Court Opinion

ID: 3493741
Source: CourtListenerOpinion
Date Created: 2016-07-05 22:01:49.057145+00
Date Added: 2024-06-11T13:05:23.025325
License: Public Domain

On the 22d day of December, 1892, plaintiff and R. D. Wheaton executed the following contract: "This agreement, made and entered into this 22d day of December, 1892, by and between the Canton Bridge Company, of Canton, Ohio, of the first part, and R. D. Wheaton, of Charlotte, Michigan, of the second part, witnesseth: The party of the first part has this day appointed said second party agent, to contract for bridges and general iron work, and to do any other work in connection with the general business when directed by the first party, in the following territory, to wit: Michigan, Wisconsin, Illinois, and all the counties in Indiana except Elkhart, Allen, Miami, and Noble counties. The party of the first part to advance all the money necessary to defray all general expenses incurred in said business, on detailed expense accounts, to be furnished to the Canton office at the end of each and every month after the time this contract takes effect. Said second party agrees to devote his entire time and ability to said business to the best interests of the above parties described, in above territory. In consideration of services rendered by said second party, said first party agrees to pay said second party one-half of all net profits on work contracted in said territory. Said profits are to be arrived at on the following basis: Average cost of metal per pound, card labor on each job, freight per pound, erection per contract, lumber per contract, contractor's expenses, and sundry expenses, or any other actual expenses on the work, all of which is to be charged to each contract, and deducted from the contract price of each job or contract, and the *Page 620 
balance to be equally divided between the parties to this contract. Any other receipts to be divided equally. In case of loss on a job or contract, the same is to be divided equally between the parties to the contract.
"It is further agreed that the party of the second part is to have charge of above territory, and to use his best judgment in managing the same. In case of a dispute in regard to cost of work, the party of the second part is to have free access to the books of the company at any time. It is also agreed that the party of the first part is to purchase one-half interest in the erection tools, office fixtures, etc., now held by J. C. Darst, of the firm of R. D. Wheaton  Co., provided they can be purchased for a reasonable price, the party of the second part to hold his one-half interest in above tools, etc.
"This contract is to take effect January 1, 1893, and to hold good for five years, unless dissolved by mutual consent.
"In consideration of the above, we hereby bind ourselves by these presents."
Upon the execution of this contract, the Canton Bridge Company purchased Darst's interest in the construction tools, as provided by the contract. From the making of this contract on, as appears by the testimony of plaintiff's witness and agent, the business contemplated by the contract was done in the name of R. D. Wheaton  Co. Shipments were made by the plaintiff in that name. Various contracts were taken from time to time, and a regular account with R.D. Wheaton  Co. opened and kept on the books of the plaintiff. The custom was for Mr. Wheaton to make collections. In September, 1893, a contract for the construction of a bridge for the defendant was made in the name of R. D. Wheaton  Co. The bridge was constructed in pursuance of the contract by the plaintiff. After the making of the contract, and before the construction of the bridge, there was some misunderstanding between the plaintiff and Wheaton, and an attempted adjustment of their matters. In the course of these negotiations the plaintiff gave to Wheaton an order upon the defendant for the contract *Page 621 
price of the bridge, but subsequently revoked this order, and notified the defendant that the contract was the property of the plaintiff, and demanded pay. The testimony offered by the plaintiff, however, shows that, in any event, Wheaton is interested in the profits of the job, and entitled to a share in them; and, if it has a right to rescind the transfer to him in the manner in which it was attempted, — a point which we deem it unnecessary to decide in the case, — it re-established the relation which the parties bore to the contract in the first instance; and this leads to the inquiry, which presents itself at the threshold of the case, of whether plaintiff and Wheaton were, by the contract set out, as interpreted and acted upon by them, copartners; for, if they were, it is clear that the disagreement between the parties cannot be made the subject of litigation in this suit at law, but both must join. Story, Partn. § 241.
Under this contract, there was an agreement to share the profits and losses. There was an agreement on the part of Wheaton to devote his time and energies to the interests of the parties; an agreement on the part of the plaintiff to advance the money necessary to defray all expenses. The profit should be arrived at after deducting the cost of the material and the expenses, including the work, etc.; and it is very clear that the losses on the contract or job would be determined in like manner. This, of necessity, involved a community of interest in the material, as fast as it was furnished, whether furnished by the plaintiff or purchased by Wheaton or the plaintiff. Should a loss of the material occur by fire or otherwise, or should a loss be met by failure to collect the contract price, it would be the joint loss of the parties to the contract. Both are alike interested. It is true the plaintiff agrees in terms to pay one-half the profits in consideration of services rendered, and, if this were all that the contract provided, it would not necessarily import a partnership; but the contract goes further, and provides for *Page 622 
sharing losses. It is difficult to conceive of any right which a partner can have in any case which Wheaton did not have, and has not, with the approval of plaintiff, exercised under this contract. He is to have charge of the designated territory, and to use his best judgment in managing the same. This he did by making contracts in an agreed firm name. He is to have access to the books. He did in fact make collections, and plaintiff's secretary testified that he was relied upon to make collections, and that he understood the arrangement to be that he was to make collections until he was notified differently. We think that, under these circumstances, it should be held that the two parties to the contract were partners. 1 Lindl. Partn. 12; Hunt v.Erikson, 57 Mich. 330; Corey v. Cadwell, 86 Mich. 570;Dumanoise v. Townsend, 80 Mich. 307. The fact that he is designated as "agent" in the contract, and that the writing refers to his profits as "pay," cannot affect the result, if, by the plain provisions of the contract, he is constituted a partner. See Dutcher v. Buck,96 Mich. 169; Beecher v. Bush, 45 Mich. 193.
The circuit judge committed no error in directing the verdict for defendant. The judgment should be affirmed.