Price v. Drew

Mr. Justice, Westcott: delivered, the opinion of the court;., This is an-'action-of assumpsit brought ¡by ;Drew, against Price. The declaration contained several counts/ The; last four were for money payable by the defendant to the plaintiff, h»' money paid by the plaintiff for'the defendant at his request, for money paid by the plaintiff to the defendant, and for money found tobe due upon an account stated. To these counts' in' the declaration the1 plea’ of never was indebted was interposed, and there was issue’thereon, uThe defendant also plead the statute Of limitations of two years, and a special plea of set-off of. an amount' alleged’to be equal to the plaintiff’s claim and due him by plaintiff for the purchase-monejr of piles and timber furnished by him to plaintiff at his request. To this plea plaintiff replied that he never was indebted ; and to the plea of the statute of limitation he interposed a demurrer, which was sustained. .The first count in the declaration was as follows: “ Eor that the plaintiff and defendant shipped a cargo of yellow pine piles to New York City on their joint account upon the agreement that they would bear equally the expenses thereof and share equally in the profits, proceeds of said shipment of piles. “ That the plaintiff advanced to the defendant on account of such shipment the sum of two hundred and eighty-four dollars; that the expenses on said shipment of piles exceeded the amount of the sale thereof by the sum of one thousand two hundred and four dollars, for which amount a loss was sustained on said shipment of piles which the plaintiff paid, and the defendant thereupon became, and — 679 — was, and is, liable and indebted to the plaintiff for one-half of said-loss besides the. amount-advanced to him:as aforesaid, and no part of the same has been'paid.” To this count the defendant filed the following plea : “ That this court ought not; to have ór take fufthef‘cognizance of the action aforesaid, because he says that‘the said supposed,cause of action,: as:set forth in the first.count of plaintiff’s declaration* is out of the jurisdiction of -this oourt, and is only, .cognizable', if af ail,-,in a. court o.f; equity, which -has: exclusive .jurisdiction ,iñ a matter of partnership.” '. In one branch of-the argument by the appellee .'and plaintiff it is insisted that the plea is to the whole action.,. The commencement-here is not applicable to a plea to a distinct count to the declaration, but the body of the plea* looking to the issues of law. and fact made upon the other counts of the declaration, shows that it is applicable to the first count alone. It is therefore to be considered in the light of a plea going to the first count only, and to no other. To this plea the plaintiff interposed a demurrer, the grounds of which were that it did not tender an issue of fact; that it did not set up facts which show that a partnership existed. This demurrer was sustained. This action is one of the errors here assigned. The questions of law arising upon this demurrer are the most important, are really the controlling questions in this case, and - we therefore consider them first. This demurrer reaches the first count in the declaration, and if it be that it does not set up a" cause of action for which assumpsit. can be maintained, it is immaterial how defective the plea is. Before discussing the matter of the first count in the declaration we will say, however, that the usual and proper method of raising the question here raised is by demurrer. By way of plea to — 680 — simply set up, facts stated in:the declaration and. deny their sufficiency in law, whether such plea be in form in abatement to the jurisdiction or in bar of the action, is not correct. Again, as to the m’atter of this plea, or rather the matter attempted to -be set up by it, that this count was for the recovery of a sum of money arising out of partnership relations .and by the plaintiff alleged to be due and that there had been no settlement of accounts by the partners or final balance struck, or expressed or implied promise to pay any such alleged balance, it has been held that this is not the subject of a plea in abatement to the jurisdiction, but rather of a plea in bar to the action. (2 Harris and Gill, 135; Evans on Pldg., 16.) Such cases, in the opinion of that court, are not merely out of the jurisdiction of a particular court, but are without remedy by the course of the common law, and present a case where there is no legal cause of action in the same manner as if there was a general release of right of action before suit brought. This is the view of the coui’t in Maryland in the case cited. See, however, upon this subject the remarks of Lord Thurlow in Nabob of the Carnatic vs. East India Company, 1 Ves. Jr., 388. But however this may be, if the first count is not good then the judgment upon this demurrer must have been against it. This count sets up, first, that the plaintiff and defendant shipped a cargo of yellow pine piles to New York City on their joint account