Case ID: sc-eq_31/html/0064-01.html
Source: Caselaw Access Project
Author: {"author": "Dtjnkin, Ch.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

G. S. Cameron vs. Stephen Watson.
    
      Partnership — Evidence—Account.
    A partnership had funds in Macon, Georgia, and one of the partners sent drafts for the amount to his agent in Georgia, with directions to invest them in cotton and send the cotton to him, and the agent, having received the amount, failed, whereby the funds were lost, Held, upon the evidence, that the loss should fall upon the partnership, and Rot upon the individual partner who remitted the drafts.
    Where, by the terms of co-partnership between A and B, A contributes money, and Bhis personal services in consideration of the use of the money, pn which interest is not to be charged, and they are to divide the profits; if no profits are made, and the money contributed by A is sunk, A cannot claim from B a por. tion of the capital thus sunk, but must bear the whole loss himself.
    The partners, however, may make different stipulations, and where, after the dissolution, B allowed A to withdraw the capital contributed by him, held, that he was bound, and that he could hot charge B with interest from the time of the withdrawal until the partnership was finally settled.
    Books kept by the partner who winds up the business of the partnership, are not as a general rule, evidence against the other partner; but'such other partner, after every opportunity to inspect the books, having agreed to refer them to an accountant, to make up an account therefrom, to be made the basis of the Master’s report, Held, that he could not afterwards object to them as evidence.
    
      Held, also, that he was bound by the mode of stating the accounts, as made up by the accountant from the books.
    BEFORE DARGAN, ,01-1., AT CHARLESTON,
    FEBRUARY, 1856.
    This case came before the Court on exceptions to the Master’s report, which is as follows:
    The decree of Chancellor Johnston filed on the 26th October, 1852, and affirmed by the Court of Appeals at its January sitting, 1853, decided “that there was no settlement between the ” (plaintiff and defendant as) “ partners, ” and directed the account of the partnership taken by one of the Masters.
    At a reference held under this Order, on the 13th April, 1853, the books of the concern of G. S. Cameron, were, by agreement of the Solicitors of the plaintiff and defendant, placed in the hands of Mr. W. B. Heriot, a skilful accountant, for the purpose of stating the partnership account from the said books.
    
    On the 16th May, 1854, at a reference then held, Messrs. Heriot & Petit (who are associated in their profession) submitted the accounts prepared by them, which accounts are herewith filed, and marked from A. to J. inclusive.
    The following abstract of these accounts will show the result to which those gentlemen arrived, and the process by which that result was attained.
    The books are balanced at two periods, on the 1st July, 1842, when the partnership of Cameron & Watson was dissolved, and in April, 1852, up to which time the books have been written. These trial balances, so far as they may be relied upon as a test of correctness, prove the books to have been accurately kept. They are exhibited in statement A.
    The liabilities of the concern on the first July, 1842, are set down in statement B. as follows:
    To Watson, Crews & Co............... $15,140 51
    Bills payable...................................... 32,168 21
    S. & J. Watson........................................ 10,686 79
    Cash (overpaid more than received)............ 1,715 04
    Sundry open accounts............................ 3,274 13
    Total liabilities at time of dissolution... .$62,984 68 The assets of the concern at this period were as follows:
    Bills Receivable....................$27,814 15
    Sundry open accounts............ 10,846 80
    W. & J. E. Fort & Co............. 1,250 00
    Bank Stock................... 673 59
    Property Account.................. 800 00
    G.S. Cameron for stock purchased 19,903 92
    Making...........................$61,288 46
    
      To this sum, however, is added the private account of the partners, to wit:
    Geo. S. Cameron, his individual indebted-edness..............................$ 5,709 48
    Adam Johnson, (alleged to have been assumed by G. S. Cam- « eron)................................. 8,822 36
    And Stephen Watson............... 2,836 66
    Making the total of Assets...$78,656 96
    And showing an excess of Assets over Liabilities or “ apparent gain ” to the credit of Profit and Loss, at the date of dissolution. $15,672 28
    An abstract of the Profit and Loss Account showing the above Credit Balance on 1st July, 1842, of $15,672 28, is appended to statement B.
    The books in April, 1852, when they are again balanced, show the following state of the partnership affairs at that time:
    Liabilities — Sundry open Accounts ................$ 46 55
    G. & H. Cameron........................ 31,695 47
    S. Watson, Capital Account............. 1,114 61
    $32,856 63
    $ 6,868 24 Assets — Bills Receivable..........
    5,559 26 Sundry open accounts
    518 72 W. & J. E. Fort & Co...
    4 59 Bank Stock...............
    $12,950 81
    To which is added as before :
    Private Acc’t of G. S. Cameron........$ 5,901 96
    And Debt of Adam Johnson............ 8,822 36
    Private Acc’t of Stephen Watson...... 4,548 79
    And account of S. & J. Watson......... 758 33
    Total Assets.....................$32,982 25
    
      Showing balance of “apparent gain” to credit of Profit and Loss in April, 1852................... $125 62
    $32,982 25
    The difference, $15,546 66, in the Profit and Loss Account at the two periods at which the above statements are made up, is accounted for in the books, by the accumulations of interest against the concern within the said two periods.
    The condition of the partnership affairs in April, 1852, having been ascertained from the books as above, Mr. Heriot in exhibit C. states, by several accounts, the manner in which the books should be closed, and a settlement had between the partners. With no expectation of being able to present these accounts more clearly than has been done by Mr. Iieriot^ an abstract of them here may enable me with more brevity to submit what I have to say in regard to them hereafter.
    The debt due to G. & H. Cameron, constituted in April, 1852, the only liability of the concern, (excepting three small items amounting in the aggregate to $167 58, which is carried to the credit of Profit and Loss.)
    To the reduction of this indebtedness to G. & H. Cameron, the bills and accounts receivable remaining uncollected at that time, amounting together to $12,427 50, would be properly applicable. But these notes and accounts are admitted to be against insolvent parties. They are therefore charged to profit and loss, making the balance to the debit of that account $12,259 92, which balante, or net loss, is chargeable in equal proportions to the partners, viz: to each $6,129 96.
    The accounts of the partnership are thus reduced to three general items — the debt due to G. & H. Cameron, and the respective liabilities of the two co-partners in regard to this debt. The amount due to G. & H. Cameron without interest as stated
    above is.................................................$31,695 47
    
