Court Opinion

ID: 4893255
Source: CourtListenerOpinion
Date Created: 2021-09-02 23:53:20.176998+00
Date Added: 2024-06-11T08:09:48.979535
License: Public Domain

Gould, Associate Justice.
Our opinion is, that the pleadings of plaintiff stated no case entitling him to the partnership lien given by the judgment.
Those pleadings show a contract between plaintiff" and defendant to erect jointly at a certain point a mill and gin, certain specified things to be done by each for that purpose, each party to bear one-half of the expenses of the construction, mutually agreeing that if either party should furnish more than the other of money, materials, &c., “ in the erection of the said mill, the other party so in arrears will pay to the party having the greater amount of capital so invested one-half of the just, true, and equitable value of the said capital so in advance, to be paid out of the proceeds of the mill,” winding up with an agreement to share equally the expenses and profits of running the mill and gin. The original petition alleged that, after the mill and gin were built, the parties, in March, 1877, had a full and fair settlement of their accounts for material, &c., furnished by each “ in the construction of said mill and gin,” “ by which settlement it was found and agreed between petitioner and said defendant that he (defendant) was indebted to and owed petitioner in the sum of $928.25 for one-half of the excess of money, material, labor, and machinery furnished by petitioner in the construction and putting in running order said mill and gin.” It alleged that the parties were the equal and' joint owners of the land, mill, gin, fixtures, and’ other improvements, and-that on or about the 16th day of February, 1877, plaintiff", *441with the knowledge and consent of defendant, sold and con-' veyed his interest in said land, mill, gin, and fixtures, winding up with a claim of a mechanic’s lion and asking judgment for the $928.25 as due on account stated.
Subsequently, the court having sustained exceptions to the petition in so far as it claimed a mechanic’s lien, and the defendant having answered, (alleging, amongst other things, that the contract was one of partnership in the construction and running of the mill and gin; impeaching the alleged settlement for fraud and mistake; asserting that if any of the balance claimed by plaintiff was due, it was, by the terms of the contract, to be paid only out of the proceeds of the mill and gin, and that plaintiff'had, by his sale, precluded himself from any recovery,) the plaintiff' filed a supplemental petition, claiming that by virtue of the “ contract of partnership between him and defendant, as heretofore alleged, he had and held a lien upon the interest of defendant in and to said mill and gin, and the land upon which the same was situated, to secure the payment of said balance found to be due him upon the settlement of accounts, as alleged in the original petition.”
The plaintiff’s right to sue for one-half of the excess of his advances for construction of the mill and gin, without going into a settlement of partnership accounts generally, could only be maintained by reason of the terms of the partnership contract. (Collyer on Part., sec. 284; Pars. on Part., 286 ; Story on Part., sec. 221; Lockhart v. Lytle, 47 Tex., 453.) The preference or lien of a partner on the partnership property is only to secure him in what may be due him on a final settlement of the partnership matters. (Story on Part., secs. 97, 221; 2 Story's Eq. Jur., sec. 1243 ; Collyer on Part., secs. 125-127.)
It has been seen that the plaintiff’s pleadings did not seek a recovery on the ground of a balance due on final settlement, but claimed it on other grounds. The case stated by him was not one entitling him to the benefit of the lien claimed, *442and it was error in the court to give judgment enforcing the lien. If the settlement actually embraced the entire partnership business, and the balance when ascertained was a final balance in favor of plaintiff, there was no averment of the fact, and the plaintiff could only recover on the case stated in his pleadings. The assignments or error are sufficient to present the question, and the error must lead to a reversal of the judgment.
Another error complained of is, that the court sustained special exceptions to that part of defendant’s answer seeking to reopen the alleged settlement on the ground of fraud and mistake. The answer of defendant was, perhaps, defective in failing to disclose the facts, in regard to the item of lumber embraced in the settlement and objected to, sufficiently to show that it was erroneous, and that defendant was excusable for failing to object to it at the time. A stated account will not be reopened for the correction of an alleged error, unless it be specified so particularly that it may be judged of by itself. (Pars. on Part., 534.) The charges of fraud in the answer extended back to the original partnership agreement, and much of the answer alleging fraud was manifestly defective. Whilst we find no error in the action of the court sustaining the special exceptions to the answer, we are of opinion, that in reopening a settlement between partners alleged to have been procured by the fraud or mistake of the active managing partner trusted as such, equity will allow more latitude than in cases where no confidence is reposed. (1 Story’s Eq., sec. 523, et seq.; Pars. on Part., 531.) The defendant, however, failed to amend his answer, alleging with greater certainty the dates and facts of the alleged errors and the excuse for his failure to discover the errors at the time of the settlement. If he was precluded from the benefit of a valid objection to the account stated, or to any of its items, the fault was his own in failing to amend, stating the facts more distinctly.
The construction of the contract, that plaintiff could recover *443only out of the proceeds or profits of the mill, we do not think correct. The proceeds were the primary fund for the reimbursement of plaintiff; but if the partnership was, by consent, terminated before the proceeds were sufficient, the plaintiff would not be left without remedy.
The judgment is reversed and the cause remanded.
Reversed and remanded.