the case coming before us, we affirmed the decision without dissent. See the case, Ohaffraix & Agar vs. Price, Hiñe & Tupper — Morton, Bliss & Co., intervenors — reported in 29 An. 176; to which we must refer for a more detailed statement of the facts.
In the present case the district court held that Lafltte & Co. were liable as partners, and condemned them to pay the amount due to Chaffraix & Agar for molasses sold to Price, Hiñe & Tupper; and we are called upon by this appeal to review that judgment.
The facts are the same, and the question is the same as in Ohaffraix & Agar vs. Price, Hiñe & Tupper — Morton, Bliss & Co., intervenors — and we have the benefit of the printed arguments filed in that ease, and the oral discussions and printed ai’guments in this case, which have been of the greatest service to us, and are of marked ability. We fully appreciate the importance of the case, and have endeavored to deal with it as res nova. If we have not arrived at a c rrect conclusion, the fault is not with the learned counsel on the one side or the other, who have arrayed all the authorities, foreign and domestic, which seem to support their respective theories. A review of them all would All a volume; and we must content ourselves with the collation of such of them as seem to us determinative of the controversy.
*633As far as we have, been able to discover, the foundation of the decision which has been accepted as authoritative and has controlled the jurisprudence of England and America for nearly a century, seems to be dicta of two of the judges in Grace vs. Smith, decided in 1775, reported in 2 W. Blackstone, 998. We have not been able to find this volume; and we state the case as it is reported in the arguments of counsel and the opinions of the judges in Coope vs. Eyre, 1 Hy. Blackstone 37, decided in 1788; and in Waugh vs. Carver, 2 Hy. Blackstone 235, decided in 1793.
Smith, a retiring partner, lent a sum of money to Robinson, the other partner, who continued in business, for which he was to receive five per cent interest, and an annuity of £300 for seven years, the whole secured by the bond of Robinson. Some years after this, Grace, a creditor of Robinson, brought suit to recover of Smith as a secret partner. The jury found for the defendant; and the court refused' to grant a new trial.
Chief Justice DeGrey is reported to have said, we suppose on the motion for new trial: “ The question is what constitutes a secret part^* ner ? . Every man who has a share of the profits ought also to bear his share of the loss; and if any one takes part of the profits he takes part of that fund on which the creditor of the trader relies for his payment.^, I think the true criterion is, to inquire whether Smith agreed to share the profits of the trade with Robinson, or whether he only relied on those profits as a fund for payment.” And Blackstone, J., is reported to have said, on the same occasion: “ The true criterion, where money is'lent to a trader, is to consider whether the profit or premium is certain and defined, or casual and indefinite, and depending on the accidents of trade; in the former case it is a loan, in the latter a partnership.”
It is upon this foundation alone that the celebrated decision in Waugh vs. Carver rests. The Carvers and Giesler. ship agents, had two distinct houses, the Carvers at Gosport, Giesler at Cowes. They agreed to assist each other in procuring agencies, and to divide the profits of a portion of t.he agency business. This was the only connection between them; and it was secret. A creditor of Giesler brought the suit to charge the Carvers and Giesler as partners. The remaining facts, and the decision, will be best stated in the language of Chief Justice Eyre, delivering the opinion of the court:
“ It is plain, upon the construction of the agreement, if it be construed only between the Carvers and Giesler, that they were not, nor ever meant to be partners. They meant each house to carry on' trade without risque of each other, and to be at their own loss. Though there was a certain degree of control at one house, it was without an idea that *634either was to be involved in the consequences of the failure of the other, and without understanding themselves responsible for any circumstances that might happen to the loss of either. That was the agreement betwben themselves. But the question is, whether they have not, by parts of their agreement, constituted themselves partners in respect to other persons. The case therefore, is reduced to the single point, whether the Carvers did not entitle themselves, and did not mean to take a moiety of the profits of Giesler’s house, generally and indefinitely, as they should arise, at certain times agreed upon for the settlement of their accounts. That they have so done is clear, upon the face of the agreement; and upon the authority of Grace vs. Smith, he who takes a moiety of all the profits indefinitely, shall by operation of law, be liable for losses if losses arise, upon the principle that by taking a part of the profits he takes from the creditors a part of the fund which is the proper security to them for the payment of their debts. That was the foundation of the decision in Grace vs. Smith, and I think it stands upon the fair ground of reason. * * * * If, therefore, the principle be true that he who takes the general profits of a partnership must of necessity be made liable for the losses, in order that he may stand in a j ust situation with regard to the creditors of the house, then 'this is a case clear of difficulty. For though with respect to each other, these persons were not to be considered as partners, yet they have made themselves such, with regard to their transactions with the rest of the world.” 2 Hy. Blackstone, 246, 247.
