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This item is filmed at the reduction ratio checked below/ Ce document est film* au taux de rMuction indiqui ci-dessous. 10X 14X 18X 22X 26X 30X 12X 16X y 20X UX 28X 32X Is J fier le ge The copy filmttd hero hat been reproduced thanke to the generosity of: Library of the Public Archives of Canada The images appearing ; _;u o July, 1845. , I ,i'i r,'i^,{\j. vi in?.'» These sums Mittleberger called upon Menitt & Adtims to pay to him, or to Tobin & Murison, on account of his firm, and, on the losses being defined, to provide like paymei^t or sureties for their proportions, on any terms they could arrange with Tobin & Murison. Merritt & Adams refused providing either payment or security, hence ac- tions wfcre necessarily brought by Mittleberger. ^^After these prosecutions, a compromise was attempted and failed. Subse- quently a basis of settlement was stated by Mittleberger nnd adopted by Mer- ritt but declined by Adams. This was reduced to a provisional agreement in July, 1843. Merritt did not complete the settlement and subsequently abandoned it, and raised some legal questions out of it as the foundation of adverse proceedings in Chancery. The original actions were, therefore, revived for the appi'oaching Assizes, but were stayed by an Injunction issued by the Vice Chancellor (expart^l, without a hearing on the part of Mittleberger, the first knowledge of such ad- verse proceedings being the service of Injunctions on his Counsel the day before the entry of suits on the Assize Docket. In appeal, these Injunctions were dissolved previous to the next Spring As- sizes, at which these actions were brought to trial. The defence was then raised on the part of Merritt, that being partners under the construction of the agreements, Mittleberger could not prosecute Merritt at Common Law, and this position was upheld. Merritt having thus taken his stand upon the legal construction of the agreements and obligations existing between the parties, and resisted all claims upon him (although admitted to be correct as to amount), this action was brought before the Assizes of October, 1841, and a special verdict taken, subject to the opinion of the Judges in Term, ns to stated points of Law, and decided against Merritt in February, 1 845, as follows : — " .! 'i.f: .- ^From the L'pper Canada Jurist, Vol. 2, No. 1, June, 1845.J * ... , ''»• - SITTINGS AFTER EASTER TERM, 8 VIC. ' ' ' ' , ,•• ' V • -■^.l- QUESTION OP PARTNEKSHIP. This case was argued ot great length last Term hy Burns and Blake for the plaintifTij, and 12. B. iSuZ/iuon, for the defendants. - ; , JUDGEMENTS By Chibf Justice Robinsov. — Tho point submitted to the j'udgemeht oi tltis court, upon the special verdict which has been consented to by the parties, is, whether during the course of certain transactions between the plaintiffs and Messrs. John Mittleberger & Co., set forth in the special verdict, t'^e de- fendant Merritt, was or was not a partner in the firm of John Mittleberger & Co , and as such partner, liable to be charged with monies advanced by the plaintifTs during that period, to John Mittleberger & Co., for carrying on the business of the firm. If the eon for some time carrying on business; and iu August, 1339, they leased the mills with other premises and appuitenances, to John MUlleberger and one 6enham« who is now absent from the province, for three years, and, at the same time, they entered into an agreemsnt with Mittleberger and Benham, very special in its nature, with the terms of which the court, as well aa the counsel on both sides, have become familiar, from its connection with other proceedings which have been before us ; and, as the agreement is transcribed in full in the spe- cial verdict, [ need not state its contents further than nmy be necessary for showing the grounds of our judgement. It recited that John Mittleberger and Bonham, intended to carry on business, at the mills so leased to them, under the name of " John Mittleberger «Ss Co.," for the term of three years, unless the period should be lessened by death, or other contingency. Merritt and Adams by it assigned, also, to /. Mittleberger and Benham^ all their stock in trade, produce and efiects belonging to the mill, a schedule of which was annexed. Mittleberger was empo>ve'.'ed to sua for, and receive, all debts due to Merritt and Adams in their former business at the mill, and certain accruing rents, credit* ing what sliould be received to Merritt and Adams in the books of Mittleberger & Co. J and permission was given by the agreement to uso all monies, which should be so realized, in the firm of John Mittleberger & Co.