Case Name: Roache vs. Pendergast
Court: Court of Appeals of Maryland
Jurisdiction: Maryland
Decision Date: 1810-06
Citations: 3 H. & J. 33
Docket Number: 
Parties: Roache vs. Pendergast.
Judges: The cause was argued before Chase, Ch. J. Buchanan, Gantt, and Earle, J.
Reporter: Reports of cases argued and determined in the General Court and Court of Appeals of the State of Maryland, form 1800 ... [to 1826]
Volume: 3
Pages: 33–37

Head Matter:
Roache vs. Pendergast.
‘ Arpead from Baltimore county court. dsmmpsif, by the appellee against the appellant. The declaration contained two counts, one for money had and received, and the other for money lent. The defendant, in the court below, plead, ed non a&mmpsif, and an account in bar, which he filed and offered to set off, &c. General replication thereto, and issues joined. At the trial the plaintiff produced as a witness one Garrett Bice, who proved that the plaintiff advanced to the defendant §150, to be employed as a capital in trade, S50 whereof to be considered as the plaintiff’s share, another §50 to be considered as the defendant’s share, anil the remaining $50 to be considered as the witness’s share.' three persons were to share in the profits arising in the course of their joint trade, which was to continue for an indefinite period| and that on the dissolution of the partnership, the plaintiff was to be entitled to; receive his gloG, $50 from the defendant, and got) from, the witness, exclusively of his one third of the profits which ■ might be made by the partnership, and also whether there, should be a profit of loss in their business. The witness i also proved that he was present when the plaintiff applied i to the defendant for an account of the profits, which the J defendant refused, alleging that the plaintiff was not cnti-« tied to any part of the profits, but paid the plaintiff a sum > of naonev, the amount whereof he did not know, it being in' i • part of the sum originally advanced by the plaintiff, but he believed it to be less than the §150 advanced as aforesaid» The witness also proved, that in a conversation between him and the defendant, the defendant stated that he would raise an account against the plaintiff, which would moré than extinguish the §150 advanced by the plaintiff’at the commencement of the partnership, provided the witness would swear to it. The witness also proved, that after the commencement of the partnership* and previous to the defendant’s refusal to account, he continued to live with the defendant, who" had the management of the business* and that while living- with the defendant he, as a partner* Collected sundry debts owing to the concern. The defendant then prayed the court to direct the jury, that Bice* the witness produced on the part of the plaintiff, was not a co’mpeteftt witness; and also, that if the jury should believe the foregoing facts to be true, that in point of law they constitute a partnership, and that it is not competent for the plaintiff in the present form of action, to recover against the defendant. Both of these directions the county court, [Nicholson, Ch. 3.) refused to give; but directed the jury, that the refusal by the defendant to exhibit an account of the profits, alleging that the plaintiff was entitled to no part thereof, and the payment by him to the plaintiff of a part of the original, sum advanced amounted to a dissolution of the partnership, and that upon its dissolution the plaintiff had a right of action in his individual capacity against each of the other copartners in their individual capacity, for the sum of 850 loaned them originally, or for so much thereof as remained unpaid at the time of the insti - tution of the suit. The defendant excepted. Verdict ar.d judgment for the plaintiff for §103 damages, and costs. The defendant appealed to this court.
i Iii assumpsit i fop money had 1 ami received, and , for money lent, a witness proved that the plaintiff • advanced to the defendant 55150, to be employed as a capital in trade, f$5Q to be considered as the plaintiff’s share, another g50 as the defendant’s share, and the remaining as the witness’s share. Those three persons were to share iu the proüts ariv. ing- in the course of their joint trade, which was to continue for an indefinite period; and on the dissolution of the partnership the plaintiff was to bo entitled to receive his 150 dollars, 50 dollars from ihe defendant, and 50 dollars from the witness, exclusive* ly of his one third of the profit* which might be made by the partnership. The plaintiff applied to the defendant for an account of :he profits, which he defendant rt-fused, alleging* hat the plaintiff was not entitled :o any part of the uroflis. but paid the ptauitift a sum of money in part, hut less than the,sum originally advanced by him* The county court directed the jury, that these feets amounted to « dissolution of the partnership; but on appeal —Held that it. outfit to have been loft to the jury to decide, whether irom the facts and circumstances proved, the piirsnrrship wsu dissolved ”
Held «Wo, that the witness testified to an undertaking distinct from the pavtnei ship, which might hit enforced in a court of law by an action of general indebitatus mtumpsit) and that the witness was competent to prove such an uadei taking.
The cause was argued before Chase, Ch. J. Buchanan, Gantt, and Earle, J.
Boyd, for the Appellant.