      Of this sum George S. Cameron is liable according to Mr. Heriot’s statement C. for his individual account on the books...........................'...$ 5,901 96
    Also for A. Johrison’s accounts said to have been assumed by him............ 8,822 36
    And for his half of loss by bad debts, as above stated........................... 6,129 96
    In all........................$20,854 28
    And Stephen Watson is held liable for his individual account on the books..$ 4,548 79
    Also for S. &J. Watson’s account...... 758 33
    For W. & J. E. Fort & Cods account (for which it was assumed that he was liable,)............................... 518 72
    And for one-half of loss by bad debts 6,129 96
    Total........................$11,955-80
    From which is deducted the balance due him on his capital account....... 1,114 61
    Making the amount of Mr. Watson’s liability in respect to the indebtedness of the concern according to statement C............................... 10,841 19
    Which added to the liabilities of G. S. Cameron................................... 20,854 28
    Makes the gross amount of the indebtedness of the concern...................$31,695 47
    This statement, Mr. Heriot says, is made exactly from the books, and without interest being charged or credited to either of the three parties.
    Interest accounts to 30th June, 1854, however, have been prepared by Mr. Heriot, and are herewith filed, marked D. to J. inclusive. By these accounts the indebtedness to G. & H. Cameron is increased to.................................$38,978 61
    Of which George S. Cameron is made liable for...$28,269 59 And Stephen Watson for...................................10,708 02
    Not varying materially (as to defendant) from the account without interest. There being a difference of only $133 17, in the two statements.
    In presenting the accounts, of which the above are abstracts, Mr. Heriot states, that in making these accounts he “has not settled any principle involved in this case beyond those of the ordinary rules of book-keeping and customs of merchants;” that “he charged Adam Johnson’s debt to Geo. S. Cameron, because he understood it to be a transaction for which he was alone responsible,” and-that “he charged S. Watson with W. & J. E. Fort & Co.’s debt, because he understood it to be a transaction for which he was responsible only.”
    , To these accounts, prepared by Mr. Heriot, numerous objections have been urged before me. On behalf of the defendant it is contended, that after the dissolution of the partnership, on the 1st July, 1842, the books of the concern, as kept by the plaintiff, should not be made the basis of a settlement between the partners, because, as it is alleged, a very different result from that arrived at by Mr. Heriot, from the books, would appear, if the plaintiff, as partner in liquidation, be charged as of the date of the dissolution, with the debts of the concern, to the extent of his own and of Adam Johnson’s indebtedness, and of the value of the stock, of which he was the purchaser, and be required to apply to the extinguishment of the remaining debts of the partnership the assets of the concern as fast as they were realized.
    Mr. Heriot, as I have already said, was, on motion of the Solicitors of the parties to this cause, appointed to state the accounts of the partnership of Cameron & Watson from the books of that concern. I believe it is allowed on both sides, that he has fairly and impartially done that for which he was employed. He states, in his testimony, that in making up the accounts, he did nothing more than exhibit what was in the , books; that the entries in them appeared to be genuine, and the accounts well and justly kept; that he found a few clerical errors, which being corrected, the books balanced; and that he discovered nothing to excite suspicion as to their fairness. His examination, in connection with sundry accounts prepared for the defendant, (and differing in their mode of statement and results from those submitted by Mr. Heriot,) he says, confirms him in the opinion that the books are correct.
    But assuming that after the dissolution the defendant was not bound by the partnership books, (although open for ten years to his examination and correction, without complaint on . his part,) nor bound by the subsequent statements made from the books by an accountant of his own selection, (although these books' are proved by that accountant to have been fairfy and correctly kept.) Assuming this, and that the defendant has a right to claim that a different mode of stating the accounts be adopted, I do not see that a different result would be attained.
    At the dissolution, the debts of the partnership amounted to......................’.......................................$62,984 68
    Apply immediately to the reduction of this indebtedness, the private acc’t of Cameron,............................. $5,709 48
    The account of Johnson,...............'.....8,822 36
    And the value of the stock,................19,903 92
    -- 34,435 76
    And there still remains an indebtedness of.........$28,548 92
    Which, according to the books, appears to have been reduced as fast as the outstanding notes and accounts were collected. But, leaving the books out of the question, (although their correctness must be presumed until the contrary appear,) Mr. Heriot says that the difference in the amounts of the bills and accounts receivable in 1842 and 1852, was applied to the payment of the debts of the concern ; that various sums of interest were charged on this outstanding indebtedness up to 1852, and that Mr. Cameron appears to have advanced between 1842 and 1852,............................................$13,303 64 in working off this indebtedness.
    If to this sum be added the balance of debts above shown,................................................ 28,548 92
    The indebtedness is increased to.......................$41,852 56
    If from this be deducted the entire collections, as claimed by the defendant, of bills receivable and open accounts, from 1842 to 1855,................. 29,831 33
    There would still be a deficit of assets of...........$12,021 23
    Which, if made the basis of an interest account between the parties, to be computed according to the rule of Bank accommodation, the result as to the defendant’s indebtedness would considerably exceed the sum for which he is found liable by the accounts prepared by Mr. Heriot.
    But, while I have adopted, generally, the accounts of Mr. Heriot, as the basis of this report, there are objections to several of the items which I- consider well taken.
    First, as to the debt of W. & J. E. Fort & Co., which is charged by Mr. Heriot to S. Watson, as an individual transaction, for which he is alone responsible, there is nothing in the books to warrant this charge. The account is against W. & J. E. Fort & Co., and shows a balance against them, at the date of the dissolution, of $1,250, and in 1852 of $518 72. There is no evidence, either from the books, or from any of the written statements of the plaintiff, that the account against these parties was ever transferred to Stephen Watson. Nor does the parol and written testimony introduced upon the references as to the original transaction, satisfy me that it is a proper charge against the defendant. Copies of three letters addressed to Fort & Co. by Watson, Crews & Co., dated in November and December, 1840, were produced, by which it appears that three drafts of George S. Cameron for $700, $300 and $250, respectively, were remitted by Watson, Crews & Co. to Fort & Co., to be invested in cotton and shipped to Savannah, to the order of the former house. A. J. Crews, one of the firm of Watson, Crews & Co., was examined, and testified that the above transactions were for Watson’s exclusive benefit; that it was agreed between Watson and the other members of the firm of Watson, Crews & Co., that the firm should not be mixed up with the old concern of Watson; and that in February, 1840, Mr. Watson went to Macon and formed business transactions with the firm of Fort & Co. I am not satisfied that Mr. Crews, in this evidence, intended to say that the transactions with'Fort & Co. were for Watson’s exclusive benefit, in respect to the firm of Cameron & Watson, but rather in respect to Watson, Crews & Co., inasmuch as he (Crews) cannot reasonably be supposed to have been informed of the private arrangements between the partners of the former firm in relation to this, or any other transaction. He, at least, does not state that he has such information. If Mr. Cameron had considered the drafts remitted, through Watson, Crews & Co. .to Fort & Co., as a charge against S. Watson, it seems to me that the amount would have been placed to the debit of S. Watson. This, however, was not done; "the drafts were charged to Fort & Co., and the indebtedness reduced by sundry payments by Fort & Co., showing that Mr. Cameron regarded it as a debt due by Fort & Co. to the concern of Cameron & Watson; and I so find. And as the debt is admitted to be bad, I have charged it to Profit and Loss, and in this respect reformed the account prepared by Mr. Heriot.
    On behalf of the defendant, it is further objected, that Mr. Heriot’s statements of the amount of stock purchased by G. Cameron & Co. does not include the value of 98 crates, which went into their possession. The testimony of B. H. Brown is full and explicit on this point. He says such packages are always charged for by manufacturers, and that two dollars each would be a reasonable charge if the stock were sold out. That it would be a proper charge unless there was a special agreement to the contrary. I have, therefore, charged the concern of G. Cameron & Co. with this item, amounting to $196.
    Another objection refers to the wages allowed by Cameron after the dissolution, for a negro packer (Isaac) owned by the firm. It is claimed that the wages allowed are insufficient. The testimony of Edward J. Folger, I think, establishes that the wages allowed ($10 a month,) are sufficient. This objec-jection, I believe, is not insisted upon.
    It is further objected to the account, that the notes to Payne are put down at $1,221 34 each, instead of $1,071 34j each. That these notes are entitled to a credit of $600, being the "valne of certain Rail Road Bank Stock taken by Payne at that sum. If the fact be, as alleged by the defendant, and not contested by the complainant, that this stock is embraced in the amount of said notes, as first above stated, then it is clear that the defendant has been charged twice with the stock, for it certainly appears to the debit of S. Watson’s private account, on the Ledger of the concern. I have reformed the statement of Mr. Heriot in this particular, according to the facts as above assumed.
    It is further contended on the part of Mr. Watson, that he should be allowed interest'on his capital account after the dissolution of the partnership. I do not think so. By the articles of partnership Mr. Watson was to receive no interest on the capital put in by him. It was to be considered as an equivalent for the personal services of Mr. Cameron. These services were continued after the dissolution. Mr. Watson, in respect to third parties, was bound as well as Mr. Cameron to wind up the affairs of the concern, and it seems to me, should contribute to the expense of doing so. Again, the capital could not properly be withdrawn until the debts were all paid; this has not yet been done. According to the books, all the available means were required to meet the outstanding demands against the partnership; and until these demands were paid, there was nothing due to the defendant upon his capital.
    This view being taken, it is claimed on behalf of plaintiff, that Mr, Watson should be charged with interest on the capital withdrawn by him before the debts of the concern were paid, and in consequence of which withdrawal the interest account against the concern was greatly increased. Although apparently inconsistent with the view above taken, I have also disallowed this claim. It is true that the capital put in by Watson was to bear no interest, in consideration of the services of Cameron ; but after the dissolution the extent of these services is reduced, and it seems equitable that the equivalent for these services should be likewise reduced. But the answer to this claim is, that Cameron consented to the withdrawal of Watson’s capital, and that Watson, by the accounts, as submitted by Mr. Iieriot, is made liable for one half of the large accumulations of interest which the withdrawal of the capital mainly occasioned, by necessitating the extended Bank accommodations for the payment of the debts of the concern, the interest upon which would have been saved, if the entire capital had been left to meet the liabilities of the partnership.
    And lastly, it is contended by the defendant that G. S. Cameron & Co. should be charged interest on the stock purchased by them from the date of the dissolution, when the stock was taken. There is no evidence that any credit was agreed upon between the partners in the sale of the stock. It appears from the evidence of Mr. Heriot, and from the books, that^he debit item of $ 19,903 92 in account of G. S. Cameron & Co. for stock purchased, was paid in 1842, 1843, and balanced in 1844. In the -absence of proof that credit was to be allowed on this purchase, either by agreement or custom, I have considered the transaction a cash one, and charged interest from the date of the dissolution.
    The accounts of the partnership having been, as stated in the beginning of this report, reduced by Mr. Heriot to three, one creditor account and two debtor accounts, and the settlement being between the two partners, and each having been already charged with one half of the net loss, it is only necessary to charge the partner against rvhom the charges are made in this report with one half of the sum here allowed, and credit the said half to the account of the other partner in whose favor it is to operate.
    Upon this principle the following account is made up, taking the result of Mr. Heriot’s accounts as- the basis, and making the alterations and additions necessary to conform S. WatsonVaccount to this report. The result is, that the defendant is indebted to the plaintiff upon a settlement of the partnership affairs on the 30th June, 1854, in the sum of
    $7,635 56, arrived at as follows:
    Balance due by S. Watson, 30th June, 1854, as per statement C......................................$10,708 02
    1. Fort’s debt, as per statement C..........$518 72
    Interest to 30th June, 1854, (C.).........1,050 39
    1,569 11
    2. 98 Crates, at $2.............................. 196 00
    Interest from 31st July, 1842, to 30th June, 1S54................................ 163 50
    
