Opinion
8 Div. 833.
April 15, 1926. Rehearing Denied May 20, 1926.
Appeal from Circuit Court, Limestone County; N.D. Denson, Judge.
Fred Wall, Thos. S. Woodroof, and W. T. Sanders, Jr., all of Athens, for appellant.
A prima facie case of partnership is made out against persons associated and carrying on a particular business by evidence that they are sharing its profits pursuant to agreement, or describe themselves as partners in any writing. Krasky v. Wollpert, 134 Cal. 338, 66 P. 309; Fourth Nat. Bank v. Altheimer, 91 Mo. 190, 3 S.W. 858; Botham v. Keefer, 2 Ont. Ap. 595; Leinkauff v. Frenkle, 80 Ala. 136; Du Bos v. Hoover, 25 Fla. 720, 6 So. 788; McMurtrie v. Guiler, 183 Mass. 451, 67 N.E. 358. Whether a person in entering into a particular business arrangement with another had the specific intention of becoming a partner is immaterial. Griffin v. Carr, 21 App. Div. 51, 47 N.Y. S. 323. A partner cannot sue alone for his share of the firm's claim. Hood v. Warren, 205 Ala. 332, 87 So. 524; Bigelow v. Reynolds, 68 Mich. 344, 36 N.W. 95; Vinal v. W. Va. Oil Co., 110 U.S. 215, 4 S.Ct. 4, 28 L.Ed. 124. Where one party furnishes capital and another party furnishes labor, and the profits are divided equally, a partnership is thereby created. Eggleston v. Wilson, 211 Ala. 140, 100 So. 89.
J. G. Rankin, of Athens, for appellee.
An arrangement by which one person furnishes capital and the other performs services, and is to be compensated by a share in the profits, without any agreement as to losses, does not constitute a partnership. Zuber v. Roberts, 147 Ala. 512, 40 So. 319; Stafford v. Sibley, 106 Ala. 189, 17 So. 324; Smith v. Murphree, 205 Ala. 213, 87 So. 795. A partnership by holding out is a rule of liability, and not of right. Lasher v. Colton, 225 Ill. 234, 80 N.E. 122, 8 Ann. Cas. 367.
Suit in assumpsit on the common counts by appellee against appellant. The account claimed to be due, and for the recovery of which plaintiff obtained a judgment, arose out of the purchase of certain cotton by defendant from one W. H. McClellan. In addition to the general issue, defendant pleaded payment, set-off, recoupment, and a special plea in abatement. This latter plea was to the effect there was a non-joinder of a necessary party plaintiff, in that said McClellan was jointly interested with plaintiff (Smith) in this account.
Defendant insists there is much evidence to sustain the view that Smith and McClellan were in fact partners in the business of buying and selling cotton. If such a partnership in fact existed, plaintiff alone could not maintain this suit, as it is not insisted there was any assignment of the interest of McClellan to plaintiff, and it is well recognized, as the general rule, that one partner cannot sue alone for his share in a firm claim. Hood v. Warren, 205 Ala. 332, 87 So. 524. Considerable testimony was offered by the respective parties upon this controverted issue of fact, which issue was, under the evidence, properly submitted to the jury for their consideration.
Plaintiff's testimony tended to show that the cotton was purchased with his funds, and that McClellan was to make the purchases and sales, and share equally in the net profits by way of compensation for his services; it being understood that he was not to be responsible for any losses. This would not constitute a partnership inter sese, as, under the decisions of this court, to constitute such a partnership the contract must extend beyond an agreement to share in the profits, and must equally bind the parties to bear the burden of the losses. Watson v. Hamilton, 180 Ala. 3, 60 So. 63; Smith v. Murphree, 205 Ala. 214, 87 So. 795; Zuber v. Roberts, 147 Ala. 512, 40 So. 319; Stafford v. Sibley, 106 Ala. 189, 17 So. 324.
But the testimony of McClellan tended to show a community of interest in the cotton purchased, though the funds used were those of plaintiff (1 Bates on Partnership, § 35), and an agreement that he was to share equally in the profits with nothing said as to the losses. There are many authorities to the effect that under these circumstances an agreement to share the profits implies likewise an agreement to bear a share of the losses. 30 Cyc. 380; Fourth Nat. Bank v. Altheimer, 91 Mo. 190, 3 S.W. 858.
This rule has been incorporated as a part of our statutory system by section 9372, Code 1923, which reads:
"An agreement to divide the profits of a business implies an agreement for a corresponding division of its losses, unless it is otherwise expressly stipulated."
See, also, Eggleston v. Wilson, 211 Ala. 140, 100 So. 89.
It was embraced in the refused charge set out in the ninth assignment of error, which, in the record proper, is noted as "explanatory charge D." The oral charge of the court contains no reference to this rule of presumption, nor is the substance of the charge found in any given instruction. The charge stated a correct proposition of law, applicable to some of the tendencies of the evidence, and its refusal was reversible error. The same reasoning is applicable to refused charge 9, embraced in the eighth assignment of error, which, in view of all the tendencies of the evidence, should also have been given. Eggleston v. Wilson, supra.
The charge, the refusal of which constitutes assignment of error numbered 11 (though argued in brief under erroneous number as 12), is supported by the case of Fourth National Bank v. Altheimer, supra, and is correct also under the above-cited statutory provision.
For the errors indicated, let the judgment be reversed and the cause remanded.
Reversed and remanded.
ANDERSON, C. J., and SAYRE and MILLER, JJ., concur.