^ during the ex- istence of that firm, without interest. Merritt and Adams covenant that they will not, during the three years, sell, mortgage, or incumber, or render liable to execution for private debt, the mills, or any of the property assigned, without the consent of John Mittleberger, otherwise they shall forfeit all right to any profits under the agreement. They covenant further, that, at any time, during the term of years anj during the solvency of Mittleberger & Co., upon the agreement oj Mittleberger^ and exhibition of the books of the firm, they will endorse notes, and accept bills as he may require, together with one George Rylcert, to the extent of £12,500, and beyond that sum without him. in such sumsas J. Mittleberger shall desire, for the use of the firm of J. Mittleberger «Sj Co. In the same agreement, J. Mittle* berger covenants that he will pay to Merntt and Adams, during the three years, or during the partnership of J. .Mittleberger & Co., the following annual rent, that is to say, "if the whole profits shall be under an average of £2,000 per annum, then the one half of such profits ; if the profits shall exceed 2,000 per annum, then the lawful intereston the estimation of the stock invested by Merritt and Adams, and specified in the schedules, and in addi- tion thereto, the one fourth part of the remaining profits after deducting the said interests." J. iVlittlobirger covenants that he will give a credit to Mer- rit and Adams together, to the amount of £1,000 in each year, which may be had out of the store of J. Mittleberger & Co., in goods: and he covenants that he will not, so long as the agreement continues, sell, mortgage, or incumber his interest in the real property of iho pre.existingfirms,of Rykert&Co.,or of Rykert, Mittleberger & Co., or either of tliom, without the consent of Merritt and Adams, or ons of them ; except a certain property specifieLl,w/«cA may he converted into available funds for Iks use of the saidfirm. lie covenants, further, that, at the expiration, or other sooner detormination of the firm of J. Mittle- berger & '^o., he. will close up the business of the firm, and first pay and dis- charge all its liabilities; and will, immediately after, pay o\e^ to Merritt and Adams their investments of cash, or stock, in the said now firm, whatever amount may be coming to them, or either of them, according to the schedules, or subsequent receipts and credits ; and shall, within three months, pay over to Merritt and Adams whatever balance of accounts, for rent or othervnke, rtitxv be due or coming to them or either of them, from the said firm ; and will, within the period of three months afier the determination of the said co- partnership, or as soon as received, pay over to Merritt and Adams any pro- portion of rents or profits thai may be coming to them. He covenants, also, that besides insuring the mills, &c., for certain amounts named, he will, from to time, insure a sufficient sum upon the produce in the mil!, and in the sto7'e-house, and on the goods, and charge the same to the firm of J, Mittleber* ger df Co. J. Mittleberger further covenants, that he will, from time to time, auring the partnership, procure Rykert to indorse negotiable business-pnper, to be used in the firm of J. Mittleberger 8f Co. ; and also, that in the firm of J. Mittleberger & Co., no one but himself shall have power, ybr him.to contract liabilities or sign the name of the firm, unless empowered under his hand and seal : that he will, twice in ench year, balance the mill and distillery ac- counts, exhibiting statements of the business thereof; and once in each year balance the store accounts, shewing an annual statement of the aggregate butiness; that he will exhibit the books at all times, or furnish a balance sheet, to each of the parties interested, if required. It is provided, that if the mill shall be burnt, or from any accident its operations be suspended for six months, the said partnership, and the agreement, may be put an end to, if de- clared by J. Mittleberger and Benham ; and if the distillery shall be dcostroyed, and not replaced in six months, the said partnership, and this ngreement, may be put an end to, if declared by Merritt and Adams ; and if the shop should bo destroyed, Mittleberger should be charged with interest on its estimated value in the schedules. And it is stipulated, that if at any time within the term it should appear, that the united credits of the several parties do not com- mand adequate means to carry on the business with profit, a dissolution shall take place, upon John Mittleberger giving one month's notice to all parties interested. J. Mittleberger binds himself to pay to S. Street, Essq., the