Court Opinion

ID: 6543225
Source: CourtListenerOpinion
Date Created: 2022-07-19 22:17:29.436954+00
Date Added: 2024-06-11T15:55:53.514648
License: Public Domain

Hughes, J. (after stating the facts). The complaint in this case alleges in substance that the partnership accounts of Johnson, Grimes & Co. were fully set-tied, and the partnership dissolved, many years before the institution of this suit, and that the judgment in favor of Marcellus Duval, paid by Mrs. Johnson, was the only remaining unsettled matter of that partnership, and that that judgment was paid out of assets of Johnson’s estate; and prays for contribution from the estate of Grimes, the only partner of the firm save Johnson who, or whose estate, was solvent. It does not pray for a settlement of partnership accounts. The answer denies that the partnership accounts of this firm were ever settled, and avers, in substance, that Johnson had a large balance in his hands, at his death, belonging to the firm, which went into the hands of his administratrix, none of which ever came to the hands of Lizzie Grimes, the only heir of Marshall Grimes, deceased, and that this amount was more than enough to have settled Grimes’ share of the Duval judgment, and that the administratrix and heirs of Johnson are not entitled to contribution; that, before it could be had, there must be a settlement of the partnership accounts, and a balance between Johnson’s estate and Grimes’ estate struck, when, if the balance is in favor of Johnson’s estate, he mig'ht be entitled to contribution. No affirmative relief is asked in the answer.  i. oi among part-It is a general rule that one partner cannot recover, either in a suit at law or in equity, for contribution for advances or loans made by him to the firm nor for money paid or debts settled by him for the firm out of his private estate, apart from a general accounting and settlement. 2 Bates, Part. secs. 849, 851, 852, 859; 2 Bindley, Part. p. * 567; Bailey v. Starke, 6 Ark. 192 ; Houston v. Brown, 23 Ark. 333. In Lang v. Oppenheim, 96 Ind. 47, a paragraph in a complaint for contribution, filed after dissolution of the partnership, was held insufficient because it did not state that there were no partnership assets in the hands of the plaintiff, or that there had been a final settlement of partnership accounts, and that there was nothing due to the firm from plaintiff, which ought to go in satisfaction of the debt paid by plaintiff for the firm, and on account of which he claimed contribution. In Houston v. Brown, 23 Ark. 333, it was held that “an action would not lie upon an instrument of writing acknowledg'ing the receipt of money by the defendant of the plaintiff, specifying' its payment on account of a partnership concern, unless the plaintiff prove that there was not an existing or unsettled partnership.” So it seems, according to those cases, that, before a plaintiff can have contribution on account of a partnership debt paid by him, he must show that there is not an existing or unsettled partnership. The complaint alleged that the partnership of Johnson, Grimes & Co. was dissolved in 1854; that Johnson died in January, 1870; and the proof is that the firm went out of busines in 1854, and tends to show that the partnership was then dissolved, except for the purpose of settling the partnership busiuess. Grimes died in 1868. Johnson died in January, 1870. On the 26th of March, 1886, Mrs. Johnson, as administratrix of Chas. B. Johnson, with the consent of his heirs, compromised the Duval judgment and satisfied it by payment of $10,487.45, and, after requesting Gizzie Grimes to pay one half the amount, brought her suit for contribution, in which the heirs of Johnson joined on November 9th, 1886, Miss Grimes having refused to contribute. Miss Grimes having died, the suit was revived against her administratrix. Did it devolve upon the appellants to prove that there were not unsettled partnership accounts, between Johnson and Grimes, as members of the firm of Johnson, Grimes & Co., which went out of business in 1854, more than thirty years before the payment of the Duval judgment by Johnson’s administratrix and heirs, more than fourteen years before Grimes’ death, and about sixteen years before Johnson’s death? In Brown v. Agnew, 6 Watts & S. 238, it is held that “if, however, the partnership has been dissolved, and the partnership accounts have been adjusted, and one partner is afterwards obliged to pay an outstanding claim unprovided for, the action of assumpsit would seem to be the proper remedy to recover the proportion of it which the defendant ought to pay by reason of the joint liability. A contract on his part to do so would arise from the fact of payment, as money paid to his use for his proportion, and on ordinary principles the action would lie for contribution. The transaction would then come within the class which are termed insulated or cut off from the general partnership concerns, and would be the payment by a mere joint contractor on the common account. * * In the present case the payment was made in 1840, * * * more than six years having elapsed from the dissolution till the payment of the claim and institution of this suit. These circumstances, we think, raise a fair presumption that the partnership accounts had been settled or terminated in some way, till it is overthrown by some evidence on the part of the defendant that the general partnership accounts yet continued open and current. This burden lies on him who seeks to avoid the plea of the statute of limitations to an action of account render or assumpsit. * * * By analogy, therefore, after the lapse of six years it lies on the party setting up an account to aver and prove that it remains open and current; and as the defendant here relies on the existence of unsettled accounts to defeat this action, the burden of making it out is thrown on him ; and not having done so, there is no ground to defeat the action of assumpsit.” “Laches and neglect are always to be discountenanced in equity. A party must not sleep upon his rights