143 Mo. 450 | Mo. | 1898
This is an action by the executrix of R. T. Willis, deceased, to recover one half of the amount of two notes and interest executed by the firm of Willis & Barron, composed of R. T. Willis and P. J. Barron toR. T. Willis in his lifetime. The petition alleges the partnership of Willis & Barron in 1890, the execution of the notes, the death of Willis in 1891, the
Defendant admitted the partnership, the execution of the notes, the appointment of plaintiff as executrix, but averred there had never been an accounting between defendant and R. T. Willis, and charged that Willis had drawn out partnership assets in excess of his share to an amount greater than the notes, and prayed for the appointment of a referee, and for an accounting. The reply was a general denial of the answer.
There was a judgment for plaintiff in the circuit court from which defendant appealed to the Kansas City Court of Appeals. That court upon a division of opinion certified the cause to this court. Appellant insists upon two propositions to reverse the judgment. First, that an action at law can not be maintained by one partner upon a promissory note executed to him individually by the partnership of which he is a member. Second, that the court erroneously excluded evidence tending to show that R. T. Willis in his lifetime drew out of the partnership funds, in excess of his share, more than enough to pay off his share of the notes sued on.
I. At common law partnership contracts were construed to be joint only, not joint and several. As a consequence of this rule in actions by or against partners it was necessary that all the partners should join as. plaintiffs or be joined as defendants. A further consequence of this doctrine was that a partner could not sue a firm of which he was a member on a note executed by the firm to himself, and if a person were a
Recognizing that this rule existed at common law,
„ This conclusion does not militate against the well settled doctrine that an action of assumpsit at law can not be maintained by one partner against another for a balance owing on the firm account in the absence of an adjustment of the partnership affairs. Scott v. Caruth, 50 Mo. 120; Bond v. Bemis, 55 Mo. 524; Smith v. Smith, 33 Mo. 557.
To say that one partner could not sue another at law is stating the rule too broadly even at common law. Chief Justice Marshall, in Van Ness v. Forrest, 8 Cranch, 30, called attention to this error. In that case it was ruled that a promissory note given by one member of a commercial company to another member for the use of the company would support an action at law by the promisee in his own name against the maker, notwithstanding both parties were partners in that company, and the money when recovered would belong to the .compapy, the Chief Justice saying: “The principle that a company can not sue its members does not apply to the case, nor does the principle that a partner can.not sue a partner on a partnership transaction apply to any case where a note is given for money, not to a firm, but to an individual member.” So in Mitchell v. Wells, 54 Mich. 127, one partner sued another on a note, and the defense was that it was connected with partnership transactions and dependent on them, and paid by credits. It was insisted there as here, that the remedy was in equity alone, but the court said, “It is a legal obligation in
So in Morrison v. Stockwell's Adm’r, 9 Dana (Ky.), 172, the action was upon a promissory note payable to James N. Morrison, executed by “Morrison & Stock-well,” of which firm Morrison, the plaintiff, was a partner. The Court of Appeals of Kentucky through Chief Justice Robertson, said: ‘ ‘The fact that Morrison (the plaintiff) was both obligee and apparent obligor, should,, per se, have no other legal effect than that of making the note the single obligation of Stockwell. . . . Morrison’s incapacity to make a contract with himself did not affect the capacity of Stockwell to make a binding contract with him on one side and in their joint names on the other side. The only reason why Morrison was not bound as an obligor did not apply to Stoelaoell. There was then a legal obligation and it was of course the single obligation of Stockwell.” In Bonnaffe v. Fenner, 6 Sm. & M. (Miss.), 212, the Supreme Court of Mississippi said: “It is laid down as a general rule that where one partner has a claim upon his copartner for a sum of money due on account of the partnership, but not constituting the balance of a separate account, or a general balance of all accounts, he can not recover by action at law;” But this rule has its exceptions. A prominent exception takes the place of the rule when the sum sought to be recovered is separated from the partnership account. Collyer on Part. 158 and 148. The making of a promissory note by several partners in favor of another is an acknowledgment of a separation of the sum from the partnership account. Smith v. Lusher, 5 Cow. 688, and the same court followed this precedent in Sturges v. Swift, 32 Miss. 239, and Anderson v. Robertson, 32
But the question is settled in this State by the decision of this court in Faulkner v. Faulkner, 73 MA. 327, to which we have not been referred, in which it was unanimously held that the note being the joint and several contract of each maker, the plaintiff could recover at latv and would not be driven into equity, the court, while admitting the common law rule, saying, “This principle, however, does not apply even at common law except where the contract is joint, and not where it is (as are all contracts in this State) both joint and several.” Smith v. Gregory, 75 Mo. 121.
II. Having disposed of plaintiff’s right to sue, it remains only to be seen whether the answer set up an equitable defense requiring the case to be heard by the chancellor. It will be observed that defendant admits the partnership and the execution of the note. He pleads payment and a counterclaim of an unadjusted partnership account. He does not state any account nor show cause why he can not. The defense of payment is of course a legal defense and was heard. Whatever may be the law in other jurisdictions it is the settled law of this court,that an unsettled partnership account can not be pleaded as a counterclaim. Wright v. Jacobs, 61 Mo. 19; Leabo v. Renshaw, 61 Mo. 292; Jones v. Shaw, 67 Mo. 667; Berthold v. O’Hara, 121 Mo. 88.
There is moreover no sufficient pleading of any equitable defense. Upon principle, and the weight of authority we think it is clear that a mere suggestion of an accounting, and an-equitable defense, will not oust a court of law of its jurisdiction, but a party must go further and state some specific ground for invoking the jurisdiction of equity. This the defendant has not done. A careful reading of the evidence offered by
The judgment of the circuit court is affirmed.