plaintiff was bound to prepare and prove his case. The per dient and mileage of these witnesses, subject to the rule that but three could be used for each issue, can properly be taxed. Between the first and the second trial this court met in Columbia, in November. 1885. The cause. was on the docket, and could be tried. The plaintiff's attorney learned before court met tha.t there would be no trial, and was able to inform all but two witnesses. These attended that and per diem. court. They are entitled to Certain depflsitions were taken. in the cause, de bene esse, Issued out of the state court. If these were issued before petition for removal, costs of witnesses attending them can· properly be taxed, even if the depositions were not used because of the presence of the witnesses who were thus examined,orbecause the facts testified to by them were admitted. Otherwise, they cannot be taxed. The fees of three commissioners are also charged. Three were unnecessary, unlp-ss the defendant assented. If he did not so assent, and if the depositions were issued before petition for removal was filed, let the costs of one commissioner, $10, be allowed. Let the clerk reform the taxation in accordance with the rules above laid down.
(Oi1'cuit OO'/J,1't, E. D. Penn8yl1Jania. October 1..1, 1886.)
PARTNERSHIP-WHAT CONSTITUTES-PARTICIPATION IN PROFITS.
Participation in the profits does not conclusively establish a partnership relation, bl'lt such partiCIpation must be considered as evidence tending to establish }hat relation, and, in the absence of other proof, is to be regarded as sufficient to make out a partnership.
Where the agreement for the partnership is in writing, its terms must be considered in connection with the participation in the profits, in determining whether the partnership relation has been established or not.
Office of L. W. Counselman & Co., Oyster and Fruit Packers, Cor. Philpot and Will Streets. BALTIMORE, MD., March 15, 1880. For and in consideration of loans made and to be made to us by Wm. G. Perry, of Philadelphia, amounting in all to the sum of $10,000, (ten thousand dol[Trade-mark.)
Assumpsit by Meehan against Valentine, executor of W. G. Perry, upon promissory notes made by L. W. Counselman & Co., of which testator was alleged to have been a member. firm the The plea was no partnership. Upon the trial it appeared that the ostensible partners of L. W. Counselman & Co. were L. W. Counsel. man and Charles Scott. In March, 1880, W. G. Perry loaned L. W. Counselman & Co. $10,000. The terms of their agreement were expressed in the following writing: L. w. COUNSELMAN. ALBERT L. SCOTT.
bye. Berkeley Taylot', Esq., of the Philadelphia bar.
MEEHAN V. VALENTINE.
lars,} for the term of one year from the date of said loans, we agree to pay to the said Wm. G. Perry, in addition to the interest thereon, one-tenth of the net profits over and above the snm of ten thousand dollars on our business for the year commencing May 1,1880, and ending May I, 1881,-i. e., if our net profits for said year's business exceed the sum of ten thousand dollars, then we are to pay to said W. G. Perry one-tenth of said excess of profits over and above the said sum of ten thousand dollars; and it is further agreed that. if our net profits do not exceed the sum vf ten thouRand dollars, then he is not to be paid more than the interest on said loan, the same being added to notes, at the time they are given, which are to-date from the time of said loans, and payable one year from date. [Signed] L. W. COUNSELMAN & CO. Approved by me. [Signed] L. W. COUNSELMAN.
The loan was renewed in May, 1881, 1882, 1883, 1884, similar agreements being executed. In November, 1884, William G. Perry died, and in April, 1885, the insolvency of the firm was announced. During the years 1880, 1881, 1882, and 1883, moneys were paid to Perry as profits under the terms of the agreement. At the close of the plaintiff's case, defendant's counsel moved .for a nonsuit, upon the ground that, under the terms of the writings in evidence, no partnership relation was established. John G. Johnson, for plaintiff.
