Court Opinion

ID: 7807716
Source: CourtListenerOpinion
Date Created: 2022-09-07 17:08:36.801282+00
Date Added: 2024-06-11T16:30:22.548709
License: Public Domain

Smith, J. Appellee Gr. B. Cole, by his guardian, commenced this suit on November 9, 1910, to dissolve the copartnership known as the Jonesboro Wagon & Manufacturing Co., iand to distribute its assets. This copartnership was formed on January 1, 1902, 'and was then composed of appellee, who owned one-half interest, and of Y. A. Cole, Sr., and Y. A. Cole, Jr., who each owned one-fourth interest. Y. A. Cole, Sr., iand Y. A. Cole, Jr., were father .an son, and Y. A. Ooile, Sr., was the uncle of appellee, Gr. B. Cole. The business wias operated by these partners without 'any contract or understanding as to (compensation for their services except that each partner drew on the partnership bank account for such money as he required for Ms personal use. Gh B. Cole became insane in May, 1907, but recovered sufficiently by tbe latter part of June to return to bis work, but be soon became insane again and retired permanently from tbe business. Thereafter T. A. Cole, Sr. 'became less 'and less active in tbe management of tbe 'affairs of tbe 'Copartnership', and finally ceased to give tbe business any attention :and died June 9, 1910. T. A. Cole, Jr., continued tbe business until this suit was filed, and was appointed receiver and wound up tbe partnership affairs as such. Aifiter appellee became insane, and after tbe responsibility for tbe management of tbe partnership ¡affairs bad fallen on appellant, be complained to bis father that it did not look right for Mm to stay at tbe factory and manage it .and receive no salary for bis labor. Appellant testified that bis father said: “I think so, too; go ahead and do the best you can. ’ ’ Speaking of bis father, be further testified:“ From time to time be would come over 'and I would talk to him about it, as often as I would get a chance, and there was ia time or two that I would get tbe subject right down to tbe point in regard to bow much salary I ought to have. I reckon be thought I wanted a little more than be thought I ought to bave.,, He further testified that on 'another oclcasion be told Ms father he thought he should have a salary of $150 per month, but his father told him that was too much, and that while no agreement was ever reached about Ms salary he supposed he would be paid for Ms services, and continued in charge of the business because of that expectation. There was testimony to the effect that T. A. Cole, Sr., had stated to the employees about the plant that appellant was to be paid a salary, and that his services were reasonably worth $125 per month. The partners adopted at the beginning a very loose and inaccurate system of bookkeeping, wMch was continued by 'appellant, and it became necessary to employ an expert accountant to state the 'account .between the partners, and there is now la wide difference of opinion as to the result of appellant’s management of the 'business. However, the heirs of T. A. Cole, Sr., were made parties to this suit, 'and the court below 'stated the account between the partners, land the only item, questioned on 'this appeal is appellant’s claim for salary-for the thirty-eight months during which he had charge of the 'business. The court found that, 'pursuant to the agreement that the partners might draw money as they needed it, T. A. Cole, Sr., had drawn $300; that $1,152.50 had- been drawn by and for Gr. B. Cole, while 'appellant had drawn $2,364.50, which sum he admits ¡should be credited against the allowance of $4,750 which he ¡claims as salary, and the 'difference between these two amounts forms the ¡subject-matter ¡of this appeal. We think the court below allowed appellant all he was entitled to receive, for the reason that the proof is insufficient to ¡show 'any right on his part to charge for his services. The law of this subject is istated in Modern American Law, Vol. 9, section 76, as follows: “A partner is entitled to participate in the profits realized in a partnership business in 'the proportion agreed upon by the partners. Since he, by ¡attending to the firm business, is conducting but his own affairs, he is. not entitled to any extra compensation unless a special agreement to that effect has been made, or unless extra trouble has been caused to him iby his copartner’s neglect of duty. Where the partnership agreement has provided for extra compensation of one or more of its members the agreement controls. This agreement may also .anticipate such events as the death or sickness of a member and may provide a compensation to the other members for the extra work which will be caused to them by such event. If no such agreement is made, the sickness of a copartner will be considered as a risk which is incidental to the partnership relation and which is, therefore, assumed by all 'the partners. ‘Even where a liquidating or surviving partner settles up the ¡business, it has been repeatedly held that he is not entitled to ¡compensation for doing so, ¡although in such case he performs all the services.’ ” An extensive note will be found to the ease of Williams v. Pederson, 17 L. R. A. (N. S.) 384, citing many authorities on this subject. Two events happened in the history of this copart-nership, either of which would have worked a dissolution of the firm had 'appellant so desired. The first of these events was the insanity of G. B. Cole, ¡and the second was the death of T. A. Cole, Sir. Notwithstanding these events appellant did not dissolve the firm, hut continued to carry on the business, and 'the presumption must be indulged, despite his expectations to the contrary, that he did so pursuant to the original articles of agreement. One witness testified that he heard G. B. Cole say, after he had ceased to perform ¡any services or to discharge any duties in connection with his copartnership, that appellant was drawing a salary for his services. But it was not shown whether G. B. Cole was referring merely to the sums which the partners had ¡been drawing for their personal use or not, nor does it 'appear that G. B. Cole had recovered his reason. Moreover, this remark was not made in the presence of appellant, and if was not shown to have ¡been communicated to him. It is true appellant testified that ¡his father agreed with him that it would be right for him to have some compensation for his services, but no agreement was ever reached with his father as to what the compensation should be. Besides, .any understanding between appellant and his father ¡about salary would have constituted an .amendment to ¡the articles of copartnership, which would not have been binding on the insane partner. If, for reasons satisfactory to himself, appellant elected not to wind up the affairs of the copartnership and dissolve it, as he had ¡the right to do under the law, but chose rather to continue its operations, then he should not be heard to say that the terms upon which he entered the partnership were not sufficiently favorable to him and that he should have a compensation not originally agreed upon. Pierce v. Scott, 37 Ark. 308; Haller v. Willamowicz, 23 Ark. 566. Upon filing -tibe bill for the settlement 'of the affairs of this copartnership .appellent was 'appointed receiver, and -wound nip its affairs, 'and was allowed a thousand dollars as compensation therefor. We think no error was committed in rejecting appellant’s claim, a/ad the decree is therefore affirmed.