Court Opinion

ID: 6430672
Source: CourtListenerOpinion
Date Created: 2022-06-25 12:07:55.136765+00
Date Added: 2024-06-11T15:52:10.705930
License: Public Domain

Braley, J.
The plaintiff having obtained a decree, the case is before us on the defendant’s exceptions to the master’s report, which may be dealt with in the order of presentation.
Upon the sale of the firm’s business to the American Felt Company, no assets remained except the bills receivable, which the defendant took over to collect for the purpose of closing its affairs, accounting, however, to the plaintiff for his share. The partnership, while it had ceased to do business, not having been dissolved, it was the duty of each partner for their mutual benefit to aid in the settlement without compensation. Dunlap v. Watson, 124 Mass. 303. The defendant, moreover, having taken upon himself the duty of liquidation, and there having been no express agreement that he should be paid, must be held to have contributed his services, even if they may have been more onerous because of the litigation which arose in the collection of the outstanding debts. Nor did the plaintiff’s request, that he close the accounts and attend to the lawsuits, subject the defendant *146to any greater burden than he had assumed already voluntarily, or take the case out of the usual rule. Sehenkl v. Dana, 118 Mass. 238. Dunlap v. Watson, ubi supra. The master’s disallowance of the defendant’s claim for extra compensation, and charging him with one half of the sum he had retained for personal services and for time spent in attending lawsuits and winding up the business was right.
It appears that for some time after the sale the American Felt Company did not assume active control, and the defendant, who acted as agent and manager for the vendee, continued the business in the name of the partnership, but for the account of the company. Upon adjustment of this account, there remained a balance due from the company to the firm, which the defendant directed should be charged off to profit and loss. The evidence is not reported, but, having determined that the defendant failed to account satisfactorily for this amount, the master accordingly held him liable for the plaintiff’s share. If as liquidating partner he chose to use the firm’s name and ostensibly the firm’s money in carrying on business for the convenience of the succeeding company in which he alone was interested, and the books of the firm, kept either by him or under his direction, disclosed an outstanding indebtedness as the result of the transactions, due from a debtor apparently solvent, the business done was the business of the firm for which the defendant was properly held to be accountable to the plaintiff. Topliff v. Jackson, 12 Gray, 565. Jones v. Dexter, 130 Mass. 380. Moore v. Rawson, 185 Mass. 264, 275. Brown’s appeal, 89 Penn. St. 139.
In stating the account, the defendant was required to show that the money received either was available for distribution or had been lawfully disbursed. The report states that nearly six months after the sale a check in the name of the firm had been drawn by him covering the amount of the last disputed item in the exceptions. Having ascertained that the firm, even if doing business on account of the company, had no customer bearing the name of the payee, and that the defendant failed to explain the entry or to show that the plaintiff ever had assented to crediting the profit and loss account with the face of the check, he rightly allowed the plaintiff his share of the unauthorized payment. Indeed it would not be an unwarranted inference from *147the facts recited, that the defendant used this money for the payment of his private debts.
But if the exceptions to the master’s statement of the accoúnt, therefore, are not tenable, a final exception is urged to his allowance of interest on the balance due from July 1, 1903. If generally in the settlement of a partnership account where no provision is found in the articles of agreement as to interest, interest does not begin to run until dissolution or a demand on the liquidating partner for an accounting, in this case the master expressly finds that the defendant “ has used for his own purpose the share of the assets of the copartnership to which the plaintiff was entitled.” In connection with this finding he also reached the conclusion that the period of three and a half years elapsing between the sale and July 1, 1903, afforded a reasonable time within which to adjust its affairs and pay over the money. It furthermore being plain from the entire report that the defendant after that date enjoyed the use of the plaintiff’s share for his own benefit, although the plaintiff previously had asked for a settlement and was finally obliged to bring suit, the exception to the allowance of interest also fails. Dunlap v. Watson, ubi supra. Moore v. Dawson, ubi supra.
But, while the decree of the Superior Court correctly overruled the exceptions and confirmed the report, it contains no order for a dissolution. If before bringing suit no formal notice to dissolve was given, yet, there having been no definite agreement in the oral contract as to the time that it was to continue, the partnership should be treated as being strictly at will and as dissolved from the date of the filing of the bill. Fletcher v. Reed, 131 Mass. 312. Mellersh v. Keen, 27 Beav. 236. A final decree upon an accounting between partners, where the partnership has ceased to do business and is to be wound up, ordinarily is not entered except upon a dissolution. Under the prayer for general relief, the decree should include such an order, and when so modified it is affirmed. English v. Foxall, 2 Pet. 595, 612.

Ordered accordingly.