Opinion
Submitted December 20, 1878
Decided January 21, 1879
Jesse Johnson, for appellant.
William A. Coursen, for respondent.
The amount advanced by the defendant Crawford was secured by a chattel mortgage upon Goetchius' personal property, payable on demand, with interest, which upon its face showed an indebtedness to Crawford. The testimony of Crawford, in reference to the understanding between him and Goetchius, which, it is claimed, if true, shows a partnership as to third persons, establishes that Crawford loaned Goetchius the sum of $2,500, which was secured by the mortgage, and Goetchius promised to turn over to Crawford one-half of his net receipts. Crawford swears that Goetchius said he could pay it back soon, and the legal presumption is that the receipts were to be applied in payment of the money borrowed. He expressly refused to participate in the profits; and assuming his statement to be true, the transaction was a mere loan of money secured by a chattel mortgage. Under such circumstances, there is no ground for claiming that Crawford was liable as a partner to third parties, within the case of Leggett v. Hyde ( 58 N.Y., 272, 276), which is relied upon by the appellant. The text at the last page of the case cited, does not hold that, where money is loaned and to be refunded absolutely without regard to the profits, a partnership exists. To have that effect, the payment must depend upon the profits. If the lender is to be paid at all events the contract does not create a partnership: ( Everett v. Coe, 5 Denio, 180.) In the case at bar, the conversation about payment out of the receipts did not restrict the right to enforce the mortgage on demand, and was not an agreement to pay out of the receipts as profits, in any sense. It rested entirely with Crawford to determine when he should proceed and collect the money which he loaned under the mortgage, and there was no valid contract to prevent its enforcement accordingly.
There was no error, I think, in the rulings or in the charge of the court as to the unsigned paper introduced in evidence by the respondent. It was drawn by the attorney who drew the other papers. I agree with the opinion of the General Term, that it was a part of the res gestæ, and also bore upon the testimony of the plaintiff, in reference to Crawford's admission to him, and upon these grounds was entirely competent. So also it was admissible, under the circumstances, for the purpose of showing how Crawford and Goetchius then understood the arrangement; and the charge of the judge, in this respect, was not erroneous.
The court was right in charging the jury in regard to the effect of the paper, if it had been signed, and that it did not amount to a partnership, but was simply an agreement that Crawford should take one-half of what was received and apply it to the payment of Crawford's debt; and if it more than paid the interest, then the surplus should be applied upon the principal, and extinguish it, as far as it went. Such, I think, was the fair construction of the writing, upon its face. It was somewhat loosely drawn, and evidently did not express the entire contract; but enough appears, to indicate that it did not contemplate a partnership, or any division of the profits as partners, but a payment of the claim of Crawford, and, as the judge upon the trial remarked, that paper would not make him a partner.
The charge of the judge, as to the effect of the papers, that all the papers assume the form of a loan, and in regard to the instrument assigning the chattel mortgage executed to Goetchius by Florence who bought the business of Goetchius, that it still carried out the theory of a loan, was not, in the form presented, liable to objection, being qualified by the remark that if the real understanding was that Crawford should participate in the profits, as such, then it could constitute a partnership; otherwise not.
The papers, on their face, bore evidence, I think, that a loan was made by Crawford without any design to form a partnership. The chattel mortgage was made upon condition that Goetchius should pay the sum named therein, which bound Goetchius to liquidate the same, and rendered him personally liable therefor; and it does not detract from the obligation because no notes were given at the time, nor does that fact show, in any way, that no loan was intended.
The whole case, upon the question whether the defendants were partners, was properly submitted to the jury, upon testimony which was somewhat conflicting; and as no legal error is manifest upon the trial, there is no ground for disturbing the decision.
The judgment should be affirmed.
All concur.
Judgment affirmed.