Case Name: ANDREWS against ALLEN
Court: Supreme Court of Pennsylvania
Jurisdiction: Pennsylvania
Decision Date: 1823-03-10
Citations: 9 Serg. & Rawle 241
Docket Number: 
Parties: ANDREWS against ALLEN.
Judges: 
Reporter: Reports of cases adjudged in the Supreme Court of Pennsylvania (Sergeant & Rawle)
Volume: 9
Pages: 241–244

Head Matter:
[Philadelphia,
March, 10, 1823.)
ANDREWS against ALLEN.
IN ERROR.
Assumpsit does not lie by one partner against another, unless there be an account actually settled between themselves and a balance struck. It is not sufficient that the balance may be deduced from the partnership books.
Error to the District Court for the city and county of Philadelphia, in an action of assumpsit, brought by Joseph Andrews against Lewis Allen, in which a verdict and judgment were had for the defendant. By the bill of exceptions to the charge of the court, returned with the record, the case appeared to be as follows:
Joseph Andrews, the plaintiff, entered into articles of copartnership with Lewis Allen, the defendant, for the term of five years from the 31st May, 1815. Andrews was to put into, the stock 8000 dollars, and Allen 2000 dollars; so that the capital of the partnership would be- 10,000 dollars; which was to be at tiaa joint and equal risque of both parties. Neither partner was to take out more than 100 dollars a month, and each was immediately to chai’ge himself in the partnership books, with what he took out, which, at the next settlement of accounts, was to be considered as part of his share of the profits. Annual settlements were to be made, and the profits equally divided between the parties. At the expiration of the term of five years, a final settlement was to be made, and all debts being paid, Andrews was to take the 8000 dollars, which he had put in, and Allen the amount of what he had put in; after which the balance of the stock was to be equally divided between them. On the 10th October, 1816, the partners being insolvent, made a general assignment of the stock in trade, debts and effects of the partnership for the benefit of their creditors, who on the same day executed releases to them. On the 16th of the same month of October, notice was given by public advertisement, that the partnership was dissolved by mutual consent. The debts due from the partnership were upwards of 30,000 dollars. The effects where sufficient, after satisfying certain debts which had a preference by the terms .of the assignment, to pay 41 per cent on the amount of the debts of the general creditors.
The plaintiffclaimed 2900 dollars 6 cents, the onehalf of 5800 dollars 12 cents, which, he alleged, appeared by the settlement of the pastnership books, to be due to him by the firm. This claim was founded on the ground of the defendant’s having taken out of the firm so much more than the plaintiff, as to leave that balance in fa-vour of the plaintiff on the final settlement of the partnership accounts: and he claime.d also on the ground, specificially of having paid into the concern a bill of exchange for 6000 dollars, which the defendant drew on the plaintiff and received the amount of, before the articles of partnership. The declaration contained counts for money had and received, insimul computassent, and a count on the bill of exchange.
The court below charged as follows:
The partnership effects assigned were, the stock of the firm in trade, the debts and effects of the partnership. At the dissolution of the partnership, after its debts wére paid, each party was entitled to. his stock put in; but if there were not enough to pay the debts, the stock of both partners must go to the creditors; and then, if this stock were assigned as the partnership effects, how could the plaintiff be entitled to it? In the judgment of the court, he is not so entitled. It was argued for the plaintiff, that this balance of account of $ 5800 dollars and 12 cents did not pass to the assignees, but was a private debt due to the plaintiff from the firm of Andrews & Allen. But it. was stock put into trade for joint benefit, and instantly liable for the debts of the partnership; nor could the plaintiff take it out till the debts of the firm were first paid. According to the articles of association, the capital was at the joint and equal risk of the parties, and after all the partnership debts were paid, each should take his stock, but not before, nor till the debts were first paid. Now the partnership. was unable to pay its debts, and assigned all the partnership effects; and surely the stock passed under and by that assignment. If the plaintiff has been injured, as he complains, by the defendants’ drawing out of the stock" put. in, his remedy is on. the covenant, if he has any remedy, which is very questionable. It is the creditors who have been injured; for if AllenhzA not withdrawn the funds, they would have had the benefit- of them. Allen certainly has no money of the'firm in his hands; and he did not undertake, in case of loss, to make good Andrews’s capital to him. Wherefore he cannot recover in this action
As to the demand as upon an account stated or settled between those parties; it is true, that áfter the dissolution of a partnership, one partner may have an action of assumpsit against the other for such a balance. In this case the partnership was dissolved, and all its debts paid or released; and by the account appearing in the books, it is said, that a balance is due from the defendant to the plaintiff. But the question is, whether an account so appearing is such a stated account, or so balanced, as that an action of assump- sit may be maintained on it. The accounts are stated between the respective parties, and the-firm, not between Joseph Andrews and Lewis Allen; and this action is for one half of the balance due from the firm to one of the members of it, namely, Joseph Andrews. But an account stated or balanced as this one appears to be by the books, is not such an account stated as will raise a promise or assumpsit.
