Court Opinion

ID: 5556788
Source: CourtListenerOpinion
Date Created: 2022-01-11 00:42:38.73823+00
Date Added: 2024-06-11T08:35:21.392699
License: Public Domain

Trippe, Judge.
1. No exceptions were certified by the Judge and entered of record, when the order appointing the auditor was granted. It was too late to raise the objection to the appointment, when *350the auditor proceeded to act under the authority conferred, or to make such objection the ground for excepting to his report: New Code, sections 4250, 4254.
2. The contract of partnership was, that one partner should furnish the stock of goods then on hand, and the other should render his skill, services, etc. It was further agreed that the first should have three-fourths of the net profits, and the second the remaining fourth. Under such a contract the partner furnishing the capital is not entitled to interest on the stock when a division of the profits is made. We can see no reason for such a claim. Such partner gets all the profits by the contract that are made on three-fourths of what he puts in the concern. The other fourth was intended as a set-off to the skill, time and services of the other partner, and the profits thereon to be his compensation. To hold as claimed by plaintiff in error, would give that other partner the net profits on one-fourth, less the interest thereon. Such was not the contract. Net profits of ah adventure do not mean what is made over the losses, expenses and interest on the amount invested. The term includes simply the gain that accrues on the investment, after deducting the losses and expenses of the business. If but two or three per cent, is realized on the amount put in, it may be a poor business, but still there would be net profits, even if the legal rate of interest were ten per cent, or greater.
3. It was further stipulated in the artices of partnership that if the necessities of the business required an increase of capital, and the same be supplied by the partner who furnished the original stock, the firm should pay him interest therefor at a certain rate. At the end of the first year the amount of profits and the share of each partner was ascertained. It was not agreed that there was any necessity for an increase of the capital of the firm. Nor was there any understanding that it was increased. The partner entitled to draw the largest share of the profits simply permitted a portion of it to remain. No notice was given to the other that the rights of the firm attached to said undrawn portion. It was sub*351ject at any time to the owner of -it. He never parted with his individual right to it, by making it a part of the firm capital. It never was subject to the terms of the partnership agreement, so as to give the other partner any authority to contest whatever right the owner might be pleased to assert over it. Had he desired to have taken it at any moment he could have so done, no matter what the immediate interests of the firm might require. This right would not have existed if it had been regularly made a part of the capital stock. And it would be manifestly unjust that he should have had the power, at pleasure, to make an individual appropriation of a large amount, and at the same time claim a heavy interest for whatever time he might not see fit so to appropriate it. Besides, the contract specially provided that Land, the working partner, so to call him, should only be entitled to draw a specific portion of his share of the profits. The balance of his interest was to remain in the firm. By the contract it was to become part of the capital. As this increase was directly provided for, and as it was also expressly contracted for a further increase, if necessity demanded it, such increase, if made, should not be left to the mere discretion of one partner to determine as he might choose at any time, whether or not his undrawn portion of the profits had become an addition to the firm capital on which he was entitled to both profits and interest.
4. The goods and fixtures constituted the stock furnished by Dr. Tutt. At the dissolution he claimed that there was a depreciation of the stock, and that he should be paid for it. It was not pretended that the value was lessened by reason of damage or injury from accident or other special cause. Had it so been, there might, probably be force in the question whether it was not a claim under the head of losses, and therefore properly chargeable to the firm. But it appeared that it was only the ordinary, natural depreciation that may occur in all things. At the time the partnership was formed, the value of the stock was ascertained, inserted in the articles, and it was agreed that Dr. Tutt should keep that sum in *352the business for the use of said firm during the continuance of the partnership, “ and that the said sum of money or its equivalent in stock of goods is to constitute the capital to be used and employed,” etc. We do not think that under this contract the partner who furnishes the stock, can, at the dissolution, claim for the ordinary, natural decrease in value of the goods. That is a risk or incident which attaches to his property, and is doubless an item considered and passed upon by the party Avho invests his capital in that form, when he enters into such a contract. If A and B were to form a partnership for farming purposes, A to furnish the land, and horses and mules for ploughing, and B his skill, labor and superintendence, and the profits to be divided equally or in any given ratio between them, could A, at the end of two years or other period, when the dissolution might take place, claim compensation for the decreased value of his horses or mules on account of their increased age, or for the wear and waste of his land from time and cultivation, etc.? It would scarcely occur to the mind of any one that such a right existed on the part of A, unless it was so specified “in the bond.” Another item in this contract settles this question, as well also as the question of the right of Dr. Tutt to claim interest on his original capital. That item is: “ It is agreed between the parties that the said gains, increase and profits shall only be reckoned, after deducting all expenses of the business, among which expenses is included the sum of $2,-500 00 per year to be paid to the said W. H. Tutt for rent of the store on Broad street, supplied by him to the partnership for carrying on the business.” The proper construction of this item excludes the idea of his claim for such interest, and for the ordinary depreciation of the stock he contributed. As well might it be asserted for the depreciation by time and use of the house, for that was also supplied by him to the firm.
5. Plaintiff in errov further sought, by way of recoupment, to have a deduction made from the claim of Land in the profits, on account of alleged fraud, neglect, and acts of disloyalty to the partnership by Land. The Court charged, in *353substance, that this could be allowed by the jury to the extent of damage proven. We do not think the charge should have gone further. A jury should have a measure of damages furnished by the evidence, especially for a breach of contract. They cannot go out into a field of speculation as to what the damages may probably be. Land was not suing for his services on a quantum valebat, or on a contract for a stipulated sum as their value. It was for a claim to property. Had it been for services as clerk, and he had violated his contract as a clerk or servant, the question would be presented, whether the breach on his part was not a forfeiture of all claim under the contract. But it cannot be the rule that one partner can set up that the other has been false to duty, and thereby he can claim all the assets, capital and profits. He may recoup or claim for damages ; but must show what the damages are.
6. The remark made by the Judge, at the trial, which is excepted to by plaintiff in error, was upon a matter which, under the whole evidence, could not have availed the party complaining. Strike out the answer of the witness, about which the remark was made, and under the view we have taken, the decision must be the same. Whether it was unauthorized or not, no legal injury could have resulted from it.
Judgment affirmed.