
    James Gill v. John Geyer.
    1. Where two parties enter into an " arrangement** to manufacture wares, one to furnish the capital and receive two thirds of the profits, the other to superintend the business and have one third of the profits, and they so conduct the business and keep their accounts, through a series of years, as to show that they intended, by their arrangement, to divide the net profits of the business, losses of ware by fire must be deducted from the profits before either party is entitled to his share thereof.
    2. Where, in such arrangement, no provision is made about the time of adjustment and division of profits between the parties, and they neglect to make any settlement until the close of their business, neither party can then be required to adjust the profits as if settlements had been made from time to time between them, but the profits must be ascertained from a full settlement of the whole business as it stood at the close thereof.
    Error to the superior court of Cincinnati.
    On July 22,1856, Geyer brought an action, in the superior court of Cincinnati, against Gill, for money had and received and further averred in his petition that, from the 6th of December, 1843, to the 24th of March, 1856, the parties carried on the cabinet-making business in Cincinnati, as partners, under the name of the plaintiff, Geyer, who advanced the capital and was entitled to two thirds of the profits of the business; that the defendant, Gill, contributed his labor and skill and was entitled to one third of such profits; that the accounts have never been settled; prays a reference and judgment for $73C0.
    The defendant, Gill, answered denying- all. indebtedness, and alleged that all the money he had received from, or for, the plaintiff, was received in part compensation for services rendered for him. ■
    Defendant also denies ever having been a partner with plaintiff; and avers that in December, 1843, he agreed to render his services to the plaintiff in the cabinet-making business, and to receive as a compensation therefor, one third of the profits on cabinet furniture after it was sold; that plaintiff was to furnish all the capital necessary for carrying on the business; that the arrangement continued without any settlement between the parties, until the 24th of March, 1856; that on full settlement there is now due to the defendant, as his share of the profits made on sales of cabinet work, over and above what he received, the sum of $2491.96, and interest.
    The case was referred, by consent of parties, to a master to take testimony and state an account 'between them. Testimony was taken, and the master reported a balance due Gill of $1576.06
    The master finds that, on the 6th day of December, 1843, the parties entered into a contract for the manufacture of ■iabinet ware, which continued until March, 1856, upon the following terms: Geyer was to furnish all the capital, the salesroom, and to receive two thirds of the profits; and Gill was to superintend the manufacture, furnish his own shop-room, and receive one third of the profits; but that a partnership never existed between them. It is further found in the master’s report, that a loss of the stock of furniture on the 22d day of February, 1854, amounting to $20,000 — less one third of the money received from the insurance company — ■ should be credited in cabinet account.
    To these, with other findings of the .master, Geyer filed exceptions.
    The superior court, at special term, overruled the exceptions, affirmed tbe report, and rendered judgment against Geyer; to which ruling and judgment he excepted, without embodying in his bill of exceptions the evidence taken before the master.
    The case was taken on error to the superior court in general term; and, at the March term thereof, 1862, the judgment at special term was reversed, and the cause was remanded to special term for a new trial.
    Gill excepted to the holding and judgment of the general term.
    The case was again heard at special term of July, 1862, and the exceptions of Geyer, as to the loss by fire, February 22, 1854, were sustained; and the court finds the balance due from Gill to Geyer to be $3723.94, and judgment was rendered for Geyer. To all which Gill excepted; and, at his request, the facts were specially found by the court: and, so far as material to the questions now raised, are as follows :
    On the 6th- day of December, 1843, the plaintiff and defendant entered into an arrangement by which they were to carry on, together, the business of manufacturing and selling “ cabinet ware ” in the city of Cincinnati. The business, under said arrangement, was carried on under the name of “ John Geyer.” ' The plaintiff claims and testifies that he was to furnish the capital to commence said business on, only. The defendant claims and testifies that the plaintiff was to furnish the entire capital to carry on the business. Without deciding between these conflicting statements, as to what the original agreement, in this particular, was, the court finds as to the manner in which the business was actually conducted, that the commencement of the account shows a few entries of small sums advanced in cash by Geyer to buy materials, pay hands,, etc., but, that almost from the beginning, the business was-carried on as a credit business, viz: material was purchased in part, if not mainly, on credit; the cabinet ware, after the same was manufactured, was sold in part, if not mainly on. credit; promissory notes were taken from the purchasers,, which were afterward discounted, and the proceeds carried-into the business; and money was borrowed which was placed in the business, the interest paid for the same being charged in the account representing the business.
    By said arrangement, the defendant was to furnish the shop-room, free of charge, and superintend the manufacture of cabinet ware, which, when manufactured, was to be taken to the plaintiff’s salesroom and sold by the plaintiff, and that the profits were to be divided between the plaintiff and defendant as follows: The plaintiff was to receive two thirds and the defendant one third of said profits. No written agreement in relation to said business was ever entered into by the parties, nor was anything ever said as to how long the arrangement should continue, nor as to when or how often settlements were to be made, or the profits ascertained. The plaintiff kept an account of sales of their ware which was called “ cabinet sales account.” A book was provided to be kept by the defendant at-the shop, in which were entered the cost of all the materials purchased, the amounts paid the workmen for wages, and all other items entering into the cost of manufacturing the ■cabinet ware. The defendant was also charged in said ac-' -count with all moneys received by him for his individual use, ■which last named items were distinguished by adding the word ■“self.” This book was known between the parties as the ■“ cabinet account book ” ór “ cabinet expense book.”
    The plaintiff from the commencement of said business, from time to time, took out policies of insurance in his' own mame, as well on the building as on the stock of cabinet ware. And regularly one third of' all amounts paid for premiums for insurance" on said stock, was charged in said “ cabinet expense account,” with the knowledge of the defendant, but without his expressly assenting thereto, or dissenting therefrom.
    One third of the expenses of the salesroom, such as clerk hire, advertising, etc., were charged in the cabinet expense account.
    Losses from bad debts occurred from time to time, of which the suspended debt, amounting to $3752.93, - still remained ¿unpaid, but such losses were never entered in the account.
    
