
    The First National Bank of Meriden, App’lt, v. Peter W. Gallaudet, Resp’t.
    
    
      (Court of Appeals, Second Division,
    
    
      Filed December 2, 1890.)
    
    1. Partnership.
    Where two persons by a contract with the owner of letters patent acquire an interest in the right to do so, and undertake to manufacture and sell such apparatus, agreeing to pay a royalty to the patentees, one of the persons to furnish money and the other having general management and to share equally in the profits, and repay the money furnished, it warrants the inference of a partnership between the parties, and the question is one of fact for- the jury.
    3. Same.
    The relation of partnership arises from a business jointly carried on by persons pursuant to an arrangement between them that they are to share in the profits as such.
    Appeal from judgment of the general term of the superior court of the city of New York, affirming judgment entered on verdict in favor of the defendant.
    
      The plaintiff, by the complaint, charged that in January, 1880, the defendant, then a dealer in commercial paper in the city of New York, sold to the plaintiff a promissory note of date January 3, 1880, purporting to have been made by Franklin Farrell & Company for $2,700 payable at three months from its date to the order of and endorsed by W. M. Babbott; that to induce.- the plaintiff’s cashier to purchase it the defendant represented to him that Franklin Farrell & Co. consisted of him and William M. Babbott, the payee and endorser; that such representation was untrue; that there was no such partnership and that the note was issued by Babbott individually. The defendant, by answer, admitted the sale of the note to the plaintiff; put in issue the other matters •charged in the complaint, and alleged that the defendant in making the sale of the note acted as the agent of Babbott, which the plaintiff then knew, and, upon information and belief, that the note was that of a firm consisting of Farrell and Babbott. The jury found specifically upon certain propositions of fact in favor of the defendant resulting in a verdict for him.
    
      Wm. H. Arnoux, for app’lt; 0. JElliott Minor, for resp’t
    
      
      Affirming 13 N. Y. State Rep., 269.
    
   Bradley, J.

There was evidence given on the part of the defendant tending to prove that at the time the note was made there was a partnership composed of Franklin Farrell and William M. Babbott in a business enterprise of manufacturing and selling refrigerator machines. Such evidence was to the effect that by contract with the owner of the letters patent, they acquired an interest in the right to do so, and undertook to manufacture and sell such apparatus under an arrangement with such owner to give the latter a portion of the profits by way of royalty ; and that as between Farrell and Babbott such contract was made pursuant to an arrangement between them that the former should furnish money and credit to carry forward the business, and the latter have the general management of it; that they should share equally in the profits, and out of them should be repaid the advances made by Farrell. This evidence taken as true warranted the inference of a partnership between the parties. Such relation arises from a business jointly carried on by persons pursuant to an arrangement between them that they are to share in the profits as such. Manhattan B. & M. Co. v. Sears, 45 N. Y., 797; Burnett v. Snyder, 81 id., 550 ; Leggett v. Hyde, 58 id., 272. The fact, however, that a person is to receive a portion of the profits may be dependent upon a right so qualified by the arrangement or controlled by the circumstances under which they are to be received, as to furnish no evidence of partnership. That is so when they are made the measure of compensation for services. Cassidy v. Hall, 97 N. Y., 159 ; Richardson v. Hughitt, 76 id., 55. The weight of evidence arising from the fact that the evidence on the part of the plaintiff was distinctly to the effect that there was no partnership, is not here for consideration. The question must be treated as one of fact for the jury. And it was specially submitted to them, and they by their verdict answered in the affirmative. Upon that subject the court charged the jury that it was for them to determine whether there was an agreement between, “ Farrell and Babbott that they should do business jointly together in the adventure of manufacturing and selling ice machines. If there was such an agreement there was a firm, and that firm was composed of Farrell and Babbott.”

Exception was taken by the plaintiff. This charge was quite comprehensive in its import, but it may be questionable whethei" it necessarily embraced all the elements requisite to the instruction given as matter of law in that respect. Community of interest may not constitute a partnership. Porter v. McClure, 15 Wend., 187; Sage v. Sherman, 2 N. Y., 427; Central City Savings Bank v. Walker, 66 id., 428. The determination of the question presented by that exception is not deemed essential to the disposition of the case, and, therefore, no opinion is expressed upon it.

The defendant was a broker dealing in commercial paper, and known to be so by the plaintiff’s cashier, who transacted the business of making the purchase of the note which was left with defendant by Babbott to sell for him. And the defendant testified that at the time of the sale he had a conversation with the cashier about who was the owner of.the note, and “ I told him the paper was brought to me by William M. Babbott to sell, and I was selling it for him.” The court submitted to the jury the two following specific questions of fact: •

1. Did the defendant state to Charles L. Rockwell (the cashier), at the time Rockwell purchased the note, that said Franklin Farrell & Co. consisted of Franklin Farrell of Ansonia, Connecticut and William M. Babbott ?

2. Did Gallaudet state to Rockwell at the time the note was purchased that he, Gallaudet, was selling the note for William M. Babbott? *

The jury by their verdict answered the first of those questions in the negative, and the latter in the affirmative. Both findings had some evidence for their support, although they were the subject of conflict between the evidence of the defendant and Rockwell. And the contention of the plaintiff’s counsel that those' questions were erroneously submitted to the jury because the first was not within the issues presented by the pleadings, and the defendant was denied by his answer the benefit of the other, is not supported. The former was fairly within the issue presented by the pleadings, and substantially within that presented by the evidence ; and, as to the latter, the defendant by his answer alleged that he made the sale of the note to the plaintiff “ as agent or broker of W. M. Babbott, the payee and endorser thereof; and that the plaintiff then well knew that fact.”

And in a subsequently numbered defense the defendant alleged, upon information and belief, that the statement that was made by the defendant “ in reference to said note in the making or validity thereof was that the defendant was informed that the firm of Franklin Farrell & Co. consisted of said Farrell and said W. M. Babbott, or words to that effect, and no other.” This allegation had reference to the note, and is not inconsistent with the fact that the defendant informed the cashier that he was selling it for Babbott, nor does it qualify the allegation of his agency and of the plaintiff’s knowledge of it at the time of the sale of the note. The facts established by the verdict were that the defendant acted as the agent of Babbott in the transaction, and disclosed such agency and the name of his principal to the plaintiff at the time of the sale; and that he made no representation to the effect that Barrel was partner of Babbott or a member of what purported tp be a firm of Franklin Farrell & Co., relieved the defendant from liability for the causes alleged in the complaint. Hor, in view of the facts so found, was there any imputation of bad faith of the defendant in the transaction furnished by the evidence.

All the exceptions taken by the plaintiff have been carefully examined, and no error to the prejudice of the plaintiff is found in any of the rulings to which they were taken.

The judgment should be affirmed.

All concur, except Haight, J., absent.  