    3. Balance Interest on stock to 1st June, 1845, (L.).................................1,484 47
    Interest on this sum from 1st June, 1845, to 30th June, 1854, 9 years 1 month,............................... 943 85
    $4,356 93
    Of this Watson is to be credited with 1-2...............$2,178 46
    8,529 56
    4.Bank Stock charged twice,............... $600 00
    Interest from 1st July, 1847, to 30th June, 1854,7 years,'............... 294 00 — $894 00
    Am’t dueby S. Watson, 30th June, 1854................$7,635 56
    
      The complainant filed the following exceptions :
    1. Because the Master ought to have charged to the separate account of Stephen Watson, the debt of W. & J. E. Fort, the same having been a transaction of said S. Watson, entirely distinct from the partnership.
    2. Because the capital put in by S. Watson was a contribution by him to the business of the concern in the use and hazard of that amount of money; that if it remained safe after payment of the debts of the concern, he was entitled to take it back; but that for any part which was sunk, he had no claim upon his co-partner for indemnity, and that the Master ought so to have stated the account.
    3. Because, even if Mr. Watson be declared entitled to any return of capital from Mr. Cameron, it cannot be until after a final settlement; and that the Master ought to have charged against Mr, Watson, interest on all-money withdrawn in advance of such final settlement.
    \
    . The defendant also objected to the report upon the following grounds:
    1. Because the Master has adopted the books of the complainant, compiled and made subsequent to the dissolution^ without vouchers or proofs, and upon such evidence alone has charged the defendant with results which are inconsistent with the data, which the books themselves furnish.
    2. Because the Master has omitted the sum ofejfive hundred and forty-four 51-100 dollars ($544 51) charged to Cameron & Co. (Journal Folio 234, Ledger Folio 445) for stock and sundries purchased by them and received by the complainant.
    3. Because the Master has charged the defendant with a disputed debt of S. & J. Watson without any proof whatever.
    4. Because the Master has neglected to state an interest account with the complainant, with Adam Johnson and with the defendant prior to the 1st July, 1842, and to strike balances on that day.
    5. Because Mr. Cameron never was in advance to the partnership or to the defendant at any time, but was always indebted to both from the dissolution to the present time.
    6. Because an intelligible account wherein Mr. Cameron shall be charged on one side with his debt at the date of the dissolution, and with each amount collected hy him on the date at which-it was received, and on th.e other'side, credited with each payment made by him on the debt due by the partnership at the time of the dissolution, at the date such payment was made, with interest on each side, will make him a debtor to a large amount, and the Master should have so reported, and such account ought to be stated with annual balances as is usual among merchants.
    7. Because the Master has disallowed interest to the defendant on his capital after dissolution of the partnership.
    8. Because on taking a full, fair and correct account from undeniable data furnished by the books of Mr. Cameron himself, and by Mr. Heriot’s statement “B.” of the books of the partnership at the date of the dissolution, the complainant, so far from being a creditor, is indebted to the defendant in a large sum of money as appears by the accounts and statements herewith submitted. •
    9. Because the entrieá in the complainant’s books charging four notes of twelve hundred and twenty-one 35-100 dollars (1,221 35) each to J. S. Payne, is fictitious. The notes to Mr. Payne were for an amount of six hundred dollars (600) less than charged.
    10. The defendant craves from the Master a report upon the evidence in the case, stating as matter of fact, how much complainant owed at the date of dissolution, including the amount for the stock in trade and for Adam Johnson’s debt, and how much the complainant collected of the partnership assets during the first year of his administration, to wit: before the 1st July, 1843, and whether these amounts were not sufficient, to pay all the debts as stated by Mr. Heriot; and also to return to Mr. Watson the balance of capital after deducting what he had already received prior to the dissolution, and to leave at that date a surplus for division between the partners.
    The Master made the following report on exceptions; and first on the complainant’s exceptions:
    The points presented in the exceptions of the complainant, are considered in my report, to which I beg leave to refer for the evidence bearing upon them, and my reasons for now overruling them.
    Upon the argument before me of the third exception, it was admitted, that the notes given by Cameron to Payne, and charged to Watson’s capital account, bore interest from their date at the rate of six per cent. In the statements of Mr. Iieriot, no interest is computed on these notes until after their maturity. The result of a change of the accounts in this respect, will be to increase the indebtedness of the defendant $341 40, as appears by the following statement:
    Note dated 1st January, 1845, due 1st January, 1846, $1,071 34, 1 year,....................................... $04 28
    Note dated 1st January, 1845, due 1st January, 1847, $1,071 35, 2 years,........................................ 12S 56
    Note dated 1st January, 1845, due 1st January, 1848, $1,071 35, 3 years,...................................... 192 84
    Note dated 1st January, 1845, due 1st January, 1849, $1,071 35, 4 years,...................................... 257 12
    Amount of interest,................... $642 80
    But the interest included in said notes and paid, having been charged to interest account in the books, and S. Watson having already been charged with one half, this must be deducted,...................... 321 40
    $321 40
    Report on exceptions of defendant:
    1. The exceptant objects to the accounts submitted by the Master, because, as it is alleged, they are made up from the books of Cameron & Watson without vouchers or proofs, and that the defendant is charged with results inconsistent with the data furnished by the books themselves.
    
      For the reasons set forth in my report the books referred to in. this exception were adopted by me in making up the accounts of the partnership. Mr. Heriot had been selected by the parties to state the accounts from these books. This he did; and upon his statement of their contents I based my report, without further proof of their correctness than that furnished by the books themselves and the testimony of Mr. Heriot. The principle on which Mr. Heriot has made up the accounts may be incorrect; but I believe it is admitted that, with a single exception, he has not gone out of the books for the charges and credits embraced in his statements. And it may be proper, as contended by the defendant, that the principle applicable to executors accounts should be adopted in this case. The books I believe furnish all the data necessary for such an account, and several have been prepared in this case, but I have not had sufficient time to test with particularity their correctness; and I would add, that it is a work of time, rather than of difficulty, to make up the accounts after this manner :
    
      2. This exception alleges the omission of a charge of $544 57 in the account of Cameron & Co.
    This charge appears in the journal of Cameron & Watson under date of 15th August, 1842, and is as follows :
    George S. Cameron debtor to sundries.
    To charges.
    For Insurance on $1,000 at 11-4 per cent, per annum from 1st July, 1842, to 4th May, 1843,............... $10 55
    Fo'r Insurance on $6,000 at 1 per cent, per annum from 1st July, 1842, to 4th May, 1843,.............. 50 63
    For Insurance on $4,000 at 1 per cent, per annum from 1st July, 1842, to 17th June, 1843, ............. 38 57
    For 1 month’s Rent of Store from 1st July to 1st August, at $1,100 per annum,........................ 91 66
    $119 41
    