The original rule, well settled both in England and in the United States, was that a participation in profits constituted a partnership as to third per:sons. There were certaiu well-known and special exceptions to this rule, but the rule itself was well settled. This rule was entirely overturned in England in the case of v. Hickman, dnd the question of partnership was made to rest upon the intention of the parties themselves. It was univeraally conceded that this was an entire and complete revolution of an eXisting and well-settled rule; and parliament, recognizing this fact at once, undertook to regulate the Whole subject by legislation, and the law in England is now governed by statute. In this country, in one 01' two of the states, as, for example, Rhode Island and probably New York, the courts have followed the English case of v. Hickman, and by a species of judicial legislation overturned the existing rule. In other states they have refused tQ depart from -the original rule. Rowland v. Long, 45 Md. 439; Pratt v. Langdon, 97 Mass. 97; Lockwood v. Doane, 107 Ill. 235; Sager v. Tupper, 38 Mich. 258. -Other of the states, as, e.g., Pennsylvania, have Wisely to make the necessary changes in the law by legislation. The rule in the federal courts is firmly established in accord with the doctrine of the earlier English cases. The supreme court announced its adherence tQ this rule in BerthOld v. fJoldsmith, 24 How. 536; Beauregard v. Case, 91 U. S. 134. In the circuit courts the decisions have been in affirmance of the doctrine of Berthold v. Goldsmith, that the partnership depends on the participation of the profits, and in disaffirmanCe of the rule of v. Hickman, that the intention of the parties is to govern. In re Ward, 8 Reporter, 136; In re Francis, 2 Sawy.286; Oppenheimer v. Clemmons, 18 Fed. Rep. 886. H. P. Brown, R. C. Dale, and S. Dickson, for defendant. An agreement to pay a share of profits in consideration of a loan of money does not necessarily impose upon the lender the liabil1ties of a partner. The -question is one of intent; and if, from the whole transaction, it is seen that
elements of the partn'ership relation'do not exist, the' agreement to pay a of the profits is not conclusive. Grace v.Smith, 2 W. Bl. 998; Waugh v. Ca1'Ve1', 2 H. HI. 235; Lindl. Partn. 20, 25; Burnell v. Hunt, 5 Jur, 650; Lind!. Partn. 34; Cox v; Hickman, Lindl. partn. 40; Bullen v. Sharp, L. R.l C. Pi 86;MoUwov. Court of Wards, L. R.4P.C. 419; Pooley v. Driver, 5 eh. Div. 458; In re Ward,(U. S. D.C. Tenn.} 8 Reporter, 136; Burckle v. Eckart,! Denio, 337; Holmes v. Railroad Co., 5 Gray, 58; ton Smelting Co. v. Smith,(R. 1.) 11 ,Cent. Law J. 211; Ha1't v. Kelley, 83 Pa. St. 286; Pleasants v. Fant, 22 Wall. 116; Einstein v. Gourd.in, 4 Wood, 415; Swann"v. Sanborn, 4 Wood, 625; Oppenheimer v. Clemmons, 18 Fed. Rep. 886; Richardson v. Hughitt, 76 N. Y. 55; Cassidy v. Hall, 97 N. Y. 159.
McKENNAN, J., (orally.) I have no doubt that, under the law as it stood before the modem decisions, one who participated in the profits of a partnership wa.s to be regarded as a partner, and, as between himself and third persons, was liable for debts contracted by the parties. This was so determined in Grace v. Smith in the latter part of the last century. The reason of the decision was that a person who received a portion of the profits, and thus withdrew from the credo itors of the firm a portion of the fund to which they were entitled, was justly liable for the debts of the firm. This seemS to have been the rule without any exception. But afterwards it was helld, in the , case of an employe who was compensated out of the profits-whe'ther by devoting to him a portion of the. profits, or by giving an equivalent out of the profits of a certain sum agreed to be paid him-that that did not constitute a partnership. I can see no reason for this exception. It seems to me the reason why other persons who do not stand in the relation of employes are subject to liability under circumstances precisely the same as those in the cases of employes is not clear. But the exception was made. Thus the law seems to have stood in England for many years.. As is suggested by Mr. Johnson, the law had not been determined by the highest judicial tribunal ilYGreat Britain until 1860. The law was thus declared by theothercourt.sin England until the case of Cox v. Hickman, which changed the rule as it .had existed before, and greatly modified it ill the decisions which have been made. If the question' was an open one in England,it ought to be regarded as an open qUElstion in this country, in so far 8S the decisiolls here rested upon tAedecisions in Gracev. Srnithand Waugh v. Carver, and by inferior courts in England. But in 1860 it was decided by the house of lords that the rule which prevailed before, founded upon these'two early decisions, was wrong; and a new rule, or a modified rule, was establiahed. The rule as determilledby'those two old cases was that to share in the profits was to make the' sharer As I understand the dec,ision in Cox v. Hickman, ;that is not altogether discarded. Participation in, the profits may be, and still is to be, considered as evi!ience tending to establish the partnership relation, and, in the aosence of any other proof, is to be regarded as sufficient to m2.ke
