In Godchaux v. Mulford, 26 Cal., 325, it is said that: "A hired clerk or salesman is no more in the possession of the goods of his employer than a hired laborer is in the possession of the farm on which he is employed to work. The employment of the vendor in a subordinate capacity is colorable only and not conclusive upon the question as to whether there has been an immediate delivery and an actual change of the possession. He cannot be allowed to remain in the apparently sole and exclusive possession of the goods after the sale, for that would be inconsistent with such an open and notorious delivery and actual change as the statute exacts in order to exclude from the transaction the idea of fraud. But if it be apparent to all the world that he has ceased to be the owner, and that another has acquired, and openly occupied, that position; that he has ceased to be the principal in the charge and management of the concern and became only a subordinate or clerk, the reason of the rule announced in the statute is satisfied."

We, therefore, under this view of the case, hold that the seizure of the property of the plaintiff, under the attachment, was illegal. The judgment is affirmed.

PARCHER ET AL. v. ANDERSON ET AL.

Filed January 10, 1885.

PARTNERSHIP, HOW CREATED-SHARING IN PROFITS NOT CONCLUSIVE.-Where there is no partnership inter se, there can be none as to third persons, unless the party sought to be held as a partner, has, by his acts, put himself in such a position that he is estopped from denying that he is a partner. But the weight of modern authority is, that the mere sharing of profits, although cogent evidence of a partnership, is not conclusive, so as to make him who receives such profits a partner in the business or enterprise by which they are earned.

APPEAL from the second judicial district court of Silver Bow county. The opinion states the facts.

Knowles & Forbis, for the appellants.

W. W. Dixon, and F. T. McBride, for the respondents.

WADE, C. J. This is an action on an account for goods, wares and merchandise alleged to have been sold by plaintiffs to the defendants, as partners, during the year 1881. There was a verdict and judgment for defendant, Nickel, and a motion for new trial overruled, from the order overruling which, and from the judgment, the plaintiffs appeal.

The action is against Frederick C. Anderson, Rudolph Schoulder and Henry Nickel, who are charged as partners; and the question to be determined is, whether under the facts and the law, the defendant, Nickel, was a partner with the defendants, Anderson and Schoulder, and, as such, liable to the plaintiffs with them, for the goods aforesaid.

It appears that a part of the goods were charged to Anderson & Co, and a part of them to Anderson and Schoulder; that Anderson

ordered the goods, and that plaintiffs did not know who were the members of the firm. There is no claim that the defendant, Nickel, held himself out as a partner in the firm of Anderson and Schoulder, or that the plaintiffs' were induced to give credit to the firm by reason of Nickel being a member of it, or by reason of any act or repreresentation of his. It further appears that Anderson and Schoulder, were about to commence, or were working the Centennial quartz mill, when on or about the first day of April, 1881, Andersou went to Nickel and asked him if he could let Schoulder have five hundred dollars, to which Nickel replied that he could, and that night Anderson and Schoulder went to the shop of Nickel and he let Schoulder have five hundred dollars in consideration of the following agreement, which was reduced to writing and signed by Anderson and Schoulder at the time, viz: "In consideration of five hundred dollars we sell one-fourth of the net profits in the Centennial mill, to Henry Nickel."

A few days subsequent to the execution of this agreement, finding that the same had no date, Nickel, as he claims in his testimony, went to Schoulder and had him execute his note for five hundred dollars, dated April 1st, 1881, to him, Nickel, he thinking that the agreement was not good, because the same had not date, but he retained the agreement, and the note was delivered to him.

Anderson testified that the note was not given until sometime in the following August, after the attachment in this case had been issued; that "Nickel asked Schoulder to give him a note for five hundred dollars so he could show it and prove he was not a partner, and so he would not be attached when the sheriff came down to serve the paper," all of which Nickel denied.

The rights of these parties must be determined by the effect to be given to this purchase of one-fourth of the net profits of the mill. If, as Anderson claims, the note was executed to conceal the fact that Nickel was a partner with Anderson and Schoulder, it was an idle thing to have done, unless he was in fact a partner, and whether he was or not, must be determined by the terms of the agreement, and the situation and acts of the parties; and we are confronted with this proposition: Did the sale by Anderson and Schoulder, and the purchase thereof by Nickel, of one-fourth of the net profits in the Centennial mill, in and of itself, make Nickel a partner, a principal with Anderson and Schoulder in the business by which such profits were to be earned? Nickel did not hold himself out, or suffer himself to be held out as a partner either to the public at large or to these plaintiffs. He is not, therefore, a partner by estoppel. He declares in his testimony, and there is no circumstauce or act to contradict him, that he did not intend to become a partner. He is not, therefore, a partner by intent; and if a partner at at all, he becomes so by the force and operation of his purchase of the one-fourth of the net profits of the mill, and by that alone. There is no doubt but that the agreement is competent evidence, and strong evidence, that Nickel became a partner in the mill; but does the bare

fact of sharing the profits furnish an arbitrary test by which a person not ostensibly a partner, is by operation of law, to be held a partner? This question has been much considered by judges and text writers, and the authorities are not entirely harmonious. But the tendencies of the more modern authorities, both English and American, is towards the doctrine that the sharing of profits is evidence that he who shares them is a partner, but not conclusive evidence, the true test being, whether there is such a participation in, and sharing of the profits as to, constitute the relation of principal and agent between the person taking the profits, and those actually carrying on the business.

