Court Opinion

ID: 4893876
Source: CourtListenerOpinion
Date Created: 2021-09-02 23:54:15.963166+00
Date Added: 2024-06-11T08:11:47.249052
License: Public Domain

Delany, J. Com. Apr.
Both parties to the suit agree in treating the proposition made by the plaintiff and accepted by the defendant as .a contract of partnership-. And the court below, in sustaining the defendant’s fourth exception to the amended petition, seems to have held that, by the terms of the contract, the partnership ex*61pired as soon as the amounts advanced by the defendant to the plaintiff were repaid out of the plaintiff’s share of the net profits. "Upon this part of the case counsel for appellee, in their brief, present the following proposition: 66 If there was any time limited by the contract for the continuance of the partnership, it was until the $75 per month advanced by Britton to Ball had been repaid, and the petition shows that this had been done.”
We cannot regard this as a correct interpretation of the contract. The proposal made and accepted evidently contemplated the continued existence of the partnership after the repayment of the sums advanced. The stipulation for the advance of $75 per month was probably rendered necessary by the pecuniary condition of the plaintiff. He must necessarily- have been engaged many months in erecting the building and putting the machinery in place, before any profits would accrue; and therefore the defendant agrees to advance to him in the meantime $75 per month. But the stipulation for the repayment of these sums out of the plaintiff’s share of the net profits was for the sole benefit of the defendant, and was utterly useless and unmeaning upon any other supposition than that of the continued existence of the partnership. Upon any other supposition the plaintiff pays twice for what he has received. Suppose the defendant had dissolved the partnership as soon as everything was in readiness to commence making the ice. The defendant would then have had all the property and all the benefit of the plaintiff’s labor, and plaintiff would have had the amounts advanced—$75 per month. This would convert him into a hireling working at $75 per month. But suppose he had postponed the dissolution until he had received out of the plaintiff’s share in the net profits all that he had advanced. The defendant would then own the entire property, including all that the plaintiff had put into it, and he would have paid back to him all that he had advanced.
But what would the plaintiff have? He would have nothing, after losing the time, labor and skill which he had invested, but the broken contract, upon which counsel tell us he could not maintain this suit.
Upon the supposition that the partnership was to continue, the parties were on an equal footing as soon as amounts advanced by the defendant were paid back to him. ^Cheir contributions to the enterprise must, for the purposes of this suit, be considered as equally productive — the defendant contributing his money, and the plaintiff his time, labor and skill; and they both .looked to the profits for their compensation. The defendant owned the property, *62but the plaintiff had invested in the enterprise and blended with the property what must have added greatly to its value.
We do not think, therefore, that the stipulations which we have been considering were intended to limit the duration of the partnership. Upon the subject of the dissolution of the partnership, appellee’s counsel present these two propositions:
1st. “ The petition showing on its face that by the terms of the contract of partnership no time was fixed for its continuance, and that either party might dissolve it at will, no damage could be recovered for future profits after such dissolution.”
2d. *'c The petition showing that Britton had the right to dissolve the partnership at the time he did, his exercising his right to do so was not wrongful, and he was not liable for future profits by reason of such dissolution.”
Any member of a firm may withdraw from it, or he may transfer his interest, or he may die, and either of these events will work a dissolution of the firm.
In such cases the partnership business is generally settled, and the members may have returned to them what they have put into it, together with their respective shares of the net profits, if any. In this case, if the parties had put into the business an equal amount of money, and the defendant had determined to withdraw from the firm, no doubt he might do so, but he could have taken away only the amount which he had contributed, with his share of the profits. But that is not the state of facts which the petition sets forth. The defendant did not withdraw from the firm. He expelled the plaintiff out of it; and he not only retained all that he had put into it, but he kept all that had been contributed by the plaintiff, except a certain portion of the profits. Although a member of a firm may withdraw from it, yet a majority of the members of a firm, consisting of more than two, cannot exclude a member without sufficient cause. Parsons on Part., side p. 381. How, if a majority, ■where there are more than two, may not exclude one, it is difficult to see how one member of a firm, consisting of only two, can exclude the other. We think, therefore, that the petition set forth a good cause of action. But we cannot adopt the suggestion of appellant’s counsel, that ten years would be a reasonable limit for the duration of the partnership, and that his damages should be assessed upon the basis of the profits of the business during that time.
The plaintiff, in his proposition to the defendant, fixed no time for the duration of the partnership, and we cannot fix any time in order to protect him against the consequences of his own neglect. Under *63the circumstances, we think the measure of damages is the value of the services rendered by him, including his skill, his time and labor in constructing and operating the factory. Of course, from this would have to be deducted whatever he may have received of the profits, if anything, over and above what had been advanced to him by the defendant. This would be the measure of the actual damage. Counsel for appellee insist that appellant was not entitled to exemplary damages, and refer us to the case of R. R. Co. v. Shirley, 54 Tex., 125, to the effect that such damages are not recoverable upon a breach of contract. In the case before us, there was a breach of contract, certainly; but there was much more. The plaintiff was, with every circumstance of contumely, excluded from a business in which he had an interest, and from premises in which he had a right to work, at least for the time being. The defendant appears to have taken the law into his cnvn hands, and to have closed the partnership in a manner entirely too summary to be sanctioned by a court of justice.
[Opinion adopted November 6, 1882.]
As to the exception Avhich interposes the limitation of one and two years, our opinion is that the amendment did not set up a neiv cause of action, and that the exception was, therefore, improperly sustained. All the substantial grounds of action set out in the amendment Avere contained in -an original petition — the only change being the enlarged measure of actual damages, and the claim of exemplary damages. Lee v. Boutwell, 44 Tex., 151. It is perhaps needless to remark, that all which Ave have said has reference to the allegations in the plaintiff’s pleading Avhich are admitted to be true by the exceptions.
Our opinion is that the judgment should be reversed and the cause remanded.
Reversed and remanded.