139 Iowa 253 | Iowa | 1908
The appellee was admitted to the practice of law in the year 1881, and during the succeeding period of nine years had been actively engaged in the business of his profession, first at Sanborn, and thereafter at Sheldon, O’Brien county, Iowa. In the year 1890 his business appears to have been well established, and of growing importance. The plaintiff was admitted to the bar in June, 1890, and on July 28th of the same year the parties entered into a written contract of partnership, which writing, omitting caption and signatures, is in the following words:
This agreement witnesseth: That W. D. Boies, party of the first part, and George W. Roth, party of the second part, have this day entered into a contract of partnership for the practice of the law in its various branches at Sheldon, Iowa, under the firm name of Boies & Roth, in the following manner and upon the following conditions: Second party upon the payment of five hundred dollars ($500), the receipt of which is hereby acknowledged, is admitted as a partner having and holding a one-third interest in and to the library, safe, typewriter, and all office fixtures and furniture, and to be entitled in the future to receive one-third of the profits of the business of the firm, first party the other two-thirds; second party to have no interest whatever in first party’s present business now pending, or in cases wherein he has been*256 retained, or collections or other business except such collections as now appear upon the collection register with no cross (x) in the ■ No.’ column.
Part Second. It is agreed that first party, at his option, at any time may retire from the firm, and in that case second party shall pay him eight hundred dollars ($800) for his interest in the library, office fixtures, and furniture, together with such additional amount as may be agreed upon for property placed in the office by the firm after this date, and in case an agreement cannot be made in relation to the said additions made then the same to be divided according to the interests of the partners; the said amounts to be secured by first mortgage on the whole library, office fixtures and furniture to be paid in equal payments of one and two years at eight per cent., after maturity.
It is further agreed as a partial consideration of ‘ Part Second ’ that in case first party shall retire from the firm that second party shall finish, conclude, and carry on the business of the firm then on hand, and pay to first party one-third of the proceeds arising therefrom. ■ The amount earned by the firm while in existence is to be divided in proportion to the respective interests of the partners. First party always reserves the option to dispose of his interest to some other lawyer, provided such lawyer shall be acceptable to second party as a partner. In case first party elects to retire from the firm and second party is not willing to perform the conditions of the contract in relation to the purchase of first party’s interest as above set forth, then first party shall have the right to pay the second party the $500.00 paid by him to enter the firm, and second party shall retire therefrom, and the partnership stand dissolved.
On April 27, 1903, this action was begun by the appellant, who alleges that said partnership continued until June 1, 1901, when it was dissolved by mutual consent, and that during the entire period of said partnership the greater part of its earnings and income had been paid to and received by the appellee, by whom no accounting had ever been made to him. He asks that an accounting be had, and that he have judgment against appellee for his proper share in the fruits of the partnership. The appellee’s answer admits
The second count of the answer charges that plaintiff neglected the partnership business and gave his time largely to the conduct of his own private affairs and those óf his family relatives, and that the time thus lost by him during the last six years of the partnership was reasonably worth $2,000 per year, for which allowance should be made in the accounting.
The third count of the answer alleges that during said last-mentioned period the plaintiff had earned large sums of money in business dealings and transactions and in services rendered for others, with which earnings and profits he should be charged in the accounting.
The fourth count of the answer repeats the charge that plaintiff neglected the business of the firm, and alleges that by reason thereof defendant was compelled to perform and did perform work and service beyond what would have been required of him had plaintiff done his full duty under the contract, and that his extra or additional service so performed was reasonably worth $12,000. At the close of the trial appellee amended his answer by alleging that prior to the making of the written contract, and as a part consideration therefor, plaintiff orally agreed to devote his entire time and energies to the business and to the study and practice of law, but in fact, after said partnership had Tjeen performed, he neglected the firm business, and gave his attention and time to his private business to such extent that the value of his service to the firm was greatly diminished, and that on or about November 1, 1899, the parties entered into an agreement by which, in consideration of his failure to give his time and attention to the firm business, plaintiff was to make no claim to any partnership interest in the fees or money earned by the defendant after May 15, 1894.
Some claim is also made in argument upon the oral agreements and understandings alleged to have been had between the parties prior to the making of the written contract. This evidence, if admissible at all, goes no further than to show that appellant, in entering the partnership, undertook and promised to the best of his ability to give his time, study, and service to the partnership business, but whether any such express agreement or understanding was or was not had, it adds nothing to the obligation to be implied from the contract as it is written.