      To Horse and Dray Account:
    For two Horses^, Dray and Harness.......................$350 00
    To C. &J. Beall, For this amount included in theirnote of Aug. $46 10, 3 10
    In the statement (B.) of the debtor balances on 1st July, 1842, The above charge is not included in the amount of $19,903 92, appearing to the debit of George S. Cameron & Co. at that date. The entry on the books was made subsequent to that date, to wit: on the 15th August, 1842, and consequently the charge could not appear in any statement made up from the books to a previous date. But the exceptant errs in supposing that the charge has been omitted by me. It is included among the debit items of George S. Cameron & Co.’s account after August, 1842, and the defendant has had the benefit of the charge in the result of the accounts submitted with my report, which are made up to July, 1854. But it may be important to ascertain the entire liability of George S. Cameron & Co. at the date of the dissolution, and it is likely that the exception is submitted with this view. From the nature of the items composing this charge (with the exception of the last, $3 10,) I am of opinion that it was an existing liability of Cameron & Co. at the time of the dissolution, and should so appear in any account made up to that period.
    3. This exception objects to the defendant being charged with a disputed debt of S. & J. Watson, as it is alleged, without proof.
    The following is the proof upon which I charge the defendant with this debt.
    The articles of co-partnership contain the following clause: “It is agreed that S.Watson shall furnish a capital of $10,000 to be used for the use and benefit of the concern, or he shall furnish goods on a credit fully equal to that amount which is considered an equivalent; but the said Stephen Watson shall not be entitled to receive any interest on the capital account so to be furnished; that being considered an equivalent for the time and labor of Mr. Cameron.”
    The books show that from July, 1838, to August, 1839, the concern of Cameron & Watson made purchases of merchandize from S. & J. Watson, to the amount of over $30,000 . that the balance of indebtedness of the former to the latter firm on the first of August, 1839, beyond the sum of $10,000 was liquidated by the notes of Cameron & Watson, and that the last mentioned amount remained to the credit of S. & J. Watson until 1st July, 1843, when it was transferred to the capital account ofS. Watson. From this statement it appears that the contribution of S. Watson to the capital of Cameron & Watson was not made in cash, but in goods, as allowed in the articles of agreement, and as alleged by the complainant in his bill.
    It further appears from the books that on the 1st August, 1839, when a settlement was made writh S. & J. Watson, a balance of interest found in their favor of $707 42 was placed to their credit on the books of Cameron & Watson, and S. Watson charged with $758 33, being thirteen months interest on $10,000, from July, 1838, the commencement of the co-partnership, to 1st August, 1839, the date of the settlement with S. & J. Watson. If the fact be, that interest was paid by Cameron & Watson on their account with S. & J. Watson for purchases from July, 183S, to August, 1839, including the $10,000 regarded as the contribution of S. Watson to the partnership, (and I think the books establish this) then it seems to me to be proper that S. Watson should be charged with the interest so paid, to the extent of the capital, which by the articles of co-partnership he was to furnish without interest. The reason for the transfer, appearing on the books in January, 1845, of the above charge of $758 33, from the account of S. Watson (where I think it properly belonged) to the account of S. & J. Watson, has not been explained. In statement K, which was made up to 1st July, 1845, and which, according to the evidence of Mr. Crews, was furnished by Cameron to Mr-Watson, this charge is stated as an individual indebtedness of S. Watson; and so I regard it. The charge against S. & J. Watson was made after the dissolution, and must, I think be considered an irregular entry, unless its relation to some transaction of the partnership within the period of its existence be shewn. The individual liability of Mr. Watson in respect to this charge was created, if at all, during the period of the partnership, and properly entered at the time in the books of the concern. The irregularity of the subsequent entry by the complainant, I do not regard as sufficient to relieve the defendant from his liability, if any originally existed.
    4. The exceptant claims an interest account with the complainant, Adam Johnson, and the defendant, prior to the 1st July, 1842, and contends that balances ought tó be struck on that day.
    An interest account with each of the parties named in this exception has been made up to the 1st July, 1854, and filed with the report. See statement C.
    The amount due by the complainant for principal and interest on the 1st July, 1842, was..........f6,962 20
    Amount due by Adam Johnson for principal and interest on 1st July, 1842........................... 9,619 37
    Amount due by defendant for principal and interest on 1st July, 1842................................. 3,420 29
    5, 6 and 8. These exceptions refer to results, which, it is claimed, are attained by a different mode of stating the accounts.
    In support of these exceptions sundry accounts have been submitted to me, and the items embraced in them compared with the books. My reasons for not reporting on these ac7 counts are indicated in what is said, in connection with the first and tenth exceptions.
    7. The question of interest on capital, presented by this exception, I have considered in my report.
    
      9. The error in the books, as to the amount of the notes given to Paine, referred to in this exception, I have corrected in the report.
    10. I am asked in this exception to report specifically the following items:
    Plaintiff’s debt with interest at time of dissolution, $ 6,962 20 Stock in trade, (including $541.41, hereinbefore reported,)................................................ 20,445 33
    Adam Johnson’s, debt with interest at time of dissolution............................................. 9,619 37
    Collections by plaintiff during the first year after dissolution, (according to the defendant’s statement submitted with his exceptions,)......$23,028 78
    Debts due by partnership at the time of dissolution.........................................,..........$52,984 68
    Capital put in by Stephen Watson..................... 10,000 00
    S. Watson’s debt and interest at dissolution.........$ 3,420 29
    The above items taken alone do not, I think, furnish the necessary data for a correct determination of the question with which this exception concludes. This, it seems to me, will be manifest, when it is observed that the assets assumed to be available in the hands of Cameron for the payment of the liabilities of the partnership at the time of the dissolution, were available at two different periods of time, and that no notice is taken of the increase of liabilities within these two periods. I am asked to state how much the complainant collected of the partnership assets during the first year of his administration, to wit: before the 1st July, 1843, and whether these collections added to the amount owed by the complainant at the time of the dissolution “ were not sufficient to pay all the debts as stated by Mr. Heriot,” &c. These collections were made between July, 1842 and July, 1843, during which two periods the liabilities of the partnership were increased several thousand dollars, for interest, rent, discounted notes, included in acknowledgment of bills receivable paid, but afterwards protested, expenses of collection, and other liabilities not embraced in Mr. Heriot’s statement of the debts of the concern at the time of the dissolution. These additional liabilities had to be paid out of the collections made during the first year after the dissolution, and the balance only of these collections remaining after the payment of these liabilities, is the true amount to be charged as assets in the hands of the complainant, for the payment of the debts of the partnership in July, 1843. The exception takes no notice of the liabilities for interest, expenses, &c., accruing after the dissolution.
    Again, I am requested to report how much the complainant owed at the date of the dissolution, including the amount for the stock in trade, and for Adam Johnson’s debt, and to apply this indebtedness to the extinguishment of the liabilities of the partnership as stated by Mr. Heriot. The whole amount due by the complainant for his private account at the time of the dissolution, cannot, I think, properly be held assets in his hands for the payment of the debts of the partnership. At the date of dissolution the private accounts of the respective partners should be equalized, and the excess of one partner’s account over the account of the other, is the amount to be considered assets for the payments of debts. The fact that Mr. Watson had $10,000 in the concern as capital, does not, I think, prevent the application of this rule to this case. The capital was not a debt, and could be claimed only after all the liabilities of the concern to third parties had been paid. For the payment of these liabilities the private account of Watson was as much assets as the account of Cameron.
    Other considerations might be presented to sustain the position that the facts upon which I am requested to report, cannot, taken alone, be properly made the basis of an account.
    I beg leave to state, that it was my intention to prepare an account in accordance with the principles contended for by the defendant, because the operation by which the debt was contracted was made by him outside the scope of the partnership, and on his own account, and for his own benefit.
    The Master has overruled this exception ; and in overruling it, has referred to his report upon the accounts, where his reasons are fully given; (vide.) I disagree with the Master in his conclusion, and think that the debt of W. & J. E. Fort should be charged to Watson’s separate account.
    It is not denied that this debt originated in a transaction entirely foreign to the objects of the partnership. It was in fact a cotton speculation. It is charged in the bill, that losses were sustained by operations conducted by the defendant, “as for instance, the loss of the sum of $1,250, (or thereabout) funds of the partnership received by the said Watson, and lost by him in the purchase of some exchangealluding most obviously to the transaction with W. & J. E. Fort. This allegation, the defendant in his answer does not deny, b.ut makes recriminations upon the plaintiff, in which he charges Aim with having entered into unauthorized cotton speculations, and thereby lost $10,000 of the capital of the firm. This is not denied by the plaintiff, who has assumed upon himself the liability of making good the sum lost by him in the aforesaid cotton speculations. And at the filing of the answer I do not suppose that the defendant meant to controvert his individual liability for the loss incurred in his own private speculations.
    The debt with W. & J. E. Fort arose in this way: There was a draft of the plaintiff upon D. Butler/ Cashier of the Macon Bank, dated 14th November, 1840, for $700; another draft of the same upon the same, for $300, dated 30th November; and another draft of the same upon the same, for $250, dated 19th December, 1840. These drafts were forwarded about their dates, respectively, by Stephen Watson, in the name of Watson, Crews & Co., to W. & J. E. Fort & Co., at Macon, Georgia, with directions to invest the proceeds of the same in cotton, and to forward the cotton to the order o f the defendant, and only abandoned this intention when it became apparent that to meet the reasonable expectations of the parties to this cause, in respect to said account, would involve the neglect of duties made imperative by the present sitting of the Court.
    To make up the partnership accounts, with any degree of accuracy, in the manner claimed by the defendant, would require an examination of every entry in the books subsequent to the dissolution. Without this, I do not see how it can be ascertained, with reasonable certainty, what items are to be allowed as légitimately pertaining to the liquidation of the partnership, and what are to be rejected as improper or irregular in the view of such liquidation.
    The exceptions of the defendant are not sustained.
    The Circuit decree is as follows:
    Dargan, Ch. The plaintiff and defendant were mercantile partners in the purchase and sale of China and Crockery-ware generally, and carried on their business in the city of Charleston. This is a bill for an account, and for the settlement of the partnership affairs. The accounts have been referred to the Master, and he has made a report thereon. To this report both parties have taken exceptions, and the case comes on for trial on the report and exceptions. These exceptions I will consider in their order, and first the plaintiff’s exceptions :
    The plaintiff’s first exception is, “because the Master ought to have charged to the separate account of Stephen Watson, (the defendant,) the debt of W. and J. E. Fort, the same having been a transaction of said S. Watson, entirely distinct from the partnership.” To explain this exception, a statement of facts is necessary. The business of the firm was carried on in the name of George S. Cameron only, Watson being a dormant partner. On the books, there is an account against W. & J. E. Fort for $1,250, which has not been realized, and has been lost by the insolvency of the said debtors. The plaintiff contends that this amount should be charged to the account of Watson, Crews & Co., of which firm Stephen Watson, the defendant, was a member. It is not disputed, that the funds upon which these drafts were predicated, were the property of Cameron & Watson. Fort & Co. realized the drafts, but did not invest the proceeds in cotton; or if they did, did not forward the cotton. They became insolvent, and the debt was lost. The question is, shall the loss be charged to the profit and loss account of Cameron & Watson, or to the individual account of Watson. A. J. Crews, (a member of the firm of Watson, Crews & Co.) alluding to the dealings with Fort & Co., says, “these transactions were for Watson’s exclusive benefit; the cotton and bagging operations were on account of Watson.” This would seem to be conclusive, and to leave no room for doubt. But it is argued, that this is not a proper construction of what the witness said, and that when he spoke of the transactions being for Watson’s exclusive benefit, he spoke in reference to the firm of Watson, Crews & Co. This is sophistical; on this supposition, why did he not say it was for the benefit of Cameron & Watson ? And if the operation was for the benefit of Cameron & Watson, why was it not carried on in their name ? why was it carried on in the name of Watson, Crews & Co. ?
    There is one further fact which may have some bearing, and to which I will allude. Statement K. of the report is an exhibit of the assets of the firm of Cameron & Co., rendered by the plaintiff to the defendant, 1st July, 1845. In this statement, the debt of Fort is thus put down: “W. and J’ E. Fort & Co., (or S. & J. Watson,) $1,250.” Here is an intimation that the plaintiff intended to hold the defendant liable for the Fort debt, (though I believe that J. Watson was at that time dead, and could not have any thing to do with the transaction.) With this intimation, the defendant never controverted his liability. I think he never intended to controvert it, and that it is a fair and just charge, that should be set down to his individual account. The plaintiff’s first exception is sustained.
    
