Ferguson v. Wright

The opinion of the court was delivered, March 11th 1869, by Agnew, J. The authorities of the plaintiff in error are all [261] against him. Whether an express promise to pay be essential, or an implication of a promise will arise from a settlement and balance struck, it is immaterial; all the authorities coinciding, that to support assumpsit there must be a settlement and balance found due to the partner who sues for it. Now the evidence in this case established no such settlement and balance due to the plaintiff from the other partners or any of them. The book produced showed only his individual account with the firm. It evidenced only how he stood with the entire association including himself, and not how he stood with his partners. The witness said in the same breath, that balances were also struck in the book in favor of the other partners. This evidenced how the company, which consisted of all the partners, stood with each one of them, but not how much any one was entitled to receive from any or all the others. To show that there must be a settlement between the partners themselves, and the result would depend on the difference in their relative balances with the firm. ■ If they were equal partners, and the firm owed each the same balance, it is evident they would owe each other nothing, and though the company’s book would show a balance due to each, it would not be a debt from one to another. That there was no such settlement between the partners as would show their relative liabilities, is evident also from another fact stated by the same witness; that a contingent fund was set aside against any loss upon unpaid debts due to the firm. The assets of a firm consist of its stock on hand and its credits. Both the stock account and bills receivable of the firm to its credit on its books were liable to be diminished by loss on sales and loss on bills not collectable. Nothing less than an agreement to take the stock at the valuation and bills receivable at their nominal or at some agreed amount, would fix the surviving partners for these sums. It was their right and their duty to settle up the affairs of the company before they could be made debtors to the estate of the survivors. Non constat that on a settlement of company affairs, any part or how much of the balance in the individual account would be due from the other partners. It might be lessened or entirely balanced by the accounts of the other partners. There was no agreement whatever shown to have been made by them to become liable to the estate of the deceased partner. Of course on the death of a partner which dissolves the firm, an account of stock on hand and debts must be taken, and the individual accounts of all persons including the partners must be balanced to exhibit the state of its affairs at that period, and the settlement of them then devolved on the survivors. But this was no settlement between the partners to exhibit their liabilities from or to each other, and indeed on the contrary contemplated a settlement among themselves only after the affairs of the firm had been fully administered in order to [262] arrive at their mutual rights and liabilities. Clearly, therefore, the suit should have been account render, or a bill in equity for an account. A question is made also whether the action lies by the administrator of Joseph S. Senat against the administrator of Lewis D. Senat, one of the surviving partners, who has died since the death of Joseph. This depends on the fact of a settlement which made Lewis a debtor to Joseph’s estate. The Act of 11th April 1848 has no influence on the case till the liability of Lewis has been first established. Before a direct liability is established against Lewis either severally or jointly with the other partners to pay a specific balance, his liability is only to account. If these were the questions on which the court below passed in deciding the reserved point we discover no error. But this case bears upon it an inherent defect in the reservation of the question that cannot be cured. It has been held in several cases that it is not a good reservation of a point to reserve it on all the evidence. The first effect is to withdraw the facts entirely from the jury. In this case it was a question of fact whether any settlement and balance had been shown to support the action. The court may have thought that taking all the evidence together it was insufficient to show such a settlement, and what has been already said shows that we are of that opinion. But possibly this was not the question intended to be reserved. It may be, the court thought that admitting a settlement and balance, the action would not lie against this individual defendant or against his estate. Or the question might have been upon the interpretation or the effect of the Act of 11th April 1848. It is impossible for us to know from the record what question the court intended to reserve. Every reservation of a question should place distinctly upon' the record what the point is which is reserved, and the state of facts out of which it arises. This is necessary to enable the party to except to it, and to have it reviewed. For this reason the judgment must be reversed and a venire facias de novo awarded.