Court Opinion

ID: 3681211
Source: CourtListenerOpinion
Date Created: 2016-07-06 06:26:45.937464+00
Date Added: 2024-06-11T15:28:42.376825
License: Public Domain

The complaint in this action alleges the former existence between the parties of a partnership; the dissolution of this partnership; the mutual agreement that either of the copartners could collect debts due the firm. Further, that plaintiff had collected debts and sold assets of the firm; that defendant had collected large sums of money due the firm and had applied the same to his own use; that, further, the partners agreed that if the amount of the debts due the firm, when collected and applied, should not be sufficient to pay their indebtedness then each of the partners should pay one-half of the amount remaining unpaid; that by reason of the facts defendant was indebted to the plaintiff in a certain amount. The cause was tried as a law action. It has twice been submitted to a jury. As the record discloses, the jury, in the special verdict, were required to determine how many firm accounts the plaintiff collected and to determine other questions of the collection and application of firm debts. As the majority opinion admits, the action is one in which the plaintiff seeks to compel defendant to contribute toward the payment of certain obligations which the defendant claims to have discharged and which obligations were owing by a partnership which had been dissolved some years previous to the action.
The pleadings and the evidence in this record involve, primarily, in order to determine the rights and obligations of the parties, a partnership accounting. As this court has stated in an early opinion, the reason lying at the foundation of the doctrine that one partner can not sue a copartner on account of partnership matters, is the impossibility of setting the acts of the partners in a legal action, and that the law will not pick out an isolated partnership transaction and predicate a liability on that alone when it is possible that on a full accounting between the parties the balance may be the other way. Devore v. Woodruff, 1 N.D. 143, 45 N.W. 701. It is the well settled rule that the question of settling a partnership account is a question of equitable jurisdiction. 30 Cyc. 716. One of the exceptions which permits an *Page 19 
action at law is where the parties have had a settlement and it is only necessary in determining the rights of the parties to consider such settlement and the liabilities of the parties in an action at law without investigating partnership accounts. Lay v. Emery, 8 N.D. 515, 79 N.W. 1053. A recognition of this exception is stated in the opinion of the court by Mr. Justice Birdzell in Zimmerman v. Lehr, 46 N.D. 297, 21 A.L.R. 8, 176 N.W. 837, viz: "It is a well established principle that one partner may sue another in an action at law where the partnership is terminated and the claim sued upon is one that can be adjudicated without the necessity of an extensive accounting as where the transactions are few and simple, and the items requiring adjudication are not numerous."
In Prondzinski v. Garbutt, 8 N.D. 191, 196, 77 N.W. 1012, this court held that it could not lend its sanction to the recognition of a remedy at law where the remedy at equity was ample, long established, and by use exclusive, particularly where the subject matter of the suit was peculiarly the subject of equity jurisdiction. Further, "Having reached the conclusions that the facts of the case made it one of equitable cognizance the duty then fell upon the trial court to find the facts themselves. The verdict of a jury or findings of a referee would be simply advisory and entirely subject to his control."
The proceedings had in this case, considered in connection with the fact that two jury trials have been had and that the majority opinion of this court now reverses the judgment and sends the cause back for a new trial, demonstrate the impropriety of requiring the jury to make an accounting of partnership matters and to fully consider partnership accounts in order to determine the rights of the parties. Long ago, this cause might have been determined through the equitable jurisdiction of the court and through findings made, with the verdict of the jury as advisory. The issues involve a partnership accounting. The trial judge should make findings and treat the verdict of the jury as advisory thereto. It is a reproach to the administration of justice that this cause should now be remanded for another trial before a third new jury with further delay and expense, and without any assurance that the next jury will, by its special verdict, cover every issue of this partnership accounting. *Page 20