interest of a mortgage long before given by Merritt and Adams, upon the mills, charging the same to Merritt and Adams, but no part of the principal, out of the funds of the said firm : that in case the available means, by debts, and stock " of the parlies hereto," shall not be sufficient to meet the liabilities as they fall due, then quarterly balances of the accounts, on either side, shall be struck, and interest charged thereon : that no permanent improvement shall be made in any part of the property, unless by consent in writing o/ all tlie parties interested : that an account shall be kept of the business distillery, till the hogs then on hand shall be sla-ightered, when the profits of tho business from the month of May, can be ascertained, one-half of which profits shall be credited to Rykert, Mittleberger & Co., and the other half to the new firm of John Mittleberger Sf Co. : that all the real estate and capital invested, united or accumulating through the business of John Mittleberger & Co., shall be held liable for all losses incurred by the firm : and that, if any property shall be seized upon and sold, which belongs to one party to the agreement, under execution for the debts of J. Mi'tleberger & Co., the property of the other party shall be held liable, and the owner pay to the party seized 07i his proportion of the value of the property sacrificed, according to the relative value of the pro- perty of each, including Rykert &: Co., and Rykeri, Mittleberger & Co. And it is further provided, that if John Mittleberger, in the new firm of John Mit- tleberger & Co , should sustain losses by the business, exceeding the profits, then the property, real and personal, or shares of property and capital invest- ed by the said Merritt and Adams, more particularly apcclAed in the schedules annexed, shall be held to bo equally liable with that of J. Mittleberger, in- cluding the two other firms of Rykert & Co., and Rykert, Mittleberger dc Co., for such losses, in the same proportion as the said John Mittleberger ought to bear in regard to other properly vested in the said new firm or partnership, ll is provided, that *' the agreement shall determine with the partnership of J. Mittieberger & Co., whenever that event may happen within the three years ; that the co-partnership of John Mittleherger Sf Co., shall cease and determine by the denth of either Merritt or Mittieberger, and the business be finally closed ; in which case, the respective owners may, jointly with the survivmg parties to the agreement, the said Rykert, and the executors or administrators of the deceased party, and the partners, or surviving partner* of John Mittieberger & Co., enter into tho premises and adjust, settle and close the business." But the death of Adams, and Benham,or either of them, is not to alfect the said business ; and the said John Mittieberger may con* tinue in his own name, if he sees fit. All debts against /. Mittieberger i/- Co.y for indorsed or security paper, by Merritt and Adams, shull stand in the same situation as all other debts against the firm, and bo claimed by them as debt* by other creditors ; and any excess beyond £12.500, for indorsed or security paper, shall be preferred to the claim of Rykert, for similar indorsements to the said sum of 12,51)0/,, and such excess shall be first discharged, so as to reduce tho liability of Merritt and Adnms, on such paper, to the ;^ame amount as Rykert's. And the parlies stipulate, " that neither party shall withdraw/rom the said firm more than 1,000/., annually, viz., Merritt and Adams not more than 1,000/., between them, and Mittieberger and Benham not exceeding an equal sum annually, /row t lie funds or assets oj tliefirm. Benham covenants with Merritt and Adams, that he will not sell, or incumber, his interest in the real property, or in the assets, of the late firm of Rykert, Mittieberger &;; Co , or any part thereof, without the consent of Merritt and AdamSy or either of them ; otherwise, he shall forfeit all profits in the said firm. And the parties bind themselves, that at the expiration of the agreement, Merritt and Adams will take such materialsinandabout the grist-mill, as are generally used in such business, that may remain on hand of the present stock, not exceeding £1,000, according to its present estimated value ; and that Mittieberger will also then receive not lessthon £1,000 of the present stock of goods (il so much remains on hand), at the prices in the schedule ; the remainder of all stock in hand to be then sold, unless otherwise agreed upon. All these parts of the agreement seem to bear, more or less, on the question of pmtnerahip, and I believe I have omitted