The claim in this case was for §50, and the verdict, and judgment thereon rendered were for §103, a sum recovered beyond the amount which was due, except upon the principle of projits made in a partnership transaction; because allowing legal interest upon the sum advanced, the verdict could not exceed §65* even supposing not a cent of money had been paid to ths plaíníiíTby ilic defendant subsequent to the advapcp of the £50, which is proved not to have hecn the fact. The first . 1 . . , . * . íübjecíion to the opinion of the court below is, that no witness is competent to prove a partnership establishing Ms interest therein, because of the fraud which might be practised by the admission of such evidence; and the second objection is, that the plaintiff misconceived his remedy, the same being only in a court of chancery; because no settlement ever was bad, or account stated» The plaintiff might have received, out of the copartnership, more, than his capital and profits, and now may be indebted to the partnership, which facts only can be established in chancery. Smith vs Barrow, 2 T. R. 476. Esp. N. P. 96, and Index, tit. ParinersMp. The express promise to pay the 850 loaned, is but what the law would have implied,, and does not change the mode of discovery. The refusal to account, though it may amount to a dissolution of the partnership, cannot rescind the original contract, the samq having Leen partly executed. Huntt vs Silk, 5 East, 452. It is not known but the partnership has lost instead of having made profit, and that the defendant, being the acting partner, may have paid Íhe. amount of the claiips against the firm t« ten times the amount of the capital advanced. By the mode of proceeding resorted to, the defendant wa$ precluded from making every defence allowed a copartner in equity, and hs$ applied to a court which, from its organization, cannot do complete justice to the parties. It may also he. observed, that on thp final liquidation of the partnership accounts, the plaintiff may appear to have not only received his proportion of the profits, but his. capital, and the capital advanced to the defendant, and more, and instead of being a creditor may he a debtor of the defendant. If it should be contended that here is a special promise varying the general rights of partnership, then it is a-special contract, and ought to have been declared on as such, and there, ought to have been a speciql averment, that the partnership was dissolved, whereby an action had accrued to recover the above sum of §50, and a general indebitatus assumpsit will not lie. Wherever a duty is to arise, on the happening of a particular event, and it is uncertain at what time the event may take place, or that it may ever take place, this amounts to a special agreementj, and before that duty can be enforced in a cowt of justice thevé must be an averment that the event has happened on which the duty arises. As for instance if a promise be made to pay a certain sum of money on A’s going to Rome, ■ or if money should be lent to be repaid on A’s going to Rome, and returning therefrom; on these events happening, the money can only be recovered by a special action on the case, and not on a general' indebitatus assumpsit. This form oí action is only applicable to cases, where the contract is executed, and the debt is immediately due, or, what is the same tiling, payable at a time certain and specified — as in the common cases of goods sold and delivered, payable immediately, or in six months. But if goods should be sold to A, and payable .when a certain event should take place, then this agreement is special, and must be declared on as such, and not generally. These distinctions, it is conceived,1 are too obvious to require authorities. But the promise made and proved in this case is nothing more than what arises by implication of law; and therefore does notvary the relative situation of the parties, or give other remedies than are provided for in the ordinary cases of partnership by a suit in chancery. Because it is obvious, that where one partner advances to his active partner the whole capital, on a dissolution of the same he must he charged in the -settlement of, the concern for the money so loaned him, and this duty arises immediately on the dissolution of the partnership. The express promise therefore, raises no other obligation, nor can be enforced in no other manner, than is pointed out in all partnership cases. Besides, this doctrine would lead to this inconvenience, that the rights of the parties in the same transaction must be determined before twoforums — First the g50 to be recovered in a court of law, and the partnership transaction in a court oí chancery; and the common law abhors the splitting and multiplying of suits. And what is still more inconvenient aiid absurd is, that on the liquidation of the partnership, cii a filial account the plaintiff might be found to be a , debtor, which would enable the defendant to obtain an injunction, thereby generating three suits, which the proper tribunal would settle in one — an absurdity in judicial proceedings which the court surely, by every reasonable construction, will endeavour to avoid. The court will also obsérve, that by the plaintiff’s own showing, the jury must have taken into view the profit's, because the proof adduc ed on his part proved a receipt of a greater sum than that loaned, which'is an additional proof of the impropriety of sustaining such actions in a court of common law; and which proof was a sufficient ground, in itself, to have defeated the action of the plain tiff without any other cause.
W. Dorsey, for the Appellee.
It appears that the appellant, appellee and the witness, agreed to enter into partnership, in which there was no limitation of time as to how long the partnership should continue. , The appellee loaned to the appellant, and the witness, each 850, before the commencement of the partnership. There is no good ground of objection to receiving the evidence of the witness, because of his being one of the partners. The payment made by tiie appellant to the appellee was evidence of the dissolution of the partnership, because it was tobe dissolved when the. 850 was paid. It cannot be a claim against the partnership, although the money was to constitute a part of the fund put into the capital. The loan was made to each partner, the appellant and the witness, in his separate capacity, and it cannot be said to be a partnership transaction, beiug loaned before the partnership. There is no solidity in the objection as to the form of action, if there had been a condition annexed to the payment of the money., then it must be specially averred. The dissolution of the partnership was an event that musí take ¡dace, and it cannot be assimilated to an event which might never happen.

Opinion:
Earle, J.
delivered the opinion of the court. It appears to the court that the judge erred in his direction tn the jury, "that the facts proved amounted to a dissolution of the partnership." He ought to have left it to the jury to decide, whether from the facts and circumstances proved, the partnership in question was dissolved. The dissolution of the partnership was an important point to be established by the plaintiff; for ilie money claimed was not due until the partnership was dissolved.
Dice, the witness, testified to an undertaking distinct from the partnership, which the court are of opinion may be enforced in a court of law in the form of action used, and without declaring upon a Special contract between the parties.
(Santt, J. dissented.
JUDGMENT REVERSED, AN?) JJROCEJOE2TOO AWARDED-