Case Name: Nancy Chandler et al. versus John Chandler et al.
Court: Massachusetts Supreme Judicial Court
Jurisdiction: Massachusetts
Decision Date: 1826-09-30
Citations: 4 Pick. 78
Docket Number: 
Parties: Nancy Chandler et al. versus John Chandler et al.
Judges: 
Reporter: Massachusetts Reports
Volume: 21
Pages: 80–86

Head Matter:
Nancy Chandler et al. versus John Chandler et al.
Within six years after the dissolution of a partnership one of the partners died, and within two years after the grant of letters of administration on his estate, but more than six years after the partnership was dissolved, his administrators brought a bill in equity against the other partners to compel them to account. It was held, that by virtue of &£. 1793, c. 75, § 3, the case was not within the statute of limitations.
Where a partnership is dissolved without any adjustment of their concerns, this Court has jurisdiction in equity between the copartners, to compel them to account and make a settlement.
Where A, a partner of B and C, having also entered into a distinct copartnership with D, who transacted the business of the same, gave a bond to B and C to share with them his proportion of the profits of this last copartnership, it was held, upon a bill in equity by C against A and B to compel a discovery and settlement of their partnership concerns, that D might be made a party to the suit.
This was a bill in equity brought by the administrators on the estate of Clark Chandler against John and Nathaniel Chandler and Theodore Jones. The bill alleges, that in January, 1794, Clark entered into partnership with John and Nathaniel in the business of merchandise, under the firm of John Chandler & Brothers; that according to the complainants’ belief, there never was any written agreement containing the terms of copartnership, and that the complainants are unable to state the terms ; that the business was carried on by John at Boston, by Nathaniel at Petersham, by Clark at Colerain, and by their agents at various other places in Massachusetts and Vermont; that John had the general superintendence of the business of the firm; that he made all the purchases of foreign goods, and that remittances were made to him from the other partners and from the several agents , that the partnership continued without any settlement being made, until the 10th of April, 1819, when it was by mutual agreement dissolved ; that previously to the death of Clark all the establishments connected with the firm, wherein other persons were interested, were closed by a settlement or an arrangement, with the exception of an establishment at Athol under the care of Jones, which then transacted and still transacts business under the firm of Theodore Jones; that this firm was nominally a partnership between John Chandler and Jones, but that John had, by his bond, made in 1818, agreed that Clark and Nathaniel should share equally with himself in the profits; that on the 1st of December, 1823, Clark died, never having settled the partnership concerns, and that on the 10th of May, 1824, letters of administration on his estate were granted to the complainants. The bill prays a discovery and an account, and that the defendants may be adjudged to pay to the complainants such sums as may be found due to them.
The suit was commenced within two years after the letters of administration were granted to the complainants.
John Chandler, to so much of the bill as seeks a discovery and relief on account of the partnership alleged to have been entered into in 1794, pleads the statute of limitations ; and to so much of the bill as seeks a discovery and relief on account of the transactions respecting the store at Athol under the management of Jones, he pleads that he and Jones, by indentures executed on the 1st of May, 1810, entered into a partnership, but that Clark was not a party to the agreement, nor interested in it, except that John, by his writing obligatory of June 26, 1818, covenanted with Clark and Nathaniel that they should each share equally with him in the profits, after they should be ascertained by a settle ment between him- and Jones ; and that as to all the matters in the bill which relate to this partnership with Jones, so far as Clark ever had any interest therein, the complainants have an adequate remedy at law.
Nathaniel Chandler pleads in like manner the statute of limitations, and, in support of his plea, puts in an answer in which, among other things, he admits the formation of the partnership in 1794 and its dissolution in 1819, and that the concerns have never been adjusted, and states that although m the lifetime of Clark sundry meetings were had by John, Clark and himself, for the purpose of effecting a full settlement, yet no account of the transactions of either partner was ever exhibited by Clark to his copartners, and that the respondent understood and believed that the books, papers and accounts of each and all of the partners, had not been kept in such a manner as to enable any of them to show satisfactorily what proportion of the joint property either partner would, upon a division, be entitled to receive for his share, and that the respondent believed it impossible to make any division which would appear more satisfactory to all the partners, than such as should leave each partner in the exclusive possession and enjoyment of that portion which remained his hands at the time of the dissolution of the partnership ; the respondent further states, that he has never refused to give the complainants any information in his power respecting the concerns of the partnership. — And as to so much of the bill as relates to Jones, he pleads that he is not interested in the partnership between John Chandler and Jones, except by virtue of the bond before mentioned ; that the bond is in his possession, and that he has heretofore furnished the complainants with a copy of it, and that he has ever been ready to deliver them the original whenever it should be necessary, to enable them to prosecute any claim which they might have against John by virtue of the covenants therein contained; wherefore he says, that in relation to the es* taAishment at Athol the complainants have an adequate remedy at law.
Sept. 30th.
Jones pleads that he entered into indentures of copartnership with John Chandler only, and that it was not understood by him, at the time of executing the indentures, that any other person than John and himself had or was to have any interest in the partnership ; that he never supposed that by virtue of his contract he could be accountable to any person other than John, as a partner; and that no contract of partnership for the transaction of business at Athol was ever entered into between him and Clark, or any other person, except as contained in the indentures above mentioned ; a copy of which was annexed to the plea.