-that 9ut. 1000x v. Hickman it is still admissible, and is to be consideredas evidence touching the alleged relation of partnership, and is sufficient if no other evidence is offered. But, as determined in that-case, it is not con.clusive. Other circumstances surrounding the transaction (whel'e the agreement is in writing, the terms in which that agreement is couched) are to be considered, in connection with the participation in the profits, in determining whether the partnership. relAtion has been created or not. Now,:tha.t is just the difference between the law as it stood until 1860, ill England, and the law as it stands now. Before 1860 a merep8lrticipation in the profits, whatever may have been the intention of the. parties, whatever may have been their agreement. was conclusive aLthe liability of the participant t.o the creditors of the fj,rm. Since.then the whole transaction is to be taken into consideration,. andfroOl that it is to be determined whether the relation of partner; was to be created. As I said before, tile American courts, followingJbos6 early cases, bald the rule aait W8S there enunciated. Sinc.ethfl decision in Cax v. Hickman, ,perhaps .the American courts have been prompted to consider this question by the light thrown on it by.tbat.decisioD; and there has been a great change or modification in this counttyof the law. as it ,stood before that decision. In many of the states, the rule asft was recognized in England, and "established by these earlier casea, Wit!> changed,and was made to conform to the decision of the house of lords in Cox v. Hickman; notably so in Massachusetts, in Rhode bland, in New York, and, also in Pennsylva\lia,because undoubtedly, until within a few yeal'8 past. the law in Pennsylvania has been' held to be as it was in England before the case of Cox v. Hickman. That .is a very striking ;of .the marked· progress made by the courts of this country in 1ibatbra.nch of the law. · So in the federal courts we have the. case reported in 24 How. (Berthold v.. Goldsmith.) That did not involve the scope of the established rule, except in so far as it applied to employes. It was there. held by the court that an employe who was to be out of the profits of a partnership did not thereby become a partner. But there are. utterances by the court in both directions. They" do say that actnalparticipation in the profits creates a partnership between the parties as to third persons, whatever may be the intention in that behalf. But there are expressions in. the other direction: that, in determining the actua.l relation that exists between the parties, all circnmstanceshaving a bearing upon that inquiry are to be taken into consideration. But in the cases before Judge HAMMOND and Judge DEAI)Y thelaw is stated to be that an agreement between persons sharing in certain proportions oUhe profits of the business does not necessarily make them partners as to each other under circumstances such render them liable to third persons. It is said by both of these judges, although I have not been able to verify their statement
by my own examination of the oase, that the case in 24 How. is not to be regarded as a decision in favor of the old rule of the common law. That a participation in the profits is ipso facto conclusive of a partnetship is not established by the supreme court of the United States. · So that, in view of all these decisions, it seems to me to be an open question, or at least one not closed by such authoritative decisions as are binding upon this court; and I think, in view of those which have been presented to the court, the decisions may hereafter reach the point which has been reached by the house of lords in England. This seems to me to be the most reasonable and fair interpretation of the rule, and, as I am not constrained by any decisions to which I have been referred, I am inclined so to hold the law in this case. The question is, then, as to the effect of this agreement. That is a' matter ·for the determination of the court. The paper must be taken together, in its entirety, to ascertain what was the intention of the parties, and what was the effect of what they did. In the first place, it is to be considered that this transaction, upon its face, was intended to evidence a mere loan. It was secured, in the ordinary form, by this paper, setting forth the obligation of, or the bargain made by, Counselman & Co., acknowledged as such, and stipulating for its payment at the end of the year. In that connection it is agreed, and clearly, as it seems to me, in consideration of the loan, and as So oompensation for the loan, to pay more than the interest thereon. That is all that the agreement amounts to. There is no stipulation here of any right of the lender t9 participate in the control of the business. There is nothing touching that within the four corners of the agreement; but it evidences a loan of $10,000, an obligation to repay it, and, as compensation for it, the usual rate of interest, and, if the profits of the business exceed $10,000, then 10 per cent. of such profits, in excess of that sum, to be received by the lenders as a compensation for the use of the money by the borrowers. I cannot, therefore, regard it, either in its terms or in its proper significance, as anything else, from beginning to end, than So loan of money, and a provision by the parties for the compensation of the lender for the use of such money, and as in no sense, therefore, indicating an intention on the part of these persons, or anyone of them, to change the relation of debtor and creditor (which is that which the paper purports, as I have said) into a contract of partnership, or into an agreement in any way to make the lender responsible for any of the debts contracted by the members of the company. Such being my view of the proper construction of this paper, I must say that, in my judgment, the plaintiffs are not entitled to recover, and the motion for a nonsuit is granted.
