Court Opinion

ID: 6603917
Source: CourtListenerOpinion
Date Created: 2022-07-20 20:10:23.36784+00
Date Added: 2024-06-11T15:58:07.123663
License: Public Domain

OetoN, J.
With all due respect for the opinion, of my brethren in this case, I most respectfully dissent therefrom, as establishing a precedent in violation of elementary principles of partnership law, which, it is apprehended, may be construed as overruling the numerous decisions of this court in which these principles have been recognized. These principles are that an action at law will not lie by one partner against another to recover as damages losses occasioned by his misconduct, or by his appropriation of more than his share of the profits of the partnership business. This doctrine, however, seems to be nominally conceded in the opinion, but this concession is outweighed by the facts which establish its denial. The complaint, in violation of a correct rule of pleading, alleges that the defendant refused “ to enter into ” or “ to carry out ” the copartnership agreement, when all of the facts show that the gravamen of the complaint is that he refused to “ carry it out ” after the partnership had been formed, if he is charged with either, which is very doubtful. The complaint studiously states “ that the plaintiffs and defendant entered into a contract wherein and whereby it was agreed that said parties should enter into a copartnership for the purpose of cutting and logging timber ” on the land of one Cline, with whom a written contract was to be made by and in the name of the defendant alone, but for the partnership benefit, and that in accordance with such agreement the defendant entered into such contract with Cline, and it was thereupon submitted to said plaintiffs and approved Toy them. The plaintiffs were to have together one half and the defendant the other half of the profits thereof. After that, the defendant took upon himself the carrying out of said contract, and without and refusing the participation of the plaintiffs in so doing, and did carry it out and perform it, and received all the payments and profits thereof, strictly according to its terms.
The complaint alleges “ that the profits which would have *132been made by these plaintiffs and said defenda/nt in said logging operation, over and above all costs and expenses, under said contract with said Cline, would have been $11,000,” and the damages claimed by the plaintiffs jointly are me half of these profits, according to their contract of copartnership. The inferences from these allegations are clearly that the defendant did not mismanage said business in any respect, for he carried out the contract with Cline strictly and was fully paid according'to its terms, and that he made $11,000 profits, for all three would have made that amount, and one half belongs to the defendant, by the admission of the complaint. This is a straight bill in equity for an accounting and distribution of the profits of a partnership business carried on by one of the partners for the benefit of the firm. The contract with Cline was to be made in the defendant’s name, and it was properly carried out by him, for Cline knew no other parties, and was not bound to recognize or deal with anj? one else. If this complaint is for the refusal of the defendant to enter into a copartnership, in violation of his agreement to do so, why do the plaintiffs join and together claim one half of the profits of the business ? They join in this suit because they were copartners with the defendant, as they should, and to arrive at their share of the profits an acootmlmg is absolutely necessary.
The partnership was formed and complete just as soon as the defendant entered into the written contract with Cline and they had approved of it. From that moment they all became interested both in the business and profits thereof as partners, and this is the whole theory of the case made by the complaint. It is not an action for the mere violation of an agreement to form a copartnership, for in such a case the damages would be either nominal or speculative in some sense and severed as to each one damaged. The damages would not be a share of the profits made by the refusing partner in his own private business for all time to come. If *133an action at law will lie in this case, it will in any where one partner attends to all the partnership business alone, and refuses the assistance of the other partners and to account to them for the profits he has received. All the grounds of the majority opinion, and the authorities cited in their support, are substantially admitted therein to be inapplicable by the direct admission that the partnership would be considered formed as soon as the written contract with Cline had been executed and approved by the plaintiffs. This fact is clearly and directly alleged in the complaint.
I think the learned circuit judge decided correctly in sustaining the demurrer to the complaint as one in an action at law, and the order should be affirmed.
By the Gourt.— The order is reversed, and the cause will be remanded with directions to the circuit court to overrule the demurrer to the complaint.