none that do. It is found by the special verdict, that between the time of making this agreement, and its termination, tho plaintiffs accepted bills drawn upon them by John Mittieberger & Co., for tho accom- modation of the company, to a very large amount, which were discounted for the company at the agencies of various banks in Upper Canada, and the pro- ceeds pasfjed into the hands of the company ; and that those bills, when ihey came to maturity, were paid by the acceptors. In relation to these advances, a mortgage was given to the plaintiffs, by Merritt and Adams, on 3rd March, 1840, which is set out in the verdict, and will be presently noticed. It is for the balance of accounts due to the plaintifTs, for such advances, and found by the special verdict to amount to £25,918 IDs. 6 universnllly to special verdictn j but it does not apply as it has been attempted to apply it. If the jury had found merely that certain evidence was given to them for th9 purpose of p'oving that those lette-rs were written by Merritt, or by some one authorised by him, then, however conclusive the proof of the fact might have seemed, wi could not have taken those letters ns proved, and could not have considered them ; but the jury find that these letters were written, and were sent by the defend- ant Merritt : what they import upon a lair construction of ihem, a ad what their contents establi'ih, becomes then matter of law rather th;in of f ict. if, for instance, a question should arise upon a trial, wholher an act do is by A, for the benefit ol 13, but without his express authority, was afterwards adopted and ratified by B, and if a letter written by the latter were produced in evi- dence, it would become the duty of the court to say whether it amounted to on adoption, or not. So, if on a prosecution of several persons for a conspiracy, it were proved that one of them wrote and sent a leuer in relation to the ob- ject of the conspiracy, it would fall to the court to say, whether the contents of the letter showed such a participation in the design, as to anount to an overt act, implicating the person in the conspiracy. In a case before Lord Ellenborough, at nisi prius, in which letters were written, not by pnr'ies in the cause, but by persons who had been acting in the matters which /rive rise to the litigation, it was objected that they were mere declarations of parties not on oath, and so not evidence ; but Lord h Hen borough observed, '^I have not now the case before me, but cite it from memory,) " i think the letters are evidence ; I must suppose the parties writing them were rational agents ; the letters were written before any dispute about these matters arose ; with what inten-, tions the writers acted, is part of the question, and what better evidence can we have of their intentions than their conduct ; their writing and sending these letters, was part of their conduct." 1 think these letters written and sent by Merritt, are fac's which we are bound to consider. They must be read through to find how far they are material. It will be seen that in all of them Mr. Merritt identifies himself with the transactions of the firm ; the Inrgo advances of money were required for carrying on the business of the mills ; wheat was to be bought in the United States, and sent to St. ('atharines to be manufactured into flour ; tliis occasioned a correspondence with the agent who was to buy the wheat, with forwarders who were to transport the flour, and with bank agents who were to negotiate bills and drafts : and these letters of the defendant Merritt, are on these subjects. He speaks of the business of J. Mittleberger & Co., as our business — "our purchases lor the fall," he says, " must be made this week ; we have two schooner loads of wheat arrived," &c. To the forwarder, he says, " we are about making large shipments to you ; our wheat arrived last week, and the mill is in full operation." * That he alludes to the mills leased by him is clear, lor he says in the same letter, " I have left the management of the mills wholly to John Mittleberger & Co." The letter of the 2nd October, 1839, he wrote to William Mittleberger, who is stated in * One of the letters referred to as being set forth in the special verdict, viz : — St. Catharines, 24th Sept. 1S39. Willi^mDickensnn, Esq., SiB,--I have left the iitanagement of the mills wholly to John Mittleberger and Co. They promised to seiui you a good proportion, llie greater part as forinerly. Your letter of the 20th is at hand. From thn personal conversation with yourself and partner, 1 fully understand the motive which ha<« dictaterf y-)nr letter. My jpoung man stliotild not have noticed it, but I have