upon the agreement that they would bear equally the expenses thereof and share equally in the, profits and proceeds. As to this shipment they were; therefore partners. The plaintiff then alleges that he advanced to thy, defendant on account of the shipment two-hundred and. eighty-four dollars ; that, the expenses , incurred. exceeded the-proceeds of .the sales one thousand two hundred and four dollars; that for that — 681 — amount a loss was sustained; that the plaintiff paid it, and that the defendant thereupon became liable and indebted, &c. . ’ Assumpsit is based upon a promise, express or implied. There is here no allegation of any settlement of the accounts connected with the shipment by the partners, no allegation of a final balance struck between them, and no allegation from which any promise, express or implied, by the defendant to pay the particular sums claimed as due arises. The claim is also for one-half of two sums due, one of two hundred and eighty-foUr dollars advanced to defendant on account of the shipment on partnership, and the other for a balance claimed to be due as a balance, ascertained by plaintiff to be one-half of the difference between the expenses and proceeds of sales. Can the plaintiff maintain an action at .law for these sums? We think not. This being a partnership, and there having been no settlement by the partners and no allegation of a balance struck, there is nothing to raise a promise,- express or implied, by one partner to pay to the other any particular sum. An adjustment of the accounts, either as to advances or profits and losses, by one partner cannot be held tó be an adjustment by the other in the absence of authority from the other, and this is true in the very nature of things, whether the partnership be for a single shipriient or “ transaction,” or a partnership of a general character; Again, under this count it cannot be said that either partner is the creditor of the other. The accounts of each are with the partnership, each of the partners compose it, and neither of them can at law sue, because such a suit'would be equivalent to suing himself. Until these accounts are adjusted-, what one partner may owe the firm is not a debt due to the copartner, nor is the indebtedness of- the firm to one of the: members a debt due from the other members to him; See the remarks of — 682 — Lord Cottenham in Richardson vs. The Bank of England, 4 My. & Cr., 165. What-say the books on' this-subject? • In 1 Chitty’s Pleading, (11th Ed.) 45, where,- with 2 Chitty, 213,-we find the most complete collection of. casés On the subject; it is said : In the case of a'partnership, .whether it be-a-general or a particular partnership,, one .partner -cannot .at . law recover his-share-of money received by: the-other: on account of the firm, tinless oh a final balance of -, all,accounts ^'particular-sum be found due- to one partner which the other expressly promises to pay, or unless, there be’an express covenant-to account.”, -The earlier-cases in' 2 T. R., 478; 2 Bing., 170; 3 Bing., 55; 6 B. & C., 149; Holt’s N. P. Cases, 368, are cited to .the. text, and upon examination some of them sustained the doctrine as announced, and others do not. The case in Holt holds that upon a settlement and balance found an implied promise arises.- - The case in 2 Bingham, however, repudiates this doctrine-, expressly referring to the case in Holt as a nisi prius case, and holds that an express promise is necessary. (P. A., 6 B. & C., 79.) The case in 2 Tenn. R. inclines to that view. In the case in 6 B. & C. there was no account settled. The later rule in England, and which is now treated as the settled doctrine in that country, and in many if not in most of the States of the Union, is that if partners finally balance all their accounts and a certain sum be found to be due to one of them thereon, the partner against whom the balance is struck may be sued at law to recover the amount, without there having been any express promise on his part to pay the same. (Wray vs. Milestone, 5 Ex., 21; 1 Bin., 191; 71 Penn. State, 180; 50 Mo., 121; 43 Conn., 66.) In New York and Illinois an express promise seems to”be required. (16 John., 322; 17 John., 84; 1 Wend., 534; 2 Scam., 498; 11 Ill., 154; 60 Ill., 561.) In Massachusetts, contrary — 683 — to the-rule in" any other State, so-far as we have, after careful examination, been able to ascertain, it is held that assumpsit will lie to recover a'final.balance of a partnership account, and that this extends to all cases'in 'which -the rendition of the judgment will be an entire termination of the partnership transactions, so' that no further cause of action can grow out of them.” In that State it is not deemed necessary that there should have been-a settlement 'by the partners or final balance struck. (11 Pick., 81; 111 Mass., 249.) - It is admitted,'however, that this is contrary to-the rule at common law and-the rule prevailing, in-other States. A'strong reason for asserting-this rulé is that- there were no Courts of Equity in that State, and