Haskins v. Burr , 106 Mass. 48 ( 1870 )

Colt, J.

The bill does not directly allege the existence of a partnership between these parties, but the plaintiff now claims that, by the terms of the agreement set forth, they became in fact partners as between themselves, and that this suit in equity can be maintained. The agreement contained mutual stipulations. On the part of the plaintiff it was agreed, in substance, that he should render service for the defendant in a rubber factory which he had recently become owner of, at a fixed annual compensation; and on the part of the defendant, that if the mortgages and incumbrances on the property should be paid as they became due, from the profits of the business, and the plaintiff’s notes on demand, given at the same time, should in the mean time be paid, he would convey to the plaintiff one half of the property and business, and not otherwise. There were other stipulations, but upon the question whether a partnership was created they are not material.

It is plain that this agreement is executory. It does not provide for an immediate partnership. The obligation of the defendant to convey an interest in the concern is contingent. There is no joint property in the capital invested. There is no such interest in the profits as will entitle the plaintiff to an account, and give him a specific lien upon them or preference in payment over other creditors. He has in one sense an interest in the profits, because their accumulation and application to the incumbrances upon the property hasten one of the contingencies upon which he may demand a conveyance and have a right to be a partner in the business ; but he has no property in the profits.

If the contingencies have happened upon which the plaintiff may demand his right to be admitted to share in the business, and the defendant has refused to perform his agreement, or has intentionally put it out of his power to perform, the plaintiff has his remedy at law to recover damages for the breach, which is plain, adequate and complete. This is not a bill for a specific performance of a contract to enter into a partnership, or to convey real estate; and although it is preliminary to, and contemplates a partnership, the remedy upon it is at law.

If, in an action at law, from the nature of this agreement, an inquiry into profits is involved, it is only for the purpose of determining what extent of damage the plaintiff has suffered by the defendant’s refusal to permit him to complete the agreement so as to become entitled to share in the business. The inquiry into the profits is only collateral. The bill cannot be maintained as a bill of discovery, to ascertain profits made by the defendant, because it contains no averment that a suit at law is now pending or is to be brought. Pease v. Pease, 8 Met. 395.

The contract does not give the plaintiff a right to an account of profits as prayed for in the bill, for any purpose except as above indicated; and the case is not within that clause of the statute which gives this court jurisdiction in equity in suits upon accounts, when the nature of the account is such that it cannot be conveniently and properly adjusted and settled in an action at, law. Gen. Sts. c. 113, § 2. 1 Story Eq. § 459.

Demurrer sustained.