uniformly told every person no agreement existed Ibis year between us, (at the same time you will Qnd by my letter to John M«PhMiison»a copy of whioli I send you, withput ifrL^ting Ui \h9 firat.of bis letter, and wbiob jqi) may kf^ep to yourself as ij, is the verdict to have been an agent of John Mittleberger di Co., employed to buy wheat for them in Cleveland, in terms which shew an intimate knowledge of the business carried on by John Mittleberger & Co., and a personol inter* est in it. In that letter he seems to reproach the agent for not sending wheat in proportion to the monies which had been sent to him ; and it is impossible to read this letter with any other impression than that the monies advanced wer^ advances made by him, and the wheat purchoeed for him j not for him alone, but in conjunction with the others who composed the firm. " We require," he says, ♦' 3U,(I0U bushels of wheat, and what we want you to inform us by Mr, Benham is, what time you can get the quantity " fn another letter to the same agent ho speaks of the advances of monies made to him, as our money ; and after urging him to send wheat, he says, "close up oil purchases ; get in ail the wheat, and ascertain what, tee may obtain it for during the winter^ (this is written in October, 1899), if we procure the funds. VVrite us what you hove in all, ond when we may expect it, as we fear our mills will be idle again in a few days. Can wheat be purchased by draiY on New York at 90 days I" Looking then at these letters written by the defendant Merritt, and nt the agreement of 28th August, 1839, we have to determine, 1st, whether he was in fact a partner with John Mittleberger, in the business for which the plaintiffs, by their accommodation acceptances, supplied funds ; 2nd, if he was, then, whether there was any thing m the terms of the mortgage given to the p.c.ui^... on the 3rd March, 1840, which should obstruct the plaintiff's legal resource against him as a partner. Upon the first point, 1 have to obsei've that, when the amount in litigation, in any causie, is very large, as it is here, amounting to more than J&25,0(l0, every question, upon which the right of the respective parties can be made to de< pend, become important, in one sense at least, as regards those parties ; and the ability and research of counsel, which were conspicuously exerted on both sides, in this case, may very oftbii succeed in giving the appearance ot doubt and difficulty to questions, which, in truth, are not in themselves doubt- ful or difficult. And this, in my opinion, is the case here. If the agent at Cleveland, to whom the defendant, Merritt, wrote the letters rcferrea to, hav- ing purchased, in the United States, large quantities of wheat, avowedly for J. Mittleberger and Co , had failed to pay for it, so that he sellers were obliged to proceed against his principals, if Mr. Merritt, being sued in such an action, had denied that he was liable as a partner, and upon the trial these letters had been produced, and nothing more had appeared, it cannot be doubt- ed that the jury would have been directed, at once, to find for the plaintiffs. I see verdicts constantly rendered ' against parties who deny their liability as partners, upon evidence much less clear and positive. Then, as to the agreement it seems to involve in it every ingredient of a partnership among the four who were f^artips to it : joint contribution of funds ; participation of all in thn general profits ', a common liability to loss ; a periodical ex- hibition of accounts ; a general accountability among themselves ; and a final adjustment, according to the property of each, has been taken into account, in the joint dealing. It is quite true, that in the agreement merely to aAPure you I have not told any person an a|>:rpement existed,^ there- fore you may rpst satitified nothing further can transpire to militate against your combination. We get tlio 6<^. abatement from all ; no agreement, but under$itood ; and if you are t^ol sati»ified to let things remain as they are, let me know im- mediately, as we are about makin/r large shipments to you. Our wheat ar- rived last week, and the mill Is in full operation. ^ ^ — «- ,.i)u^\,^<>...^.^.^^^\^. Yours, &e. -y'^nf^- ' ''■■.■■'"'; •fT*' :- ?fe*.7 ■ »>(t.-«>u A fiifn; 'W.ffpkir ,»..