Appeal from judgment of Court of Common Pleas of Bucks County, Jan. T., 1963, No. 1023, in case of N. Clarence Rosenberger et al. v. Julius Herbst et ux.
John R. Mondschein, with him Harry A. Dower, and Dower, Huston & Cahn, for appellant.
Richard A. Rosenberger, for appellees.
Ervin, P. J., Wright, Watkins, Montgomery, Jacobs, Hoffman, and Spaulding, JJ. Opinion by Hoffman, J. Watkins, J., dissents.
[ 210 Pa. Super. Page 129]
On January 1, 1957, defendant Julius Herbst and one Eugene Parzych entered into a formal agreement relating to the operation of a farm owned by Herbst, located in Bucks County. The agreement, which is long and complex, recites Herbst's contribution of certain assets, principally the use and occupancy of the farm. It further acknowledges Parzych's indebtedness to Herbst in the amount of $6000, repayable with interest of five per cent per annum.
The actual farming operation is stated to be "under the full control of Parzych." Herbst is entitled to receive one-half of the net profits, and is bound to indemnify Parzych for one-half of any losses sustained.
In a key paragraph, the agreement recites: "Since any remuneration due hereunder to Herbst is a payment in return for his investment in the business and his capital contribution thereto, as well as in return for his leasing the Herbst Farm to Parzych without further rental payments, the parties do not intend by this agreement to establish a partnership of any kind or type, but rather [ a relation ] of Debtor and Creditor and Landlord and Tenant." (Emphasis supplied).
Between February, 1957 and June, 1960, the plaintiffs, trading as "Clover Leaf Mill" (hereinafter "Clover Leaf") sold and delivered to Parzych large quantities of grain, feed, and fertilizer for use on the farm.
In July of 1961, Clover Leaf, for the first time, formally demanded payment from defendant Herbst for certain debts contracted by Parzych in connection
[ 210 Pa. Super. Page 130]
with farming operations.*fn1 Herbst disclaimed all liability, and this suit followed.
The court below focused exclusively on the Herbst-Parzych agreement. Concluding that the agreement constituted the two parties partners, in spite of the disclaimer clause noted above, the court directed a verdict in ...