Court Opinion

ID: 6988808
Source: CourtListenerOpinion
Date Created: 2022-07-24 03:21:13.2107+00
Date Added: 2024-06-11T16:09:32.948232
License: Public Domain

Wilson, P. J. It appears from the master’s report, that in ascertaining the amount of the net profits he excluded from expense account appellee’s per diem, and charged the same to appellant individually. As appellee’s share of the profits, calculated upon this basis, would be materially increased, it is essential to determine whether this mode of computation is warranted by the partnership agreement. The agreement provides that “ said Phillips is to have the sum of five dollars per day,” etc., but it does not say, in terms, from whom he is to have it, nor does it otherwise define how the net profits are to be computed. The fact that provision is made in the contract for the per diem allowance, furnishes, of itself, no evidence that it is to be paid by appellant individually. It is a familiar principle that, in the absence of an agreement to that effect, one partner can not charge his co-partner for services rendered about the partnership business. Even when the services of the respective partners have been very unequal, or are all rendered by one partner, if there be no agreement that such services shall be remunerated, no charge in respect to them can be allowed in taking the partnership account. 1 Lindley on Part. 774; Par. on Part. 229; Lewis v. Moffett, 11 Ill. 392; Roach v. Perry, 16 Id. 37; 7 Paige, 483. The provision for the per diem was doubtless inserted to avoid the effect of the principle just stated, and this was its only office. Without it appellee would not have been entitled to any remuneration for his labor beyond his share of the profits of the business. To whom, then, was appellee to look for hisyoer diem pay? We think the partnership agreement in that respect is susceptible of but one construction. The services were rendered, not for appellant individually, but for the firm, and the natural, indeed the only legitimate inference is that they were to be paid for by the party for whom they were rendered, it not being otherwise provided for in the contract. The case is simply that of a partnership in which one partner furnishes the capital and the other his labor, with a stipulation that he is to be paid therefor by the firm. Whatever is paid by the firm for materials or labor, is chargeable to expense account, and must be deducted from the gross earnings of the business, when computing the net profits. To adopt the construction contended for by appellee, is to ignore the existence of the partnership, and make Phillips a mere employe of Cook. That there was a partnership is not disputed. Appellee in his bill, and appellant in his answer so allege, and the agreement in express words creates the partnership relation. The fact that appellant had the excl usive management of the business, that he alone was authorized to draw checks, and had the right to dissolve the 'partnership at his pleas uz’e', is not inconsistent with the existence of a partnership. The parties had the right to fix upon whatever terms and conditions they saw fit. The case of Selz et al. v. Buel, 105 Ill. 122, is not, as we understand the opinion of the court, in conflict with the views here expressed. That was a suit, not by a partner, but by azi employe of the firm, to recover for services rendered under a special contract, by the terms of which the plaintiff was to receive - as salary or compensation a sum equal to one fifth of the net profits of the business, which sum the firm guaranteed should be not less than §7.500 per year. The contract pointed out the manner in which the profits were to be calculated, and the court held that, under the provisions of the contract, to treat the amount guaranteed as a factor in ascertaining the amount of the net profits, would be, in effect, to compel the employe to contribute toward the payment of the amount guaranteed; in other words, that Buel’s compensation should not be charged to expense account, in determining what his share of the profits was. In the present case, the language of the partnership agreement does not require such a construction. On the contrary, we think the language of the agreement must be held to manifest an intention that the net profits should be computed upon the basis of charging appellee’s per diem to expense account. As to the Ilolmes job, no reason is perceived for applying to it any other or different rule than that applicable to the other partnership transactions. Whatever was received from Ilolmes, whether in the form of commissions, or for appellee’s day’s work, belonged to the firm, and constituted a firm fund, to be accounted for and divided on the same basis as the other partnership earnings. The proofs tended to show that Holmes paid as commissions, $1,175, and §550 for appellee’s labor, making the gross earnings $1,725; but as the §550 must be treated as a firm expense, and chargeable to expense account, there remains as net profit on that transaction, §1,175. The evidence as to the date of the termination of the partnership, was conflicting. The master found that the date was March 22, 1884, and we can not say that the finding in that particular is not supported by the proofs. ■ The decree is reversed and the cause remanded to the court below for further proceedings not inconsistent with the views herein expressed. ¡Reversed and remanded.