      (The plaintiff’s second exception is: “Because the capital put in by S. Watson was a contribution by him to the business of the concern, in the use and hazard of that amount of money; that if it remained safe after the payment of the debts of the concern, he was entitled to take it back; but for any part of it which was sunk, he had no claim upon his co-partner for indemnity, and that the Master ought so to have stated the account.”)
    The first proposition involved in the exception is certainly true. As between creditors and the members of the co-partnership, .the capital invested is certainly liable, and further, with a personal and individual liability as to the private estate of each member. .But unless otherwise provided for by the articles of co-partnership, each party, on winding up the affairs of the company, is entitled to receive back the capital which he contributed, with interest thereon.
    In this case, Watson contributed $10,000, and Cameron contributed his services only. It was stipulated in the articles of co-partnership, that Cameron was to manage the business, and that his services in such management was to be considered- the equivalent for the use of Watson’s capital. Watson was to have no interest on the capital which he contributed during the continuance of the partnership. The Master reports that the whole capital has been lost; and besides this loss, there has been a large amount of debts of the firm which have been paid by Cameron, beyond the assets which were in his hands, and of which he claims that Watson shall pay his share.
    But the question made in this exception, is, whether Watson, on the loss of his capital, is entitled to contribution, and if so, for how much, with or without interest ? And if with interest, with interest from what time ?
    A participation in the profits and loss will make the partners liable as such to all persons dealing with the firm. And no stipulation to the contrary would exempt them from this liability which the law, imposes upon them. Consistently with this rule, and as among themselves, they may modify and vary their rights in any manner they may think proper. The terms of the- contract of co-partnership, will become the law by which their rights and liabilities, as among themselves, will be determined.
    In this instance, whether Cameron, who put in no capital, but was to receive half the profits, is to contribute to Watson for the loss of the capital which he put in, and which has been sunk in the operations of the firm, the contract is silent, except in the way of an implication, which I will hereafter notice. I am, therefore, left to decide this question, not so much upon a construction of the contract, as upon the general law of the land applicable to the subject. The paucity of authorities bearing directly on this point has surprised me. Neither has the argument, nor have my own researches, furnished me with any thing authoritative or reliable. In the absence of any decision, or precedent, by which I might be guided, I must appeal to principles more general and comprehensive.
    A participation in profit and loss enters into the nature of a partnership. It is this which renders each member of the firm liable to creditors in respect to his individual estate, without reference to the amount of the capital which he contributes, or the share of the profits which he is to receive. The partners may stipulate among themselves, that one shall receive any given share or'proportion of the profits, and sustain none of the loss. But I apprehend, that in the absence of any stipulation to this effect, the general idea of a partnership must prevail, namely, that each member is entitled to a share of the profits, and is liable to bear a share of the loss.' And in the absence of any such stipulation, as would become the law of the contract upon the subject, the proportion which the partners were to receive of the profits, (if profits were realized,) would furnish the true and just criterion by which their respective proportions of the loss should be determined. And, inasmuch as the plaintiff was by the agreement to have received one-half of the profits, he is, in my judgment, liable to contribute to the defendant for one-half of his lost capital.
    An inference leading to this conclusion, may, I think, be considered as arising by implication from the contract of co-partnership. The second article is as follows: “ It is agreed that S. Watson shall furnish a capital of ten thousand dollars, to be used for the use and benefit of the concern ; or he shall furnish goods on a credit ffilly equal to that amount, which is considered an equivalent. But the said Stephen Watson shall not be entitled to receive any interest on the capital so to be furnished — that being considered an equivalent for the time and labor of Mr. Cameron.” Here is a stipulation, that Cameron’s time and labor is to be considered an equivalent to the interest on Watson’s capital. It is not to be inferred that Cameron’s services were also to be considered as an equivalent for the hazard of Watson’s capital, in the successful employment of which Comeron was to receive of the profits. The implication is the opposite of this. Expressio unius, Exclusio alterius. (The plaintiff’s second exception is overruled.)
    (The plaintiff’s third exception is “ Because, even if Watson be declared entitled to any retupn of capital from Cameron, it can not be until after a final settlement; and because the Master ought to have charged against Watson interest on all money withdrawn in advance of such settlement.”)
    It is expressed in the articles of agreement, that Watson was not to be entitled to interest on the capital which he agreed to advance. But this obviously means, that interest was not to be charged during the continuance of the partnership. There was no provision in the contract as to interest. But the right to interest arises ex equo et bono. Where the contributions of the partners are equal, an interest account is unnecessary. But inequalities of contribution can only be fairly adjusted by an interest account; and except under special circumstances, which I do not conceive to exist in this case, the interest account should commence at the dissolution.
    But for the terms of the contract, Watson would have been entitled to interest from the commencement of the operations of the firm. He agreed, however, that Cameron’s services should be considered an equivalent for the interest on the capital that he had invested. After the dissolution, Cameron’s services in a measure ceased; and, of course, when the equivalent is withdrawn, the interest should commence. It is said that Cameron rendered services after the dissolution, in settling the affairs of the firm. This has no bearing on this question. If he rendered such services, and is entitled to compensation, it would be on the indebitatus assumpsit, for what such services were worth. It would not be under the agreement of partnership. After the dissolution, Watson would be entitled to interest, and Cameron to compensation for his services, which should not be as much as he was to receive during the partnership. After the dissolution, he did not devote the whole of his time to the affairs of W atson & Cameron. He entered into other business, and earned profits in that way. The third exception of the plaintiff is overruled.
    Having disposed of the plaintiff’s exceptions, I will now proceed to consider the exceptions of the defendant.
    The first is, “because the Master adopted the books of the complainant compiled and made subsequent to the dissolution, without vouchers or proofs, and upon such evidence alone has charged the defendant with'results which are inconsistent with the data which the books themselves furnish.”
    By the articles of agreement, the partnership was to continue for three years from the first day of May, 1838. At the expiration of that time, it was continued by mutual consent for one year longer, and then expired by its own limitation. The plaintiff was appointed agent, or liquidating partner, to settle the affairs of the firm. He remained in possession of the stock in trade, and of the assets, sold, collected, paid debts.) &c., as he was authorized, to do. The exception is not taken to the books of the partnership that were kept during the four years that the partnership continued, but to the books and entries of the plaintiff kept or made by him after the dissolution of the firm, and during the period of the plaintiff’s agency.
    When the books of a partnership are admissible in evidence, they prima facie prove and establish the transactions entered, or recorded therein. In such cases, it is, of course, competent for a party whose interest it is to do so, to disprove the correctness of the entries — to surcharge and falsify. The onus proiandi is upon him who disputes the correctness of' the books. The prima facie presumption is a strong vantage ground for the party in whose favor it operates.
    The books of a partnership are admissible, and generally conclusive in favor of strangers who have dealt with the firm by#whomsoever the entries have been made. This is upon the principle, that the-act of one partner is the act of all. And if the entries have been made by a clerk, then they have been made by the agent of the firm, and are their acts. But the admissibility of the books of a co-partnership on questions arising between the partners themselves, is founded upon a different reason. It is founded upon the right of each partner to have access to the books, and to inspect them; and upon the presumption that he has in fact inspected them. It is not to be supposed that he has failed to exercise a privilege so important to his interests, and so necessary for his protection. If he discovered errors, or false entries, to his prejudice, he would of course immediately make objections, and adopt the proper measures for their correction. His acquiescence amounts to an implied acknowledgment of, or tacit assent to the correctness of the books. He cannot afterwards dispute that which he has thus admitted. This is a fair and reasonable rule, ’and is analogous to the well settled principle, that if a creditor presents to his debtor his account, or a statement of his demand, and the debtor examines it, or retains it for examination, and makes no objection within a reasonable time, it is an admission of the debt These remarks apply to books kept during the existence of the partnership. But after the dissolution, I apprehend, the circumstances are different, and the rule is different. Books kept by one of the partners after the dissolution, or entries made in the original books, . ought not, and can not be binding upon the other partners, without their acknowledgment, express or implied, or some further and satisfactory proof of the correctness of such entries. And more particularly would I consider such evidence inadmissible in a case like this, where one of the partners (the plaintiff) was appointed the agent, or liquidating partner, (as he is sometimes called,) and the other members of the firm engaged in other occupations, and have personally nothing to do with the transactions which the books record. For although all the members of the co-partnership, after dissolution, so far retain their original powers or rights, as to be able to receive and discharge debts due to, or to pay debts due by the firm, (which is by virtue of their rights as co-partners,) such liquidating partner is but an agent, and can be regarded in no other light. It would be absurd to say, a man situated as the plaintiff was, should be allowed to manufacture evidence for himself, by entries made by himself, in books kept by himself, without check or supervision on the part of them whose interests are to be affected thereby. It is clearly settled that the books of an agent, though they may be used to charge him, are inadmissible to discharge him. His accounts must be vouched, as in the case of any other accounting party. I will cite but one case— Williams and others vs. Gregg, 2 Strob. Eq. 297, which seems to be directly in point.
    (Upon the abstract proposition, therefore, whether the books and entries of a party situated as was the plaintiff, in reference to his co-partner, the defendant, are admissible as evidence in his favor, and against the defendant, for the foregoing reasons, I am decidedly of opinion that such books and entries are not admissible for such purpose. But it does not appear that the defendant ever objected to the admissibility of the books until after the filing of the.Master’s report. The books now disputed were made the basis of the examination, and of the statement of the account, without an exception being taken as to their competency. The Master states this verbally to the Court, and his statement is amply corroborated by extracts from his minute book, with which I have been furnished. íhere are contradictory statements on this point from the Solicitors of the parties. The Solicitors of the plaintiff, and of the defendant, being at issue as to the facts, I say now, as I said at the trial, I will have to rely on the statement of the Master, and on the extracts from his minute book. Some of these I quote : “ 13th April, 1853, account submitted by defendant; books by consent referred to Heriot.” “Mr. Petigru proposed the appointment of an accountant, by each party, to make up account from books, and Mr. P. named Mr. Heriot.” The other side consent to such reference, and name sanie referee; whereupon ordered, that the books of Cameron & Watson be referred to W. B. Heriot, to make up account, and that said account be basis of Master’s report. “Ordered that this reference to Mr. Heriot is not intended to prevent either party from offering evidence before the Master extrinsic of books, to invalidate account when rendered by Mr. Heriot.” ’
    Thus it appears, that these books, now so strenuously objected to, were admitted in evidence before the Master, and were reférred to an accountant to state an account from them, which was to serve as the basis of the Master’s report, with no other reservation or objection than that either party should have the privilege to offer “ evidence extrinsic of the books to invalidate account when rendered by Mr. Heriot.” After an expensive and protracted investigation — after the accountant has made his statement from the books, and the Master has made his report on the basis of that statement, as agreed on by the parties, it is insisted that these very books are inadmissible as evidence. The objection comes t<?b late, and for this reason the exception is overruled.)
    