      The parties entered into partnership with John Hughes, in the manufacture of cabinet ware, at Hughes’ shop, sold the ware at plaintiffs salesroom, charged themselves with the ware, and all losses thereon, in cabinet expense account.
    The business carried on under said arrangement between the plaintiff and defendant was continued until the latter part of March, 1856. During that time two losses by fire occurred, viz: a partial loss in November, 1852, and a heavy loss on the 22d of February, 1854, involving almost the entire destruction of the stock of furniture at the salesroom. The amount of the loss of furniture by the last fire is found by the master to have been $20,000.00. One third of the money collected from the insurance companies for the loss on stock by the first fire (being the proportion of the furniture to the chairs and upholstery) was credited in the cabinet sales account. And for the loss on cabinet ware by the second fire, the sum of $4500.00 was collected from the insurance companies, which was-also credited in the cabinet sales account.
    During the continuance of the business, the defendant drew from time to time, and was charged in the cabinet expense account with the sum of $10,005.16. The gross amount of sales, as per cabinet sales account (including the moneys collected for losses by fire) was $140,770.52. The gross amount of the cabinet expense account less Gill’s individual account, was $130,026.85. Said accounts were never balanced, nor were the profits ever stated or ascertained during the entire time the business was carried on. The defendant, at all times, had free access to the books, made frequent entries in the cabinet sales account and cabinet expense account, and never objected to the form of keeping said accounts or to any of the entries therein above referred to, until after the termination of the business and after the present controversy had arisen between him and the plaintiff.
    The court further find that said cabinet expense account includes the cost of manufacturing all the cabinet ware that was burned in the fire of February 22, 1854, but that said cost, less the amount credited from the insurance companies, ought not to be deducted from the cabinet expense account. And the court also find, as a conclusion of law, that said accounts are not now to be adjusted as if settlements had been made from time to time, and the defendant had drawn his share of the profits as declared upon settlement, but that the gross amount of the cabinet expense account (without deduction for said 'loss by fire) must be taken from the gross amount of the cabinet sales account; that of the balance thé defendant is entitled to one third as his share of the profits, and that all moneys received by him beyond that amount is an overdraft, which the plaintiff is entitled to recover back, the amount so overdrawn being before found in the account as above stated by the court; to which conclusion of law the defendant excepted.
    The defendant Gill thereupon filed his petition in error in the superior court in general term; but the court in general term, affirmed the judgment at special term. To correct the supposed error thus committed, the present petition in error is prosecuted in this court.
    
