Polk v. Buchanan

Decision Date31 December 1857
Citation37 Tenn. 721
CourtTennessee Supreme Court



This bill was filed in the chancery court at Clarksville, for the purposes fully stated in the opinion. At the ________ Term, 1857, Chancellor Frierson rendered a decree for the complainants. The defendants appealed.

Robb & Bailey and J. M. Quarels, for the complainants; F. B. Fogg and Shackelford, for the defendants.

McKinney J., delivered the opinion of the court.

The bill seeks to charge the defendant, Buchanan, as a partner with J. L. James & Son, for the hire of slaves for the year 1854, amounting to near the sum of $2,000; not upon the ground that, in point of fact, a partnership existed, as between the parties themselves, but that as to third persons, the defendant is to be held liable as a partner, by construction of law, in opposition to the actual intention and agreement of the parties.

It appears that J. L. James and Son were iron-masters and owners of the Phoenix Furnace, situate in Montgomery county. In order to raise money to enable them to carry on their business, they had procured the defendant, Buchanan, who was a commission merchant, resident in Cincinnati, Ohio, to accept drafts, for their accommodation, to the amount of $8,000, prior to the 25th day of June, 1853. And as indemnity to him, for this liability, they, on that day, executed to him a conveyance for a moiety of said furnace, and lands appurtenant thereto, together with the fixtures, stock, etc. Shortly thereafter, towit: On the 22d day of July, 1853, the parties entered into an agreement in writing, the stipulations and provisions of which are stated somewhat inartifically, but their true import is manifest. After reciting the above mentioned conveyance, and the real consideration thereof, namely, Buchanan's acceptances for James & Son, to the amount of $8,000, the instrument proceeds as follows: “And it is understood, that the said Robert Buchanan shall receive, after the first day of January, 1854, one-fourth of the net profits of said furnace, in consideration of his said advances of eight thousand dollars; and his having agreed to furnish the necessary facilities, through his acceptances, to carry on said business, in such sums as may be necessary for the same.” The instrument then, in substance, provides, that all the metal made at said furnace, after the 1st of January, 1854, shall be placed under the entire control of Buchanan, and that James & Son shall furnish him, monthly, with statements of the products and expenses of said furnace, that they shall take an account of stock on the 1st of January, 1854, and that any debts that they may have to provide for, after that date, shall be deducted from their share of the net profits of the concern; and that Buchanan is not to be liable for any debts of James & Son, contracted either before or after the 1st of January, 1854. James & Son are bound to renew their bills and drafts on Buchanan, as they fall due, and to pay all interests, exchange, and charges on the same. It is further stipulated, that said agreement should continue in force for two years at the expiration of which time, Buchanan bound himself to reconvey to James & Son, the moiety of the furnace, etc., subject to his right to be indemnified, out of the same, for his advances, and “share of profits.” And in the conclusion of the instrument, is the following statement: “The commissions of one-fourth the profits of the furnace, being paid to the said R. Buchanan, in consideration of his acceptances of said drafts, now out, and to be given hereafter.”

It is not assumed by the complainant's counsel, that the parties, by this agreement, intended to make themselves partners. On the contrary, it is understood to be conceded in argument, and the question admits of no serious controversy, that, in fact, there was no intention to create a partnership, either as between the parties themselves, or as to third persons. But it is insisted that, by construction of law, the provision, securing to Buchanan ““one-fourth of the net profits,” constituted him a partner, as to creditors.

The authorities are at variance upon this subject; and, as we have no decision of our own upon the point, we are at...

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3 cases
  • Wyatt v. Brown
    • United States
    • Tennessee Court of Appeals
    • January 7, 1955
    ...decisions appear to have treated the sharing of profits as conclusive evidence of a partnership; 40 Am.Jur., Sec. 33, p. 147; Polk v. Buchanan, 37 Tenn. 721. Over a period of years exceptions have been engrafted on this rule, the present law being Code Section 7846(4), enacted in this State......
  • Stewart v. State
    • United States
    • Tennessee Supreme Court
    • April 29, 1950
    ...Law the receipt of a part of the profits of a business as compensation for services did not per se make such recipient a partner. Polk v. Buchanan, 37 Tenn. 721; Bell v. Hare, 59 Tenn. While there is considerable logic in the conclusions of the Circuit Judge, since Stewart was operating the......
  • McClure v. Williams
    • United States
    • Tennessee Supreme Court
    • December 31, 1857

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