Palmer v. Warren Insurance Company.

in ports and places in Mexico and Texas. But even if this part of the clause should be construed to exclude voyages to and from Mexico and Texas during the year insured, it would not follow, that the other part of the clause is to receive the same interpretation. In the case of Yeaton v. Fry (5 Cranch R. 335, 341), the Supreme Court of the United States, upon a policy containing a clause, "all risks, blockaded ports and Hispaniola excepted," held the clause to be divisible, and applied the construction of it thus; that a voyage to Hispaniola was not insured; but a voyage to a blockaded port was, unless known to be blockaded, although it was in fact blockaded. The risk of loss from a known blockade was excepted, and not the voyage to the port itself. The same exposition might be applied here.

But, as the brig did not, in fact, go on any voyage to Mexico or Texas, it is unnecessary to insist on that. We may read the clause, then, as if it were, "excluding during the term the West Indies from July 15th to October 15th, each at noon." Now, here it is clear, that voyages to and from the West Indies are not excepted generally; but the West Indies for a specified time only. The natural interpretation, then, of this clause is, that it excepts from the protection of the policy the time passed in the West Indies from July 15th to October 15th. I say, this is the natural interpretation; for the insurance is for a year, the exception carved out of it is for three months, and these three months not universally, but only when the vessel is in the West Indies. If the vessel is not in the West Indies, the policy covers the whole term; so that West India ports or places, or West India risks, only seem within the construction of the clause of the policy. Suppose the brig had sailed on a voyage to the West Indies on the 1st of July, and had been lost on the 10th of the same month; what words are there in the policy (supposing there to be no

Palmer v. Warren Insurance Company.

warranty, condition, or prohibition, which I have already said there is not), which would prevent the owner from a recovery of the loss under this policy? I confess I can perceive none. The loss would be without the excepted period, and not within it. Besides; it seems to me, that policies on time are properly to have the same construction throughout, unless there be an irresistible presumption the other way. The very object of a policy on time is to avoid any designation of voyages, or chances of deviation; and to leave the party at liberty to proceed on any voyages or adventures, which he may choose. Exceptions, therefore, in the policy, if they admit of any other reasonable interpretation, ought not to be construed as cutting down the policy to particular voyages, excluding all others; but to be deemed exceptions of time and risks in particular ports or parts of voyages. Now, every word in the present policy is perfectly satisfied by the interpretation, which I have given to it, without any straining of the words from their ordinary meaning, as words of exception or exclusion. But if we construe the clause the other way, as excluding all voyages to and from the excepted ports in Mexico and Texas, and all voyages to and from the West Indies begun before, or continued after the excepted period, we are necessarily obliged to interpolate many words into the clause, and to deflect the words from their common signification. In short, we are to construe a policy, purporting to be a policy on time, to be also a policy on voyages, and the exception to be, not of time and risks, but of voyages to and from the excepted ports and places, as well as an exception of the time passed in them. It appears to me, that this is not a reasonable or justifiable

construction.

But, suppose the meaning of the excepted clause is ambiguous, and admits of either construction, which is then to be

Palmer v. Warren Insurance Company.

adopted? The rule adverted to, decides this. The exception is to be construed most strictly against the underwriters, and most favorably to the insured.

Upon the whole, therefore, notwithstanding I have had some difficulty on the subject, my mind reposes on the construction, which I have stated, as the true, the natural, and the appropriate meaning of the policy.

CIRCUIT COURT OF THE UNITED STATES.

Fall Circuít.

RHODE ISLAND, NOVEMBER TERM, 1840, AT PROVIDENCE.

Hon. JOSEPH STORY, Associate Justice of the Supreme Court. BEFORE {Hon. JOHN PITMAN, District Judge.

THOMAS R. HAZARD V. BENJAMIN HAZARD.

A partnership, as to third persons, may arise by mere operation of law, and without the intention of the several parties thereto; but the actual intention of the parties will alone constitute a partnership as between themselves. A mere participation in the profits will not make the parties partners inter sese. Quare, whether there is any clear and solid distinction between cases, which constitute partnership, as to third persons, by participation in the profits, and cases of mere agency, where the remuneration is to be paid by aportion of the profits.

Under the circumstances of this case, where one third for one year and one fourth for another year, of the profits in a certain business carried on by A and B, was allowed to B, for his services, it was held, that there was no partnership, but a mere participation of interest in the profits, as a remuneration to B for his agency.

BILL in equity for the settlement of the accounts of an asserted partnership between the plaintiff and the defendant, and for a decree for payment of the balance due to the plaintiff, &c. The answer denied the partnership, and stated expressly, that no partnership was intended between the parties; but that the defendant was, by an informal written instrument, annexed to the bill, and which was admitted to be the true agreement be

Hazard v. Hazard.

tween the parties to have a certain portion of the profits of the business in lieu of, and as a compensation for, his services.

The written instrument was not signed; but was in the following terms, and was in the handwriting of the defendant: "Benjamin Hazard agrees with Thomas R. Hazard to run his two factories, situate on Rocky Brook, on the following terms, viz. The said Benjamin Hazard agrees to devote his whole time, excepting his attendance of religious meetings, exclusively to the management of the concerns of said factories, and to take the machinery in the order it is at present in, and return it in like order, at the expiration of this agreement. In consideration of which, the said T. R. Hazard agrees to allow him one fourth of the profits of the business, for the first year, and one third of the profits for each year after, until the expiration of this agreement, which is to be the sole reward of the said B. Hazard's services. And Thomas R. Hazard agrees, on his part, to purchase the stock and attend to the sale of the goods, without any charges for his personal services and time, excepting the actual expenses, necessarily incurred. All stock, and articles of any description, bills, &c. paid by Thomas R. Hazard, are to be credited to the said T. R. H., and the proceeds of the goods are to be delivered and charged to him, in the factory books. And the said Thomas R. Hazard agrees to furnish a horse and wagon, to do the business of the factory, which is to be kept at the expense of the factory, and returned of equal value, at the expiration of this agreement. It is to be understood, that Benjamin Hazard is to have no control over, or profits arising from the rents, &c. of the houses and lands adjoining the factories. Thomas R. Hazard is to charge no rent for the factories, which, with the dam, water-wheels, running gear, &c. is to be kept in running repair, and the expense charged to the factory." The agreement has no date, but it is admitted, that it was made in De