*» W. H. Men III Yt. !, the firm ii spoken uf as consUting of J. Mittloberger and Benham, alone; but I take it to bo equally clear, that if, in any such agreement all the parties in the most express form of words that could be used, declared that those two alone should compose the firm, and bad added that those two alone should be liable us partners to third parties, but yet had gone on, in the Htime agreement (however absurdly it might have seemed), to constitute in fact a partneship in the eye of the law, by providing for a common partioipa* tion of the profits, and a common liability to losses, the rights of third parties, dealing with them, would have depended, not on what they might have said as tii who should be the partners, but upon what they had done by that agree* ment, or afterwards, to make some or the whole ol them partners in fact. — If by law they would bo partners, acting ns they did, then the only effect of their declaring that Mittlcberger and Benham should compose the firm, would bo, that they might be regarded as the name in which the whole traded. It is needless to inqui. •> what substantial effect it could have inter se ; as to third parties no such provision in their own contract can except any porty from the liability, who ought to be held liable upon the actual mode of dealing. — This is no such case as that of Emiy et. al. v. Lye et. al. where the ^nr- \y discounting a bill drawn by one member of a firm, in his own name only, as a third party sought to make the partners of the drawer liable^ though the bill wus not drawn in the name of the firm, on the ground that the money went in the partnership account. There the court held, that the per- son discounting the bill had no pretence for following the funds into whatever hands they came, for that they had discounted the paper on the credit of the parties to it, and had no remedy except on the security. To have held oth- erwise would have introduced great confusion into mercantile transactions, fiut here the plaintiffs advanced the monies upon bills drawn on them by J. Mittlcberger and Co. ; they accepted for their accommodation, and lent their money to them ; and. the only question is, who are comprehended in the firm of J. Mittleberger and Co. ? for nil who are, are clearly the borrowers of the money. Now, how can it be denied, upon the face of the agreement alone, thai the monies, which where advanced for buying wheat to be made into flour at the mills, went to carry on a business in which Merritt and Adams had a joint interest as partners. It may have been imagined, that a «ort *f qualified or limited partnership could be constructed, such as would give to Merritt and Adams all the chance of profit outof the business, without making them subject to the debts incurred in it. It would seem that both in the agreement and in the letters such an idea was sometimes present, though it was at other times lost sight of. But the point that all four were partners, is, in my opinion, too clear for argument. It would be tedious to cite all the proofs of a paitnership afforded by the agreement ; they are irresistable, and it is unnecessary to cite authorities for what admits, as I think, of no dis- pute. The various authorities cited are in cases where the palpable, direct arguments, which of themselves goto constitute a partnership, were wanting, and where some one or more collateral circumstances relied upon, and these, though material, were sought to be explained away, or were counteracted by something that mode them incon jsive : but, here the four were in fact part- ners, by their agreement, that is by its expositions in many parts of it, and by its effects on the whole. There can, in my opinion, be no question raised, unless there is ground for it iii the particular character ot the transaction be- tween these plaintifTs and iMcrritt, which led to their giving accommodation to J. Mittleberger and Co. — 1 refer now to the mortgage of 3rd March, 1840. I see nothing in that that can control the liability ofevery member of the firm of J. Mittleberger and Co. ; it refers to the agreement of 28th Augimt, 1839 ; and though it recites but a small part of it, I must infer, unless the contrary were shewn, that its contents were known to all. Tlien, if so, while these plain- tiffs knew thnt, oniong themselves, the |)arties hod agreed to call J. Mittleber- ger and I^enham the Hroi, they also knew, on the other hond, that the monies which they were about to advonce, were t<» be applied i" carrying on a business, of which the whole four were to share the profits, and were to be liable to tho losses; \n which they were to be mutually ocrountnble during the progress, and' at the end of the business; in which they a II had stock invested; ana of which an account was to be *inally toked and adjusted among all at the conclusion. To be sure, it is stated that before Merritt and Adams were to receive their share of the profits, all the debts of the firm should be paid ; but that must be presume.! to be the principle and intention of all partnerships, however