As we have seen, there was no such question in Grace vs. Smith. The simple question was, whether a retiring partner, lending to the partner who continued in trade a sum of money in consideration of a certain annual interest, and an annuity for a term of years, was liable as a partner. It would seem that this was not a question of fact to be left to the jury, but a question of law to be decided by the court. The question would not have been different if no social relations had previously existed between Smith and Robinson; and the -court in refusing a new trial necessarily decided that, upon the given state of facts, Smith was not liable as a partner. It is difficult to imagine what support this case gave to Waugh vs. Carver; and we think we are justified in saying, either that Chief Justice Eyre misapprehended and misapplied what was actually decided, or that the case is not correctly stated in any report to which we have had access.
In his examination before a select committee of the House of Commons in July, 1851, on the law of partnership, Mr. Eane exposed, in a masterly manner, the fallacy of the reasoning, and the utter want of foundation for the decision in Waugh vs. Carver. See report; of this examination in note, Lindley on Partnership, Am. ed.,1860, p. 93. We do *635not hesitate to say, that, in our opinion, Waugh vs. Oarver could never have stood the test of judicial criticism; and that it was accepted and allowed to control subsequent jurisprudence, only because of an exaggerated respect for the doctrine of stare clecisis.
Nevertheless, this decision was followed in England, and was so strictly adhered to that, as Mr. Lindley tells us, and he cites the cases to prove it: “ Cruel as it may seem, it is established lawr, that if a person^ as executor or trustee employs money in any trade or business, and shares the profits arising from it, he thereby incurs all the liabilities of a partner, although he in fact has personally no interest whatever in the/ matter.” Partnership, 91.
The judicial mind, however, in England and America, was not satisfied with this decision; and its absolute and arbitrary application to every case in which there was a participation in the profits of a business was found to be so unjust, in some eases cruel, as Mr. Lindley says, that the judges sought to escape from it, and took refuge in distinctions, which some very eminent men, of world-wide reputation, have characterized as “very thin.” Lord Eldon, in Hamper’s case, 17 Ves. 404; Judge Story in Hazard vs. Hazard, 1 Story’s Reports, 375; Sir Montague Smith in Mollwo’s case, L. R. 4 Privy Council.
Thin and arbitrary as these distinctions were, they found ample justification in the equally arbitrary rule in Waugh vs. Carver;- and -at length they became as well established as exceptions to the rule as Waugh vs. Carver was as the general rule. Thus we find a class of cases of which Hamper’s case, decided in 1811, Smith vs. Watson, 2 Barn. & Cress., 401, decided in 1824, may be mentioned as examples, in which the rule is recognized and enforced, that if. a trader agrees to pay another person, broker, clerk, agent, for his labor in the concern, “a sum of money, even in proportion to the profits, equal to a certain share, that will not make him a partner; hut if he has a specific interest in the profits themselves, as profits, he is a partner. 17 Ves. 404. See, also, Dreg vs. Boswell, 1 Comp. 329; Wilkinson vs. Frazier, 4 Esp. 182; Mair vs. Glennie, 4 Maule & Selw. 240. Examples of American cases to the same effect are Muzzey vs. Whitney, 10 Johnson, 228; Loomis vs. Marshall, 12 Conn. 69; Hazard vs. Hazard, 1 Story 375; Denny vs. Cabot, 6 Met. 83; Vandenburg vs. Hull, 20 Wend. 70; Berthold vs. Goldsmith, 24 Howard 536; Seymour vs. Frees, 8 Wallace 202; Hallett vs. Desban, 14 An. 529, in all of which the employees were to receive a certain share of the profits; and they were held not to be partners because they had no proprietary interest in the property.