here, any more than at law. He must use all reasonable diligence to assert his claim, or the court will not help him. This principle is found in a great variety of cases; * * * * and it is more particularly applicable to stale demands, brought forward and attempted to be supported for the first time after the death of the original party to the transaction.” Powell v. Murray, 2 Hdward’s Ch. 644. “Calling for accounts is not to be encouraged, after the death of the accounting party, provided he lived long enough to have accounted, and there was no impediment.” Bertine v. Varian, 1 Edward’s Ch. 343. It is not claimed that there was ignorance of his rights upon the part of Grimes in his life-time, or of his heir, Lizzie Grimes, after his death ; and if Johnson had the large amount of assets in his hands that it is charged in the answer here he did have, he could have been called to account by Grimes before his death, or by his administratrix or heir after the death of Grimes. No reason is assig'ned why it was not done. Nor was there, in our opinion, any evidence sufficient to show that Johnson had in his hands or possession at the time of his death, or that his administratrix or heirs received, any effects of Grimes, or of Johnson, Grimes & Co., not disbursed in the settlement of the firm debts or accounted for. After the 27th day of July, 1869, by which time, according to the evidence of the Hon. Jesse Turner, Johnson had compromised and settled all the claims in his hands against the firms of Johnson & Grimes, and Johnson, Grimes & Co., it is not shown that there were any outstanding unsettled claims against the firm of Johnson, Grimes & Co., or Johnson & Grimes, except the Duval debt, nor is it shown any where that, after that date, Johnson paid, or promised to pay, anything on account of Johnson & Grimes or Johnson, Grimes & Co. to any one, or that he made any promise, or acknowledged any obligation, to make any payment, or to account, except that it is shown that he afterwards sought to compromise the Duval judgment, which his administratrix and heirs did compromise and settle after his death. Here is a period of over sixteen years, when there is nothing to show an acknowledgment, either expressly or by implication, of accountability. It cannot fairly be presumed, after the lapse of so great a length of time, that Johnson had in his possession assets of the partnership not disbursed in settlement of the debts or accounted for in some way. What he had in his hands originally for the purpose of settling their debts does not appear from the evidence. If we were to support the appellees’ contention that it must be presumed he had assets of the firm more than sufficient to pay the debts, from the fact that he undertook to settle the debts of the firm, and that he should be held to account, and the right to contribution be denied without an account, we would be called upon to presume, in the first place, that he had such assets ; second, that he had not disbursed them, and, third, that he had a balance in his hands for which he was liable to account. This would be presuming too much against one who died several years before this suit was brought. We are of the opinion that the matters arising out of the partnership of J. C. D. Blackburn & Co. in Sherman, Texas, after the close of the war, ought not to affect the question of the right to contribution, as between the members of the firm of Johnson, Grimes & Co. dissolved in Arkansas in 1854; that they are separate and independant matters. But if it were legitimate to consider matters growing out of the Texas partnership of J. C. D. Blackburn, Johnson & Grimes, we are unable to find that Johnson received anything- from that source, belonging- to the estate of Grimes, for which he has not accounted. We think there was error in the decree of the chancellor in' this case in dismissing the complaint, and that the appellants are entitled to contribution.  2. As lo laches in forcing pro-bale judgIn regard to the interplea of Nicholas Gacking, it is sufficient to say he appears to have been an innocent purchaser of the forty acres of land claimed by him. Johnson’s estate was entitled to contribution, as against Grimes’ estate, out of this forty acres, only by right of subrogation to the equity and right of Marcellus Duval to have it sold for the satisfaction of his judgment. This judgment was rendered in 1871. Gacking bought the land in 1884, about thirteen years after the judgment was rendered. In Mays v. Rodgers, 37 Ark. 155, it is held that “the lands and tenements of which an intestate has died sieved are, by the statutes, made assets in the hands of his adminstrator for the payment of his debts, and, in case of a deficiency of the personal estate, may, under an order of the court, be sold for that purpose. But this charge upon the real estate is not a perpetual one, which may be enforced by the administrator after any lapse of time. The heirs should not be forever deterred from making- improvements on the property, or prevented from selling it, by the possibility that it may be sold for the debts of the estate. The power of the administrator must be exercised in a reasonable time, and will be lost by gross laches or unreasonable delay.” See authorities cited in the case. Ten years delay was held unreasonable in that case ; and so we think that thirteen years was an unreasonable delay in the case at bar, and that, when Gacking bought the forty acres, the lieu of Duval’s estate had been lost by lapse of time and unreasonable delay, and that Gacking’s title is good against the claim of appellants for contribution. (See also Berton v. Anderson, 56 Ark. 470.) The decree is reversed, and the cause is remanded, with instructions to sustain the interplea of Gacking, and to discharge from the attachment the forty acres of land claimed in his interplea, and to re-instate the attachment as to the other lands attached in this cause, and to enter a decree for contribution, as praj^ed for in the appellants’ complaint. Wood, I., dissents on the question of contribution.