Court Opinion

ID: 7882042
Source: CourtListenerOpinion
Date Created: 2022-09-08 21:34:27.377795+00
Date Added: 2024-06-11T16:31:37.609363
License: Public Domain

By the Court,

Kingman, J.
Defendant in error brought suit against plaintiff in error to obtain dissolution of a partnership and to recover a balance which he claimed due him.
The petition states that the partnership was formed in May 1858, to do a grocery business, and that in December 1859, it was extended so-as to include the business of farming on Kickapoo Island.
*23The answer denies the partnership in the grocery business at any time or place, and as explicitly admits a partnership in the grocery business commencing about August 1858, and avers that it was closed by dissolution in 1859, and claims that they entered into the partnership as to the farming in December 1859, claiming a large amount due him on this last partnership, and asking for an accounting therefor.
The case was referred to a special referee, to state an account between the parties.
The report of the referee was filed at the next term of the court without objection, and the cause continued.
The report finds that the partnership as to the grocery business and farming were one and the same, and that there was no dissolution, and that the plaintiff’s interest in the partnership property was greater by $486.51 than that of the defendant, and that he therefore was entitled to judgment against the defendant for that sum.
At the term next after the filing of the report the defendant moved to set aside and also to strike out parts of it, both of which motions were overruled, and judgment was rendered on the report.
The evidence, which appears by the report to have been voluminous, is not in the record. No exceptions were taken on the trial before the referee to any evidence taken or any decision of the referee; while evidence was taken for both parties on all the points raised in the pleadings, or submitted in the report without objection.
So far as the referee acted within the limits of his duties* there wras no ground on which to predicate a nlotion to set aside the report. A party cannot go through ail the steps of a trial before a referee, without objection, and then invoke the action of the court to set it aside because of error in the proceeding of the referee. 22 Barb., 319; 4 Com., 284; 4 Seld., 205.
It is claimed however, that the report should have been set aside because the referee exceeded his authority in tak-*24ing testimony and passing upon questions not referred to him, and in not stating the account sufficiently in detail.
Without deciding what would be the result were the report open to these charges, we are satisfied that it is not liable to that objection. The plaintiff in error is himself in error in stating that the partnership in the grocery busi* ness was put in issue by the answer. While it is denied broadly and squarely in the first paragraph of the answer, it is as expressly and fully admitted in the next paragraph. And by every principle of construction the part admitting it must be taken as true. The answer sets up, however, a different time for the commencement of the partnership in the grocery business from the petition, and says that it had been dissolved and settled up.
Now the referee, in stating an account would be compelled as a preliminary to ascertain when the partnership commenced and when it expired, if that were the fact, and also the extent and character of the partnership. In most cases these facts would be shown by the partnership agreement, but in this case there appears to have been no written agreement, so that the duty of ascertaining them by proof became a necessity before the referee could proceed in stating the account. They were a part of the facts necessary to be ascertained in discharging that duty, and we think very properly were stated in the report, being legitimately and necessarily embraced in the order of references
It is further objected to the report that it does not present the account in detail. The referee in his report states, for reasons given, that such a statement is impossible. The parties kept no books. There were no reliable entries of charges. Both parties lived off the partnership business; sometimes together, and sometimes one on the farm and the other in Leavenworth at the grocery. The proof is represented as conflicting and contradictory through nearly one hundred pages. The report is full as to the grounds of its conclusions, and satisfactory in its reasons why the *25account is not submitted in detail. The parties themselves had made it impossible, and as such had invoked an accounting, such an one only could be had as they had tendered it possible to make.
Again it is urged that the referee exceeded his powers by reporting what were the assets of the firm; that is, as to the real estate, because there was no allegation that there. were assets in the pleading. "We do not perceive how it makes any difference because a part of the assets were realty. The amount of the assets was a necessary and essential part of the facts proper to be presented in accounting of partnership business.
The report not only shows the state of facts as to the 'relative interest of the partners, but goes further and adds a conclusion of law which is clearly reviewable.
The report shows that the interest of the plaintiff in the concern was greater than that of the defendant by $486.51, with interest on that sum from April 15th, 1859, and deduces from that fact the legal conclusion that plaintiff ought to have judgment against the defendant for that amount. This is error of law. Defendant owed that amount to the firm, not to the plaintiff. If defendant advanced that amount to the firm, he would then have as much interest in the partnership as the plaintiff, and be entitled to an equal share in the distribution of the assets, thus getting back a moiety of the sum he had thus advanced. The court entered judgment according to the suggestion of the report.
To correct this error the case will be remanded to the District Court, with instructions to so modify its judgment as to order the sale of the entire partnership property, and out of the proceeds arising from such sale to pay, first: the costs of the proceeding; and second, the amount found by the referee to be due the plaintiff below, and the residue if any, to be divided equally between the parties.
All the justices concurring.