Court Opinion

ID: 7812619
Source: CourtListenerOpinion
Date Created: 2022-09-07 17:14:33.636639+00
Date Added: 2024-06-11T16:28:31.061720
License: Public Domain

REHEARING OPINION. Hart, J. Both parties have filed motions for a rehearing, and, in the main, have followed the line of argument made in their original briefs. We can see nothing in their arguments to cause us to change the rulings made in our original opinion. Counsel for appellee, in their motion for a rehearing, lay special stress on the case of Cole v. Cole, 119 Ark. 48. They contend that, under the principles of law laid down in that case, the court erred in allowing compensation for running" the hotel after Batson was ousted from any participation therein. In the Cole case there were three partners, and the partnership became dissolved by the death of one and the insanity of another. There was no dispute whatever about the terms of the partnership or the compensation that each one was to receive. The third partner continued the partnership on his own motion without any claim of right to do so, and we held that, under the circumstances, he was not entitled to extra compensation. In the case at bar the court recognized that the partners stand in a fiduciary relation to each other, and that, if one partner, instead of winding up the partnership affairs, at its dissolution, continues to use the partnership property in business and makes a profit thereon, he must account for it. We further held that, under the peculiar facts of this case, in stating an account between the partners it was equitable to allow Drummond an allowance for his time and business ability, which largely contributed to the success of the business. This is a well known exception to the general rule and has been well stated in Rowell v. Rowell, 122 Wis. 1, as follows: “The court recognized the principle that, while surviving partners, in closing up the affairs of the firm, are not entitled to compensation for services, yet, when those interested in the estate elected to demand not only the fair value of their interest, but also a share in the profits earned by the use of the whole propertv, a court of equity will inquire to what extent the profits of the business are attributable to the personal services of those conducting it, and, if some share or sum is proved so to be. with reasonable certainty, will allow that, on the theory that those who seek equity must accord it, also that profits due to such services are not due to the property. This is, of course, subject to the consideration that they who have wrongfully appropriated property of another by mingling and confusing it with other things must bear the burden of proving with reasonable clearness and certainty what part of the ultimate general result is due to other sources than the misappropriated property.” Several decisions are cited to support the ruling. In the present case there was a dispute between Drummond and Batson as to whether a partnership existed between them. It is true that we held that the relation existed, and that Drummond was a wrongdoer in ousting Biatson from the partnership business. The testimony, however, was sufficient to warrant Drummond in testing his rights in the courts, and we are of the opinion that, under the circumstances of this case, Drummond and his vendee should be allowed a reasonable compensation for their successful management of the hotel. In this connection it may be stated that- the receiver continued -to manage the property successfully during the time he had it in charge, and, for the reasons stated above, the cost of the receivership should be equally borne between Drummond and Batson. A master was appointed to state an account between the parties. It does not appear that Drummond in any manner undertook to conceal the state of the account between them. Drummond simply claimed that Batson was not entitled to share in the profits because he was no longer a partner. After the court held that Batson was his partner, it does not appear from the record that Drummond interposed any obstacles in the way of accounting. Therefore we believe that the cost of accounting was also a proper charge against the partnership profits, and that the costs thereof should be equally borne by the parties. No contest is made as to the amounts allowed the master or the receiver. As we understand the decree of the chancery court, the cost of the receivership and of the accounting was taken out of the partnership funds, and the balance was ordered distributed under the principles of law announced in our original opinion. It follows that the motion for a-rehearing will be denied.