Teipner v. Teipner

SiebuokeR, J. Error is alleged on plaintiff’s appeal upon the court’s denial of his motion to amend the complaint, after all the evidence in the case had been received, to the effect that the partnership was dissolved in 1892. This motion to-amend the complaint was an attempt to conform it to the facts claimed to have been proved. The allegations of the original complaint clearly assert the existence of the partnership and throughout all of its allegations recognizes it as a fact. The existence of a partnership was not specifically denied under oath in any subsequent stage of the pleadings. It also appears from the evidence that the parties treated the-partnership as a subsisting one until the time of the trial. Plaintiff’s omission for the period of thirteen years to prosecute the action for a dissolution, his use as proprietor throughout this period of the hotel as a living place^ and his treatment of the business and firm property as partnership [385] affairs show that be considered that tbe partnership bad not been ended. Tbe referee also found that plaintiff was not excluded from participation in tbe control of tbe partnership affairs, and that be exercised tbe right to inspect tbe business and defendant’s management thereof at all times. Tbe evidence is sufficient to sustain tbe referee and tbe court in these findings. We cannot say that tbe bolding of tbe court is against the clear preponderance of tbe evidence on these matters. In view of these facts, tbe court’s ruling denying plaintiff’s application to amend tbe complaint was proper. Probably another good reason why tbe court so held on this motion is tbe fact that if tbe complaint were amended as requested it would bring tbe cause of action. alleged within tbe bar of the statute of limitation. If the original complaint bad contained such an allegation defendant would no doubt have availed himself of this statute, and have sought to defeat plaintiff’s right to- prosecute this action after it was barred by tbe statute of limitation, and tbe defendant could not justly be deprived of bis right by allowing this amendment after tbe trial of tbe.case bad been practically completed. Tbe plaintiff urges that tbe court erred in charging plaint'iff with tbe sum of $2,520 for failure to give any of bis time and attention to tbe partnership business from 1892 to the time of trial, in disallowing him a balance of $69.63 which tbe referee found should first be paid to him o>ut of tbe firm assets, and in denying a re-reference of tbe case. Consideration of these alleged errors involves consideration of tbe errors assigned by tbe defendant upon bis appeal from the action of tbe court in not allowing him for tbe farm produce which he claims to have furnished for use in tbe hotel business, and in not reimbursing him for tbe amounts be claims to have paid out of bis individual funds in defraying partnership obligations. An adjustment of these divers claims and rights cannot be made without an accounting of tbe [386] partnership affairs and the claims between the partnership and the members arising out of their individual' dealings with the firm. An entry upon these fields of inquiry in this partnership enterprise is met by an array of obstacles that render ascertainment of the true condition of the partnership affairs impossible. As we have seen, there are no boohs of account of the business transactions of the firm nor, through its entire existence^ of the moneys received and disbursed by the partners, nor is there an accurate or intelligent account of any part of the business for any year, month, or even a day. No balance or statement of the firm’s business affairs or of the accounts of each partner with the firm was ever made or attempted. From the inception of the partnership each member used partnership funds for his individual needs as in his judgment occasion required. The referee found and the court held that, so far as shown by the evidence, all partnership funds not so appropriated to the individual use of the members were applied in payment of partnership obligations. This method of conducting the partnership affairs and of applying the moneys was approved and acquiesced in by both partners. Under the circumstances any attempt in this action to state an account would be futile, and would fail for want of sufficient evidence of the actual state of the partnership affairs. It appears that defendant attended to collecting, disbursing, and the handling of the moneys of the firm so far as they were applied to partnership uses. It also appears that plaintiff understood that no accounts were being kept of any of the financial transactions of the firm. Acquiescence in this method of conducting the firm’s business by the members amounts to an agreement to conduct both their partnership and individual transactions with the partnership upon a basis of mutual trust and confidence, and operates to mutually preclude them from insisting on a partnership accounting or an accounting of matters arising out of the dealings of the members with the firm. [387] Each member of the firm is necessarily limited to demanding that the partnership be now dissolved, and that he be awarded his share of the partnership assets after payment of the existing liabilities and the expenses involved in this proceeding. Erom this it results legally that no charge can be made against plaintiff for failure to give his time and attention to the firm business since 1892, that no claim can be asserted by defendant for the produce he claims to have furnished for use in the hotel; nor can he be charged with particular items of partnership funds which came into his hands. The evidence is sufficiently clear that defendant used his private funds in payment of partnershipi debts and expenses to an amount in excess of the amount of partnership funds he used in paying his private obligation on the Larzelier bond, and he has thus made full restitution to the firm of all firm moneys he originally used to discharge his obligation on this bond. The other items charged against him in the attempt to state an account are firm transactions and not properly claims against him, and must be treated as firm accounts. Though the referee’s statement of account as modified and affirmed by the court cannot stand as an accounting, yet the judgment entered, directing payment of the firm’s liabilities and the expenses of this action as specified therein, and the distribution of the remaining assets equally between the partners, embodies the result of an adjustment of the partnership affairs upon the basis we have above indicated, and it therefore is the proper judgment in the case. By the Court. — Judgment affirmed; neither party to recover costs in this court, the plaintiff to pay the clerk’s fees.