Osbrey v. Reimer

The difference between the parties arises from the assertion of the defendants, that the profits or losses of each year are separable from those of each of the other years during which the agreement was to continue, and that, consequently, the losses of 1861 being ascertained at $>82,227.75, the plaintiff was, on December 31, 1861, chargeable with, and became liable for, 17-|- per cent of those losses, upon which interest was chargeable., The solution of this difficulty depends upon the question, whether by the agreement contained in the letter of the defendants, dated Februry 11,1861, the parties became copartners in trade, or whether the plaintiff was employed as the salesman of the defendant, for the specified term of three years, as an unbroken period of service.

Whatever may be the character of the parties in relation to creditors or others, it is quite clear that in relation to each other, they were not copartners. The letter to which I have referred, distinctly provides that the arrangement thereby entered into, should not give to the plaintiff the right of partnership in the firm, or of signing the name of the firm, and that he was to superintend as salesman of the department of general dry goods for the period of three years; at the expiration of which time he was to receive, as a compensation for his services, 17J per cent on the profits of the business, within that time; of course, after deducting all losses. The *275words are, "to share the profits and losses of our business in the above mentioned time, at the rate of 17^ per cent.” This calculation, in order to ascertain the amount of the plaintiff's compensation, was not to be made at any fractional portions of the three years, every year, every month, or every week, but at the expiration of the whole term. Otherwise, certainly, the agreement would have provided for such an accounting. Instead of this, the letter provides that the plaintiff shall be at liberty to draw $2500 a year, in monthly installments, for Ms personal and other expenses, and, in case of his death, the books of the firm may be balanced either on the 31st of December, or 30th of June, wMchever - date may follow after his death. This, surely, excludes the idea that they should be advanced at any other time within the three years. If the accounting, then, was not to be made until the expiration of that period, the profits and losses were to be calculated upon the whole, and not upon any fractional part of it—not' upon every year, or month, or week, within it; in a word, the gross profits and losses of the specified term of the contract were to constitute the elements of the accounting. If so, the conclusion of the referee is correct, “ that the defendants had no right to charge the plaintiff interest on losses for the first year, nor to reduce the amount loaned them by the plaintiff, in consequence of such losses.”

The judgment should be affirmed, with costs.

I concur. The report is according to the contract. The defendants refused to pay interest on the plaintiff’s capital, and on his share of the annual profits.' That is the principle adopted by the referee.

Welles, J. also concurred.

Judgment affirmed.

Leonard, Clerke and Welles, Justices.]