Court Opinion

ID: 4011647
Source: CourtListenerOpinion
Date Created: 2016-07-06 11:15:08.467306+00
Date Added: 2024-06-11T07:44:45.818003
License: Public Domain

The plaintiff contends that the trial court erred in finding there was due him under the contract the *Page 211 
sum of $1,789.60. It is urged that the court below committed error in refusing to allow the plaintiff recovery of the value of good will as an asset of the partnership business appropriated by the defendant, and that the court erred in allowing charges of expense to be deducted from the income of the partnership business which were not supported by evidence, and thus deprived the plaintiff from recovering his full share of the net income of the partnership business. These claims of the plaintiff require interpretation of the contract of the parties, designated a copartnership agreement. It appears from the context of this agreement that the defendant Bacher was, prior to and at the time this agreement was made, engaged in the business of soliciting liability insurance and was conducting this business in connection with the firm of Louis Auer  Son, who were doing a general insurance business in the city of Milwaukee. The contract provides that out of the gross receipts of the business transacted "all expenses shall first be paid, including all sums due to said Louis Auer  Son, pursuant to the agreement made, and to be made from time to time between said Louis Auer  Son and said first party hereto, which said sum so paid to Louis Auer  Son shall in no event exceed one quarter (¼) of the net receipts of the partnership hereby created, after payment of all other expenses." It was also agreed that the plaintiff was to pay the defendant $3,000 on the day the contract was made and an additional $3,000 out of his profits on September 1, 1906, 1907, and 1908. In consideration of these payments to the defendant he assigned to the plaintiff "a one-third (1/3) interest in said business and in the net income thereof." The partnership was to continue five years from the date of the contract, September 1, 1905. The stipulations of the contract and the recitals therein clearly contemplate that the business to be transacted by the partnership was principally that which the defendant Bacher secured the right to do by his connection with the firm of Louis Auer  *Page 212 
Son. The business transacted during the contract period was almost entirely under contract by defendant with this firm. It appears that the defendant had been engaged as soliciting agent for years under like arrangements with said firm and that there were a large number of policies in force at the time the plaintiff joined him in the business. It is urged that the down payment by the plaintiff of the $3,000 and an additional $3,000 out of his share of the earnings was a purchase by him of an interest which included an element of good will in defendant's business. The nature of the business and the terms of the contract tend to negative this claim. Defendant's business cannot be likened to an established commercial plant. Its advantages to plaintiff in associating himself therewith consisted in becoming acquainted with defendant's patrons, in sharing in the profits of the commissions that would naturally come to the firm through renewals of contracts with such patrons, and the proceeds of defendant's success as a soliciting insurance agent in connection with Louis Auer  Son. Under the circumstances and condition of this business it is apparent that the terms of the contract assigning to the plaintiff a "one-third (1/3) interest in the said business and the net income thereof," granted to plaintiff an interest in the earnings thereof for the contract period. We find nothing in the agreement, when applied to the situation of the parties, to indicate that they contemplated that the transfer of an interest in the business and the income thereof was to include an element of value in the nature of good will. We are of the opinion that the trial court properly held that the contract gave plaintiff a right to a one-third interest in their joint net earnings realized from the business during the contract period.
The question remains, Did the court find the correct amount due plaintiff out of the net proceeds of the business under the contract? The plaintiff contends that he has not been awarded recovery of the full amount due him, and bases this *Page 213 
contention on the ground that he has shown the gross amount of commissions and fees earned by them during the five years covered by the contract, and that defendant, who had charge of the disbursements, has failed to prove an amount thereof which reduces the gross earnings to the net amount found by the court. The account of the income and disbursements of the business was kept in the books of Louis Auer  Son. This is not disputed. According to the entries of these books the court allowed the plaintiff recovery for the correct amount due him. It however is urged that this basis of settling the partnership affairs is not proper, and that the book entries cannot control because the defendant failed to show that the disbursements as itemized in such book accounts are correct and proper deductions. The bookkeeper testified that she made the entries of expense therein as they were given to her by Mr. Bacher. It also appears that Bacher gave the plaintiff a monthly statement of their earnings, and that they were not objected to by the plaintiff as incorrect. The contract provides that the books shall be closed on the 1st day of January in each year, and that the profits, if any, be then divided. The contract furthermore provides thatBacher "shall be the head and manager of the business, and all questions concerning such business shall, in case of disagreement between such parties, be settled and determined by said first party" (Bacher). Under these terms of the contract Bacher clearly had the management of the business concerning the charges and disbursements and was authorized to direct the entry of the charges in the books of account. When he submitted monthly statements to plaintiff of the net earnings, it devolved upon the plaintiff to object thereto if he did not accept them as correct. This he never did until the five years of the contract had run. It is apparent that the plaintiff accepted the defendant's statement of the business expenses as correct until the contract period was about to expire. Under these circumstances and under the terms and conditions of *Page 214 
the contract for conducting the partnership affairs, the evidence of the monthly statements, the books of accounts, and the testimony of the bookkeeper that the items of expenditure deducted from the gross earnings were proper and correct as they appeared therein, primafacie established the items involved in the accounting. The facts and circumstances were competent proof on the subject and warranted the trial court in concluding that the items Bacher reported and directed to be charged as expenses should be deducted from the gross earnings. The court properly allowed them and awarded plaintiff a judgment for the balance due him on the amounts collected and paid before September 1, 1910, and for the amount earned before but collected after that date.
 By the Court. — Judgment affirmed.
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