GRAHAM v. UNITED STATES (two cases)

GRAHAM v. UNITED STATES (two cases). Nos. 4429, 4430. Circuit Court of Appeals, Seventh Circuit. Nov. 11, 1930. Frank C. Olive, of Indianapolis, Ind., for appellants. George R. Jeffrey, of Indianapolis, Ind., for appellee. Before ALSCHULER, SPARKS, and PAGE, Circuit Judges. [MAJORITY — PAGE, Circuit Judge.] PAGE, Circuit Judge. From the facts, stipulated in the District Court, it appears that the appellant in each of these cases was an equal partner with the other in a manufacturing business in Indiana, and concerning that business they made the following agreement with their fourteen year old son: “The oral agreement was that the son should have for his own one-third of the profits of the business which would be reduced by one-third of any losses sustained in any year.” The sole question is, Did that agreement as between these parties constitute a partnership? We are of opinion that, on authority of the eases relied on by appellants, we must affirm these judgments. In Bacon v. Christian, 184 Ind. 517, 521, 111 N. E. 628, 630, the court said: “It is apparent that to establish the partnership relation, as between the parties, there must be (1) a voluntary contract of association for the purpose of sharing the profits and losses, as such, which may arise from the use of capital, labor, or skill in a common enterprise; and (2) an intention on the part of the principals to form a partnership for that purpose.” In Driscoll v. Sullivan, 186 Ind. 178, 115 N. E. 331, the elements necessary to constitute a partnership, as laid down in the Bacon Case, are again stated. Nothing is said about a partnership in the agreement. The language of the agreement, namely, that the boy should have one-third of the profits, reduced by one-third of any loss sustained in any year, excludes the idea that as between the parties the boy was to be liable for losses. The agreement did not constitute a partnership, and the judgments are affirmed.