As we have already noted, the contract implies the inferiority in value of the appellant’s services, and adjusts the division of income accordingly. As the experienced member of the firm, appellee took upon himself, as both parties apparently expected him to do, the leadership of the firm business, the control and management of its most-important affairs, and, as is usually the case in instances of this kind, the position of the younger member became largely that of collector, clerk, and office keeper. But in all this there was at no timé prior to November, 1899, any,suggestion by either person to the other that the agreed ratio of division of the income was not satisfactory. Appellee says that during this time he did not think appellant entitled to one-third of the earnings of the firm, and did not think he would demand it, but the subject was not mentioned, and he does not claim himself to have then had any very definite idea as to just what appellant’s rights in the firm were. His present contention that' appellant should have nothing in excess of the receipts from the collections and office business, and that he himself should have all of the income arising more directly from his own services since 1894, does not appear to have then been formulated, for he concedes that on several occasions from 1894 to 1901 he paid over to appellant sums ranging from $100 to $1,000. He does not claim that these were loans, but says that he expected appellant to be charged therewith in settling up their partnership business, and we think this conduct is explicable only on the theory of appellee’s recognition of appellant’s right to share in the general income of the firm. The force of this conclusion is emphasized by the fact that none of these pay
To make an entirely satisfactory accounting upon the record furnished us is not an easy matter. Neither party has attempted to state in a single comprehensive account all of the items of receipts and expenditures during the nearly eleven years of the firm’s existence. Appellant has attempted to cover the entire business by stating the account in various condensed groups or schedules, and from a combination of these computes a balance in his favor of something over $11,000. Appellee’s counsel content themselves with denying in whole or in part certain items of receipts and expenditures set forth in the appellant’s schedules, and make a list of other items with which appellee should be credited. The trial court’s judgment is accompanied by no findings of fact showing what items it allowed or disallowed. We regret that the parties did not see fit to have the books and accounts referred to some competent person for a complete and detailed statement of the same. With such a statement before us each disputed item and the effect of its allowance or rejection upon the general result could be readily seen, and the true balance determined with comparative ease. This court cannot attempt to go through books and accounts and build up in opposing columns of debt and credit every item of business in the whole history of an active partner
Amount paid by one Severson . $119 50
“ “ “ “ Nurk . 29 00
“ “ “ “ Lowery . 75 00
“ “ “ city of Sheldon. 104 15
“ “ for electric light .■’ 108 00
“ “ to Clerk Martin ... 135 00
“ “ “ Clerk Armstrong .'. 30 00
“ « “ Heaphy .;..... 45 00
—■ making a total of miscellaneous overcharges and omitted credits of $645.65, for which amount appellee should have due allowance. Appellee is also entitled to credit for expenses. Unfortunately he kept no record of these items,
For services to O’Brien county. $5,000 00
For services to the Harker estate. 8,500' 00
For services to the Davidson estate. 5,000 00
Collected from Royce. 4,652 52
Collected from Bums..... . 200 00
Collected from Reynolds.. 250 00
Collected from Minden & Hickey. 50 00
Collected from Schelser.•.■. 800 00
Collected from Kearney.•. 150 00
Collected from Gould. 100 00
—all of which were collected by the appellee.
Of these items we think the fees in the case of Royce and Schelser had been substantially earned before the dissolution of the partnership, and that no deduction should be made therefrom for services after that date. As to the other items we are disposed to credit the appellee for services rendered after the dissolution of the partnership as follows:
Davidson estate .. $1,000 OO
In the Harker estate. 1,000 00
In the O’Brien county case. 2,500 00
*272 In the Bums case.. . 200 00
In tbe Reynolds case. 150 00
In the Minden & Hickey case. 50 00
In the Kearney case. .¡.. .. . 100 00
In the Gould case... 100 00
This allowance, added to the other items already enumerated, makes a total of $9,245.65, by which sum the net proceeds of the business is reduced to $47,980.73. From this sum appellee expended for addition to library and office furniture still on hand and undivided $1,064.36, leaving net balance for distribution of $46,918.47. Of this sum the appellant was entitled to receive by the terms of the partnership contract one-third, or $15,639.47. He has received in fact $7,628.90, leaving a balance his due from the partnership business in the hands of the appellee of $8,010.92.
In the foregoing computation we have taken no account of the rights of the parties growing out of their investment in the tract of land known 'in the record as the “ Tarr Land.” It is shown without controversy that the land was sold by the parties at a profit, and the matter in dispute relates principally to the proportionate share therein to which they are respectively entitled. The appellant demands one-half, and the appellee concedes to him but one-third. There appears to have been no express agreement between them upon this subject, and, while the transaction was perhaps one not ordinarily within the scope of the partnership business, the land came to them through negotiations with a client for whom they had foreclosed a mortgage upon the property, and the value of their professional services were applied as part payment of the purchase price, and we think the conclusion justified that the parties treated such purchase as a partnership investment, and that the profits therefrom should be divided in the same proportion as their professional earnings. Granting appellee, therefore, two-thirds of the profits arising from the land transaction,
As the record discloses that there is a large number of uncollected and unsettled accounts due the firm, and that some addition to the library and office equipment was made during the existence of the partnership, and no provision having been made therefor in the decree of the district court, it will be necessary that this cause be remanded for further proceedings in harmony with this opinion, and for the entry of a decree making final adjustment of the partnership rights and distribution of its assets. The costs of this appeal will be taxed to the parties in equal share's.— Modified and remanded.