Court Opinion

ID: 7984492
Source: CourtListenerOpinion
Date Created: 2022-09-09 01:24:06.636498+00
Date Added: 2024-06-11T16:35:09.334395
License: Public Domain

Tarbell, J.,
deliyered the opinion of the court.
The question in this case is as to the binding effect of a mutual settlement of partnership dealings, assented to by members of the firm. Crawford, with Peteet and wife, constituted a copartnership in the livery and sale busines. Upon the termination of the partnership, the parties mutually adjusted their accounts. Thereupon, Peteet and wife filed a bill in chancery to obtain in equity another settlement. Fraud is charged, and the settlement is prayed to be annulled, and for an account.
Upon bill, answer, exhibits and proofs, the bill was dismissed; whereupon, an appeal was taken by the complainants.
The power of the court to open a settlement is not understood to be questioned, but it is urged by counsel that there is no proof of specific acts in facts of fraud.
The books of the firm were kept by a brother of Crawford. Peteet was ignorant of bookkeeping and of figures. Both parties testify that the business was profitable; yet, by the settlement, Peteet was a heavy loser and Crawford was a large gainer by the enterprise. According to the record, an item of over $600 was wholly omitted from the settlement, and this omission is without explanation. All the accounts and statements are so unintelligibly presented, as to render a satisfactory balance sheet out of the question. Two or three days after the settlement, Peteet becoming dissatisfied with the result, requested of Crawford that the accounts be referred for adjustment to mutual friends. This was declined, except so far as to permit the footings to be reviewed. Upon the face of the record, Peteet was *46defrauded, but bow, or wherein specifically, cannot be pointed out. In view of this record, the duty and the power of the chancellor, according to the authorities, were unquestionable. The law is clearly stated in Pars, on Part., 513, ch. 16, sec. 2, and the adjudications are numerous and uniform in all the states. Cases of this sort have not been frequent in this state.
Mere errors alone will not “ always ” lead to the opening and restating of accounts (Pars, on Part., 513); but even when there is an agreement that closed accounts shall not be opened for error after the death of the parties, or after a fixed period, a court of equity will open and restate the account for fraud, or great danger of fraud (id.); and in case of such an agreement, even after the death of the parties, or long acquiescence, a settlement would be opened and the account restated, for an important error. Id. When there is “ danger ” of fraud, or when the accounts have been made up by parties having unrestricted power, and acting under strong personal interest, a long acquiescence will not establish a settlement beyond the reach of inquiry. Id., 514. If the bill praying for the opening of a settled account does not allege fraud, but in the opinion of the court, the facts stated “ imply ” fraud, the prayer will be granted. Id., 515. In Mackellar v. Wallace, 26 Eng. L. & Eq., 62, it is said, if error occur in the settlement of an account, it is a sufficient ground for opening such account and setting it right in a court of equity. And the settlement is good for nothing if, either from the collusion of the parties or from the circumstances under which it takes place, it is proved in a court of equity that the transaction was not so fairly and so fully understood between the parties, either from the confusion in which it was involved, or from misrepresentation made on the one side or the other, as it ought to have been, and that injustice has been done on either side.
Clearly, in the case at bar, the settlement should have been opened and the accounts restated.
Decree reversed, and cause remanded for further proceedings.