Judd & Harris v. Wilson

The opinion of the court was pronounced by Williams Ch. J. — In this action it appears that the auditors reported in favor of the defendant, Wilson, on two grounds. First, that the articles charged and claimed against him were not recoverable in an action on book ; [189] and, second, that the claim for them was settled by an award of arbitrators. Judd, Harris and Wilson were partners from January, 1821, to July, 1826. It appears to have been a partnership consisting of three parties ; and it also appears, that, previous to January 1, 1824, no accounts were kept on the partnership books, against either of the partners; but that after that time charges were made and continued to be made against each of the individual partners on the company books to the time of the dissolution of the partnership. The object of this undoubtedly was, to ascertain what sum each took out of the partnership, to be adjusted on the final adjustment of their concerns. But it does not appear ever to have been considered that these charges constituted a claim or account against the individual charged, to be paid or settled by him at any stipulated time. It is obvious, therefore, that no action could be maintained by two of the partners against the other for any articles charged against him, during the existence of the partnership; and they certainly could not have maintained an action on book, if there had been any stipulation in the articles of agreement that each should settle an.d pay his account with the partnership at any given period. As there appears to have been no agreement to this effect, these charges constituted no claim against the individual partner, who would be indebted only on the ground that he received more than his share when the whole concern was adjusted ; and as here were three partners, this concern could only be adjusted in chancery and could not have been adjusted in an action of account. Wiswall vs. Wilkins, 4th Vt. Rep. 137. The dissolution of the partnership and the award did not change the remedy which either of them might have against the other for any thing accruing during the partnership, much less could it give one an action on book against the other, when no such action could be brought before. If this claim was not adjusted, and any thing is due thereon to Judd and Harris from Wilson, it must be sought for by some more appropriate remedy than an action on book, probably by a bill in chancery. If this claim had been particularly awarded to Judd and Harris, or if the arbitrators had intended and [190] declared that it should be paid to them, the remedy therefor must have been either an action of assumpsit or an action on the award itself, and not an action on book. This v*ew ^ case ^ata^ to action of Judd and Harris,' and justifies the determination of the auditors and the judgment of the county court thereon. On the second ground taken by the auditors it is equally clear that there is no foundation for this action. This account, when charged and during the continuance of the partnership, was not a debt or demand due from Wilson to Judd and Harris, and would not constitute any claim against him, unless on an adjustment of their partnership it should be found that he had received so much more than his share. It could not therefore have been awarded to Judd and Harris under the general terms adopted in the awafcj, that they should “ receive all debts due to said firm at Middlebury.” The arbitrators, in order to ascertain the sum due to Wilson, and which they awarded him, must have taken into consideration all the claims against each individual partner, which were on the partnership books; and when they awarded a sum to be paid to Wilson, it was a sum due after paying all claims which the firm had against him. The legal effect of their award (and an adjustment or arrangement by the parties made and expressed in the same terms which are used in the award would have been to the same effect) is to extinguish and settle all and every claim or demand growing out of, or accruing from the property or money of the partnership received by either during its existence, and not fraudulently concealed from the other partners. The amount of the. charges for which this action is brought was embraoed in the settlement and award made by the arbitrators, and Judd and Harris can have no claim, therefore, against Wilson. On both grounds the decision of the auditors was correct, and the judgment of the county court accepting their report must be affirmed.