      The defendant’s second exception is, “because, the Master has omitted the sum of $544.51, charged to Cameron & Co. for stock and sundries, purchased by them and received by the complainant.”
    It seems, from the Master’s report on exceptions, that this exception is founded on misapprehension, and that the charge has not been omitted. The exception is overruled.
    The defendant’s third exception is, “ because the Master has charged the defendant with a disputed debt of S. & J. Watson, without any proof whatever.” For the reason stated by the Master in his report on exceptions, the third, exception of the defendant is overruled.
    The fourth exception of the defendant is, “because the Master has neglected to state an interest account with Adam Johnson, with the complainant, and with the defendant, prior to 1st July, 1842, and to strike a balance on that day.” It seems that the Master has done what it is claimed in this exception he should have done; (see report on exception.) The defendant’s fourth exception is overruled.
    The defendant’s fifth exception is, “ because Mr. Cameron never was in advance to the partnership, or to the defendant, at any time, but was always indebted to both from the dissolution to the present time.” This is an assumption which has not been verified. One of the defendant’s solicitors wished me to go into an examination of the partnership books, for the purpose of shewing that the ground taken in this exception is true. This I refused. The exception is overruled.
    Passing by the sixth exception for 'the present, I will next consider the seventh exception of the defendant, which is “because the Master has disallowed interest to the defendant on his capital after the dissolution of the co-partnership.” In commenting upon the plaintiff’s third exception, I have already expressed my views on the defendant’s seventh. My judgment is, that the defendant is entitled to interest on his capital from the dissolution. By the terms of the agreement, he was not to have interest during the existence of the partnership, the services of Cameron being considered an equivalent. But after the dissolution, interest is not inhibited by the articles. This principle seems to be conceded in the Master’s report. But he considers the services of Cameron, after, as before the dissolution, an equivalent to the interest on the defendant’s capital. The defendant is entitled to interest on his capital from the dissolution, and the plaintiff is entitled to compensation' for his services. He ought to have whatever they are reasonably worth. But it does not seem reasonable that he should have as high compensation after the dissolution, when he was pursuing, other profitable avocations, as before the dissolution, when he devoted his undivided labor and attention to the business of the partnership. This exception is sustained.
    The defendant’s eighth exception is, “ because on taking a full, fair and correct account from the undeniable data furnished by the books of Mr. Cameron himself, and by Mr. Heriot’s statement B., of the books of the partnership at the date of the dissolution, the complainant, so far from being a creditor, is indebted to the defendant in a large sum of money, as appears by the accounts and statements herewith submitted.” Generalities and gratuitous assumptions. The exception is overruled.
    The defendant’s ninth exception is, “ because the entries in the complainant’s books, charging four notes of twelve hundred and twenty-one and 35-100 dollars each, to J. F. Payne, is fictitious. The notes to Mr. Payne were for an amount of six hundred dollars less than charged.” In reference to this exception, the Master in his report on exceptions, says: “ the error in the books, as to the amount of the notes given to Mr. Payne, referred to in this exception, I have corrected in the report.” This exception is sustained. Let the error be corrected, if that has not been already done.
    The sixth and tenth exceptions, I shall consider together. The sixth is, “because an intelligible account, wherein Mr. Cameron shall be charged on one side with his debt, at the date of the dissolution, and with each amount collected by him on the date at which it was received; and on the other side credited with each payment made by him on the debt due by the partnership at the time of the dissolution, at the date when such a payment was made, with interest on each side, will make him a debtor to a large amount, and the Master should have so reported; and such account ought to be stated with annual balances, as is usual among merchants.”
    (The tenth exception is as follows: “ The defendant craves from the Master, a report upon the evidence in the case, stating, as matter of fact, how much the plaintiff owed at the date of the dissolution, including the amount for stock in trade, and for Adam Johnson’s debt; and how much the complainant collected of the partnership assets during the first year of his administration, to wit: before the 1st of July, 1843 ; and whether these amounts were not sufficient to pay all. the debts as stated by Mr. Heriot, and also to return Mr. Watson the balance of his capital after deducting What he had already received prior to the dissolution, and to leave at that da^e a surplus for division between the partners.”
    I am not satisfied that justice has been done by the manner in which the accounts, have been stated. I confess, that to me, the statements that have been submitted are not very intelligible, which may be owing to my want of familiarity with the mode of stating mercantile accounts. I think the defendant is entitled to have an account stated according to, the principles assumed in his sixth exception, which will be more intelligible and satisfactory than the statement made by the accountant. Whether this mode of stating the accounts will make the plaintiff a debtor to a large amount, as affirmed in the exception, remains to be seen. But it is a mode familiar to lawyers, and common in Chancery. The defendant is also entitled to have the statements made by the Master which he claims in his tenth exception. It cannot be doubted that such statements will enlighten the Court, and be subservient to the ends of justice. The sixth and tenth exceptions are sustained.)
    
