Court Opinion

ID: 6547937
Source: CourtListenerOpinion
Date Created: 2022-07-19 22:21:12.45793+00
Date Added: 2024-06-11T15:56:01.386580
License: Public Domain

AVood, J., (after stating the iacts). The complaint alleges a partnership growing out of the terms of the contract between the Armstrongs and Mrs. Bogard. But, as we view the contract, it is nothing more nor less than a lease contract between the Armstrongs and Mrs. Bogard, whereby the former, as the lessors of the property therein described, lease the same ho the latter as the lessee for a definite term upon consideration that the lessee give to the lessors their board and thirty per cent, of the gross receipts of the business, which belonged exclusively to the lessee, and was to be operated and conducted by her solely for her own benefit. The contract, considered as a whole, does not create the relation of partnership, when measured by any of the rules by which such relation is determined, as announced by the decisions of this court. In the case of Herman Kahn Co. v. Bowden, 80 Ark. 26, this court said: “A partnership may be defined to be as the relation existing between two or more persons who have agreed to carry on a business together and to share in the profits thereof as joint owners of the business.” In Culley v. Edwards, 44 Ark. 427, we said: “So far as liability to creditors is concerned, the test of the partnership is whether the business has been carried on in behalf of the person sought to be charged as a partner, i. e., did he stand in the relation of the principal toward the ostensible traders 'by whom the liabilities have been incurred and under whose management the profits have been made?” See our latest case, Roach v. Rector, 93 Ark. 521, where former decisions are cited and approved. Now, there is nothing in this contract to show that the Armstrongs and Mrs. Bogard agreed to “carry on a business together, and to share in the profits thereof as joint owners of the business.” The contract shows to the contrary. There is nothing in the contract to show that the business was carried on or was to be carried on in behalf of the Armstrongs. They do not by the terms of the contract stand in the relation of a principal to Mrs. Bogard. She was not in any sense their agent in conducting the hotel business. The contract shows to the contrary. In Buford v. Lewis, 87 Ark. 412, we said: “A participation in profits is not conclusive, but it is a cogent test for trying the question, and is conclusive, unless there are some circumstances altering the nature of the contract.” Here the circumstances under which the hotel business was to be conducted, so far as the rights of appellees are affected, are expressed in the contract, and on'demurrer these must be taken as the test of the relation. The terms of the contract do not'show a hotel business to be operated as a joint enterprise for the common benefit of the parties to it. The Armstrongs, as we view the contract, had nothing whatever to do with the management or operation of the business. Mrs. Bogard was the .sole proprietor of the business. Appellees had no voice in the methods or manner of carrying on the business. As we have stated, the parties did not sustain the relation of principal and agent in any sense of the word. Under the rule announced in Meehan v. Valentine, 145 U. S. 611, for ascertaining the partnership relation as to creditors, and quoted and approved by this court in Buford v. Lewis, 87 Ark. 412, supra, and in Rector v. Robins, 74 Ark. 437, the business must be “carried on” as a “joint business.” That essential feature is conspicuously absent from the contract under consideration. See other authorities cited in appellee’s brief. The decree is affirmed.