Herron v. Herron

Opinion by Williams, J., The administrator of a deceased member of a firm brought suit against the survivor for an accounting. It appears that James Herron and M. F. Herron were copartners, trading as M. F. Herron & Co.; that the partnership was dissolved in 1895 by the death of James Herron; that M. F. Herron, after his release from an insane asylum in 1895, received from his committee $1,895.82 as the assets of the firm; that James Herron was, when he died, indebted to the firm in the sum of $8,099.59. In July, 1897, M. F. Herron was compelled to pay a part [574] nership debt of $8,150. This he did by using the $1,-895.82 received from his committee and making up the balance from his own resources. Nothing else appears in the case until 1912 and 1913 when M. F. Herron succeeded in collecting (two judgments) from debtors of the firm, less expense of collection, the sum of $2,839.28. The plaintiff asked for a decree-to obtain his share of these collections. The defendant replied that there was nothing due, because of the balance due him for payment of partnership debts and the balance due the firm by the decedent. The court below held that the statute of limitations applied to all of the transactions except the collections made by M. F. Herron of partnership assets in 1913 and decreed an accounting of one-half thereof to the plaintiff. The forty-nine assignments of error raise but two questions, (a) Was the court in error in holding that the items claimed as credits by the defendant were barred by the statute of limitations, and (b) that it did not apply to the two judgments collected by the defendant? There are two classes of claims: (1) A balance due on the partnership books which was struck in 1895, and (2) contribution for a debt of the partnership paid by the defendant in 1897. Either of these, if allowed, would eliminate any claim of the plaintiff to any part of the fund raised by the collection of the two judgments. The first claim is for what is known as an account stated. In Leinbach v. Wolle, 211 Pa. 629, such an account is defined to be “an account in writing, examined and accepted by both parties. And this acceptánce need not be express, but may be implied from the circumstances.” The long acquiescence in the account on the books as of 1895 would raise the presumption of acceptance which would be conclusive. The cases where accounts rendered have not become accounts stated were where there has been no real or presumed acceptance of their correctness: Lowenstein v. Bache, 41 Pa. Superior Ct. 552, 556, and Tully v. Felton, 177 Pa. 344, 357. The [575] statute of limitations does not run against an open account between partners: McKelvy’s App., 72 Pa. 409; Garretson v. Brown, 185 Pa. 447; Tully v. Felton, supra; Hurst v. Brennen, 239 Pa. 216. But it does run against a closed account, such as an account stated; especially in the case of the dissolution of a partnership as against a partner who is not a liquidating partner: McKelvy’s App., supra; Guldin v. Lorah, 141 Pa. 109; Hamilton v. Hamilton, 18 Pa. 20; Everhart’s App., 106 Pa. 349. The right to recover a balance due, such as appears in the present case, is lost if not asserted in six years after the right to demand it accrues, if the statute of limitations is pleaded. There is no subrogation which arises out of the payment of partnership debts, for each partner is equally liable for such payment: Baily v. Brownfield, 20 Pa. 41; Hoge’s Est., 188 Pa. 527. The payment, therefore, would not, by any principle of subrogation, vest title in, nor produce an equitable assignment of, an equal amount of partnership assets to the partner who paid the debts of the partnership out of his own funds. If the surviving partner neglected to seek contribution from the estate of the decedent within six years, he alone is at fault. The right to such action is a matter which is not necessarily involved with any of the partnership transactions, and in McKelvy’s Appeal, supra, it is pointed out that an action to recover contribution should be brought within six years. Defendant having collected the two judgments within six years, the plaintiff had the right to recover his share. The collection of the judgments was in the nature of an insulated or cut off transaction such as occurred in Brown v. Agnew, 6 W. & S. 235, where the right to an accounting was allowed to be enforced despite the fact that the statute of limitation had run since the dissolution of the partnership. The assignments of error are overruled and the decree affirmed.