Threadgill v. . Faust

Devin, J. The questions presented by this appeal concern only the counterclaim set up by defendant Eaust. The referee concluded on the facts found by him that the plaintiffs were entitled to recover of the defendants $345.00 on the cause of action set out in the complaint, and his conclusion of law to this effect was adopted by the court below. Upon the counterclaim of the answering defendant Eaust for damages on account of the fraudulent representations of the plaintiffs, whereby *229 be was induced to enter into tbe contract of lease and caused to suffer loss in tbe purchase of machinery and in expenditures for labor, tbe referee found that fraudulent representations were made, and this finding was adopted and concurred in by tbe judge of tbe Superior Court. Rut tbe referee held that defendant was not entitled to recover on bis counterclaim upon two grounds: (1) For that be found that after discovery of tbe true facts of tbe matters misrepresented defendant began and continued operation on tbe premises for five months, and tbe referee concluded that defendants’ conduct and actions constituted an election to waive tbe fraud and affirm tbe contract; and (2) for that defendants Faust and Noble and one 0. V. Larsen, who was not a party to tbe action, were partners in tbe lease, and that there bad been no accounting between tbe partners or dissolution of tbe partnership, and that defendant Faust by bis counterclaim was undertaking to recover judgment for himself and not in behalf of tbe partnership, and tbe referee concluded that all tbe partners were necessary parties to tbe counterclaim, and that defendant Faust was not entitled to recover in bis own behalf on a partnership claim. Tbe judge of tbe Superior Court struck out tbe referee’s finding of fact and conclusions of law as to waiver of tbe fraud, and found as a fact that defendant did not discover tbe true facts as to tbe condition of tbe mine until November, 1935, and adjudged that defendant was not precluded by bis conduct from setting up counterclaim for sums wrongfully paid out by reason of fraudulent representations. In this particular there was evidence to support tbe finding of tbe judge, and bis ruling thereon was in accord with tbe decisions of this Court. May v. Loomis, 140 N. C., 350, 52 S. E., 728; Wolf Co. v. Mercantile Co., 189 N. C., 322, 127 S. E., 208. Tbe referee’s findings that defendants were partners with Larsen in tbe lease and operation of the mine, and that defendant Faust under bis counterclaim was undertaking to recover judgment for himself and not in behalf of .the partnership were stricken out by tbe court, and, instead, the court found as a fact “that tbe answer and counterclaim was filed by Faust for and on behalf of himself and bis partnership, and tbe recovery sought in tbe further defense and counterclaim contained in said answer is for tbe benefit of said Faust and bis firm,” and tbe court struck out tbe referee’s corresponding conclusion of law, and adjudged that defendant Faust bad tbe right in this action to seek recovery for himself and bis copartners, Noble and Larsen. Tbe finding of tbe judge in this particular does not seem to be supported by any evidence appearing in tbe record before us. Tbe defendant Faust filed answer for himself alone, set up counterclaim seeking recovery for himself, and made no reference to tbe existence of a *230 partnership with others in relation to the transactions sued on. In the hearing before the referee defendant Faust testified: “I brought this suit in my name and am undertaking to make recovery as I made the investment individually. Mr. Larsen is not included because he has nothing to lose. Noble and Larsen have nothing in the investment. There are three partners to the contract — Noble, Larsen, and myself.” The power of the judge of the Superior Court, upon exceptions duly filed to the report of a referee, to set aside findings of the referee and to make other and additional findings of his own, as authorized by C. S., 578, and the uniform decisions of this Court, is limited by the established rule that there must be some competent evidence to support his findings. Dent v. Mica Co., 212 N. C., 241; Anderson v. McRae, 211 N. C., 197; Martin v. McBryde, 182 N. C., 175, 108 S. E., 739. In the absence of any evidence adduced in the hearing before the referee to support the judge’s finding on this material matter his ruling thereon cannot be upheld. Therefore it follows that, when the finding of the referee has been stricken out and the finding of the judge in lieu thereof is unsupported by evidence, there is no basis for the judgment, and it must be vacated and the cause remanded to the Superior Court for proper determination of the matters raised by the pertinent exceptions to the report of the referee. Coleman v. Hood, Comr., 208 N. C., 430, 181 S. E., 280; Wilson v. Allsbrook, 203 N. C., 498, 166 S. E., 313. The general rule in this jurisdiction is that one partner may not sue in his own name alone, and for his own benefit, upon a cause of action accruing to the partnership. The action must be prosecuted in the name of the real party in interest. C. S., 446; Vaughan v. Moseley, 157 N. C., 156, 72 S. E., 842. “It is the general rule that in all suits relating to a partnership all the partners are necessary parties, and the action must be brought in the name of the partnership.” Roller v. McKinney, 159 N. C., 319, 74 S. E., 966; Cain v. Wright, 50 N. C., 282; Heaton v. Wilson, 123 N. C., 398, 31 S. E., 671; Allen v. McMillan, 191 N. C., 517, 132 S. E., 276; 47 C. J., 957. While objection on this ground, ordinarily, must be raised in apt time by proper plea, in the instant case the fact of the partnership agreement did not appear in the pleadings and was not disclosed until the taking of testimony before the referee, who thereupon ruled that the one partner could not maintain action on a claim pertaining to the partnership. Hence it may not be held that the objection was waived. Vaughan v. Moseley, supra. In view of the opinion of the trial judge that there was an error in the calculation of the amount of the recovery and his attempt at a subsequent term, over the objection of appellants, to correct the mistake, and upon consideration of the affidavits filed in support of plaintiffs’ *231 motion in this Court for a new trial for newly discovered evidence on tbe question of tbe amount of defendant’s damages, we deem it proper, and so order, tbat additional evidence be taken or a new bearing be bad as to tbe amount of defendant’s counterclaim, in tbe event be is found entitled to recover tbereon. It is ordered tbat tbe judgment appealed from be vacated, and tbat tbe cause be remanded to tbe Superior Court of Yancey County for further proceedings not inconsistent witb tbis opinion. Error and remanded.