Court Opinion

ID: 3668913
Source: CourtListenerOpinion
Date Created: 2016-07-06 06:18:00.910422+00
Date Added: 2024-06-11T14:08:49.279632
License: Public Domain

The two Sheltons and the two Bufords in their answers disclaimed any interest under the assignment, and admitted that if anything was due upon a settlement of the copartnership accounts, it belonged to the plaintiff.
The defendant Pilkington, in his answer, admitted most of the allegations of the bill. He insisted that if he was liable to account at all, it was to the Sheltons under the assignment, and not the plaintiff; that his recognition of the plaintiff as a partner proceeded from the fact that he was constituted the agent of the assignees, and their cestui que trusts, in managing the copartnership business. He insisted that the copartnership expired on 1 September, 1818, and that not knowing where the plaintiff then resided, he did not give him notice of an intended sale, which he averred was advertised at several places, and conducted fairly, *Page 385 
being upon a credit of six months. But he admitted that the goods were sold in lots, and that he and Roberts had purchased nearly all of them, and that these purchases formed a part of the stock of the new copartnership of Pilkington  Roberts. He denied that profits had been made by the copartnership of which the plaintiff was a member, and insisted that the business had resulted in a heavy loss, which had absorbed the capital. He admitted that, subject to the claim of the assignees in trust, the plaintiff was entitled, and stated that prior to the assignment being executed the name of Abraham Buford had, with his consent, been inserted in the copartnership articles, instead of that of the plaintiff, for fear of embarrassment from the creditors of the latter.
The defendant Roberts joined in this answer, to which a (483) replication was filed.
Pilkington filed a cross-bill, in which he insisted upon the matters set forth in his answer, praying that he might be allowed compensation for attending to the business of the copartnership and be protected from loss by reason of his suretyship for the plaintiff to Hicks, and for a decree against the plaintiff for his (the latter's) share of the loss which had taken place.
To this bill the defendant answered, and set forth an extract from the articles of copartnership, whereby Pilkington agreed to attend to the copartnership business without compensation. He denied the losses, and submitted to an account, and that Pilkington should be protected from loss as prayed by him.
Pilkington died during the pendency of the suit, and the defendant Neely was made a party to the original bill by sci fa. and appeared and prosecuted the cross-bill.
In the court below a reference which was to be without prejudice to the parties was directed. The master reported a balance due the plaintiff, and exceptions were taken to the report by both parties. Many of them involved simple questions of fact. Those upon which questions of law arose were the fourth of the defendant Neely because the master had rejected a claim for compensation to his intestate for managing the copartnership business.
The case was argued both upon the right of the plaintiff to an account and upon the exceptions to the report.
The plaintiff having assigned his interest in the firm by an absolute deed, in 1816, to Abraham Buford, it is now contended by Roberts and Pilkington's administrator, two of the defendants, that the partnership was dissolved at that *Page 386 
(484) time by that act, and no account of the partnership transactions could be decreed after that period. It is true that a bona fide
assignment by one partner of his share is a dissolution of the partnership, at the election of either. The remaining partners may not have confidence in the assignee, nor may the assignee choose to be concerned in trade. Griswold v. Waddington, 15 John, 82; Marquand v.Manufacturing Co., 17 John., 535. But in this case it was expressly agreed by the parties that the partnership should continue. It was agreed by the deed of 1816 that Abraham Buford should appear as the partner, and that William Buford should act as his agent. By the deed executed in 1817 by the plaintiff to the two Sheltons in trust to secure Abraham and John Buford for their liabilities for the plaintiff, the same property is conveyed as that contained in the deed of 1816, and it is recited in the last deed that the first was considered ineffectual for the purposes intended. Abraham Buford, by agreeing that the same property should be conveyed to the Sheltons, admitted that he had no title under the first deed; or, at most, it was considered as a mortgage. It is contended that if Pilkington and Roberts are bound to account, they should do so only to Abraham Buford, or the Sheltons, who now are the owners of the share which formerly belonged to the plaintiff.
