Case ID: ny-st-rep_39/html/0664-01.html
Source: Caselaw Access Project
Author: {"author": "Merwin, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

William W. Gilmore, Pl’ff, v. Edward E. Ham, Def’t.
    
      (Supreme Court, General Term, Fourth Department,
    
    
      Filed July 7, 1891.)
    
    1. Appeal—Refusals to find.
    An appeal cannot be taken directly from the decision of the court or the-refusals to find. The exceptions in such case are reviewable only on appeal from the final judgment.
    3. Partnership—Contribution.
    Where a partnership is dissolved, the liquidating partner retaining assets-more than sufficient to pay the debts, and subsequently the retiring partner is compelled to pay a judgment recovered against the firm, he may maintain an action for contribution against the liquidating partner, although an action for an accounting is barred by the statute.
    Appeal by the defendant from a judgment entered in Onondaga county on January 2, 1891, upon the decision of the Onondaga special term, November, 1890, in favor of the plaintiff for $951.53, with interest from June 17, 1890, with costs.
    Appeal by the plaintiff, as stated in his notice of appeal, “ from that part of the decision of the court at special term, wherein and whereby said court refuses to allow a judgment in favor of the plaintiff and against the defendant for the sum of $6,969.61, besides the costs,” the appeal being stated to be based “ upon the exceptions to such decision.”
    
      Hunt & Everson, for def’t; T. K. Fuller, for pl’ff.
   Merwin, J.

—In the complaint in this case it is alleged that on March 9, 1864, the plaintiff and defendant formed an equal co-partnership in the clothing business under the firm name of Ham & Gilmore, and did business as such for several years thereafter; that on 19th December, 1866, the firm borrowed of Sarah E. Ham the sum of $675, giving therefor the firm note payable one day after date, with use; that in June, 1869, the plaintiff “ left said firm and left the state of Hew York to reside elsewhere, and also left in the hands of the defendant, as his partner, the entire assets belonging to said firm of Ham & Gilmore; ” that on or about July 5, 1869, the defendant published in the Syracuse Daily Standard a notice of dissolution signed by him, stating that the firm had been dis- . solved, and that “ all the assets were in the hands of the undersigned, and he will settle all accounts with the firm and debts against it; ” that defendant failed and neglected “ to pay said partnership note of $675, or any part thereof or interest thereon, as by said notice of dissolution he had agreed to pay; ” that on 12th May, 1886, Sarah E. Ham brought an action in the supreme •court against the plaintiff and defendant, as such copartners, upon the said note, and on December 17, 1886, recovered judgment thereon against this plaintiff and defendant for $1,619.58, which, upon appeal to the general term, was reduced to $1,572.77 ; that the defendant, who is the husband of said Sarah, did not defend the action; that on 17th June, 1890, this plaintiff paid the whole •of said judgment, then amounting to $1,903.05; that there has never been an accounting between the plaintiff and defendant of their partnership affairs, and the same has never been adjusted between them, and that the defendant, though requested, has neglected and refused to account.

The allegations thus far stated are not denied by the answer. It is also alleged in the complaint, but denied in the answer, that this defendant wrongfully conspired with his wife to enable her to obtain her judgment against the firm; that the assets of the firm left in the hands of the defendant in 1869 were in value $7,000 and upwards, and the firm did not owe, aside from the note, an amount exceeding $1,000, and that upon a just accounting the defendant would be indebted to plaintiff in at least the sum of $3,000 and interest over and above the half of the judgment. As relief the plaintiff demands an accounting, and that defendant pay him such sum as may be found due him, and also half of said judgment. The answer, besides the denials above referred to, sets up the six and ten year statutes of limitation.

In addition to the admissions in the pleadings, it was found by the court that the assets of the firm which passed into the hands of defendant in June, 1869, amounted to $7,000, and that the debts, aside from the note of Mrs. Ham and “ certain family indebtedness which .has never been paid,” did not exceed $1,000; that it did not appear in proof what that other family indebtedness amounted to, or whether it was now a valid claim; that if an accounting had been had in June, 1869, there would have been due the plaintiff $2,500, and this amount the defendant has since-then had belonging to plaintiff.

