free essays
Free essays

Brown V. Swett and Crawford of Texas


BrownV. Swett and Crawford of Texas

BrownV. Swett and Crawford of Texas

Accordingto the Appeals Court decision, Brown had not made a partnership withthe Galtney despite the fact that the two established the Houstonoffice and shared commission. The Appeal court claimed that Brown wasreceiving a base salary and bonuses, which were compensations for theservices he rendered to the organization. This implies that he wasineligible to receive a share of the profits the organizationconsidering that he was receiving an attractive remuneration packageand was working as an at-will staff member (Radack, 2005). The courtfurther claimed that an agreement to share gross returns of anorganization does not make it does not imply that an organizationBrown had a partnership agreement with Galtney. The two sharedroyalties that were based on the average returns of the policies theysold, and not the gross profits IBS earned from the same sales. Thiscompensation is similar to consultation fees that made Brown anat-will employee. On the same note, the Supreme Court of Texas ruledthat IBS did not commit to a relationship, despite that fact that itagreed to give compensation to Brown and Galtney with respect totheir agreed sharing ration (Meiners, 2012).

Browncould have ensured that he was made a partner of IBS and Galtneythrough objecting to receiving the basic salary, which the court usedto justify that he was compensated for his consultation services. Inaddition, Brown should have insisted that he should receive a bonusbased on the average profit accumulated from the sales they made,instead of receiving a royalty pay based on the average sales theysold. Brown should also have ensured to sign a contract with IBS andGaltney indicating that they were supposed to share the profits. Insuch a case, the Supreme Court could then substantiate the basicsalary Brown was a partner to Galtney and IBS, hence he owned aportion of the business (Texas., &amp West Publishing Company,1996).


Meiners,R. E., Ringleb, A. H., &amp Edwards, F. L. (2012). Thelegal environment of business.Mason, OH: South-Western Cengage Learning.

Radack,S. (2005). Brown V. Swett Crawford of Texas Inc. FindLaw.

Texas.,&amp West Publishing Company. (1996). Texascorporation and partnership laws: As amended through the 1995 regularsession of the 74th Legislature.St. Paul, Minn: West Pub.