      The case is referred back to the Master, and he is directed to state the accounts, and to conform his report with this decree. Pie will base his statement and his report upon the , evidence furnished by the books, and such other evidence as is already taken. It is so ordered and decreed.
    The complainant appealed on the grounds:
    1. Because it is respectfully submitted, that his Honor erred in overruling the complainant’s second exception to the Master’s report, by which it was insisted that the capital “put in by the defendant was a contribution by him to the business of the concern, in the use and hazard of that amount of money; that if it remained safe after payment of the debts of the concern, he was entitled to take it back; but that for any part which was sunk, he had no claim upon his co-partner for indemnity, and that the Master ought so to have stated the account.”
    
      2. Because, it is respectfully submitted, that his Honor erred in overruling the complainant’s third exception, by which it was insisted, “that even if Mr. Watson be declared entitled to any return of capital from Mr. Cameron, it cannot be until after a final settlement; and that the Master ought to have charged against Mr. Watson interest on all money withdrawn in advance of such final settlement.”
    3. Because, it is respectfully submitted, that his Honor erred in. sustaining the sixth and tenth exceptions of the defendant to the Master’s report, and referring it back to the Master to take a further account as there suggested before a decree. Whereas, it is submitted, that after the proceedings in the cause, when the account had been fairly and fully taken by the accountant selected by the defendant himself, re-examined before the Master, and reported on by him, his Honor should have sustained the report, except in such particulars as to which some specific error or mistake had been shown.
    The defendant also appealed upon the grounds:
    1. Because the complainant’s book-entries after the dissolution, without proofs or vouchers, or affidavit, were received in evidence against defendant, but not in his favor, (as in the charge against S. & J. Watson,) and the entries were not made at the time of the transactions they purport to record, and are discredited by other irregularities.
    2. Because, a disputed claim against S. & J. Watson, not charged to defendant in complainant’s books, is charged to him in the decree, and with no other evidence concerning it than the entries of complainant, where it is first charged to S. ■ & J. Watson, then to defendant, and finally re-charged to S. & J. Watson; stating on the face of the entry, that it had been charged to defendant erroneously, and the pleadings do not warrant trial and judgment upon the merits of a claim against S. & J. Watson.
    3. Because, the decree charges a debt due by W. & J. E. Fort to defendant.
    4. It is respectfully submitted that G. S. Cameron is not entitled to charge the other partner fpr winding up the partnership estate, there being no evidence of any contract or agreement for such a charge, and the fact that no such charge was made by the complainant himself either in his intercourse with the other party, or in his bill, or in the accounts kept by him, is conclusive against it.
    5. That if such a charge, in the absence of contract, could be allowed, Mr. Watson would be equally entitled to charge for his endorsements or the use of his credit or any other services rendered after the dissolution.
    
      Mitchell, for complainant
    
      Petigru, Campbell, contra.
   The opinion of the Court was delivered by

Dtjnkin, Ch.

It will be convenient to consider the questions involved in this appeal very much in the order in which they are discussed by the Chancellor. Upon the subject of the amount lost by the default of W. & J. E. Fort, the Chancellor has arrived at a different conclusion from the Master. In November, 1840, the co-partnership, represented by the plaintiff, had funds in the Macon Bank of Georgia. If these funds were appropriated by Watson to his own account, he is responsible. If, on the other hand, the transaction was only a mode adopted by Watson with the consent and co-operation of Cameron, to remit the funds, any loss accruing properly falls on the co-partnership. The evidence is susceptible of either construction. It is very clear that Cameron knew of the transaction in its inception, for he made the draft in favor of Watson, Crews & Co., which was directed to be invested in cotton and consigned to the order of Watson, Crews & Co., at Savannah. Crews says in his evidence the operation was on Watson’s exclusive account. Crews was one of the firm of Watson, Crews & Co. When he states “the transaction was on the individual account of Watson,” the Court understands him only to mean that, though the cotton was to be consigned to the address of Watson, Crews & Co., that firm had no interest or concern in the matter. The debt of W. & J. E. Fort & Co. was originally $1,250 — it was afterwards reduced by payments carried to the credit of the co-partnership, and, in 1852, stood on the books at a balance $518.72, which is charged by the Master to profit and loss account. In consequence of the difficulties in exchange, merchants are, not un-frequently, induced to adopt this mode of remitting funds. It is well illustrated by what is called in the accounts “the Adam Johnson debt,” charged by\the master to the plaintiff’s individual account, and without objection on the part of the plaintiff. The co-partnership had purchased goods in England and were indebted for them. Under such circumstances the ordinary mode of payment is by remittance in sterling exchange — but it sometimes happens that bills are at a high premium and cotton comparatively low, and it may be more advantageous to make payment by shipments to Liverpool. If, in this case, the plaintiff, with the knowledge and consent of his co-partner, had purchased cotton here, and had it consigned to his commercial friends in Liverpool, with instructions to sell, and with the proceeds pay the debt of the firm in Staffordshire, or wherever else their creditor might be, this operation would have been at the risk of the firm, which would be properly so chargeable, if loss accrued. But, so far as the Court can perceive, and it seems to be so conceded,, the purchase of cotton made by the plaintiff was wholly without the knowledge or participation of the defendant, and was for an amount far exceeding the debt due by the firm to their English creditors. The Master has accordingly charged the loss to the individual account of the plaintiff, and he has acquiesced in the judgment. The debt of Fort is analagous; except that it was a mode of procuring a remittance of funds, in another State, belonging to the firm, and not of paying a debt due by the firm abroad. The consequence is different, because it is manifest that, in the Georgia transaction, the plaintiff had knowledge and participation, and it must be inferred that it was with his consent and approbation; and so he seems to have regarded it when his bill was filed. In adverting to the complaints of the defendant on account of the losses incurred by the plaintiff, he says that “if losses occurred from transactions conducted by him, that some losses were also sustained from those conducted by the defendant; for instance, the loss of the sum of $1,250, or thereabouts, funds of the said partnership, received by the said defendant, and lost by him in some purchase oí exchange” (manifestly referring to the Fort debt); and then adds “that, in no case, can partners be thus held responsible for the result of their business operations.” Such is, also, the view which this Court entertains under the circumstances disclosed by the testimony, and are of opinion that the exception should have been overruled.

The subject next considered is in relation to the amount of money or goods to be furnished by the defendant, as provided by the articles of co-partnership. The plaintiff was a young man, without pecuniary means, but having some experience and probably skill in the conduct of a business of this character. The defendant was a merchant of large resources, and the house of S. & J. Watson & Co., of which he was a member, were also importers of the articles of the character of those in the sale of which the new co-partnership was to be employed. The defendant undertook to put into the concern ten thousand dollars, or that amount in goods. The plaintiff was to conduct the business in his own name, the defendant being only a dormant partner, and the plaintiff was to devote his personal services to the management of the concern. No interest was to be allowed on the sum of money, or value of goods, furnished by the defendant, which was to be used for the benefit of the concern. Each party was to receive one-ha.lf of the net profits arising from the business. No provision was made for the contingency that no profits might be made; and no stipulation as to the adjustment of losses as between themselves, in the event that it should prove a losing business. In a note to the S. 26, Story on Partnership, the commentator cites, with apparent approbation, what is stated in another treastise on the same subject: “For in partnerships, where, on the one side, labor is contributed, and on the other, only the use of money, that partner who contributed the money, does not always admit the other to a share of the principal, but only to his share of the profit, which such labor and money joined together might produce. And if A, for instance, who furnishes labor only, hath no title to any part of the money advanced upon dissolving the partnership, so B alone should be liable to the risk of the money as owner thereof; for, in such a case, it is not the money itself, but the risk which it runs, and the probable gain which may accrue from it,-that are to be compared with the labor.” After stating a rule which might be adopted, the writer continues: “According to this rale, if there should be nothing gained by the partnership concern, A would lose his labor, and B his interest, which would be equal and just. And should the original stock be diminished, by the same rule, A loses only his labor, whereas B would lose interest and a part of the principal.”

