Pleasants v. Fant

Citation22 Wall. 116,22 L.Ed. 780,89 U.S. 116
Decision Date01 October 1874
CourtUnited States Supreme Court

ERROR to the Circuit Court for the District of Maryland.

R. & H. Pleasants sued Fant in the court below, and the single question in dispute was whether the defendant was a partner in the firm of Keene & Co., so as to charge him with a debt conceded to be due by that firm to the plaintiffs, arising out of some transactions in cotton. The case was tried before a jury, and when the testimony was through, both plaintiffs and defendant prayed instructions of the court, which were all refused, and the court said to the jury,

'There is no evidence in this cause from which the jury can find that the defendant had such an interest in the purchase and sale of the cotton by Keene & Co. as will make him, the defendant, a partner as to third persons, and the jury will, therefore, find their verdict for defendant.'

The bills of exception disclosed the testimony on which this instruction was founded, and the question now before this court was whether the verdict founded on that instruction should be set aside and the judgment reversed.

The direct testimony offered to prove the partnership was confined to the statements of Fant in a conversation with one of the plaintiffs and a clerk in their office, and the deposition of Keene, a partner of Keene & Co. The substance of the former was that Fant denied that he was a partner, said he knew from some experience what was necessary to make him a partner, and admitted that he had procured for Keene a loan of $10,000 in gold from a bank of which he was president, and that he was to receive part of the profits of Keene's venture in purchasing cotton with that money, as compensation for procuring the loan. What portion of the profits he was to receive was not stated.

Keene in his deposition denied that Fant was a partner in the transaction, but said that Fant had negotiated for him the loan from the bank, and he had made Fant a promise, which was entirely voluntary, to give him a part of the profits he might realize, and that he had mentioned no particular part or proportion of the profits to be so given.

After the admission of this testimony, the plaintiffs, on the ground that they had sufficiently shown a relation between Fant and Keene to admit of Keene's declaration to third persons as to Fant's interest, offered to prove by one of the plaintiffs, that Keene had told him Fant was a partner, and asked that the plaintiffs would advance money enough on the cotton then in their possession as brokers to enable him to pay Fant his money and let him out of the firm. This offer was objected to and the objection sustained by the court.

A large amount of testimony, however, was admitted, the object of which was to show that Fant, as president of the bank, was in the habit of using the money of the bank in private speculations, without the knowledge of the directors, but which was very feeble and far from establishing that fact.

Verdict and judgment having been given for the defendant, the plaintiffs brought the case here.

Messrs. I. N. Steele and S. T. Wallis, for the plaintiffs in error:

1. The English rule laid down in Waugh v. Carver,1 makes a participation in profits conclusive proof of partnership under all circumstances.

In Berthold v. Goldsmith,2 and in Seymour v. Freer,3 this court holds that the rule does not apply to 'a case of service or special agency, where the employ e has no power, as a partner, in the firm, and no interest in the profits, as property, but is simply employed as a servand or special agent, and is to receive a given sum out of the profits, or a proportion of the same, as a compensation for his services.' Beyond that exception the court does not go in its adjudication or its reasoning. There is nothing in either to countenance the idea that a party, not an employ e, but contributing, or lending, or procuring the capital of a concern, can stipulate, ab initio, for a share of its profits, as a compensation for doing so, and yet escape liability for its debts. And such an idea is contrary to the whole current of authority.4 This court has not followed some of the later English cases.5

2. The instruction given to the jury improperly took the case away from it. The evidence undoubtedly did at least tend to prove a participation in the profits; and while the rule of evidence does not allow one partner to bind or speak for the other, until proof has been given of his authority, it nevertheless requires nothing more than proof tending to establish the authority; proof legally sufficient to go to the jury on the point.6

It is settled law that a Circuit Court has no authority to order a peremptory nonsuit against the plaintiff's will.7 But very nearly the same result is reached if after a plaintiff has given what he deems sufficient evidence of his case, and which does confessedly tend to prove it, the court may tell the jury what this court told the jury below.

Mr. R. T. Merrick, contra.

Mr. Justice MILLER delivered the opinion of the court.

If the admission of Fant to plaintiffs, and the evidence of Keene, are insufficient to raise a prim a facie presumption of partnership, then Keene's declarations on that subject were inadmissible, and the court was right in its instruction to the jury. If it was sufficient for that purpose then it was erroneous, and the evidence here offered of Keene's statements to plaintiffs was improperly excluded.

The case rests after all on the question whether in Fant's declaration to the plaintiffs and Keene's deposition there was evidence of a partnership on which a verdict for plaintiff could have been sustained.

We have been favored by counsel with a reference, very learned and very exhaustive, to the authorities on the question of how far or when a participation in the profits subjects a party to the liability of a partner to third persons. And it must be confessed that some of the discriminations, where profits are used as compensation for definite services, are very nice.

We do not think that a close examination into these is necessary in this case. According to Keene's restimony there was clearly no contract binding him to divide the profits with Fant. He says the promise was entirely voluntary and that no portion of the profits was mentioned. By voluntary he undoubtedly means that it was not a part of the agreement by which he obtained the money, but a gratuitous promise to reward his friendship if he succeeded in his venture.

Fant's statement to the plaintiff, as detailed by the latter, differs but very little from this. As a compensation for obtaining the loan, he says that Keene agreed to allow him a part of the profits, but how much or what proportion, or whether it was a definite sum to be paid out of the profits, or a proportionate part of the profits, is not shown.

If one of the most approved criteria of the existence of the partnership in such cases be applied to this, namely, the right to compel an account of profits in equity, the evidence totally fails. In a suit for that purpose, founded...

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