Poundstone v. Hamburger

Citations

• 139 Pa. 319
• 20 A. 1054
• 1891 Pa. LEXIS 995

Syllabus

<p>1. AVkere parties in business together, declare in a contract that “ it is understood hereby that this agreement is not, in fact, and is not to be construed as creating a partnership,” the court, in considering the rights of creditors, will be governed by the effect of the contract relation created, and not by the name given to the association.</p> <p>2. The act of April 6, 1870, P. L. 56, providing that a loan to an individual or firm, upon a share of the profits in lieu of interest, shall not constitute the lender a copartner, does not authorize the exemption, when the lender, by privileges and covenants secured, acquires from the borrower as much control of the business as if he were an actual partner.</p> <p>3. At all events, where a loan has been made for use in a business, under covenants for such privileges and control, the lender may not by a subsequent purchase of the business and the application of the purchase money to the loan, relieve himself from liability as a copartner, at least to the extent of the amount of the money loaned, under the provisions of said act.</p>