In the case of Eastman v. Clark, 53 N. H., 276, decided in 1873, the court says: "It has been supposed a sharing profit test, with divers exceptions and qualifications, was, at one time, established by the authorities. It has been supposed that it was established in the latter part of the last century; that it was settled in the class of cases generally ranged under the leading case of Waugh v. Carver, 2 H. Bl., 235. That it was upheld until 1860, and that it was then overthrown by the decision of Cox v. Hickman, 99 E. C. L., 47; 8 House of Lords cases, 268. Cox v. Hickman, and the subsequent English cases, maintain that there is no such test; that the question of partnership liability is a question of the liability of a principal: that so far as it is a question of law, it is governed by the general doctrines called law of agency, or law of principal and agent, when applied in a case of an agent and one principal, and called law of partnership, when applied in a case where the agent is a joint principal; and that, so far as it is a question of fact, sharing profits is evidence tending to show that the sharer is a principal. From 1866, to the present time, that has been held to be the common law of England.

"But what was the meaning and effect of the English cases before 1860? This is an important question, for this reason, among others, that before 1860, the American authorities were generally intended to be a mere following of the English; and when we ascertain the meaning and effect of the English cases before 1860, we shall learn what the mass of American authorities were intended to be." The judge then goes into a careful history and analysis of the English cases for nearly one hundred years prior to 1860, commencing with that of Bloxham v. Pall, 2 Wm. Bl., 998, in 1775; Grace v. Smith, and Waugh v. Carver, 2 H. Bl., 235, in 1793, in which the sharing profit test had its birth; reviewing Hoare v. Dawes, 1 Doug., 371, 1780; Cooper v. Eyre, 1 H. Bl., 37, 1778; Steville v. Robertson, 4 D. & E., 720; Benjamin v. Porteous, 2 H. Bl., 590; Wilkinson v. Frasier, 4 Esp., 182, 1802; Hasketh v. Blanchard, 4 East., 144, 1803; Dry v. Boswell, 1 Camp., 329, 1808; Wish v. Small, 1 Camp., 331, 1808; Ex parte Garland, 10 Ves., 110, 1804; Barton v. Hanson, 2 Jamet, 49, 1809; Waland v. Elkins, Hoet's N. P., 227; Gonthwaite v. Duckworth, 12 East., 421, 1810; Ex parte Hamper, 17 Ves., 403, 1811; Wightman v. Toronver, 1 M. & S., 412,

1813; Waland v. Elkins, 1 Stark, 272, 1816; Cheap v. Cramond, 4 B. & Ald., 663, 1821; Fromont v. Coupland, 2 Bing., 170, 1824; Smith v. Watson, 2 B. & C., 404, 1824; Dickinson v. Vapley, 10 B. & C., 128, 1829; Fox v. Clifton, 6 Bing., 776, 1830; Id., 9 Bing., 115, 1832; Ex parte Chuch, 8 Bing., 469, 1832; Green v. Busley, 2 Bing., N. C., 108, 1835; Owen v. Body, 5 A. & E., 28, 1836; Bond v. Pittard, 3 M. & W., 357, 1838; Wilson v. Whitehead, 10 M. & W., 503, 1842; Pote v. Eyton, 3 C. B., 32, 1846; McAlpine v. Mangnall, 3 C. B., 496, 1846; Barry v. Nesham, 3 C. B., 641, 1846; Hey-. hoe v. Berge, 9 C. B., 431, 1850, and then says: "Such are the most important English cases, before Cox v. Hickman, 1860, relating to the subject of a sharing profits test. Whatever loose general notions may have been entertained as to the effect of these cases, they do not establish such a test in an unqualified form. They can be arrayed as a mass of authorities overruled by Cox v. Hickman and the subsequent cases, which have settled the law for England, that sharing profits, in a general unlimited sense, is not a test.'