The arbitrary character of any such distinction is obvious when we remember that the foundation on which Waugh vs. Carver rests, the ratio decidendi that he who receives part of the profits is liable as a *636partner, is that he takes from, the creditors a part of that fund which is the proper security to them for the payment of their debts.
Dealing with these subtle, thin, arbitrary distinctions, which serve to show to what straits the judges were reduced, and the heroic efforts they made, taxing to the utmost their ingenuity and mental powers, to evade a rule which found no support in sound reason, which was wrong in principle, and unjust and oppressive in its application, but which they had not, shall we say it? the nerve to overrule and to declare not to be law, Judge Story, in his Treatise on Partnership, 36, says:
“ As an original question, it might admit of very grave doubt whether it would not have been more convenient, and more conformable to true principles, as well as to public policy, to have held that no partnership should be deemed to exist at all, even as to third persons, unless such were the intention of the parties, or unless they had so held themselves out to the public.”
And again, 49, this learned author says: “In short, the true rule, ex cequo et bono, would seem to be, that the agreement and intention of the parties themselves should govern all the cases. If they intended a partnership in the capital stock, or in the profits, or in both, then, that the same rule should apply in favor of third persons, even if the agreement were unknown to them. And, on the other hand, if no such partnership were intended between the parties, then, that there should be none as to third persons, unless where the parties had held themselves out as partners to the public, or their conduct operated as a fraud or' deceit upon third persons. It is upon this foundation that the decisions rest which affirm the truth and correctness of the distinction already considered as a qualification of the more general doctrine contended for.”
In our judgment it is not possible to lay down the rule which should govern in all such cases more clearly, or more in accordance with reason and common sense, equity and public policy. It affords ample protection against acts and conduct by which third persons may have been misled and deceived, while it renders due respect and homage to the meaning and intention of the parties, as expressed in their contracts and agreements; and it does not, like the rule in "Waugh vs. Carver, ride rough-shod over actual contracts, and invent, and substitute for them, and enforce as contracts, new obligations to which the parties never consented, and which they never dreamed of contracting.
Reviewing the English jurisprudence on this subject, Mr. Lindley in his work on Partnership, side page 40, expresses the hope “ that the rule which makes persons liable as partners simply because they share profits, will ere long cease to exist. The rule is in the highest degree arbitrary: it is grossly unjust; and it is productive of the greatest confusion.”
*637What could be more unreasonable, more unjust, than, setting out/ with an agreement for a share of the profits, where it was plainly-intended not to share the losses, to make liability for losses follow, as a necessary consequence, by mere operation of law, and thus to force upon the parties a partnership with all its consequences, contrary to their intention and agreement, and against which they vainly endeavored to protect themselves by the plain, unequivocal terms of a formal contract ?
In Wilson vs. Whitehead, 10 Meeson and Welsby, Exchequer 502, three persons agreed to establish a review. One of them was to be the publisher, and to make and receive general payments: another was to be the editor; and the other was to be the printer: the three to share the profits of the publication equally, after payment of all the expenses. The printer was to furnish the paper for the work, and charge it to the account at cost price; and he was also to charge the printing at master’s prices. He furnished accounts to the publisher, from time to time; but no settlement of accounts ever took place, nor were any profits ever realized from the work.
The suit was against the three, as partners, to recover the value of paper sold to the printer, who, it seems, carried on the business of printing generally. Lord Abinger directed a nonsuit, with leave to the plaintiffs to move for a verdict for the amount sued for. The rule was tried before Lord Abinger, Barons Parke, Gurney, and Rolfe; and they all concurred in the opinion that the defendants were not liable; that there was no proof of any authority to the printer to make the purchase for account of his co-defendants; and’that he could, if he had chosen to do so, have used the paper for his own purposes, and not for the review. This case was decided in 1842; and it seems wholly irreconcilable with Waugh vs. Oarver.
In Gox vs. Hickman, 8 House of Lords Cases, 268, decided in 1860, the proprietors of iron works, becoming embarrassed, gave to trustees, by deed, power to carry on the works for the benefit of the creditors, who were to be paid ratably out of the income. The. suit was brought to hold the creditors, the beneficiaries, who were parties to the deed, liable as partners for a debt contracted in operating the works. There was judgment for the plaintiffs; and the case was taken into the Exchequer Chamber, where the judges were equally divided. It was afterward taken to the House of Lords; and the solemn judgment of that august tribunal, after the most elaborate discussion, was that the defendants were not partners, and that they were not liable.