In this case, the ten thousand dollars was advanced by the defendant, in the hope, and with the reasonable expectation, of realizing from it large profits. At the dissolution, he was entitled to claim it before any division of profits. His co-partner could claim nothing as profits until the amount put in by the defendant was returned. On the other hand, if it was not there, the defendant who had thus risked his property must submit to the loss. At the dissolution of this co-partnership, in 1842, if an assignment of their effects had been made to a third person, it would have been the duty of the assignee to have sold off the stock, collected the assets, and paid the debts of the concern. If the amount realized proved sufficient to pay the debts and return the amount put in by the defendant, and no more, the concern would have made no profits. The defendant would lose the interest on his money, and the. plaintiff would have lost his labor and services for four years. If the assets proved only sufficient to pay the debts and not return the amount put in by the defendant, the deficiency would be his loss, as the plaintiff would have no right of participation, if it had been returned.

But the parties were probably well aware of the ruinous consequences which would attend this summary mode of closing their concern. As has been remarked, the plaintifPs pecuniary means were very limited, while the credit and resources of the defendant were ample. In order to wind up the affairs of the co-partnership in the most advantageous manner, to preserve the credit of the parties, to pay their debts, return the amount put in by the defendent, and save what could be saved for distribution, the plaintiff undertook, by means of the aid and credit of the defendant, or of his firm of S. & J. Watson, through their indorsement, of his paper in bank, to settle up the co-partnership affairs. This was continued for a series of years, certainly until 1845; during which time loans were made from the banks, through the credit of the defendant, large accumulations of interest accrued, but nearly the whole amount put in by the defendant was paid to, or withdrawn by him, with the assent of the plaintiff. In stating the accounts, the defendant has been charged with his proportion of this .accumulation of interest, and of the other expenses, attendant upon this mode of closing the business. The Master states that the large accumulations of interest arose'from, “the extended bank accommodations required for the payment of the debts of the concern,” and that the defendant was made liable in the account, for one half of this accumulation. He has, accordingly, recognized this arrangement of the parties, regarded the premature withdrawal or refunding of the capital of the defendant as made, with the assent of the plaintiff; and while he has refused to allow interest on the defendant’s capital, he has declined to charge interest against the defendant on the amount withdrawn by him. The Court approves the views taken by the Master, and is satisfied with his conclusions thereon.

In respect to the admission of the books and their effect as evidence, the Court deems it necessary to add little to what is said by the Chancellor. It may be remarked, however, that, pending the reference before the Master, these books were, for about six weeks, in the exclusive possession of the defendant. Since that time, (April, 1853,) ample opportunity has been afforded for the most searching scrutiny, as well by the parties and the accountants engaged, as by the Master of this Court. No error is even now suggested in the entries of these books, except one of six hundred dollars, which is satisfactorily explained, and a doubt as to a charge made in 1841, during the existence of the co-partnership, when (as appears not to -be questioned) the books afforded, at least, prima facie evidence of the transactions therein entered.

But the Chancellor, in concluding his decree, observes that “ the manner in which the account is made up is not very intelligible to him, probably (as he says) from his want of familiarity with the mode of stating mercantile accounts, and that he is not satisfied that justice has been done by this manner of stating the accounts.” He therefore sustained the defendant’s exceptions as to the mode of statogafeh^cfe^mints. From this part of the decree the ])lain|^&Sja^^Ej!IbqL because, as he submits, after the procp<&lgs in the^cáfi^se, wheir the account had been fairly ano>fimy takh^^y’me accountant selected by the defendant nfeleu', re-examin|d before the Master, and reported on by|him,.ttyeW^'ancejlor should have sustained the report, exceptM such j»#irticu-lars as to which some specific error or nuSféStNIfas been shewn.”

These proceedings, for an account, were instituted in 1851. Several pleas were interposed, which were overruled by Chancellor Johnston, October, 1852, and a decree to account made, which was sustained by this Court in January, 1853. The case was referred to Master Tupper, and his minutes of the proceedings before him were in evidence before the Court. From these it appears that, after several preliminary proceedings in February, March and April, 1853, on 13th April an account was submitted by the defendant, and the counsel of the defendant proposed the appointment of an accountant for each party, to make up account from the books; and the defendant’s solicitor named, on his part, Mr. Heriot; the other side consented to the reference proposed, and named the same referee. Whereupon, under the act of 1840, which authorizes Masters or Commissioners to make all such orders as may be necessary to prepare causes for hearing upon the merits, the following orders were made, with the assent of the parties: Ordered, That the books of Cameron & Watson be referred to W. B. Heriot to make up account, and that said account be basis of Master’s report. Ordered, That this reference to Mr. Heriot is not intended to prevent either party from offering evidence before the Master, extrinsic of books, to invalidate the account when rendered by Mr. Heriot. Ordered, That the Master hear evidence as to the value of the wages of a packer,’ and direct accountant as to the proper entries to be made in the account when desired — each party to furnish statement if they please. The books and papers were accordingly placed in the hands of Mr. Heriot, and the sum of five hundred dollars was-paid to him by the parties. He kept the books, &c., for some thirteen months, and, on 17th May, 1854, his account was submitted. According to the order of April, 1853, this account was made the basis of the Master’s report, which, after various references, was filed on 12th June, 1855.

Mr. Heriot was admitted to be one of the most experienced and skilful accountants in the city of Charleston. The exceptions filed by the defendant present no objections to his ability, or the fidelity with which he discharged his duty. So far as the Court can understand, no account was made up by the defendant, or by any accountant, upon the principles which he suggests. In the course of the argument it was urged that, after the dissolution in 1842, it was the duty of the plaintiff to have closed the concern, as an executor or administrator would have managed the estate of his testator, or intestate, and that the account should be now stated as if he had proceeded in this manner. But the answer to this is, that the defendant sanctioned and approved a different mode of proceeding on the part of the plaintiff. As has been already stated, this was probably done fully as much for the purpose of protecting his own interests as those of the plaintiff after the dissolution. The notes of the plaintiff in bank, discounted, as the Master states, for the purpose of paying the debts of the concern, were regularly indorsed by the defendant, or his mercantile firm. “These indorsements,” says one of the witnesses, “ were a mere continuation of the paper existing before the dissolution, or made to take up the old liabilities. After the dissolution (says the witness) Watson continued frequently to confer with Cameron as to the business of the firm. These renewals continued to 1845, and several years longer, and also the consultations of Watson with Cameron in relation to the business of the firm; and Cameron continued to render him accounts of the concern and its business.” Another witness (who became a partner of the defendant in mercantile business in 1839,) testified that, “he knew of plaintiff’s rendering accounts of the firm of Cameron & Watson to the defendant, from their dissolution in 1842 to about 1st June, 1847, and that the account (K) was one of them, and of the form in which they were usually made.” Under these circumstances it is no matter of surprise that, at the reference before the Master in April, 1853, the defendant, after several weeks scrutiny of the books in which the transactions were entered, instead of arraigning the course of proceeding pursued by the plaintiff in winding up the affairs of the concern, proposed, through his counsel, that an accountant should be appointed “to make up the account from the books,” and cooperated in obtaining the order thereafter made, that the account, so to be made, should “be the basis of the Master’s report.” To prevent any misconception or conclusion of either party, it was further provided that either party might offer evidence before the Master “extrinsic of the books, to invalidate the account, when rendered by the referee;” and further, the Master was instructed to take evidence on a particular subject not embraced in the books, and direct the accountant as to the proper entries when desired. The account was accordingly made from the books, and forms the basis of the Master’s report. After what had thus passed, we are all of opinion that it was too late for the defendant to repudiate what had been done, and to require a new account to be made up, framed upon different principles, and applicable to a course of proceeding essentially different from that which he had himself sanctioned.

After a review of the several exceptions on the part of the plaintiff and defendant to the Master’s report of 12th June, 1855, and without intending to impugn the abstract propositions affirmed in some of them, the Court is of opinion,that the same should have been overruled, and that the report, as corrected by his report on the exceptions, 29th June, 1855, should have been confirmed and made the judgment of the Court. It -is now so ordered, and decreed, and the decree of the Circuit Court is reformed accordingly.

Dar&an and Wardi, aw, CC,, concurred.

Decree reformed.