Houston v. Polk

EvANS, J. 1. In the brief of counsel for the plaintiffs in error in the main bill of exceptions it is urged that the demurrer to the answer should have been overruled, because, being in the nature of a special demurrer, it could not be filed after the first term. It appears, however, that no such point was raised in the exceptions to the auditor’s report which assigned error upon the sustaining of the demurrer, it being contended merely that the paragraphs of the answer attacked were legally sufficient to withstand the demurrer; and the question as to whether the demurrer was properly sustained must be decided on the points made in the exceptions to-the auditor’s report and passed upon by the court below. We have no hesitation in holding that the Houstons were not entitled to-charge against the share of the net profits due Polk any proportion of the amount estimated as representing the depreciation in value of the plant and machinery of the partnership. Conceding that an electric lighting and power plant will, as contended, wear itself out [108] in ten years, we fail to see how it can be said to follow, where such .a plant is owned and operated by a partnership, that the burden of this depreciation should be borne by one partner to the exclusion of the others. If this item of depreciation was a legitimate charge against Polk, it was an equally legitimate charge against the Hous-•tons, and the account between them on this score stood balanced. It is not contended that this claim grew out of any special agreement between the partners made when the partnership was formed; ■or that any such agreement existed. The case of Tutt v. Land, 50 Ga. 339(4), is directly in point; and while counsel for the plaintiffs in error made a provisional request that this case be reviewed, we can not see any good reason why it should be disturbed, .as it seems to us to be founded on sound reason and unanswerable logic. It was there held that where a mercantile partnership was formed, one partner furnishing the stock of goods and the other his ■skill and services, on a dissolution of the partnership the former was not entitled to claim for the ordinary, natural depreciation of ■the goods and fixtures of the store. The case of Park v. Tennille, 20 Ga. 118, with which it is contended that Tutt v. Land is in conflict, is not in point. No question of the settlement of partnership .accounts was even remotely involved. It was merely decided that where, by the terms of a marriage settlement, the husband had a "title to the “annual increase or profits” of a plantation, without the power to dispose of the corpus of the estate, the phrase quoted, in ■order to give effect to the evident intention of the instrument, .should be- construed to mean the net rather than the gross profits, .and that creditors of the husband could not levy upon' crops which ■constituted the gross profits of the plantation. We fail to see how ■this decision in any manner stands in the way of the decision in Tutt v. Land, supra, or what possible bearing it has upon the case now under consideration. 2. The portion of the answer in which it was sought to set off ¿against the plaintiff’s demand a claim for the cost of installing a water-wheel after the partnership had been dissolved was in the following language: “That it has been necessary for defendants •to instal a new water-wheel in said plant since the construction of the same by said Polk, at a cost of $416.67, which is a proper charge .•against the said Polk and against said receipts, because defendants .. . relied on said Polk as a skilled mechanic for the proper con [109] struction of said plant. But instead of using the proper skill and judgment in tbe construction of said plant, which defendants expected of said Polk, said Polk installed a water-wheel, over the protest of defendants, in said plant, which was entirely too large for the power of the stream, and did not yield for consumption by the-machinery the amount of power that should be obtained from a. stream carrying the volume of water carried by the stream in question. The placing of this wheel in said plant, and the consequent necessity of replacing it by a new one in so short a time after the-construction of said plant, was due entirely to the negligence and. want of skill in said Polk, who represented to defendants that he' was entirely competent to properly construct the plant in question, and the cost of said new wheel is a proper charge against said Polk,, as the same is a direct damage to defendants.” It will be observed that there is no charge that Polk was guilty of bad faith in the part that he took in the installation of the original water-wheel. Indeed the averments distinctly negative the idea of fraud or bad faith, and place the entire blame for the alleged damage done upon the-lack of judgment and skill of the plaintiff. It is well settled that, for such damage occasioned by the act of a partner the firm itself is. liable, and the individual partner can not be held to respond. See 22 Am. & Eng. Ene. L. (2d ed.), 128 (10 b), where the principle is. announced that “A partner is not solely liable for losses caused merely by his lack of discretion or good judgment, not amounting' to negligence or bad faith, but the loss in such cases must fall upon the partners as a firm.” While, in the present case, the answer averred in general terms that the plaintiff had been negligent in installing the original water-wheel, the other averments in the same paragraph distinctly negative this idea; for it affirmatively appears that the expediency of installing a wheel of the size described was called in question at the time of its installation; that the plaintiff and the defendants differed on the subject; that the defendants relied upon the supposed superior skill of the plaintiff, and that whatever error he committed was one purely of discretion and judgment. Indeed it was not claiñied that there was any negligence in installing the wheel, but merely that through a mistake of judgment the plaintiff installed one that was too large for the purposes for which it was intended. We are clear that there was no error in striking this paragraph of the answer. [110] 3. It is contended by counsel for tbe Houstons that the amendment to the plaintiffs petition, in which it was alleged that W. J. Houston Jr. was cognizant o'f the contract of dissolution between the plaintiff and Houston Sr. and agreed to the terms of the contract, should not have been allowed, because its effect was to bind Houston Jr. by thev terms of a contract to which he was not a party. In view of all the allegations of the petition, as well as the contract which was made an exhibit thereto, we do not think this contention is well founded. On its face the contract was merely one whereby Houston Sr. purchased from Polk the interest of the latter in the partnership. Apparently, Houston Jr. parted with nothing and acquired nothing by this instrument. But in a suit by Polk against the surviving partners for his share of the net profits under the terms of the original partnership agreement, it was certainly not amiss to allow him to allege and prove that his withdrawal from the firm was with the full consent and acquiescence of all the partners —not for the purpose of holding Houston Jr. as a party to the contract or of binding him to perform any of its terms, but to show the entire mutuality of all the parties to the dissolution, and to negative the idea that by reason of any concealment from Houston Jr., of the existence of the contract, he was not bound to account to Polk for his share of the net profits of the concern. ‘4. There was no error in refusing to submit to a jury the exceptions of fact to the auditor’s report. While an accounting may be had at law as well as in equity, an accounting between partners, such as the one in the present suit, where various demands and cross-demands are set up between the parties, is peculiarly a subject for equity jurisdiction. Civil Code, §3989; Hogan v. Walsh, 122 Ga. 285. 5. This being an equity case, the question raised by counsel for Polk in the cross-bill of exceptions, whether the court erred in taxing one half the costs against him, depends solely upon whether the trial judge abused the discretion vested in him. Clearly, this does not appear, and we therefore hold that the assignment of error in the cross-bill is without merit. Civil Code, §4850; Guernsey v. Phinizy, 113 Ga. 898. While numerous questions were raised by the exceptions to the report of the auditor which have not been discussed, they were not argued in the brief of counsel; and under the uniform practice of [111] this court these -contentious must be treated as having been abandoned. We find no error requiring a reversal of the judgment on -either bill of exceptions. Judgment on loth lills affirmed. All the Justices concur.