we presume this had great weight in establishing the doctrine. In-this State we have Courts of Equity, and we must, follow'the' rule as announced by the English and American courts. - But it is said that the present case is-that of a particular1 adventure, and not of a general partnership for commercial purposes. This is true, but we do not think as applicable to this case the rule is varied. •The case of Beville, et al., vs. Hammond, 6 Bar. & Cress., 79, was a case where two persons undertook to procure a cargo for a vessel for a certain commission, and the rule was applied to it, Abbott, C- J., remarking: “ It is a general rule that between partners, whether they are so in general or for a particular transaction only, no account can be taken at law. These parties have never settled any account between themselves, and the only ground on which this ease is distinguishable from former decisions is that all the moneys have beeu received and paid by one partner. That certainly makes an account between them less necessary, but if we therefore held this action to be maintainable, I think we should be breaking down a general rule and introducing nice distinctions which it- is much better to — 684 — avoid.” The case of Leidy vs. Messinger, 71 Penn. State, they, as partners, purchased for $1,000 one share of the stock of an unincorporated oil company. Messinger paid $500 in cash- and Leidy gave his note for $500, which was passed in payment for the purchase-money of the land of the company, placed by the vendor in the hands of counsel for collection, and was unpaid. The company became insolvent, and it was held that Messinger in -assumpsit could not recover from Leidy the one-half of cash paid by him, and that Leidy’s liability to Messinger resulted from the partnership relation, and Messinger could not recover until there was a settlement of their accounts and balance struck. The case of Sprout vs. Crowley, 30 Wis., 187, was the case of- a “joint adventure.” The court remarked that: “ In the absence of fraud or express agreement, or other circumstances rendering the case exceptional, one partner has no claim against his copartner individually on account of partnership transactions until a final settlement of the partnership affairs, although such settlement would show a balance in favor of the former, and until such final settlement the general rule is that the firm and not the individual partner is the debtor.” But it is insisted that this is the case of a partnership in a “ single transaction,” and that one of the partners may, in an action of assumpsit for money paid to his use, enforce from the other contribution towards a debt which he may have discharged but to which they were jointly liable. This is the text of Glow on Partnership, §79. This writer, in support of this proposition, cites 8 T. R., 186, and 2 Bing., 132. The case in 8 T. R. was that of a judgment in tort against two defendants where there, was a levy of the whole damages on one. This one sued for a contribution from the other. Lord Kenyon said that he had never before heard of such an action where the judgment was for — 685 — a tort, and that it would be otherwise if the judgment had been in assumpsit. No one, 'certainly, can see any partnership in a single transaction or otherwise in this case. There is no contribution in tort. Each tort feasor is liable for the whole without right of contribution. Unquestionably where there is a judgment in assumpsit against two and one pays the entire amount, he is entitled to.contribution. This is all that is here said or decided. The case in 2 Bing., 132, was not a case of an action between partners. The action was by Evans against Yeatherd. The defence was that Yeatherd was in partnership with Follett, and that the articles sold were delivered to him on the joint account of Yeatherd and Eollett, and that they had been paid for by remitting a debt due from the vendor, who brought the action to the firm of Y. & F. The court held that because, either at law or in equity, Yeatherd would be entitled to contribution from Eollett, he, E., was an interested witness. I cannot see how this case sustains the text, so far as it concerns partners in a joint adventure, if that is what it means. The other case cited from 2 Black., 917, I have not been able to examine. The present ease, however, is not the one stated in the text where contribution is sought for a joint debt paid by one of two joint debtors who may be partners with reference to that debt alone. In speaking of the cases cited by Gow in the second edition of his work to sustain his proposition, there somewhat modified, and of others of like character, Parsons, in his work on Partnership, says : “ These eases seem to be very far from establishing the proposition for which they are cited, which • is that. through an action of assumpsit for money paid to his use one partner may enforce, contribution from the other in a.ease where they were-partners in a single transaction. In some of them are to be found dicta' of — 686 — Judges asserting