In Bullen vs. Sharp, in the Exchequer Chamber, decided in 1865, L. R. 1 Common Pleas, 86, Sharp was about to commence business as an underwriter at Lloyd’s. His father guaranteed his habilites to the *638extent of ¡£5000, in consideration of an annuity of ¡£500, or ten per cent, which, was to be increased in the event that the net average profits for three years should exceed ¡62000. The son failed; and the suit was on a policy of insurance, underwritten by him, to hold the father liable as a partner. The court considered Waugh vs. Carver as overruled by Cox vs. Hickman; and the judgment was that the father was not a partner and was not liable. Baron Bramwell, one of the judges, expressed the hope that the notion that he who takes a moiety of the profits indefinitely, shall, by operation of law, be liable for losses, is overruled; and he characterized the rule as one which “ I believe has caused more injustice and mischief than any bad law in our books.” P. 128.
In the same case, Justice Blackburn, who dissented in Cox vs. Hickman, delivered- an elaborate opinion, in which he said: “I think the ratio decidendi is, that the proposition laid down in Waugh vs. Carver, viz., that a participation in the profits of a business does, of itself, constitute a partnership, is not a correct-statement of the law of England.” P. 112.
This was followed by Mollwo vs. the Court of Wards, L. R. 4 Privy Council, 419, decided in 1872, in which money was advanced to a commercial firm, and it was agreed that the creditor should have inspection of the books, and receive twenty per cent annually out of the profits. It was proven that he did not know much about commercial affairs; but that he had interfered, to some slight extent, in the business. In the course of a clear, forcible, learned opinion, upon which it was decided that this did not constitute a partnership, Sir Montague Smith said: “ It appears established that, although a right to participate in the profits of trade is a strong test of partnership, and that there may be cases where, from such perception alone it may, as a presumption, not of law, but of fact, be assumed, yet, whether that relation does or does not exist, must depend on the real intention and contract of the parties. Cox vs. Hickman had certainly the effect of dissolving the rule of law which had been supposed to exist, and laid down principles of decision by which the determination of cases of this kind is made to depend, not on arbitrary presumptions of laio, but on the real contracts and relations of the parties.
And again, he said, p. 433, the rule that participation in the profits raises a presumption of partnership sufficient to establish it as regards third persons, is too artificial: “ Eor, it takes one term only of the contract, and at once raises a presumption upon it, whereas, the whole scope of the agreement, and all its terms, ought to be looked at before a presumption of intention can properly be made at all. The rule in Waugh vs. Carver was eminently an arbitrary one; and subsequent discussion has led to the rejection of the reason for it as unsound.”
*639The case of Tenant, decided in July, 1877, in the Supreme Court of Judicature in England, as cited by co.unsel for defendants, from the London Times, is like that of Bullen vs. Sharp, except that the father, who furnished the capital for his son was to have one half the net profits of the underwriting business, and £25 a year besides, to be paid to him by the son; and that the father claimed to be a partner, and sought as such, to have the assets of his bankrupt son applied to the payment of the debts of the business.
The court decided that there was not a partnership between the father and son; and Lord Justice Baggallay said: “Regard must be had to the whole of the terms of the contract between the parties, which, in the present case, showed that the father was not entitled to a share of the profits to be taken out of the assfets of the business, but merely that a share of the profits was made a debt from the son to the father, j ust in the same way as the £25 was a debt.”