"Neither is such a test established by a preponderance of the weight of American cases decided without reference to Cox vs. Hickman. The subject has been much considered in Massachusetts and the result is far from being a simple absolute sharing profits test; Reynolds v. Tappan, 15 Mass., 370; Rice v. Austin, 17 id., 197; Baxter v. Rodman, 3 Pick., 435; Grozier v. Atwood, 4 id., 234; Cutler v. Winsor, 6 id., 335; Turner v. Bissele, 14 id., 192; Denny v. Cabot, 6 Met., 82; Bradley v. White, 10 id., 303; Holmes v. O. C. R. R., 5 Gray, 58; Fitch v. Harrington, 13 id., 468; Julis v. Ingalls, 1 Allen, 41; Gunnison v. Langley, 3 id., 337; Pratt v. Langdon, 12 id., 544; S. C. 97, Mass., 97. Sometimes such a test seems to be recognized with the qualification "as principal:" Loomis v. Marshall, 12 Conn., 69; Berthold v. Goldsmith, 24 How., 536-548; Collyer on Part., book 1, ch. 1, sec. 25; Story on Part., sections 49, 54, 55. Of course if one shares profits as a principal— i.e., in the capacity as a principal-he is a principal. And so he is if he does anything else in that capacity. When sharing profits is accepted as a test, it is almost universally with this qualification, that if the profits are received as compensation for services, or payment of any debt, sharing them is not a test. The number of cases that favor an unqualified sharing profits test, is hardly appreciable among the vast number opposed to it. * * *The sharing profits test, in this modified form, enveloped in and consolidated with its mass of qualifications and exceptions, the only form in which it can be claimed to be established by the authorities, is nothing but the elementary doctrine of the liability of a principal, disclosed or undisclosed, on an authorized contract made by his agent; which is the doctrine of Cox v. Hickman and the subsequent English cases: Cox v. Hickman, Baven, 164; 25 L. J. Ch., 142; 18 C. B. 617; 3 C. B. (N. S.) 523; 8 H. L. cases, 268; 9 C. B. (N. S.) 47; Kilshaw v. Jakes, 3 B. & S. 847; Bullen v. Sharp, 18 C. B. (N. S.) 614; Redpath v. Wigg, L. R. 1 Ex., 335; Easterbrook v. Barker, L. R., 6, C. P., 1; Holme

No. 60.-5.

v. Hammond, L. R., Ex. 218; Shaw v. Galt, 16 Ir. Com. Law, 357; Re. E. & I. C. & U. S. A., 1; Humming v. Miller, 85; Mallow v. Court of Wards, L. R. 4 P. C., 419; Noakes v. Barlow, 20 W. R., 388; 26 L. I., (N. S.) 136; Ex parte Macmillan, re Whittaker, 24 L. T. (N. S.) 143.

In the case of Cox v. Hickman, supra, Lord Carnworth said: "A right to participate in the profits is in general a sufficiently accurate test; for a right to participate in profits affords cogent, often conclusive, evidence that the trade in which the profits have been made, was carried on in part, for, and on behalf of the person setting up such a claim. But the real ground of the liability is, that the trade has been carried on by persons acting on his behalf. When that is the case, he is liable to the trade obligations, and entitled to its profits, or to a share of them. It is not strictly correct to say that his right to share the profits makes him liable to the debts of the trade. The correct mode of stating the proposition, is to say that the same thing that entitles him to the one, makes him liable to the other; namely the fact that the trade has been carried on in his behalf, i. e., that is, that he stood in the relation of principal towards the persons acting ostensibly as the traders, by whom the liability has been incurred, and under whose management the profits have been made. I can find no case in which a person has been made liable as a dormant or sleeping partner, in which the trade might not fairly be said to have been carried on for him, together with those ostensibly conducting it, and when, therefore, he would stand in the position of principal towards the ostensible members of the firm as his agents.

Commenting on this statement of Lord Carnworth, the court in Eastman v. Clark, supra, says: "By 'a sufficiently accurate test,' he meant satisfactory evidence. His remark suggests how easily a piece of evidence could be transformed into a legal test sub modo, by tribunals accustomed, as English courts are, to deliver their judgment on questions of fact. When Lord Carnworth said sharing profits affords cogent evidence of a partnership, he expressed his opinion on a question of fact; and the evident soundness of such an opinion tends to obliterate the distinction between the law and the fact of the subject. Sharing profits, in the absence of all other evidence, would, as a matter of fact, be cogent evidence of a partnership; but every item of cogent evidence is not a legal test; it moreover is generally not impossible to have other evidence in a case besides sharing profits; whether it is cogent or weak depends upon its character explained by other circumstances.

Mr. Lindley, in his valuable work on partnership, 1 Lind. Part., 42, commenting on the cases subsequent to that of Cox v. Hickman, says: "There can be no doubt that in all these cases the decisions would have been the other way had they occurred before Cox v. Hickman; and they are particularly valuable as showing that the principles on which that case was decided by the House of Lords, may now be safely relied upon in opposition to the old rule which