the general right of' contribution between joint defendants.” ’ (This is the case in 8 T. R., as we have seen.) “ In some contribution is actually enforced, but between persons who are not pai’tners but simply joint contractors or otherwise jointly connected, while in the others (2 Bing., 132,) the question before the court is the competency of a witness, his competency depending upon his liability to contribute, either in law or in equity, to a demand which his testimony establishes. The distinction, if any, which these cases suggest, is one between persons who are simply joint contractors and between those who hold to each other the closer relation of partners; that is, it is between parties who • are partners and those who are not, and not between different kinds of partners.” See as to this- difference, 5 Gray, 463, 468. There is another class of cases which may be called the “single item” cases. (5 Wend., 274; 1 Stark., 78; 16 Wend., 603; 4 Burr., 283; 6 N. H., 551. See citations in Parsons on Part., 3d Ed., note, page 309.) These are principally cases where there has been some special transaction in reference to the partnership in which a balance has been admitted to be due by one partner to the other and a promise to pay, before any final winding up of the partnership. 16 Wend., 601; 4 Burr., 281; 6 N. H., 547. The case of Robson vs. Curtis, which is usually cited in this connection, and upon1 which most of the American cases are founded, is rather in conflict with the cases just mentioned. In that case A., receiving a bill of exchange in payment for part of a lot of cattle jointly purchased by himself and B., endorsed the bill to B., B. endorses it over, and the bill being dishonored, B. promised to pay A. half of the amount if he would take it up. A. paid it, brought his action and was non-suited, because a part of the cattle jointly purchased remained over. But however this may — 687 — be, the ease here is not one which, .in any-sense, or within the principles established by any of these cases, can be called a single item case. The count in the declaration claims a balance on account of advances to the partnership by the plaintiff for his partner, and a balance due for losses paid by him in the matter of the joint venture, as shown by an account of the sales and expenses. Our conclusion, upon an examination of the facts set up in this count, is that it fails toset up any legal cause of action in that no settlement by the parties is alleged. There is no promise, express or implied, to pay any sum. What is alleged shows that the plaintiff, certainly to the extent of the losses, is a creditor of the partnership and not of his partner.. The advances made being on account of the shipment would seem to be an advance by the partnership through him to his co-partner, and as to this, therefore, the defendant is the debtor of the partnership and not of the plaintiff. It is said that the partnership is dissolved. That may be true in a general sense, but the rights of the partners still exist for the purposes of adjusting their accounts, and they must seek the forum appropriate to such relief. The demurrer to the plea to the first count in the declaration should have been overruled. The next question here raised is that arising upon the demurrer to the plea of the statute of limitations of two years. We think this not a good plea to the indebitatus count in the declaration for money paid, &c., for, so far as it is concerned, the action is upon a contract, obligation or liability, not founded upon an instrument of writing, and the limitation in such case is three years. The demurrer to this plea should therefore have been sustained. Without going into an elaborate statement of the facts appearing upon the testimony, we will simply state that after careful examination we find merit in the case, and — 688 — that Price should in equity settle this matter upon the basis of partnership dealings, but we do not find a ease from which a promise, express or implied, arises to pay any balance, or to pay - any money, upon which an action of assumpsit will lie. As to the statute of limitations applicable to the case made in the first count of this declaration, we will say that it is neither an action for goods, wares and merchandise, nor for any article charged in a store account, within the meaning of the- statute. What the limitation is to his equitable right to have an account of the matters of the partnership and decree for any balance to be found due, is a question which a court of equity, not this court, must determine. As to the present action we think it proper to say, however, for it relates to the nature of this action viewed in. reference to the statute of limitations, that it is, in our opinion, clearly an action within the meaning of the first clause of the Sixteenth Section of the Statute of Limitations, Chapter 1869, Laws. Judgment reversed, and case remanded with directions to set aside ■ the finding, and for further proceedings conformable to law and consistent with this opinion.