We are quite ready to agree with the learned editor and annotator of a recent edition of Story on Partnership, and the equally distinguished author of some of our most valuable works on commercial law, both of whom have favored us with able arguments in behalf of plaintiffs in this case, that Waugh vs. Carver is no longer the rule; and that other's, tests must be resorted to in addition to participation in the profits, in order to determine the question of partnership vel non. Participation in the profits is one circumstance; participation in the losses is anotheiy It is demonstrated that participation in the profits alone is not sufficient. The parties may stipulate for a participation in the profits, and that there shall be no partnership; and they may also agree to share profits and losses, and exclude partnership, since there is nothing in liability for losses, an incident of the contract of partnership, which .gives it greater significance as a test of that relation than participation in profits, which is also an incident of that contract. Such agreements serve to fix the rights and relations of the parties with respect to each other; and the public, or third persons are not interested in or prejudiced by them, whether they are publicly avowed,, or 'known only to the parties. The true, final, satisfactory, conclusive test is in the answer to the question: What was the real meaning and intention of the parties, as expressed in their contract, whether verbal or written ? If they intended to create a partnership, they will be treated as partners inter sese and with respect to third persons: If they did not intend to create that relation, but merely to divide the profits, or to share profits and losses, in a speculation or adventure, they will not be partners inter sese, nor will they be liable as such. Those who hold themselves out to the public as partners, or knowingly permit themselves to be so held out, may not, indeed, be actually partners, if they have not so intended and agreed; but they *640will be subject to the same liabilities as partners to those who have dealt and given credit on the faith and in consequence of such acts.
The secret partner, and the publicly avowed partner, are equally liable, are equally partners, because, in the one case and the other, it is the real intention and the contract which bind them; and the secret partner can escape liability only by the failure of the creditors to discover his true relation to the business.
We shall not attempt to analyze the American cases. Such of them as hold that he who shares in the profits, or in the profits and losses, is a partner, have simply followed Waugh vs. Carver, and the subsequent decisions which rest upon it, which were so long regarded as authoritative and controlling: while such as hold that one or both of these tests can not be accepted as conclusive proof of partnership rest upon distinctions equally as arbitrary as the rule in Waugh vs. Carver; and are supported by authorities of no less weight. It is to be hoped that the jurisprudence of the United States, like that of Great Britain under the recent decisions, will no longer depend upon arbitrary rules or arbitrary distinctions; but will' accept the real intention and contract of the parties as the only safe and conclusive proof of their actual relations, whether inter sese, or as to third persons.
Those who have the leisure and the curiosity to trace the conflict in the English and American courts from Waugh vs. Carver down, have but to look into Gow, Collyer, Lindley, Story, Parsons, Troubat, any work on partnership, and read the cases cited in support of the harsh rule which ignored intention and contract, and the equally numerous cases by which it was palliated, by ingenious distinctions, until finally it was declared not to be the law of England, and the plain, natural, just, common-sense rule recognized, by which the real intentions and the contracts of parties are restored to that supremacy which they have always maintained in the civil law, and in the kindred systems which have sprung from that noble parentage.
It is elementary in our law, that there can exist no partnership without the consent of the parties, that is, without a contract establishing that relation. This was the rule of the Roman law. Papinian calls partnership voluntarium consortium, Dig. 17, tit. 2,1. 52, § 8: and Ulpian says, id. 1. 44: “ Si margarita tibi vendenda dedero, ut, sí ea decern vendidisses, redderes mihi decern; si pluris quod excédit, tu haberes: mihi videtur si animo contrabandee societatis id actum sit, pro socio esse actionem; si minus preescriptis verbis.” There was no inquiry as to whether a compensation was to be given, in proportion to the profits, equal to a certain share, or a specific interest in the profits themselves as profits. The sturdy Jurisconsult did not dally with artificial distinctions, resting on imaginary differences, but came squarely up to the question submit*641ted to him; and he solved it by a rule too plain to be misunderstood, an unerring guide, a perfect test, under all systems, in all ages, in all oases. If the parties intended to contract a partnership, “ si animo contráhencloe societatis,” then that will be their relation with respect to themselves, and to all persons whomsoever, even to the extent of controlling the form of the actions to which it may give rise. If that was not their intention, si minus, their agreement will not constitute a partnership, whether inter sese, or with respect to others. It may fall into that mass of contracts styled innominate, because' hot susceptible of distinctive classification, but not less obligatory on that account; and the litigations which may grow out of it must be in form actiones in factum, actions on the case, so-called'“ quia, nomen non possumus invenire,” which were as well known and as useful in the Roman tribunals as they are now in Westminster Hall. Dig. 19, title 5,1.1.
In Prance, “La société procede toujours d’un contrat. Sans convention, point de société. Troplong, Société, 1, p. 9, No. 3.