indif- ferently it may be observed sometimes. Then, knowing these facts at the time, or afterwards discovering them, how could the plaintiffs imagine, that when they accepted billsdrawn on them by J. > ittleberger and Co., they were not to have the liability of all, who, upon the well known principle of mercantile law, must be held to he included in the firm. They could ii(»l suppose that any one could stand in that situation that ho could make almost a fortune, out of money advances by them, from the profits ofa business carried on with it, and ye: be exempt from contributing to its payment. The many stipula- tions, in the ogreement of August, 1639, intended for the protection of all four, and particularly those regarding the dissolution of the firm, on Merrltt's death, (though it was not to be dissolved on Benhain's death), are consistent witli the idea of a co-partnership, and with no other state of facts ; and so the defendant, Merntt, seems clearly to have understood, from his letters. It Deed hardly be stated, that the fact of Merritt having given a mortgage upon •ome of his lands, to what value is not ascertained, towards securing the plain- tiffs, in their acceptances for J. M ittleberger and Co., can never be held to deprive the pinintiffs of the full benefit of their recourse upon all who are in fact liable upon their acceptances. I see no reason for holding the sum of 2,293/. lis. 1 lirf , as otherwise than part of the partnership dealing ; it was money lent to J. M ittleberger and Co., and was applied by them in purchas- ing produce, no matter of what kind, which went into the hands of the plain- tiff, and relieved all the partners of the firm, pro tnnto, by discharging so much of the general account, on which all were liable. 1 am therefore of opinion, that the plaintiffs should recover the sum of '25,9IP/. It's. (W. By Justice Jonks. — The amount involved in the question to be determined is large 'or this country, and although the case occupied much tmie, and was ably and ingeniously argued on tKe part of the defendants, I cannot see much difficulty in the decision. The agreement of the 28th August, 1839, so far as it relate-^ to the question of partnership, is in substance this; Merritt and Adams leased to John Mittleberger, the !St. Catharines mill, and other real property, for three years ; and M ittleberger and Benham in the name of John Mittleberger and Co., agreed to carry on, for three years, the milling business, which had p'-eviously been conducted by Merritt, the business which had been previously carried on by George Rykert and John Mittleberger, in the name of George Rykert » due the establishment, and the u-e of a schooner, aciorc ng to a schedule annexed lo the agreement, and covenanted, omongst oti ,tr tbines, not to discharge any of the dubts, so trans erred, under tho p«n- Wity oi ibrfeiture of any right to profits unJer the agreement. Mittlebergci 10 covenanted to pay Mcrritt and Adams fm annual rent, as follows: '-If the whole j)rofits shall be under an average of 2,000/ per annum, then, and in such case, the one half of such profits ; and if the whole profits shall exceed 2,000/. per annum, then and in such case, the lawful interest on the estimation of stock invested by the said Merritt and Adams, and specified in the schedule annexed,* and, in addi ion thereto, the ono-fourih part of the remaining profits after do- ducting the said nterost." Also, to give an annual advance of goods to Mer- ritt and Adams if required, of I,0IU)/. ; to close up the business at the end of ihc partnership of John IMittleberger & Co, and first, to pay and discharge all its liabilities ; 'o pay over to Merritt and Adams, their investments of cash, and stock in the new firm , and, within the perio i of three months after the determination o the said co-partnership, or as soon as received, to pay over to the said Merritt and Adams, any proportion of rents or 7)ro^/5 that may be remaining to tfiem. Mittleberger further covenants to insure the produce in the mill and store-house, and also the goods ; also, once in each year to bal- ance the other accounts, shewing an annual statement of the aggregate busi ness, to exhib!l the bo ks at all times, or furnish a balance sheet to each of the parties interested, if required. It was further mutually agreed, that at the expiration of the term, Merritt and Adams should take back the materials about the mill, to the amount of 1,000/., and that Mittleberger should take back goods, wares and merchandize, to a like sum ; the remainder of all stock whatsoever to be then disposed of. The circumstance, that Merritt and Adams were to indorse for the firm, was strongly relied upon in the argument, to shew that their liability in the business was to be limited by such eiidorsations. 