      Collins $ Herron, for plaintiff in error:
    1. The first judgment at special term in Gill’s favor, was never legally reversed. The superior court in general term erred in undertaking to review the judgment at special term without any of the evidence before them, on which that judgment was predicated. Code, sec. 292; Busby v. Finn, 1 Ohio St. Rep. 409.
    2. The judgment of the superior court is, that the loss by the fire of February 22, 1854, is to be borne by the parties in the ratio of one third by Gill and two thirds by Geyer. It is the same, in effect, as if Gill had been the absolute owner of one third interest in the stock — that is, he must lose one third of its value, and Geyer two thirds. We affirm this to be erroneous. Geyer was exclusive owner of the stock burned, and the entire loss fell on him, save that Gill lost a portion of profits on sales which might otherwise have been made. Gill was not the partner, but only an employee of Geyer. Hearn 
      v. Hall, 1 B. Mon. 159; Story on Partnership, secs. 27, 28, 29, 38; Kent’s Com. Book 1, Cap. 1, sec. 1; Loomis v. Marshall, 12 Conn. 59; Turner v. Bissell, 14 Pick. 192; Stevens v. Briggs, 5 Pick. 177; Denny v. Cabot, 6 Metc. 82; Vanderburg v. Hull, 20 Wend. 70; Judson v. Adams, 8 Cush. 556.
    3. Although nothing was said between the parties as to how often the books should be balanced and the profits ascertained, yet the presumption is that each contemplated what is usual in such cases, viz: periodical settlements as often, at least, as once a year, perhaps semi-annually.
    That Gill was to receive his portion of profits, and withdraw them from the business as well as from hazard by fire must have been contemplated. He was an employee. His portion of profits was to be as a compensation for his services, and in lieu of wages, which are always paid as they accrue. He is not the capitalist. He is working for his subsistence, and is expected to withdraw his profits from time to time to support his family.
    The dealings of the parties fully demonstrate that this was their mutual understanding. Gill did dráw from time to time, on an average, about eight hundred dollars per annum, without any objection on the part of Geyer. The fact that the books were not balanced can not give Geyer any advantage. That should have been done, and equity will consider it as done.
    
      JSf. Headington, for defendant in error:
    1. The court below did not err in finding that the cost of manufacturing the cabinet ware burned in the fire of February 22,1854, less the amount credited from the insurance companies, ought not to be deducted from the cabinet expense account. Cox v. Delano, 3 Devereux, 90, 91; Brown’s Ex’rs v. Higginbotham, 5 Leigh, 586-7; Pierson v. Steinmeyer, 4 Richardson, 314; Perry v. Butt and Banks, 14 Georgia, 706-7; Sampson et al v. Feltz, 1 McCord’s Ch. 213.
    2. The court below did not err in holding that the accounts are not now to be adjusted as if settlements had been made from time to time, and Gill had drawn his share of the profits, as declared upon settlement, but that they are to be balanced as they stand upon the books. Colgin v. Cummins, 1 Porter, 156.
    3. A partnership existed between Geyer and Gill. Smith’s Merc. Law, 23; Story on Part. secs. 2, 23, 27; Collyer on Part. secs. 18, 44, 167, 172; Bond v. Pittard, 3 Mees. & Welsby, 357; Doak v. Swan, 8 Greenl. 170 ; Barrett v. Swan, 5 Shepley, 180; 1 Story’s Eq. Jurisp. secs. 459, 462; Denny v. Cobott, 6 Metc. 92; Ward v. Thompson, 22 How. 330; Bromley v. Elliott, 30 N. H. 287; Griffith v. Buffum, 22 Verm. 181; Chapman v. Devereux, 32 Ib. 616; Robbins v. Laswell, 27 Ill. 365; Jones v. McMichael, 12 Rick. (S. C.) Law, 176; Julio v. Ingalls, 1 Allen (Mass.) 41; Bullfinch v. Winchenback, 3 Ib. 161.
    Whether they were partners in the property, or in the-profits only, in either event, inasmuch as the losses were not equal to the profits, Gill would be liable, out of his share of the profits, to make good his proportion of the loss by the fire of February 22, 1854.
    4. The question passed upon by th.e superior court upon the first petition in error, is not presented upon the record in such form that this court can review it. The law presumes that that judgment of reversal was correct until error is shown.
    If Gill felt aggrieved by that judgment and desired to have this court pass upon the question of its correctness, he should have applied at once for leave to file his petition in error. This, however, he did not do, but acquiesced in the judgment and went to trial a second time in special term. Having thus speculated upon the chances of another judgment in his favor, and lost, it is- too late for him to attempt to take advantage of any supposed error in a judgment Avhich, for the purposes of the case, he treated as properly reversed.1,
   Dat, J.