The word partnership is used in our Code to designate the contract by which that relation is created, and to signify the relation which is created by the contract. The Revised Civil Code of 1870, art. 2801, Code-of 1825, art. 2772, treats of the contract; and it declares that “ partnership is a synallagmatic contract.”
Art. 2805, R. O. 0., art. 2776 of the Code of 1825, treats of the relation; and it declares that “Partnership must be created by the consent of the parties.”
Article 2807, 2778 of the Code of 1825, also treats of the relation; “ A community of property does not, of itself, create a partnership, however that property may be acquired.” And in Pickerell vs. Pish, 11 An. 278, this court said; “ A partnership is formed upon the voluntary consent of the parties, as contradistinguished from the relations which may arise between them by the mere operation of law, independent of such contract.”
The law may, and it does, impose liability as a necessary consequence of the acts and conduct of parties; but it can not form the contract or create the relation which it calls partnership.
Article 2825, art. 2796 of the Code of 1825, has been relied upon sometimes to show that the relation of partnership exists from the nature of the trade or business in which the parties engage; but it has no such effeet'or scope.
Section 1, of chapter 2, title xi., treats of “ the division of partnerships.” Article 2824 declares that partnerships, according to their objects, are either commercial or ordinary;-and article 2825 declares that commercial partnerships are such as are formed—
*642“First — For the purchase of any personal property, and the sale thereof, either in the same state or changed by manufacture,” etc.
That is, where the relation has been created by the contract, the voluntary consent of the parties, articles 2825, 2826, enable us to determine whether it is a commercial partnership or an ordinary partnership by reference to the objects for which it has been formed; but these articles are of no value in determining whether the contract has been formed and the relation established.
Our predecessors decided in Hallett vs. Desban, 14 An. 529, that a clerk who received part of the profits as compensation for his services was not a partner, because he had no proprietary interest; in Belden vs. Reed, 27 An. 103, they decided that a consignment of goods for sale, under an agreement that the consignor should take back such of them as were not sold, at cost and a small percentage, and that the profits and losses should be divided equally between' consignor and consignees, did not constitute a partnership, because the consignees had no proprietary interest in the goods; and in Edwards vs. Fairbanks, 27 An. 452, they decided that refiners receiving two thirds of the profits on sugars as compensation for the -refining, were not partners, for the same reason.
It would not be profitable to pursue this subject further. We find in this record no evidence of any act on the part of Lafitte & Co. which authorized plaintiffs or any other person who- sold molasses to -Price, Hine & Tupper, to suppose that Lafitte & Co. had any connection with or liability for these purchases. Price, Hine & Tupper were general dealers in sugar and molasses, and all of their purchases were not for account of Morton, Bliss & Go. The agreement was that Morton, Bliss & Co., through Lafitte & Co., would take and pay for such molasses, of the grade agreed upon, as Price, Hine & Tupper might buy and place in the possession and under the control of Lafitte & Co.; and if plaintiffs allowed Price, Hine & Tupper to make delivery to Lafitte & Co. of molasses for which Price, Hine & Tupper had not paid, the fault was with them, and with them alone.
Price, Hine & Tupper had no proprietary interest in the molasses after they had delivered to Lafitte & Co. the receipts and bills of lading and received the price according to the agreement; and Lafitte & Co. had no proprietary interest, but held merely as agents for Morton, Bliss & Co. The whole proceeds went into the hands of Morton, Bliss & Co. without any power .of control on the part of Price, Hine & Tupper or Lafitte & Co.; and if profits had been realized, Morton, Bliss & Co. would have been the debtors of Price, Hine & Tupper and of Lafitte & Co. each for one fourth of the profits, when all of the molasses was sold, and the profits ascertained, the stipulated compensation for their services respectively. There was no partnership between these several *643firms, because there was no contract by which that relation was created; and Lafitte & Co. are not liable for the default, or the acts or omissions of Price, Hiñe & Tupper, because they did nothing with respect to the ■dealing of Price, Hiñe & Tupper to mislead- or deceive plaintiffs or any person whomsoever.
It is therefore ordered, adjudged, and decreed that the judgment of the district court appealed from be annulled, avoided, and reversed; and that the demand of plaintiffs be rejected, and their suit dismissed with costs in both courts.