Case ID: ala_39/html/0172-01.html
Source: Caselaw Access Project
Author: {"author": "R. W. WALKER, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

PIERCE & CAMPBELL vs. WHITLEY.
    [BILL IN EQUITY FOR DISSOLUTION AND SETTLEMENT OF PARTNERSHIP.]
    1. What defenses may he set up m avoidance of partnership. — After the defendants have, for several years, recognized the plaintiff as a co-partner, and received the benefit of his services in that capacity,it is too late for thein to set up, in avoidance or denial of the partnership, either the non-payment by him of his share of the capital stock, of the non-execution of written articles of partnership.
    
      Appeal from tbe Chancery Court of Dallas.
    Heard before the Hon. James B. Clask.
    The bill in this case was filed, on the 15th November, 1859, by George Whitley, against Thomas B. Pierce and Peter Campbell, ashing the dissolution of an alleged partnership between the complainant and the defendants, and a settlement of the partnership accounts. The partnership between the parties, according to the allegations of the bill, commenced on the 1st June, 1855, and was to continue for the term of five years ; and the partnership business — that of a foundry and machine shop in Selma — was carried on by them until October, 1859, when the defendants excluded the complainant from the partnership, and refused to recognize him in future as a partner. The defendants filed a joint answer, in which they denied the existence of the alleged partnership, but admitted that, after the formation of the partnership between themselves, they had proposed to the complainant that he should become a co-partner with them, on paying one-third of the capital stock which they had invested in the purchase of a lot, and in the erection of necessary improvements thereon; but they alleged that the complainant never accepted their proposal, never paid in any portion- of the capital stock, and refused to sign written articles of partnership when presented to him. On final hearing, on pleadings and proof, the chancellor held, that the evidence established the existence of the partnership, and its continuance until the 1st November, 1859; but that the defendants had sufficient cause to terminate it at that time, as they did, on account of the complainant’s misconduct. He therefore decreed a dissolution as of that date, and ordered a reference to the master to state the accounts; and his decree is now assigned as error by the defendants.
    Byed & MORGAN, for appellants.
    J. B. John, contra.
    
   R. W. WALKER, J.

The question in this case is altogether one of fact, depending upon evidence which it would be difficult, if not indeed impossible, to reconcile. Anything like a minute discussion of this evidence would be unprofitable, occupying much space, but settling no legal principle, and establishing no precedent for the decision of other cases. We therefore content ourselves with saying that, after a careful consideration of the testimony, we concur with the chancellor in thinking that the weight of the evidence establishes the existence of a partnership substantially as alleged by the complainant.

The argument, that the payment by the complainant of his share of the capital stock was a condition precedent to his becoming a partner, is not sustained by the evidence. It is inconsistent with the frequent admissions of the defendants, made long after the complainant became connected with the business, that the latter was a member of the firm. It is, in an especial manner, contradicted by the testimony of Mr. Haralson, and by the written articles prepared by him, which, though never signed, were yet, as he states, drawn at the instance of, and in strict accordance with directions received from all of the parties. These articles distinctly show that the operations of the parties “ as partners” began in 1855; and while the complainant was undoubtedly to be liable for an equal share of the capital stock, the testimony of this witness, as well as other evidence in the case, precludes the idea, that complainant’s payment of the same was considered as a condition precedent to the vesting of his partnership rights.

Nor do we think that the parties designed that the existence of the partnership was to depend upon the execution of written articles of partnership. On the contrary, he partnership is shown to have existed for nearly, if not quite two years, before any effort was made to reduce its terms to writing; and long after the attempt to do so had been made, and had proved unsuccessful, we find the defendants distinctly admitting the continuance of the partnership. The circumstances convince us that the parties desired to have a written agreement, not as a means of establishing a partnership which had not existed before, but as furnishing a convenient memorial of the terms of a partnership already formed and in operation. After receiving the benefit of complainant’s services as a partner, and recognizing him as such, for three or four years, it is too late for the defendants to set up either his non-pay-ment of his portion of the capital stock, or the non-execution of written articles of partnership, as proof that no partnership ever existed. — See Stein v. Robertson, 30 Ala. 286; Fogg & Vanderslice v. Johnston, 27 ib. 432.

The appellants have not brought to our attention any error of which they can complain ; and the decree must, therefore, be affirmed.