Wells objected to this plea of Jones, that it did not state any new matter, but only denied allegations in the bill; which was proper for an answer and not for a plea ; and that it seemed to be rather in the nature of a demurrer; Com. Dig. Chancery, H; 1 Harr. Ch. Pr. 278 ; 2 Madd. Ch. Pr 237 ; that it was double ; Com. Dig. Chancery, I; 1 Harr 244 ; Cooper’s Pl. 212, 230 ; 2 Madd. Ch. Pr. 238 ; that it did not deny a material fact stated in the bill, that Clark and Nathaniel C. were jointly interested in the store at Athol; 1 Harr. 278 ; Cooper, 228 ; and that it undertakes to give a construction of law ; Cooper, 225, 227. If it was to he considered as a demurrer, he referred to Long v. Majestre, 1 Johns. Ch. R. 305.
He urged several objections to the pleas of the statute oí limitations, and he contended that the case was taken out of that statute by St. 1793, c. 75, § 3.
Admitting that the complainants have a remedy at law m respect to the transactions at Athol, yet as those transactions make part of the general concerns of the partnership between the Chandlers, the Court have power, when once the case is drawn out of a court of law, to call before them all parties interested in the subject of the suit, in order to make a complete settlement. 2 Madd. Ch. Pr. 143; King v. Baldwin, 17 Johns. R. 384; 1 Harr. 77, 281; Poore v. Clark, 2 Atk. 514.
L. Bigelow, for the defendants,
contended that the plea of Jones was sufficient; that it stated facts only, and that those facts showed he was not a partner with nor accountable to Clark Chandler.
April term 1827, at Greenfield.
In regard to the store at Athol, the answer of Nathaniel C. shows that he and Clark were not partners as between themselves ; Ex parte Hamper, 17 Ves. 404; Hesketh v. Blanchard, 4 East, 144; and that there is an adequate remedy at law. Jones may there be a witness for the complainants.
By the statute of 1793 only certain actions of the case and of debt are saved from the operation of the statute (of 1786, c. 52,) of limitations. This suit is more analogous to an action of account, which is not mentioned in the statute of 1793.

Opinion:
The opinion of the Court was read as drawn up by
Parker C. J.
The plea of the statute of limitations cannot avail, because until the dissolution of partnership there was no subsisting cause of action for the settlement of accounts between the partners. Clark Chandler died in 1824, within six years after the dissolution, and the bill was brought by his administrators within two years after his death, so that by St. 1793, c. 75, [see Revised Stat. c. 120, § 10,] the right of action remained.
The case presented by the bill seems clearly to come within the statute of 1823, c. 140, [see Revised Stat. c. 81, § 8,] committing to this Court equity jurisdiction in cases of partnership accounts, and it is very certain that a plain and adequate remedy could not be had at law. It is a known principle of the common law, that an action will not lie by one partner against another, except where there has been an adjustment of accounts and a balance struck, so that until the statute of 1823 there was no remedy in this commonwealth in the cases which must frequently occur of partnerships dissolved by death or otherwise without any settlement of the accoimts. The rights of the surviving partner and the liability of the executors and administrators of a deceased partner rendered it absolutely necessary, in order that justice might be done, that the jurisdiction given by the statute of 1823 should exist somewhere, and although it cannot be conveniently exercised by this Court, yet as the legislature have imposed the duty on them, they must to the best of their ability discharge it. The case before us is one of exceedingly complicated transactions, and it would seem impossible that it should ever be justly or satisfactorily settled without the application of those powers which belong to a court of equity alone.
The plea of Nathaniel Chandler sets forth nothing which shows that the bill ought not to be sustained; on the contrary, it affirms the allegations on which the bill is founded, to wit, that a partnership did exist, that the accounts have never been settled, and that they are of so complicated a nature that they cannot be settled even by the parties. It is very clear that the means usually employed by courts of chancery in like cases, such as compulsive discovery, production of books and papers, and an examination of accounts by some skilful person, under the control of the Court, are absolutely indispensable.
The several pleas therefore made by John Chandler and Nathaniel Chandler are overruled, and so much of them as does not relate to the statute of limitations may stand for answers, with liberty to make further answers, or if no further answer shall be made, to be open to exceptions.
With respect to the plea of Jones, it may finally be sufficient for his defence ; but as Clark Chandler and Nathaniel were by contract with John Chandler entitled to a proportion of the profits of that partnership between John Chandler and Jones, and therefore have an interest in that fund and a right to know the state of the accounts, Jones is still to be held as a party for the purpose of discovery through John Chandler, of the state of that concern.
If no further answer is made or required by exceptions, before the first day of next term, a master will be appointed to examine and report upon the whole transactions of these partnerships, with proper power to enable him to execute that trust.
See Wilby v. Phinney, 15 Mass. R. (Rand's ed.) 121 and n. (a); Haskell v Adams, 7 Pick. 59.
See Story Comm. Eq. c. 15, tit. Partnership, p. 612, 614, 621, 622, 632, 633; Collyer on Partn. bk. 2, c. 3, sec. 4, § 3 to 12, p. 166 to 189; Miller v. Lord, 11 Pick. 25.
See Collyer on Partn bk. 2, c. 3, sec. 7, § 1, p. 200; Waggoner v. Gray, 2 Hen. & Munf. 603 Long v. Yonge, 2 Simons, 369.