On this point the defendant's counsel has cited several authorities. When examined, they prove nothing more, where there is no collusion, than this: A creditor shall not be permitted in equity to file a bill for relief against the executor and a debtor of the testator, or against an assignee in bankruptcy and a debtor to the bankrupt, or against a trustee and a debtor of the assignor, where all the assignor's effects and debts are transferred for the benefit of all his creditors. Where there is no fraud, the creditor's remedy is against him who has the legal title. If this was not the rule, every debtor to such estates might be harassed with a bill in equity. The plaintiff does not claim as a creditor, nor is he seeking a surplus under a resulting trust arising from the deed to the Sheltons. Ever since the date of that deed Abraham Buford has (485) not pretended to be considered as a partner in the concern, but William has always claimed to be and has been so acknowledged by Pilkington himself. It is a general rule that where a bill is brought for relief, all persons materially interested in the subject of the suit should be parties, either as plaintiffs or defendants, in order to prevent a multiplicity of suits, and that there may be a complete decree between all parties having material interests. 2 Mad. C., 179. If the assignees in this case had brought a bill for an account and relief, the assignor must have been made a party to show his interest if he had any, for how would the defendant be protected against the assignor if it should turn out that the assignment was not valid. Cathcart v. Lewis, 1 Ves., Jr., *Page 387 
463; Ray v. Fenwick, 3 Bro. Ch., 35. In this case all the parties have been brought before the court, and those persons who the defendant says have the absolute interest which formerly belonged to the plaintiff disclaim any interest, and expressly state that it all belongs to the plaintiff. The defendant Pilkington admits in his answer that the plaintiff had an ultimate interest, after Abraham and John Buford should be satisfied. The defendant Pilkington also admits sufficiently in his answer for us to see that he always treated the plaintiff as a partner; he made monthly returns to him of the sales, kept up a correspondence with him upon the subject of the concern, and agreed to come to a settlement with him. And we think there is nothing to prevent the defendants now accounting with him.
It is said that although Abraham and John Buford and the Sheltons now disclaim any interest, yet the Court should not let the plaintiff have the fund unless it should appear that all the creditors of William Buford, mentioned in the deed of trust of 1817, have been satisfied. The answer is that the deed of trust was to secure Abraham and John Buford for their liabilities to those creditors mentioned in the deed of trust. The trustees and Abraham and John Buford, admitting that they are satisfied, is presumptive evidence that all those creditors have been paid; it does not appear that they had not been paid. And if it should appear that they have not, I am not prepared to say   (486) that would prevent the relief he is seeking.
We are of opinion that the defendant Pilkington's administrator is liable to account to the plaintiff William Buford as a partner of all the firms mentioned in the bill, and that Robert's and Pilkington's administrators are liable to account to William Buford for his part of the capital and the profits that were made on the same after the time when by the original articles the partnership expired. We consider the sale of the stock of goods made by Pilkington, and purchased by him and Roberts, a fraudulent transaction. William Buford was not divested by the sale of his interest in the stock in trade, and as the defendants Pilkington and Roberts traded upon that stock and capital, if any profits were made, three-fifths of the same belonged to William Buford.
A report having been made in these cases, subject to the opinion of the Court whether Pilkington and Roberts were bound to account, and the Court being of opinion that they are, exceptions have been filed by both parties to the said report, and the exceptions now come to be decided. His Honor here considered several of the exceptions which involved questions of fact.
The defendant's exceptions will now be considered. The first, second, and third exceptions are overruled. His Honor here stated the reasons shortly. *Page 388 
The fourth exception is overruled. Pilkington was bound by articles of copartnership to attend personally to the business; he did not stipulate for compensation. He is not entitled to receive remuneration for doing that which he agreed to perform, and which it was his duty as partner to transact. It has been held that a surviving partner, when there is not an express stipulation to that effect, is not entitled to charge in account a sum of money as a compensation to himself for his management of the trade, and for his time and labor; he cannot, in the absence of a positive agreement, claim an allowance for carrying on the trade.Burden v. Burden, 1 Ves. and Bea., 170; Gow., 380, 381. The fifth exception is overruled, as to all but the sum of $60, with interest (487) from 1 October, 1824, which is allowed for Pilkington's services and expenses in attending to the suit brought by Hicks against him as the surety of the plaintiff.
PER CURIAM.                        Decree accordingly.
Cited: Anderson v. Taylor, 37 N.C. 421; Butner v. Lemly, 58 N.C. 148,149. *Page 389