Court Opinion

ID: 6665908
Source: CourtListenerOpinion
Date Created: 2022-07-20 21:06:08.525539+00
Date Added: 2024-06-11T16:00:20.639065
License: Public Domain

Stephen, J.
dissenting, delivered the following opinion. The first bill of exceptions taken in this case being abandoned by the appellant’s counsel, it only remains for this court to consider and decide upon the second. That exception presents the following statement of, facts. [After stating the facts, he then proceeded as follows:] The general principle is clear and incontrovertible, that one partner cannot sue another at common law for a partnership claim, unless there be a settlement of accounts between them, and a balance struck. It was formerly held that an express promise to pay was likewise necessary; but the law now seems to be settled, that such promise is not essential.*301The reason is, that as between the parties, as partners, their relative rights cannot be known, or the relation of debtor and creditor ascertained, until there, is an adju -tmenl of their accounts, either by themselves or by a bill in equity for an ac*' count. But it is equally clear and indisputable; that where one partner has an admitted claim against another; or, in other words, where one partner has in his hands money belonging to another partner, which he has not a right to carry to the partnership account, an action will lie at law to recover it, and that it is not necessary to resort to chancery for that purpose. This principle is established in Smith v Barron, 2 T. R. 476, where the court decided that one partner might maintain an action for money bad and received against another partner, for money received to the separate use of the former, and wrongfully carried to the partnership account. Ashhurst, Justice, says, “the sum now claimed by the plaintiff did not belong to the partnership account; and as the defendant has received-a sum of money belonging to the plaintiff alone, which he has wrongfully carried to the partnership account, he is liable to refund it in this action.” Grose, Justice, says, “supposing that the plaintiff had received this money, he would have been entitled to have set apart for his separate use the whole sum, except that part which belonged to the partnership account. Then the circumstance of the defendant’s having received it cannot alter the right.” So in the case now before this court — if the $500 had been paid to the plaintiff according to contract, on his performing the stipulated service, can there be a doubt that he would have had a right to appropriate it to his own exclusive use? If he could, can his right be so materially changed by the bad faith of those with whom he dealt, in not paying it to him according to their agreement? In Gow on Partnership, 144, the law is stated to bo, that where one partner pays a partnership debt out of his own individual funds, equity will enforce a contribution. Formerly, indeed, (he says) contribution was always obtained through the medium of a bill in equity, although latterly, actions at law between partners for a contribution t>ave become frequent. In support of this principle see also Wright v Hunter, 1 East, 20, which was.an action at law by one partner against another for contribution on account *302of money paid to a creditor of the copartnership. This case likewise shows, that the defendant in this case was liable to the whole demand, he not having pleaded in abatement that there were other partners. Lord Kenyon says, “as.between a creditor and the partners, all are liable for the whole debt, though as between the partners themselves, each is only answerable for his respective share. The plaintiff here stands in the relation of a creditor to the other three partners. He might sue all or one of them; and as the defendant has not pleaded in abatement, I think the whole monej' may be recovered from him.” The case of Holmes v Higgins, 8 Serg. & Low. 27, is distinguishable from the present; because in that case there was no express promise of compensation to the partner, whose services were rendered to the partnership. He was merely appointed toperform a particular duty, without a promise of payment. As to the liability of one partner to be sued by another in the case of an express undertaking, the case of Van Ness v Forrest, 8 Cranch, 30, is referred to as a very strong authority. In Bradford v Kimberly, 3 Johns. Ch. Rep. 433, Chancellor Kent says, “in the case of joint partners, the general rule is, that one is ngt entitled'to charge another, a compensation for his more valuable or unequal services bestowed cin the common concern, without a special agreement; for it is deemed a case of voluntary management. But where the several owners meet, and constitute One of the concern an agent to do the whole business, a compensation is, necessarily and equitably, implied in such special agreement, and they are to be considered as dealing with a stranger.” Suppose in this case the partnership had been insolvent, would not Causten have had a right to recover his stipulated compensation from the persons contracting with him as individuals? Or, would he have lost it? According to the evidence contained in the bill of exceptions, the promise was general and absolute, not qualified or conditional, and it amounted to a waiver of any right to have the partnership accounts adjusted prior to payment. If he had been selected for the agency, without an express promise of remuneration, it would have been similar to the case of Holmes v Higgins, 8 Serg. & Low. 27, referred to in the argument. A partner is entitled to nothing for services rendered