Wood v. Gault, 2 Md. Ch. 433

Wood v. Gault

2 Md. Ch. 433 | New York Court of Chancery | 1850

The Chancellor:

The Chancellor is not prepared to say, that in the condition in which this case now stands, the act of limitations is a bar to the relief prayed by the bill.

The parties, it appears, entered into a copartnership by an agreement under seal, dated the 1st of January, 1838, to continue for the space of three years from that date. On the part of the defendants, it is insisted, that the partnership terminated in March, 1839, by mutual agreement. That there was a statement and settlement of accounts at, or about that time, and that for the sum agreed to be paid to the complainant, for his interest in, and as the consideration of his retiring from the concern, the defendants gave him their promissory note, dated the 4th of May, 1839, at ninety days, which they paid at maturity, and which they have produced, and proved under the commission.

The plaintiff, on the other hand, insists, that no such account was stated, and settlement made, but that the partnership endured for the full period stipulated in the agreement, and assuming, for the sake of argument, that the question of limitations is not affected by the fact, that the articles of copartnership are under seal, (a point which I do not mean to decide,) the validity of the defence, appears to me, to depend upon the sufficiency of the evidence of the dissolution and settlement as alleged by the defendants. The answer in this respect is not responsive to the bill, and of course, it is incumbent on the defendants to prove the facts. I incline to the opinion, that though the partnership was formed by an agreement under seal, that still, in a court of equity, a dissolution actually made by the parties, though not under seal, before the period limited, would be held effectual as between themselves, and as to third persons having notice thereof. Such is evidently the opinion of Mr. Justice Story. Story on Part., section 268.

But, though this may be the case, it is essentially necessary that the will of the parties, in reference to the dissolution, should be clearly expressed. This is required in respect to all partnerships, whether for a limited period or at will. Ibid., sec. 268. Such being the law, the defendants are under an obligation to *440show, by satisfactory proofs, that the will of these parties that their connection as .partners should be dissolved before the period limited, was clearly expressed.

In my opinion, they have not done so. The evidence of Matthew G. Emory is inexplicit, and believing it all to be true, (and I see no reason to discredit him,) it by no means establishes, with distinctness, a clear agreement to dissolve the partnership. Nor is there any thing in the circumstances and facts offered in the case, necessarily, or perhaps even plausibly, conducing to that conclusion. The balance sheet relied upon by the defendants, so far from showing the plaintiff a creditor of the firm, or entitled to any thing on account of profits, shows the reverse; and yet on the 4th of May, 1839, the defendants gave him their note for $250. It is true, the witness before referred to says, that John B. Emory, one of the defendants, gave up to the complainant, the amount of his indebtedness to the firm, and also said note, as a final settlement, and for the dissolution of the partnership; and that complainant was much' pleased, at the manner in which it was settled, and so expressed himself to the witness. It is quite probable that there was a settlement of accounts between the parties at that time, of some sort; and the witness may be under the impression that the debt due from complainant to the firm according to the balance sheet and the note, were given as a final settlement, and for the dissolution of the partnership, but he does not say he heard the complainant say so, and, therefore, giving him credit for veracity, and conceding his memory to be perfect, after a lapse of ten years, (which may admit of a doubt,) and still we are not furnished with that sort of clear evidence of the intention of the partners to dissolve their partnership which the^law requires. Certainly, ordinary prudence all round, would have prompted the parties, either to reduce their agreement to writing, or to have more satisfactory evidence of it, than was afforded by the casual presence of a young man in their employment, whose statement of what did take place, is rather inference and deduction than positive assertion.

Assuming, then, that a final settlement of accounts, and dissolution of the partnerships have not been clearly made out, and *441it seems to me the plea of limitations is not an answer to the account prayed for by the bill. The bill alleges that the partnership continued until the 1st of January, 1841, and that after the expiration thereof by lapse of time, the defendants who were active partners, proceeded to complete divers jobs of work in said business, contracted for and commenced, during its continuance, for which they received divers large sums of money, of which among, other matter he prays for an account. Now it is impossible to say when these sums of money (assuming the statement in the bill to be true) were received. They may have been received within the period of three years of the filing of the bill, and if so, may have the effect of taking the whole account out of the statute of limitations. At all events, I certainly am not prepared now to say, that limitations are a bar. Nor do I think the defendants have made good their defence, founded upon a stated account. A man who pleads a stated account, says Lord Hardwicke in 2 Atk., 399, must show it was in writing, and likewise the balance in writing, or at least set forth what the balance was. He need not, to be sure, show that it was signed by the parties, as acquiescence in it without objection, for a length of time, will render it a stated account. Willis vs. Jernegan, 2 Atk., 251. Nothing of the sort is shown in this case, no account stated, signed by, or acquiesced in, by the parties. A balance sheet is shown, but this cannot be made to perform the office of an account stated between the plaintiff and the defendants. This balance sheet, was to show the general condition of the firm, and not the particular state of the account between the plaintiff and his partners. Nor is it pretended that the promissory note was given for any such balance, because, assuming the balance sheet to show correctly .the situation of the affairs of the firm, the plaintiff was a debtor, and not a creditor. If the proof shows any thing in opposition to the title of the complainant to an account, it is not that an account has been stated between the parties, but that there was a compromise, and anfassignment of the complainant’s interest in the partnership, for a sum certain. Of this, however, I am *442not satisfied, and, therefore, shall decree an account with liberty to the parties to take proof in reference thereto.

Grafton L. Dulaney for Plaintiff. Edward Hinkley for Defendants.

[An appeal has been taken in this case which is still depending.]