NOTE. Subsequently a motion to take off the nonsuit in this case was made by plaintiff's counsel, which motion the court overruled.
ROyER V. SHULTZ BELTING CO.
ROYER 'D., SHULTZ BELTING CO.1
(Oircuit Oourt, B. D.Missouri. November 8, 1886.)
tiff at the close of his case, it should instruct the jury to find for the defend·
Where the court would set aside the verdict eo instante if found for the plain-
At Law. Motion by plaintiff for a new trial. For report of trial, see 28 Fed. Rep. 850. M. A. Wheaton and Broadhead cf: H<:eu88ler, for plaintiff. Krurn cf: Jona8, for defendant. TREAT, J., (orally.) This case being for an alleged infringement of an expired patent under the recent rulings of the supreme court of the United States, it becarg.e necessary to go to the jury on the law side of the court. Those who have had any expe:fience in this class of litigation kno)V how difficult it is for 12 gentlemen, sitting in a jurybox, to go through an examina.tion of a long series of patents, hurried as they must be, in order to reach a right conclusion; but the law devolves that duty upon them under proper circumstances. The patent in this case of Boyer was before the jury, with the specifications and claims, and a draft, admitted to be correct. of the apparatus used by the defendant. The court instructed the jury to find for the,defendant. In doing so it laid the strain of the case on what it believed to be non-infringement. True, the counsel for the defendant insisted very strenuously, as he has on the motion now pending for a new trial, that the contrivances were not patentable, because there was no novelty, or no patentability I should say. The court did not consider that question, for the to suit the convenience of the court and all concerned, it was suggested by the court that the question of infringement should be at first considered, and, if there was an infringement, the court would .then proceed, in proper order, to determine the patentability or non-patentability of plaintiff's contrivance. The ground on which the court instructed the jury, as stated orally at the time, was that, admitting the plaintiff's patent to be valid, the defendant did not infringe. The reasons were then stated, and are preserved in the record.. I have seen no reason to change my view with regard to the non-infringement by the defendant of plaintiff's patent. I held up the case on another question,whether, inasmuch as the patentee, being a witness on the stand, said that the defendant's machine was substantially the same as desoribed in his patent, it should not have been submitted to the jury. Now, the case referred to in 13 Wall., and succeeding cases, as I understand them, ar,e practically these: that, where a court should set
by Benj. F. Rex, Esq., of the St. Louis bar.
aside the verdict eo instante if found for the plaintiff at the close of the plaintiff's case, it could instruct the jury to find for the defendant, thus saving time, costs,expeoses, and annoyance.. It was upon that doctrine, whioh I understand'tO be the doctrinenbw laid down by the supreme court, that the jury were instructed to find for the plaintiff. There is no error. Therefore the motion will be
and another. 1
(llfrcuit Oourt, .E. n. Mi880Uri. November S. 1886.)
REPLEVIN'-VERDICT-AssESSMENT OJ' 'VALUE.
Where, tnil. replevin suit,anumber of the articles seized under the writ, delivered tQ :the ,plaintiff. and, by him disposed of, are found by the jury to have belong",4 to the defendaJ;1t, and to have been unlawfully taken from . him, their value should be assessed.
At Law. Motion by defendants for a new trial. For the report; of the trial, see 28 Fed. Rep. 872. Oharles A. Davis and O. D. Saucey, for plaintiffs. Frank M.Estes, for defendants.
TREAT, J., (orally.) This was, an action of replevin. The case was submitted to: the jury under instructions given by the court. The oase is peculia.rin many of its incidents. I was very strongly under the impression, from all that was developed in the trial, that the court ought at once to have ordered the dismissal of the case. Whetherit should so do will be reserved for the next trial. In no possible aspect of the case can this verdict stand. The circuit court of Wayne county issued a writ of replevin, under which writ, as far as the record discloses, 2.500 blocks of granite seized, and were in the custody of the law; the rights of had the parties thereto to be determined by the state tribunal. The parties supposing that they could treat the proceedings there, under some supposed decisions of the supreme court of the state ofJ\fissouri, as void, brought this case. seized all those blocks, and other blocks that happened to be on the premises; the property was delivered by the United States marshal to the plaintiffs, by them disposed of, and the proceeds retained. Now, taking the verdict of the jury as a basis for the action of this court, while it· decides that 2,500 of the blocks were not the property of these plaintiffs, but were included in the levy under the Wayne county process, the jury gave no value therefor; and the res1?-lt is. if this verdict
by Benj. F. Rex, Esq., of the St. Louis blll'.