17 Gratt. 321 | Va. | 1867
delivered the opinion of the court:
Two cases have been decided by this court, which. have a material bearing on the one now under consideration, viewing it as a suit in equity for the settlement of a partnership account, and without reference to the effect of the settlement, which will be presently mentioned. Those cases are Coalter v. Coalter, 1 Rob. R. 79, decided in 1842, and Marsteller v. Weaver’s adm’x, 1 Grratt. 391, decided in 1845. In the former it was held, first, that an action of account by one partner against his co-partners for a settlement of the partnership accounts, must be commenced within five years next after the cause of action accrued, and unless so commenced will be barred by the statute of limitations—1 R. C. 1819, ch. 128, § 4, p. 488; for such accounts do not concern the trade of merchandise between merchant and merchant, and therefore are not embraced by the exception to the statute; and secondly, that a suit in equity between such parties for such a settlement, being a substitute for the action of account, should, like that action, be brought within five years, and if not brought within that time, will be barred by the statute of limitations. In the
The business of the partnership in this case commenced in March, 1837, and ended in March, 1839. The original suit for the settlement of the account was brought in December, 1856, and would have been barred by the statute of limitations according to the case of Coalter v. Coulter, but for the fact that there were debts due to the firm outstanding within five years before the suit ivas brought, one or more of which appear to have been good; and it appears also that during that period one or two debts due by the firm were paid; under which circumstances it seems that, according to the case of Marsteller v. Weaver's adm'r, the suit would not be barred by the statute, at least as it stood in the Revised Code of 1819.
How far does the change made of that statute by the Code of 1849, ch. 149, § 5, affect this case? The Code provides that an action by one partner against his co-partner, for a settlement of the partnership accounts, may be brought until the expiration of five years from a cessation of the dealings in which they are interested together, but not after. The time prescribed by the statute does not begin to run as to any of the partnership dealings until there has been a cessation of all of them. But what acts are comprehended in the word “ dealings ” in the meaning of the Code, may be a question of some doubt. Is the word confined to the active operations of the partnership during its continuance, or does it embrace also any act done after its dissolution in winding it up ; such as the collection or payment of outstanding debts due to or by the firm, and even good debts due to the firm, outstanding when the suit is
The statute of limitations not being a bar to the suit, it seems to follow, as a necessary consequence, that laches and lapse of time constitute no such bar; but they may, notwithstanding, have a material effect in deciding upon particular claims which may be asserted in the course of the settlement of the partnership account. Of course I do not mean to say that laches and lapse of time constitute no bar in any case in which the statute does not constitute one. ' When the statute is a bar there is no need of any bar from laches or lapse of time. The latter bar peculiarly applies where the former does not. What I mean to say is, that if the cause of action be one to which the statute applies, but the lapse of time since it accrued be not such as to bring the case within the statute, laches and lapse of time cannot in themselves constitute a bar to the suit. Though the time prescribed by the statute may not begin to run until the business of the partnership is wound up, yet the parties may have a partial settlement of the partnership account before, and may bring a suit for such a settlement. It is not necessary that a suit for a settlement of the partnership account should be delayed until all the debts due to the firm have been collected, and all due from it have been paid. Circumstances may delay the collection of a debt until long after all the other business of the partnership
Where there has been a partial settlement of a partnership account, and there is no valid objection to the settlement, it is conclusive upon the parties to it as far as it goes, and leaves open only the unsettled portion of the account. The time prescribed by the statute of limitations begins to run at the time of the settlement against the cause of action arising therefrom, but the transactions not embraced in the settlement remain unaffected by the statute, as if the settlement had never been made.
In this case there was a settlement on the 12th day of March, 1845, between John W. Foster, acting for himself and Marsten Foster, and William Rison, witnessed by an agreement in writing under the hands and seals of the parties, and described in said agreement as “ a full settlement ” of the partnership: upon which settlement said Rison executed his bond for the sum of $575.75, in full of all demands which said John W. and Marsten had against said Rison on account of said partnership, except a certain acceptance due said John W. and a cer
This agreement, if valid, was a full and final settlement of the partnership account, at least as between said Fosters and Rison, except as to the parcel of debts due the said firm which were considered as insolvent. And in order to succeed in this suit for a general" settlement, William Rison and Marsten Foster, or his representative, must therefore, in some way, get rid of the said agreement.
How do they seek to get rid of it? On two grounds: First, on the ground that it was not authorized by Mars-ten Foster, but made without his consent or knowledge; and secondly, on the ground that material mistakes and omissions were made in the settlement to the prejudice both of Marsten Foster and William Rison.
I will examine these objections in their order; and, first, that the agreement was not authorized by Marsten Foster. If it is charged, it certainly is not proved, that J. W. Foster was guilty of any fraud in making the settle
(The judge then proceeded to consider the evidence on the subject; and then proceeded as follows:)
I am therefore of opinion that J. W. Foster had authority from Marsten Foster, express or implied, to make
Secondly—Were any mistakes or omissions made in the settlement to the prejudice of Marsten Foster and William •Rison, or either of them ?
It is a curious fact, that neither in the original bill nor in the answer of Marsten Foster thereto, is there any complaint of any such mistake or omission. In these the settlement is impeached only on the ground of want of authority, as before stated. In the cross-bill filed in October, 1858, after the death of Marsten Foster and by his executor, errors in the settlement are, for the first time, charged, and the charge is repeated in the answer of Wm. Rison to the cross-bill.
(The judge then proceeded to consider the first error in the settlement alleged to have been made. This relates to the two sums of $ 615.25 and $294.43, which it was claimed should have been credited to Marsten Foster. He then proceeded as follows:)
The next error alleged in the settlement is, that John W. Foster was credited with $ 975 as for merchandise put in by him from Clai'ksville.