With respect to the bill-of exchange, to which one part of the plaintifi’s declaration is .made applicable, the money proceeding from, it was placed by the defendant to the credit of the firm, without objection from the plaintiff, and the court does not think that on that point, the action can be sustained, as argued for the plaintiff.
The plaintiff excepted to the charge of the court.
Two questions were argued in this court. 1. Whether the defendant was liable at all to the plaintiff under circumstances of the ease. 2. Whether the plaintiff could maintain assumpsit. But as this court gave an opinion only on the latter, the argument oh the former is omitted. •
Phillips and C. J. Ingersoll, for the plaintiff,
contended, that the form of action was proper, account render being necessary only where there is an account to be settled between the partners: whereas, here, the account has been settled from the partnership ooolts, and the balance appears. . No express promise is necessary. They cited Morris v. Pugh, 3 Burr. 1241. Gill v Kuhn, 3 Serg. & Rawle, 333, Smith v. Burrow, 2 T. R. 476. Foster V. Allenson, 2 T.fyR. 479. Meriwether v. Nixon, 8 T. R. 186. Osborn v. Harper, 5 East. 225. Ex parte Williams, 11 Vez. 5. 3 Vez. and Beams, 36.
J. R. Ingersoll and Chauncey, contra,
insisted, that the only actions the plaintiff could maintain were either covenant on the articles of co-partnership, or account render. Assumpsit cannot be maintained by one partner against another, unless there be an account stated, and a balance struck by themselves, which had never been the case here. " Ozeas v. Johnson, 1 Binn. 191. Moravia v. Levy, 2 T. R. 483. Foster v. Allenson, 2 T. & R. 479, Carey v. Baush, 3 Caines, 293.

Opinion:
The opinion of the court was delivered by
Tilghman, C. J.
On the trial in the District Court, the jury were charged, that the plaintiff was not entitled to recover, for which various reasons were assigned. To this charge, the counsel for the plaintiff excepted, and the cause has been brought before this court by writ of error. It is unnecessary to consider all the reasons given by the District Court in support of its opinion, because if it appears that for any reason, the action is not maintainable, the judgment must be affirmed. Now there is one' reason against the action, which is irresistible. These partners had neyev come to a final settlement of their accounts. And in such'case, the proper action is account render — assumpsit will not lie. The plaintiff alleges that the balance may be deduced from the partnership books. But that is not sufficient. An actual settlement must be made and a balance struck, by the act of both parties, before either can be charged in an action of assumpsit. It is very possible that the books may not show the true state of the account. There may be false entries, or omissions, so that, nothing certain can be deduced from calculations made by one partner,'on the entries appearing on. the face of the book, without the concurrence of the other. There should be a settlement in which both concur. Otherwise the proper remedy is account render. So wasthe-law laiddownintheeaseof Ozeas v. Johnson, 1 Binn. 191, which has never been departed from. It will be found that this principle of Ozeas v. Johnson, is in accordance with the case of Foster v. Allanson, 2 T. Rep. 479, and Moravia v. Levy, cited in the-note to 2 T. Rep. 483.- I am of opinion, therefore, that the judgment of the District Court should be affirmed.
Judgment affirmed,