Opinion
(December Term, 1843.)
Persons who share in the profits of a concern are liable as partners to a third person; but as between themselves they are only liable according to their particular contract.
This cause, having been set for hearing, was, by consent, transferred from CASWELL Court of Equity, at Fall Term, 1843, to the Supreme Court.
Morehead for the plaintiff.
No counsel for the defendants.
The pleadings exhibited the following facts: The defendants, Jones, Anderson Co., brought an action at law against the plaintiff, Motley, and the defendant Cobb, for a balance due for the price of manufactured tobacco, sold to Motley and Cobb as copartners, and the plaintiffs at law obtained judgment for the sum of $982.29.
Motley then filed his bill against the plaintiffs at law and Cobb, and therein charged that the tobacco was not sold to Motley and Cobb, but was put in as stock by Jones, Anderson Co., in a partnership, consisting of Jones, Anderson Co., the plaintiff, Motley, and the other defendant, Cobb, upon these terms: Jones, Anderson Co., who (145) were manufacturers in Danville in Virginia, were to furnish, at reasonable prices, any quantity of tobacco that could be disposed of, and ship it to Motley and Cobb at Mobile, where it was to be sold by Cobb, and, out of the proceeds of the sale, the prime cost was to be paid by Jones, Anderson Co., in the first instance, and then, after defraying expenses, the residue was to be divided as profits, one-third to Jones, Anderson Co., one-third to Motley, and the other third to Cobb. The bill further states that Cobb received and sold the tobacco, sent under the agreement, by Jones, Anderson Co., and made to them considerable payments, leaving, however, the balance still due of the original price, which was recovered at law by Jones, Anderson Co., and that Cobb wasted or lost the other effects of the firm, so that the said balance is a clear loss, and, therefore, ought to be borne equally by the partners, in proportion to their said shares of the profits. The bill then states that Cobb is insolvent and has absconded, and that the plaintiffs at law were about to raise the whole amount of the judgment from the present plaintiff. The prayer is, for a discovery of the partnership agreement, that an account may be taken and the loss adjusted between the several parties, and in the meantime for an injunction.
Upon the bill an injunction was granted for one-half of the recovery at law.
Cobb did not answer, and the bill is taken pro confesso against him. Jones, Anderson Co. deny the alleged partnership altogether, and say that the transaction was an ordinary sale to Motley and Cobb at agreed prices, to be paid at particular days named. They admit that, in consequence of Mobley and Cobb, expecting to sell large quantities of tobacco in Mobile, they agreed to let the article go at low prices, in consideration of the agreement, on the part of Motley and Cobb, that, in addition to the invoice prices of the tobacco, those persons were to pay Jones, Anderson Co. one-third part of the net profit of the adventure, after deducting the cost of the tobacco and all incidental expenses; (146) of which third part of the profits, the defendants say they have received nothing. The answer states positively, that the agreement was, that the price of the tobacco was to be paid to these defendants by Motley and Cobb at all events, and that the only concern they had in the profit and loss on the transaction was that, if there was a profit, they should be entitled to one-third of it, as an addition to the invoice prices of the tobacco sold by them.
Upon the answer, the injunction was dissolved. The plaintiff then replied and proceeded to take proofs; and after these were completed the cause was transferred to this Court.
The proofs are all on the side of the plaintiffs, and consist of declarations by one of the firm of Jones, Anderson Co., as to the terms of the agreement. But they do not vary the case made in the answer, as they are all consistent with the account given therein.
But it has been contended for the plaintiff, that according to the answer itself these parties were partners, and consequently that they must bear the losses equally. They were, no doubt, partners, as they shared in the profits; which gave each an interest in the whole. And each was certainly liable to third persons upon any partnership contract. But as between themselves, though partners, their right to profits, and liability for losses, depend upon the agreement they made. Partners do not necessarily bear losses equally, more than they are entitled to the profits equally; but that is regulated by the contract. Here the plaintiff says the tobacco was to be paid for out of the proceeds of sale; which would make the payment depend on the success of the adventure. But the answer denies that; and says that Motley and Cobb bought it and were to pay for it at all events, whether it sold for more or less — though, if it sold for more, then Jones, Anderson Co. would be entitled to one-third of the excess, after paying other expenses. The plaintiff, therefore, has no claim on Jones, Anderson Co. for contribution to the loss arising from Cobb's mismanagement or (147) unfaithfulness, and the bill must be dismissed as to them with costs, and as the bill does not seek an account of the partnership, as existing between the plaintiff and Cobb alone, it is dismissed as to him also.
PER CURIAM. DECREED ACCORDINGLY.
Cited: Fertilizer v. Reams, 105 N.C. 297.