Thursday, February 14, 2013

Martin v. Peyton case brief

Martin v. Peyton case brief summary
246 N.Y. 213

SYNOPSIS: Appellant challenged a judgment of the Appellate Division of the Supreme Court in the First Judicial Department (New York) in favor of respondents in appellant's action seeking to charge a firm's debt to respondents as partners in the firm.

-Appellant claimed that respondents became partners in a firm doing business as bankers and brokers. -Because appellant claimed an actual partnership, the claim depended on the interpretation of certain instruments.
-One of the firm's partners got a loan from respondents for the firm to use as collateral for bank advances.
-Respondents refused to become partners in the firm but reached an agreement with one of the firm's partners expressed in three documents.
-The general purpose was for respondents to loan the firm liquid securities for use in the business.
-To insure respondents against losses, the firm was to turn over its own more speculative securities, which could not be used as collateral for bank loans.
-In compensation for the loan, respondents were to receive a percent of the firm's profits and an option to join the firm.

-The court found that the documents did not associate respondents with the firm so that they and it together carried on as co-owners of a business for profit.
-Respondents' measures taken as precautions to safeguard the loan were ordinary caution and did not imply an association in the business.

-A partnership results from a k, express or implied.
-The conduct of the parties and the circumstances surrounding their relationship/transactions control the question of whether a partnership exists in cases where the parties have not documented their intentions.
-The only intent necessary is an intent to do things constituting a partnership.   

OUTCOME: The judgment was affirmed because respondents were not partners with a firm where they did not carry on with it as co-owners of a business for profit.

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