Russell v. Herrick

Houghton, J. (dissenting):

I think the proof showed liability on the part of Horton as a1 partner. At the timé the agreement was entered into the firm of E. R. Herrick & Co. did not exist except in name. Herrick was the only person interested and he owned all the assets. By the agreement Horton assumed to direct him as well, as to control the management of the business. Horton was to receive interest upon his money and one-half the profits until the notes were paid, and after the notes were paid he was' to receive ten per cent of the profits for ten years.

The agreement does no't say that the fifty per cent of profits which Horton was to receive xvas to- be applied to payment upon the notes, but it was to be paid to him as profits. Whether a certain portion of the notes was to. be paid before profits were figured *509does not appear. Evidently it was considered either that the business would be very profitable or that the assets were sufficient security for Norton’s indebtedness, for no time was fixed for payment of the notes, and until they were paid Norton was to have fifty per cent of the profits, and after they "were paid for ten years he was to have ten per cent.

That such is the fair interpretation of- the somewhat obscure 9th ' paragraph of the agreement is evidenced by the fact that at the end it is provided that in the event of Norton’s death he should no longer receive either of said sums.” The term “ either of said sums ” can refer to nothing except one-half the profits and the ten per cent.

It would be a curious condition of law if a man could thus deplete the resources of an actual or fictitious copartnership and escape liability for its debts.

Of course a man can lend money to a copartnership or perform services for it and stipulate for a share of the profits as compensation without becoming a partner inter sese or as to third persons, but-such an agreement must be fairly construed. If Norton by his contract made himself a partner he could not change its legal effect by stipulating in the same instrument that he should not be so considered.

The appeal brings up only questions of law, for each side asked for a direction of verdict, and no question of weight of evidence arises. If any inference as to participation in the copartnership business is to be drawn from the fact that Norton appeared when the deal for sale of the copyright plates was closed and demanded that the $1,200 be paid to him and that he paid the agent his commissions, it must be taken in favor of the plaintiffs.

In view of the provisions of the contract, I think this act on his • part has some probative force.

I think the judgment was right and should be affirmed.

■Judgment and order reversed, new trial ordered,costs to appellant to abide event.