trustee for syndicate checked with officers of Kamex before refused to pay. approaching co-owner Codified in s.4(c)(i) Creditors were not Reliance Hickman does not appear Cox v. – Hickman partners (even to have relied on trustees (likely didn’t (1860) though receiving know who they were) cut of profits to pay Unjust Enrichment creditors – off debt) and were benefited from supply of goods at the not liable to pay expense of Hickman (might have been a other creditor’s factor, but not an overriding one) debt. Least Cost Risk Avoidance creditors – Sharing of profits likely not in any better a position to creates a rebuttable assess risk of business failure than presumption of Hickman was partnership. (Promoting Arrangements) if – case had gone against creditors it would have been foolish for any creditors in future to agree to arrangement such as this Pooley v. All funds of grease, Found to be a Reliance no direct reliance since – Driver pitch and manure partnership Pooley admitted he was not aware of (1876) business provided by connection of Drivers to business maybe – Deals with lenders Pooley held mentioned indirect reliance similar to Cox – provisions several bills that agreement Unjust enrichment Drivers – similar to endorsed by between the parties benefit from advance of goods on credit s.4(c)(iv) partnership and sued stating that they and a share in the profit the Drivers (a were not partners Cost Avoidance Drivers in – lender) arguing they was NOT good position to assess risk associated w/ were also partners. determinative) business Can’t have this kind of arrangement w/out partners (Would effectively give Drivers limited liability; Persons dealing with business would find it difficult/costly to determine whether there was significant equity in business) Martin v. Partnership obtained Provisions taken Reliance Peyton et al. were not part – Peyton loan of securities together do not of operations of the business so their (U.S. Case from D’s (D’s denied constitute a involvement was probably unknown to of partnership partnership third parties (no reliance) However, 1927) because of the poor reliance may have taken form of third financial state of the (Statements that no party expecting business to have company); loan partnership is substantial equity capital behind it repayment provided intended is not Unjust Enrichment maybe, if they – on basis of a share of conclusive) got a share of profits while others the profits provided goods to KNK and suffered loss
trustee for syndicate refused to pay. checked with officers of Kamex before approaching co-owner Cox v. Hickman (1860) Codified in s.4(c)(i) Creditors were not partners (even though receiving cut of profits to pay off debt) and were not liable to pay other creditor’s debt. Sharing of profits creates a rebuttable presumption of partnership. Reliance – Hickman does not appear to have relied on trustees (likely didn’t know who they were) Unjust Enrichment – creditors benefited from supply of goods at the expense of Hickman (might have been a factor, but not an overriding one) Least Cost Risk Avoidance – creditors likely not in any better a position to assess risk of business failure than Hickman was (Promoting Arrangements) – if case had gone against creditors it would have been foolish for any creditors in future to agree to arrangement such as this Pooley v. Driver (1876) Deals with provisions similar to s.4(c)(iv) All funds of grease, pitch and manure business provided by lenders – Pooley held several bills endorsed by partnership and sued the Drivers (a lender) arguing they were also partners. Found to be a partnership mentioned that agreement between the parties stating that they were not partners was NOT determinative) Reliance – no direct reliance since Pooley admitted he was not aware of connection of Drivers to business – maybe indirect reliance similar to Cox Unjust enrichment – Drivers benefit from advance of goods on credit and a share in the profit Cost Avoidance – Drivers in good position to assess risk associated w/ business Can’t have this kind of arrangement w/out partners (Would effectively give Drivers limited liability; Persons dealing with business would find it difficult/costly to determine whether there was significant equity in business) Martin v. Peyton (U.S. Case 1927) Partnership obtained loan of securities from D’s (D’s denied of partnership because of the poor financial state of the company); loan repayment provided on basis of a share of the profits Provisions taken together do not constitute a partnership (Statements that no partnership is intended is not conclusive) Reliance – Peyton et al. were not part of operations of the business so their involvement was probably unknown to third parties (no reliance) However, reliance may have taken form of third party expecting business to have substantial equity capital behind it Unjust Enrichment – maybe, if they got a share of profits while others provided goods to KNK and suffered loss