Court Opinion

ID: 8002396
Source: CourtListenerOpinion
Date Created: 2022-09-09 01:50:23.146933+00
Date Added: 2024-06-11T16:35:45.892422
License: Public Domain

Holmes, Judge,
delivered the opinion of the court.
The plaintiffs filed their bill in equity, after a dissolution by consent of the partnership subsisting between the parties, praying for an injunction, a receiver, an account, and a sale of the partnership effects, for the purpose of winding up the concern. The articles of partnership contained a stipulation that in case of the dissolution of the partnership by the decease of a partner, or by a violation of the agreement, or otherwise,, a general account of stock should be taken, and that the interest of the outgoing partner, being ascertained by agreement or by arbitration, should be paid over to him, one-third in one month, and the other two-thirds in one and two years, and to be secured by notes and a deed of trust on the property of the concern, or otherwise, as 'might be agreed upon. The plaintiff Quinlivan retired, and the defendant retained the possession of the property and continued the business. It appears that the parties did not agree upon any mode of carrying the stipulation into effect, nor was a reasonable time allowed for that purpose before the filing of this bill. An injunction was granted and a receiver appointed. Upon the hearing, the injunction was dissolved and the bill dismissed.
It is insisted for the plaintiffs that they were entitled to the relief prayed, or at least that the bill should have been retained for the purpose of taking an account and ordering a sale of the property to ascertain the interest of the plaintiffs and wind up the concern. The defendant insisted that he had been always ready to comply with the articles, and that he was entitled to have the matter settled upon the terms of the stipulation, and that there was no equity for relief in the case.
It does not appear that the defendant had been'guilty of any violation of the articles or of any breach of contract or duty, nor that any reasonable attempt had been made to adjust the matter according to the stipulation or to refer the subject of dispute to arbitration, nor that there was any urgent occasion for an injunction, or any necessity for the appointment of a receiver; but a receiver was appointed, who still has charge of the property. We think there was no case to warrant an injunction or a receiver. *366(Story on Part. §§ 228, 330; Henn v. Walsh, 2 Edw. Ch. 129; Harding v. Glover, 18 Ves. Jr. 281.)
It is true (as contended by the plaintiffs) that the interest of a partner is his balance of account, or share of the surplus, after the debts have been paid and the affairs of the concern have been wound up. At the same time, the stipulations of the articles of partnership are to be carried into effect so far as it can practically be done. Where the mode of settlement and division of the partnership property that is provided in the articles becomes impracticable, or cannot be fairly carried into effect, the court may order a sale of the property; but effect will be given to a stipulation that one or more of the parties shall be entitled to purchase the share of the outgoing partner at a valuation. (Story on Part. § 207.) It' appears that this property consists of a brewery and stock employed in the business of brewing ale. The plaintiff had consented to retire and allow the defendant to retain the property and continue the business. After this lapse of time the mode of payment agreed on has become impracticable, or cannot now be fairly enforced, but the stipulation can still be made effectual so far as to allow the defendant to keep the possession of the property and effects at a valuation. If he should decline to do this, or if it should appear to have become impracticable, there is no doubt that, in such case, the court might decree a sale of the property for the purpose of. winding up the concern. (Collier on Part. § 312-13.)
Upon the facts appearing in the case, we are of the opinion that the court should have retained the bill and proceeded to have an account taken and stated, upon the basis of allowing the defendant to receive and retain the property to his own use at a valuation, and to ascertain the balance of account due the plaintiffs, for which they would be entitled to judgment against the defendant. The receiver may be ordered to deliver the possession of the property to the defendant, upon his agreeing to take the same at a valuation to be settled and fixed by a master or referee ; otherwise the property to be sold and accounted for by the receiver.
The judgment will be reversed, and the cause remanded for further proceedings in accordance with this opinion.
The other judges concur.