Couch v. Woodruff , 63 Ala. 466 ( 1879 )

BBICKELL, C. J.

The primary question is, whether, by the agreement of December 29th, 1870, into which Couch' and Harrell entered, a partnership between them' was created. If there was, a court of equity alone had jurisdiction to decree an account and settlement of the partnership transactions. If there was not, the bill ought to have. been dismissed, and the error of entertaining it is fatal 1° all the proceedings.

In determining whether a partnership was created, we are to consider alone the intention of the parties, as it may be fairly collected from the agreement, and the circumstances attending its execution.. — Pars. Part. 58. There is a well-recognized distinction, between cases where third persons are concerned, who have dealt with parties associated in business, and cases where controversies arise between the parties themselves. In the former class of cases, for the protection of strangers, a partnership may arise by mere operation of law, without an inquiry into, or in direct opposition to, the expressed intention of the parties. The general course of decision, founded on the principles laid down in Waugh v. Carver, 2 H. Bla. 235 (1 Smith’s Lead. Cases, 968), is, that whenever two or more persons agree to combine or unite capital, skill, or labor, for the purpose of trade or business, for their common benefit, and that the proceeds shall be received on their joint account, and distributed among them, as to third persons they will be regarded as partners, although such may not be their intention. There is community of loss, and of profit, and the law implies the existence of a partnership. — Pars. Part. 70-93. In the latter class of cases, the question, as we have said, is one of intention; and when the agreement between the parties is in writing, the intention must be collected from its words, and the circumstances which may be resorted to for aid in'its construction — the circumstances surrounding the parties, the occasion giving rise to the contract, and the object to be accomplished. — Pollard v. Maddox, 28 Ala. 321.

Couch was entering into a business new to him, in which Harrell had been previously engaged, and had experience, and an acquaintance with the class of the immediate community .from whom customers and patrons were expected. The enlargement and extension of the business is the purpose of Couch, explicitly avowed in the first clause of the agreement. The means and methods to be employed are— first, that Couch shall invest a capital of ten thousand dollars, and conduct the business in the narqe o,f W. H. Couch & Co., being allowed eight per cent, interest on his capital. He is prohibited from drawing out any part of this capital, during the continuance of the business relations, which were limited to January 1st, 1872. ■ He is to employ Ethridge, at a salary of fifteen hundred dollars, and such other help as may be needed. The duty of Harrell is to give his whole time and attention to the business; and therefor, and because of his influence and business qualifications, Couch agrees to give him one-half the net profits, and he is to bear one-half the losses, if any are sustained.

Whether a person associated with another in trade or business, receiving a share of the profits as compensation for his labor and skill, is, as between the parties themselves, to be esteemed a partner, or only a servant or agent, is a question often of unmixed difficulty. The difficulty lies, not in ascertaining the principle by which the question may be determined, but in its application to the varying facts of the particular cases. It may be safely asserted, as the result of the authorities, it seems to us, that where there is a communion of profit and loss — when the party is not only entitled to share in the profits, but must bear the losses, whereby he may not only be excluded from all compensation, but involved in liability he can be compelled to discharge from his individual, separate property; when it is plain that he looked beyond the personal responsibility of his associate, to an interest or lien upon the resulting property, or proceeds — a right beyond that of an ordinary creditor, which would survive the death or bankruptcy of his associate; a mere agency, or employment as a servant, is excluded, and, as between themselves, the parties are partners. — Emanuel v. Draughn, 14 Ala. 303; Moore v. Smith, 19 Ala. 774; Meaher v. Cox, 37 Ala. 201; Scott v. Campbell, 30 Ala. 728; 1 Smith’s Lead. Cases, 985. Applying this test to the agreement of these parties, when it is read in the light of the circumstances, and construed according to its obvious meaning, we think a mere agency, mere employment on the part of Harrell, is excluded, and that, as between themselves, he and Couch were partners.

3. We.are unwilling to dissent from the conclusion of the chancellor, that, if Harrell is to be charged with the one thousand dollars Mrs. Craig had contracted to pay him, the partnership, not Couch individually and separately, should be credited with • it. In the superintendence of the business of Mrs. Craig, it was from the business of the partnership the time and attention of Harrell was withdrawn; the loss, if any was sustained, was sustained by the partnership ; and for it compensation was due only to the partnership.

4. There was no error in excluding such parts of the evidence of Couch and Etheridge, as sought to engraft on the written agreement, by parol, independent stipulations on the part of Harrell, increasing his duty and obligation. In the absence of fraud, or mistake, a writing in itself complete, and which has been executed with deliberation, cannot be varied or altered by oral evidence. It is presumed to contain the sole memorial of the contract of the parties: in it all prior negotiations or stipulations are mergedand when these are intentionally omitted, it cannot be said by either party subsequently that they were not waived.

We find no error in the record, to the injury of the appellant, and the decree must be affirmed.