(The judge then proceeded to consider the evidence in relation to that alleged error. He then proceeded as follows :)
It is possible, after all, that the account given of this matter in the examination of Wm. Rison is the true one, and that the credit of $975 given to J. W. F. in the settlement was in fact given by mistake. But whether the fact be so or not, I think it is not proved by that degree and amount of evidence which ought to be required under the circumstances, and that in attempting to correct such supposed mistake, there would be danger of doing injustice to the estate of J. W. Foster. Ten years elapsed after the settlement was made and before the death of J. W. Foster, during which time nothing was said about any mistake in the settlement, nor until more than a year thereafter when the original bill was filed. Had the suit been brought in his lifetime he might have explained the transaction as he was a party to it, and probably knew, or had the means of showing, a'.l about it. At all events he would have had the benefit of his answer. I am therefore of opinion that it would be against public policy and the principle of our decisions on the subject to afford relief in such a case, at least without the strongest evidence to sustain the claim. As was said by Allen, J. (with whom the rest of the court
The only remaining error alleged in the settlement is as to the charge to Wm. Rison of $220.65 and $347.31 for interest on the balance of capital not returned to his partners. It is a sufficient answer to this objection that the matter was argreed in the settlement, and is concluded by it if the settlement be valid and binding, as I think I have shown that it is; at least as between the Fosters and Rison. The exception of Rison to the commsssioner’s report, which was overruled by the court below, rests on the same principle with the objection just disposed of. The court below sustained the appellants’ fifth exception to the commissoner’s report, “because the commissioner has allowed to the said Wm. Rison the sum of $ 5U3.0S commission for collecting the debts of said concern of Wm. Rison & Co.; ” and the counsel for Rison complains that this was error. The same answer may be made to this objection as to the one just disposed of, that the subject of it is concluded by the settlement.
I have now fully considered the case so far as Wm. Rison is concerned, and so far as it is affected by the
The only money charged to have been received by J. W. Foster from M. Foster, on account of the partnership, was the two sums of $615.25 and $294.43 received in April and May, 1837, which havé already been the subject of observation in this opinion. And in regard to those two sums of money, as well as any money which John W. Foster may have received from William Bison for Marsten Foster on account of the latter’s interest in the partnership assets, Marsten Foster, to the extent of any just claim he may have had thereto, had a legal remedy for the recovery thereof, which has been long since barred by the statute of limitations. There was no partnership between John W. and Marsten Foster; so that the account between them does not stand on the footing of a partnership account, though it may be composed of items for money received by one on account of the interest of the other in the partnership assets. The case stands upon the same footing with any other case in which money is had and received by one party for and at the instance and request of another. I have, already, I think, shown, that whatever money
The settlement of March, 1845, was a full and final settlement of the partnership account between the Fosters who contributed the capital and Rison the only acting partner, with the single exception of the debts due to the concern, which were considered as insolvent, amounting to $1,532.70, and which were left with said Rison for collection on the joint and equal account of the parties. They remained partners only in regard to the matter of
• Then the only remaining question is, was there any fraud or concealment on the part of J. W. Foster in regard to any money received by him for M. Foster on account of the partnership ? If there was, and the effect of such fraud or concealment was to keep M. Foster in ignorance of the receipt of such moneys or prevent him from suing for it, until within five years before the filing of the cross-bill, then the statute of limitations is not a bar to the suit. The mere fact that Marsten Foster was ignorant of the existence of any debt which may have been due to him by J. W. Foster until within five years before the institution of the suit, will not be sufficient to repel the bar of the statute. To have that effect, such ignorance must proceed from the fraud of J. W. Foster, which ought to be plainly charged by the pleadings, and clearly shown by the proofs. The charge of fraud in this case
Something may be due: I might go farther and say that probably something is due from the estate of John "W. to the estate of Marsten Foster on account of the transactions stated in the bill. But tSe possibility or even probability that something is so due, is not enough to entitle the plaintiff to »n account. Independently of the bar of the statute, it would be a sufficient answer to his claim for an account, that one cannot be now settled with any reasonable expectation of doing justice to the defendant, and that the plaintiff’s testator is in fault for not having sooner asserted and prosecuted his claim. It may be said that John W. Foster was also in fault, for not having himself rendered and settled an account. Non constat that he did not render and settle an account. He is not now here to speak for himself. But concede that he was equally in fault with the other partners, that is not enough to make him liable. In such a state of equality the condition of the defendant is better than that of the plaintiff. It may be further said, that Mars-ten Foster did not know7 that anything was due to him until shortly before the institution of the suit, and was led to believe the contrary. It certainly does not appear, as I have already shown, that John W. Foster led him to such belief, or did anything to conceal or cover up the transaction. Marsten Foster knew that he was a partner in the concern, and it was his business to enquire into it and inform himself of its condition. If he chose to depend upon another to do this for him, he must take the consequence of neglecting his own duty, and having lost his opportunity of delay he cannot excuse himself on the ground of want of information, unless it proceeded from the fraud of his adversary, which must be proved. Vint
Upon the whole, I am of opinion that the decree should be reversed and all of the bills dismissed with costs; but without prejudice to any claim-which the representatives of John W. and Marsten Foster or either of them may have for an account of the debts due to the firm of William Bison & Co., which were considered as insolvent and left in the hands of William Bison for collection at the time of the settlement of the 12th of March, 1845; and also without prejudice to any claim the representative of said Marsten may have to the balance or any part thereof due upon the bond for $575.75 given upon the said settlement by the said Bison to the said John W. and Marsten Foster.
Degree reversed.