Reversing.
A.F. Crider has prosecuted an appeal from a personal judgment against him in favor of the Providence Coal Mining Company, for an admitted debt of the Paris Coal Company. The question presented is whether A.F. Crider was a partner in the firm known as the Paris Coal Company.
Prior to July 7, 1926, W.S. Paris was engaged in the retail coal business in the city of Marion, Ky., under the assumed name of Paris Coal Company. On that date, W.S. Paris and wife conveyed to A.F. Crider, of Shreveport, La., for a consideration of $1,500 cash, an undivided one-half interest in certain real estate in the city of Marion, then and thereafter occupied and used as a coal-yard by the Paris Coal Company. The deed of conveyance contained this provision:
"It is further agreed and understood that the first party (W.S. Paris) has sold and by this deed also conveys to second party (A.F. Crider) an undivided one-half interest in and to the Paris Coal Company, including scales, one wagon and harness, and two mares, as well as all shovels and other tools and equipment used in connection with said coal business."
Some background is relied upon by both parties as affecting the interpretation of the deed. A.F. Crider permitted his brother J.H. Crider to engage in business *Page 516
with W.S. Paris under the firm name of Paris Coal Company, and allowed the firm to use his one-half interest in the property conveyed by the deed. J.H. Crider agreed to pay the taxes and insurance premiums on the property. There was no agreement or communication whatever between A.F. Crider and W.S. Paris, except the transaction evidenced by the deed, which was negotiated by another. It was proven without contradiction that A.F. Crider acquired the property for the purpose of lending it to his brother, whom he desired to assist in a business way. Another brother of A.F. Crider conducted the negotiations for the purchase of the property, but the agency was completed when the property was acquired. The judgment of the circuit court was rested upon the conclusion that the provision quoted from the deed to A.F. Crider operated as a matter of law to create a partnership between A.F. Crider and W.S. Paris in the Paris Coal Company, and rendered A.F. Crider personably liable for the debts of that concern. The soundness of that conclusion is the sole problem now to be resolved. Some conflict has arisen among the authorities as to the true test of the partnership relation. In general, it has been understood to mean a contract between two or more competent persons to place their money, effects, labor, and skill, or some or all of them, in lawful commerce or business, and to divide the profits and bear the losses in certain fixed proportions. Goldsmith v. Eichold,
Sir Frederick Pollock, in his work on Partnership, considered that quoted above the most businesslike and substantially accurate definition, and one which, with slight amendment, might be accepted, notwithstanding the criticism by Sir George Jessel (5 Chan. D. 472), on the ground that there may be partners who do not contribute any property, labor, or skill, as where a share is given to the widow of a prior partner. Bouv. Law Dict. (3rd Rev.), page 2471, Partnership. Undoubtedly, a business may be so conducted by two or more persons as to evidence a contract, status, or relation that will constitute a partnership, or at least estop the parties from denying that it was so. Roy C. Whayne Supply Co. v. McGowan,
"The rule formerly laid down, and long acted on as established, was that a man who received a certain share of the profits as profits, with a lien on the whole profits as security for his share, was liable as a partner for the debts of the partnership, even if it had been stipulated between him and his copartners that he should not be so liable; but that merely receiving compensation for labor or services, estimated by a certain proportion of the profits, did not render one liable as a partner. Story, Partn., c. 4; 3 Kent, Comm. 25, note 32-34; Ex parte Hamper [17 Ves. 403], above cited; Pott v. Eyton, 3 C. B. 32, 40; Bostwick v. Champion, 11 Wend. [N.Y.] 571, and [Id.] 18 Wend. [N. R.] 175, 184, 185, [31 Am. Dec. 376]; Burckle v. Eckart, 1 Denio [N.Y.] 337, and [Id.]
3 N.Y. 132 ; Denny v. Cabot, 6 Metc. (Mass.) 82; Fitch v. Harrington, 13 Gray [Mass.] 468, 474 [74 Am. Dec. 641]; Brundred v. Muzzy, 1 Duteher (25 N.J. Law) 268, 279, 674. The test was often stated to be whether the person sought to be charged as a partner took part of the profits as a principal or only as an agent. Benjamin v. Porteus, 2 H. Bl. 590, 592; Coll. Partn. (1st Ed.) 14; Smith, Merc. Law (1st Ed.) 4; Story, Partn., sec. 55; Loomis v. Marshall,12 Conn. 69 ,78 [30 Am. Dec. 596]; Burckle v. Eckart, 1 Denio [N.Y.] 337, 341; Hallet v. Desban, 14 La. Ann. 529."
It was determined in that case that a contract by which a sum of money was lent to a partnership under an agreement that a small amount of interest should be paid at all events, with a contingent compensation for the loan equal to one-tenth of the annual profits of the business, if those profits exceeded the sum lent, did not render the lender liable for the debts of the partnership. In the later case of Karrick v. Hannaman,
In Boreing v. Wilson,
The judgment is reversed for proceedings consistent with this opinion.