in and about the partnership *303concerns. When, therefore, he was employed for a valuable consideration to go on this business to the south, it shows that those who contracted with him did not deal with him in the character of a partner, but as they would have dealt with a stranger. Would not the money when received by him have belonged to him exclusively, or could it have been carried to the partnership account? If he would not have received it as a partner, it is clear that it could not have been carried to the partnership account. Why then make the right of recovering it to depend upon a final settlement of the partnership transactions? And it is only in such a case, that a resort would be necessary to a court of equity to compel payment. As to the necessity of declaring upon the special contract, the law is stated to be, that “with respect to debts for work and labour, or other personal services, it is a rule that however special the agreement was, yet if it was not under seal, and the terms of it have been performed on the plaintiff’s part, and the remunera» tion was to be in money, it is not necessary to declare specially, and the common indebitatus count is sufficient.” 1 Chitty’s Plead. 338. To the same effect is the case of Mudd v Mudd, 3 Harr. & Johns. 438. Upon the subject of the liability of one partner to be sued by another, there is a very late case, Coffee v Brian, 11 Serg. & Low. 25. The facts of that case were as follows: “Thomas Coffee, the plaintiff, John Coffee, and Brian the defendant, were jointly concerned in the Irish butter trade; John Coffee consigned the butters to Brian in London, who sold them, and Thomas Coffee accepted bills, drawn by John, to the amount of the butters sent. The profits of the various transactions were divided between the three parties. Brian having received the proceeds from a certain quantity of this butter, Thomas expressed uneasiness at accepting bills in his own name, without some security for the risk he incurred; when Brian engaged to provide for the bills at maturity, out of the proceeds already received. Thomas Coffee having been obliged to pay the bills, now sued the defendant for the amount in an action on the bills,and for money had and received,” on which count the court thought the plaintiff was entitled to recover. In that case it was insisted that the whole transaction was a partnership concern, and that, therefore, an action would not lie by one partner against his copartner, no balance having been struck, *304nor any agreement entered into to pay separately. In deciding this case Best, Ch. J. observes, “It has been objected that this is a partnership transaction, and no doubt the money came to the defendant as the money of all three of the'partners; but that has happened which divests them of the joint property in it, and- vests it in the plaintiff. The defendant says, I have money in my hands, the produce of these butters, and if you will accept certain bills, I will hold the money on your account, in .case of your being called on to pay the bills. When the bills were paid, therefore, the money in the defendant’s hands became separated-from the .partnership account” Park, J. says .- “a partner may sue for a balance due to him upon an account; closed, and an agreement to pay the amount, and this is a case of the same description.” This case establishes the principle that one partner may support an action against another partner without ascertaining by a settlement of their partnership dealings, whether he is a debtor or creditor of the concern, where there is an express engagement by One partner to pay him for a particular service rendered to the partnership, out of the partnership funds; for Park, Justice, observes, “the butters were consigned on the account of three, but it was necessary that one • of them should accept bills, and Thomas Coffee refused to do this without some kind of security; upon which the defendant agrees to appropriate for that purpose, money already in his hands.” This case could only have been likened to an account closed, and an agreement to pay the balance, upon the ground, that the express assumption of the partner to pay his copartner, •if he should be compelled to pay the bills when they became due, the amount he should so pay, amounted to a waiver of the settlement of their partnership transactions, and to an acknowledgment or admission of his right to receive the promised indemnity or reimbursement, without such a settlement. If the case now before this eourt is to' be viewed under the aspect of a partnership transaction, the above authority, it is conceived, settles the principle, that for a sum of money expressly promised by one partner to another for a particular service rendered to the concern, he may sue in a court of common law, without an ascertainment of the relation of debtor and creditor first having been made. And it is here worthy of remark that the rigour of the law upon this subject has been lately much relax*305ed; for although it was formerly holden that there must not only be a balance struck, but an express promise to pay, yet it is now well settled that such express promise is not necessary to enable one partner to sue another at law. But if this case is not to be considered as a partnership transaction, but as a contract between those partners who were present and the plaintiff^ in their individual capacities, the right of the plaintiff to recover in this suit is entirely free from doubt, there having been no plea in abatement filed in the cause.
I am of opinion that the judgment ought to be reversed.
JUDGMENT AFFIRMED.