The principal questions, arising upon the record and discussed by counsel, are, whether the loss by the fire of February 22, 1854, ought to be deducted from the cabinet expense account, and Avhether the accounts are now to be adjusted as if settlements had been made, and Grill had drawn his share of the'profits as declared upon such settlements.

It should be borne in mind, that no question of contribution arises between the parties, but the object sought is, simply, the proper adjustment of the matters appertaining to their joint business through a series of years, with the sole view of ascertaining the amount of profits to be divided between them.

To accomplish this, reference must be had to the original “arrangement” made between the parties, to any subsequent modification thereof by them, to the circumstances that surrounded them, and to their conduct, in carrying on the business, explaining their construction and understanding of their relations and obligations under their joint arrangement.

We do not deem it material for us to determine whether or not these parties were partners; for, if that was their relation, the profits to be divided between them would be the remainder of their earnings after all expenses and losses were paid; but if not, and their relation was that of employer and employee, then the profits to be divided by way of compensation to Grill, under their arrangement as explained by their subsequent conduct, were understood by them to be, and therefore were, the net profits of the joint business. The amount in either ease would be the same.

The time and manner of ascertaining the amount of such profits were not provided for by any express agreement between the parties; nor, during the long time that they were engaged in the business, did they settle and liquidate the amount. The parties themselves having so left their joint business, the court below very properly held, that its duty was, to ascertain the amount of the net profits of the whole business as it stood when the parties brought it there for liquidation,

This being the condition in which the rights of the parties stood, it follows that the loss by the fire of February 22, 1854, ought not to be deducted from the cabinet expense account ; and, it also follows that, since the parties were undei no obligation to make intermediate settlements and neglected to do so, neither party can now compel the other to adjust the accounts as if such settlements had been made.

It is, also, claimed on the part of the plaintiff in error, that the judgment, rendered in his favor on the first trial at special term, was not legally reversed. The reason assigned is, that-the superior court in general term, reviewed the judgment of the special term, without any of the evidence before them on which that judgment was predicated.

It is provided in the seventeenth section of the “ act to establish the superior court of Cincinnati,” that the' proceeding at general term to reverse a judgment rendered at special term, “ shall be the same as those provided by the code of civil procedure upon petitions in error, except that it shall not be necessary to file with the petition a transcript of the proceedings, as required by section 517 of the code; but the petition in error shall be heard upon the original files, pleadings and proceedings.”

It appears upon the record, that the plaintiff below presented to the master exceptions to his report, and that the master returned the same with his report as follows: “ Which exceptions are allowed and signed by said master, and returned with and made a part of the report herein; and all the testimony taken in the case was reduced by him to writing, and the same, together with the exhibits therein referred to, are returned with and made a part of his report herein.”

It further appears from the bill of exceptions, taken at the special term when said judgment was rendered, that the court, upon the master’s report and the evidence filed therewith, found that the plaintiff was indebted to the defendant,” etc.

It also appears that, in the final disposition of the case, the court ordered, “ that, in recording said master’s report, the clerk shall omit the evidence and exhibits therewith returned, without prejudice, however, to the claim of the plaintiff that the same form a part of the record.”

It does not affimatively appear upon this record, that the superior court at general term did not have before it the evidence upon which the court at special term found its judgment. On the contrary, since the reviewing court was required, by the statute, to hear the case “ upon the original files, pleadings and proceedings,” it is quite probable that, as stated in the bill of exceptions, the evidence filed with the master’s report was before that court.

But whether the evidence was before that court or not, the record shows that the master’s report and exceptions to it ,were a part of the files and proceedings in the case, and, therefore, were properly before it. There was error appearing in the report itself, in overruling the exceptions to the report, and in sustaining and affirming the finding of the master,— that the loss by the fire of 1854 “should be credited in cabinet account; ” therefore the judgment was properly reversed.

The judgment of the superior court is affirmed.

Brinkerhoee, O.J., and Scott, White and Welch, JJ., concurred.  