F. J. Dubos & Co. v. Jones

Citations

• 34 Fla. 539

Syllabus

<p>PARTNERSHIP — SHARING OF PROFITS — WHEN HOLDING OUT AS PARTNER IMPOSES LIABILITY AS SUCH.</p> <p>1. The law at one time treated the sharinq of profits as the true test that established a partnership, particularly as to third persons, but this doctrine has become entirely obsolete, and is no longer law either in England or in this country. The-law is now well settled that where a person loans or advances money or goods to another to be invested in some business or enterprise, the lender to share in the profits as or in lieu of interest on, or in repayment of such loan or advance, does not constitute a partnership; neither will it constitute a partnership as to third persons, unless the acts of the parties, in furtherance of the agreement between themselves, amount to such a holding of themselves out as partners as that third persons are misled into a reasonable belief that a partnership, exists in fact.</p> <p>2. To constitute a loan in such a case, tlie money adyaneed must be returnable in any event. It is not a loan if repayment is-contingent upon the profits, for m such case it is made, not upon the personal responsibility of the borrower, but upon the security of the business. Neither must the transaction be a mere device to obtain the benefits of a partnership without iñcuring its responsibilities, for in such case, whatever else the parties may call it, it will be construed to be a partnership.</p> <p>3. Persons who can not be regarded as partners between themselves, may, nevertheless, under certain circumstances, growing out of tlieir acts, declarations and dealings, be regarded as such as to third persons. Thus, a person holding himself out as a partner in a, firm or permitting himself to be so held out, will be held liable as such as to third parties, whatever may have been his actual relations with the firm or its members. One who is not a partner in fact, however, can not be held liable to third persons on the ground of having been held out as such, exc