38 P. 185 | Or. | 1894
Opinion by
The questions suggested by this record are two: First, where one gives a promissory note to his retiring partner, covering partnership funds advanced by the partner so retiring, and used in the business, can failure of considera
1. It is contended that when the one thousand eight hundred dollars for which the note was given was put into the business by Daniel Wilson, being a contribution to the capital invested, it became the property of the partnership; that this partnership investment or property constitutes the consideration for the note in question; and that, being the property of neither partner, but of the copartnership, It could not constitute a consideration moving from Daniel Wilson to the defendants, and therefore would not support the note. The purpose of the evidence offered and refused was to show that at the time this note was given, there had been no settlement, either partial or complete, of the partnership business, and that, upon a final settlement of the partnership, there would be nothing due the the plaintiff. It is alleged in defendants’ answer, however, that Daniel Wilson, after he had expended about two thousand three hundred and eighty dollars, withdrew from the partnership, and that W. C. Wilson promised to pay him this amount on condition that he should make it out of the mine. The note in contest was thereupon executed, covering one thousand eight hundred dollars of this two thousand three hundred and eighty dollars; so that it may be reasonably inferred from the answer and the proofs offered that there was a dissolution of the part
It is also true, as a general rule, that until the accounts of the partners are finally adjusted, or until the affairs of the firm are so far settled as that nothing remains to be done by it or its members except to ascertain the final state of the account between the partners, no action can be maintained by one partner against the other in respect of particular items of account pertaining to the partnership business. But there are exceptions to this general rule, and a prominent one is where the sum sought to be recovered is separated from the partnership account; 1 Collyer on Partnership, § 258; Bonnaffe v. Fenner, 6 S.
2. We are aware of authorities which hold that a promissory note given by one partner to another in settlement of particular transactions of a partnership, prior to the final settlement and adjustment of the general partnership affairs, will not support an action at law; that the maker being under no legal.or equitable obligation to pay that for which the note was given, it is therefore a mere nudum pactum, and can have no greater force or effect than an express promise would have if made under like circumstances in any other form. Of such are Martin v. Stubbings, 20 Ill. App. 398, 9 Am. St. Rep. 621; Stafford v. Fargo, 35 Ill. 481, and Sewell v. Cooper, 21 La. Ann. 583, Without attempting to distinguish or criticise these cases, we note that in them all the doctrine is maintained that it is sufficient to defeat an action upon a note given by one partner to another to answer that the note was based upon transactions touching the business in which the partners were engaged as such,' and that no final accounting or settlement of partnership affairs has been had, and that a mere showing of this state of affairs will defeat the action at law. This recognizes a sort of an equitable plea in abatement, which, in effect, bars the action. It is altogether clear that an accounting between partners cannot be had at law, and, upon principle, a mere suggestion that an accounting is necessary ought not to defeat an action where the parties have, by the giving and taking of a promissory note, expressly recognized that a right of action at law exists. If equitable reasons exist why a defendant should not pay his note in whole or in part, the remedy in equity is ample. At common law equity will enjoin proceedings at law where an unfair advantage is about to be taken, and will proceed to administer all the relief which the particular
3. As to the contention of counsel under the second head,—that they were entitled to show by oral testimony that the note in question was intended merely as a memorandum, and was not to be paid until the amount thereof could be realized out of the mine,—the law is settled by this court adversely thereto: Portland National Bank v. Scott, 20 Or. 423, 26 Pac. 276; see also Burnes v. Scott, 117 U. S. 586, 6 Sup. Ct. 865. We therefore conclude that the evidence offered and rejected by the court was clearly incompetent to show either a want of consideration for the note in question in a court of law under the issues herein, or that the note was intended as a memorandum only, and was not to be binding until the amount thereof could be realized from the mine. The instruction complained of, when taken in connection with other instructions pertaining to the same subject matter, comports with these conclusions, and hence the court below has committed no error either in refusing to submit the testimony offered to the jury or in its charge touching the law of the case.
4. Another question made by the appellants, which is raised here for the first time, is that the plaintiff brings the action in his capacity as administrator of the estate of Daniel Wilson, deceased, and his letters of administration having been issued to him by the probate court of Pacific County, State of Washington, he is therefore a foreign administrator, and is precluded from bringing the action