1 do not so view it. In order to carry on the extensive business contempla- ted by the parties, large advances and credits would be required from the bankd, by the discount of drafts or notes ; and the security of parties, suppo- sed to be unconnected with the business, is usually required on such paper, in Upper Canada. If, therefore, Merritt and Adams had been known to be |)artners in the firm of John Mittleberger & Co., their indorsations would not, of course, havebeei. considered as any additional .•security upon the paper of the fjim; andtothis, 1 tnink, may boattributedtheirdesircnottoberegarded, by the public, as connected with thebusinpss of John Mittleberger &. Co , their names not apperinsr in the firm. There is, by this agreement, a participati* n in the ujiimate profits, by all the parties concerned ; although the business was to be conducted in the nnme of John Mittleberger & Co., the naines of the otiier parties not nppearinsj ; and although a sum was agreed to be paid as rent, it was to be ascertained by the actual profits upon the whole business, and the amount depended entirely upon such profits. I cannot but regard the business to be carried on ui:dcr the ngreeinent, as a partnership business bo- twf en all the parties, and I do not ':?o how any person can read the agreement without coiping at once to the same conclusion. if anything » Ise were ro- quircd, the way in which Mr. Merritt seemed to consider it, by his 1 tters, would remove all doubt. On the argument, a great number of authorities were cued, on both sides. I will refer to one more, Wightman v. Townroe ot. al. where it was decided, that executors were personally liable as part- nors, when they carried on busines with the partners of the testator, in the names of the surviving partners, under the old firm, for the sole bent.li^ of the testator's infant daughter. The counsel who contended against the 1: bil- ity of the executors, insisted that "that there were only two wayn by which a person can be made liable as a partner ; first by beneficially pa .ticipating in the profits, in which case, it mus; be admitted, he will be liablr, although he does not appear to the world as a partner. Secondly, by holding himself out to the world as a partner, and then \}c will be liable, although he does not api- 11 pear to the world as a partner." Here the defendants participated in the pro- fits and this alone made them partners inter se, and isiith all the world. In Waugh V. Carver cited in the argument, Lord Chief Justice Eyre says the parties did not intend to become partners according to their agree- ment. But the question is, whether they have not by parts of their agree- ment, constituted themselves partners in repect to other persons. And that the defendants have done so, in this case, I have no doubt. By Justice McLkax. — It seems to me impossible to read the agreement re- ferred to, without discovering, in almost every part of it, the clearest evidence of partnership between William Hamilton Merritt, George Adams, John Mit- tleberger, and Beadier Banham. By it they are severally to share in the profits and losses, during a certain period, and the joint credit of all the parties was to be used to procure funds to carry on the business. The death of Mer- ritt or Mittlebergar, was to operate as a dissolution of the connection ; and, in several parts, the O3tabli^:timont of a co-partnership is exp'"ossly recognized. It appears therefore clear t-) me, that Msrritt and Mittleberger are liable, in this action, as co-partners with Adams (now deceased) and Benham, who has left the province. As partners they must be responsible for all sums due by the firm of J. Mittleborgor & Co., though the debts may have been contracted in business not precisely within the scope of the original agreement. The plaintiffs, when they advanced their money to the firm, could not interfere with its applicantion, and it m itters not to them, whether it was used in the purchase of wheat, to be ground into flour, or in the purchase of American flour, or other produ?-e, to be transmitted to them for sale ; the application was a matter which rested with the partners of the firm, but their joint liability could not be alfvicted by any matter of that kind. Under the full conviction that the agreement establishes a partnership between the defendants, I cannot, of course, see any reason or grounis why the plaintiffs should not retain their verdict, and enter their judgajent for the whole amount found to be in arrear by the firm of John Mittleoerger & Co. Judgment for plaintifTs,