Court Opinion

ID: 6242983
Source: CourtListenerOpinion
Date Created: 2022-02-17 20:49:39.695052+00
Date Added: 2024-06-11T08:58:15.504346
License: Public Domain

Mr. Justice Mitchell,
dissenting.
The matters which led to this controversy having occurred between partners who were on entirely friendly terms, were unfortunately not carried on with the formality and precision desirable in business transactions, and' it is not therefore surprising that the parties failed to have the same "understanding at the time, and their recollections now differ.- But with the written documents as a basis I am of opinion that the substantial agreement is clear. Mr. Smith desired to dissolve the partnership, and had the legal right to do so, but became convinced that it would involve very serious loss not only to his partners, but to himself to do so at that time. He therefore agreed that no public change should be made, but as between the partners themselves the notice was not withdrawn and liquidation commenced at the beginning of the year 1891. The receipt shows this beyond all doubt. Smith received $10,000 of his capital and the rest was to be repaid “ as soon as possible when certain accounts that show a shrinkage are closed out.” The losses on these special accounts were to be equally divided, but it is nowhere said or indicated that general losses, or any losses at all on new business were to be paid in part or in whole by Smith. The business of 1891 was a new business on a new basis, and so far as the partners themselves were concerned, if it had proved a losing one Smith could not have been charged with-any share of the losses, and on the other hand he had no claim for any of the profits. *279I do not see the difficulty that my brethren find in regard to the notice by Mr. Toland to Mr. Smith in September, 1891. The firm of Ervin & Toland continued during 1891 so far as the public were concerned. The use of the firm heading and paper was therefore not only natural but imperative. A change would have given notice to the public of what the circumstances required should not be known. And as to the partners themselves the firm still continued under the same name so far as Mr. Ervin and Mr. Toland were concerned. It was this latter firm from which Toland desired to withdraw, and his doing so involved the winding up of the business to the public eye as well as in fact between the partners, and therefore the termination of the temporary arrangement which had run through the year 1891. In this arrangement Smith of course was interested and he was entitled to notice of its intended termination. The letter of Toland to Smith was therefore not only a courteous and friendly but a proper business act.
I would reverse this judgment and. approve the findings of the referee.
Williams, J., concurs in this dissent.