The appeal of the plaintiff is not from the judgment, but, as the notice states, from a part of the decision of the special term, and is based upon the exceptions to such decision.” The only exceptions in fact taken by the plaintiff were to the refusal of the court to find certain requests. Hpon an appeal from the judgment these would be reviewable. Code, §§ 1353, 994. There is no provision for appealing in such a case directly from the decision, or from the refusal to find. The appeal must be taken from the final judgment, Code, § 1346, and the notice of appeal must so state. Code, § 1300. If the judgment is not appealed from, it stands as correct. It follows that the attempted' appeal of the plaintiff is ineffectual for any purpose, and must be dismissed.

. The only question then before us for review is upon the appeal of the defendant. The plaintiff was allowed to recover one-half of the amount of the judgment against the firm. The claim of the defendant is that plaintiff could recover only after an accounting, and that an action for that purpose is barred by the statute of limitations.

The general rule undoubtedly is, that if one partner pays a debt against the firm he cannot, as long as the partnership accounts are unsettled, sue his copartner at law for contribution. 3?or until an accounting was taken it could not be ascertained whether the plaintiff had or had not paid more than his proportion. Gridley v. Dole, 4 N. Y., 492. If, however, the cause of action is distinct from the partnership accounts and does not in- • volve their consideration, the action may be maintained. Ferguson v. Baker, 116 N. Y., 257 ; 26 N. Y. State Rep., 626.

In Gray v. Green, 125 N. Y., 203; 34 N. Y. State Rep., 732, the plaintiff and defendant were partners, and the firm was dissolved by mutual consent, and the plaintiff was, by the agreement of dissolution, made the liquidating partner. More than ten years thereafter he brought an action against the defendant for an accounting, alleging in the complaint that the defendant, upon the dissolution, retained possession of firm assets exceeding in amount his partnership interest, and that such excess was due and payable to plaintiff. It was held that the action was barred by the statute ; that the claim against defendant was an asset, and it was the duty of plaintiff, as the authorized agent of the partnership, to collect it, and that, therefore, the cause of action accrued immediately upon the dissolution. A distinction was taken between such a case and one where the action was brought against the liquidator. In the latter case it seems to have been conceded that an action would not lie until after the lapse of a reasonable time for the liquidating partner to perform the duties of his trust.

Iii Riddle v. Whitehill, 135 U. S., 621, it was held that, where-partnership affairs are being wound up, in due course, without antagonism between the parties, or cause for judicial interference, assets are being realized and debts extinguished, and no settlement has been made between the partners, the statute of limitations has not begun to run; that when the right of action accrues between partners after a dissolution of the partnership, so as to set the statute of limitations in motion, depends upon the circumstances of each case and cannot be held as matter of law to arise at the date of dissolution, or to be carried back by relation to that date.

In Hammond v. Hammond, 20 Ga., 556, it was held that the statute of limitations does not commence to run in favor of one partner against another, even after a dissolution of the partnership, as long as there are debts from the partnership to be paid, or debts due to it to be collected, nor as long as either of these things is so is a partner barred as against' his copartner by the principles of stale demand.

In the present' case, all the assets of the concern were left with the defendant and he apparently undertook to pay the debts; close up the business. He has not yet completed this undertaking. Having the assets, it was his duty to apply them to the payment of the debts. He held them in trust for that purpose and they were in amount sufficient. This trust was apparently never repudiated until the commencement of the action by Mrs. Ham in 1886. Upon this basis it may be said with some force that the statute is not available to defendant as a defense, so far at least as the claim of plaintiff upon the judgment is concerned.

The rule is well settled that if a partnership has been dissolved and the partnership accounts adjusted and one partner is after-wards obliged to pay an outstanding claim not provided for, he may maintain an action in assumpsit against his copartner for the proportion of it which the latter ought to pay by reason of his joint liability. Parsons on Part. (2d ed.), 296, and note. If by reason of the lapse of time and the force of the statute of limitations the dealings between the parties as they stood in 1869 are to be deemed closed, the fact remains that an outstanding debt was not provided for and that too by the fault of the defendant. Upon this debt there has been obtained in this court a judgment against the plaintiff and the defendant. It is so alleged in the complaint and not denied in the answer. So that defendant is not in a position to deny the debt or the judgment. It is suggested on his behalf that he was not served with process in that suit. It is not so found nor was there any request to so find. This judgment having been paid by the plaintiff, it should be deemed a single isolated transaction not involving so far as the defendant is concerned an examination of the partnership accounts. For he by his position as to those prevents it He has no ground for complaint. Under the circumstances of this case the judgment should be affirmed.

Appeal of plaintiff dismissed and judgment aijirmed, without costs of appeal to either party.

Hardest, P. J., and Mártir, J., concur.