Court Opinion

ID: 3553877
Source: CourtListenerOpinion
Date Created: 2016-07-05 23:05:35.517377+00
Date Added: 2024-06-11T14:25:25.398485
License: Public Domain

The bill states that the assets of the firm of Chase  Co., and the real estate of the individual partners, Chase and Gale, were conveyed to Sulloway for the purpose of paying the debts of the firm, and that Sulloway agreed in writing to reconvey and restore to the respective owners whatever balance of the property should remain in his hands after the payment of the debts o [of] Chase  Co., according to the written agreement of the creditors of the firm, and the costs and expenses of making such payment. It also alleges that all the indebtedness of the partnership, together with the costs and expenses, have been paid out of the money received from the sale of the goods and the collection of the accounts of the firm, and that the real estate conveyed to the trustee by the individual partners is undisposed of, and there is a balance of the partnership funds in his hands to be distributed. The prayer is, that Sulloway may be ordered to render a full and particular account of all money received and paid out by him, and of all accounts and demands collected or in his hands; that a receiver may be appointed, and that the funds, demands, and accounts in the hands of Sulloway may be placed in his hands, the debts due the firm collected and converted into money, and that any surplus thereof remaining be distributed to the persons entitled to the same; that the premises conveyed by the plaintiff to Sulloway may be reconveyed to him, and for an injunction.
The answer of Sulloway states an account of all money received and paid out by him as trustee; and the answers of both defendants allege that there are unsettled partnership claims existing between Chase and Gale which should be adjusted before any distribution of the funds can be properly made; and the defendants ask the court to determine the amount due to each partner, and to direct the distribution of the residue of the fund. As the trustee was selected by the partners, and there is nothing indicating any intended breach of the trust or danger to the trust fund, no case is made for granting an injunction, or for the immediate appointment of a receiver. 2 Per. Tr., ss. 816-819. The objection of the plaintiff to the allowance of the $579 in the trustee's account, paid to creditors who did not sign the written agreement for compromise, is technical and not substantial. The agreement provided *Page 60 
that it should be valid only upon condition that all the creditors assented to it, and therefore the trustee could not safely pay any creditor until all assented. The acceptance, by those not signing, of fifty cents on the dollar, in full discharge of their claims, was a sufficient assent to the terms of the compromise, and the objection that they did not sign the written agreement may be obviated by now signing it.
As the partnership is dissolved, and the claims of all partnership creditors satisfied, the partners and the trustee are the only persons interested in the distribution of the partnership funds in the trustee's hands. By the terms of the trust, the trustee is required, after the payment of the debts of Chase  Co., and the costs and expenses, to restore the balance of the property remaining in his hands to the respective owners. To determine the ownership of the surplus of the assets of the partnership now remaining in the hands of the trustee, an adjustment of the claims of the partners relating to the business of the partnership is required. Before a distribution of this surplus can be decreed, an accounting between the partners must be had. In no other way can the share of each partner be determined, and the necessity for an accounting does not depend upon whether the partners are to be treated as creditors of the firm to the extent of their respective claims against the partnership. The taking of an account is therefore preliminary to any further proceeding.
The evidence offered of a parol agreement made subsequent to the written agreement by which the trust was created, and the evidence relating to the proposed arbitration, was incompetent. The terms of the trust cannot be varied by parol, and the death of one of the arbitrators revoked the submission.
It is the right of the parties to have all matters in controversy determined in this suit, and when the respective claims of the partners have been adjusted and their interest in the fund ascertained, a decree can be made that will protect the rights of all parties.
"It is the practice of courts of equity, when they have once obtained jurisdiction of a case, to administer all the relief which the nature of the case and the facts demand, and to bring such relief down to the close of the litigation between the parties." Earl, J., in Church v. Church,73 N. Y. 95.
It may be doubtful whether, as the case now stands, the court would have power to order a sale of the real estate of one of the partners, in the hands of the trustee, to pay a debt due from the partnership to the other partner. That question we have not considered. What is first required is an adjustment of the partnership affairs between the partners, to determine the "respective owners" of the partnership assets.
Case discharged.
STANLEY, J., did not sit: the others concurred. *Page 61