Turnipseed v. Goodwin , 9 Ala. 372 ( 1846 )

ORMOND, J.

What is the interest of the respective partners in the partnership funds, in the absence of any contract ascertaining the shares of each ? This is a question, about which, in England, there appears to be some diversity of opinion. In Peacock v. Peacock, 2 Camp. 45, which was the case of a father taking his son into partnership, without any stipulation as to his share of the profits, Lord Ellenborough held, that there was no presumption in law, in such a case, that the son was to be entitled to a moiety of the profits, but that it was for the jury to determine what was fair and just between the parties, from what had passed between them. The jury found that the son was entitled to a fourth part.

.This was an issue out .of Chancery, and upon its return to that court, Lord Eldon expressed great dissatisfaction with it, and maintained that the son was entitled to a moiety, or nothing ; there being in fact a partnership, and no agreement about the division of profits. [Peacock v. Peacock, 16 Vesey, Jr. 50.] Of the same opinion was Mr. Baron Park, in Farrar v. Beswick, 1 Mood. & Rob. 527. A recent decision of the House of Lords, appears to have shaken, if it has -not overthrown the donation of Lord Eldon, and established that of Lord Ellenborough'. [Thompson v. Williamson, 7 Bligh, 432.]

In the United States, so far as the question has been considered, the law as laid down by Lord Eldon, appears to be recognized. See 3 Kent’s Com. 1 ed. 6; Gould v. Gould, 6 Wend. 263, and such it may be added, is the opinion of the English text writers. This doctrine commends itself by its certainty, and simplicity, as it would be extremely difficult, if not impossible, in many cases, to ascertain the precise value to the partnership, of what each party brought into the concern. This would especially be the case, where the money of one partner, was opposed to the skill and experience of another. How can a just estimate be made of matters so vague and indeterminate, as skill, experience, probity, &e.? Juries, and Judges, would determine it differently, and therefore such a rule is wanting in that certainty, and precision, which is essential to the correct administration of justice ; and it appears to us much more reasonable to suppose, that when the parties do not stipulate for the division of the profits, they intend an equal division, than that they should have contemplated some uncertain rule, to be afterwards ascertained. Yfe think, therefore, the rule is, that where there is no contrary stipulation, and no fact or circumstance exists, from which it may be inferred that the parties intended the profits should be divided in certain unequal portions, they will be entitled to equal portions of the profits, and be liable to an equal share of the burdens.

In this case, indeed, there is but very slender ground for the argument which has been made, as the parties have provided for the manner in which the profits shall be divided.' By the first article, “ one half to Turnipseed, Clawson and Green, and the other half to T. and J. Goodwin.” A subsequent agreement, relating to other lands, 'declares, that “ the profits are to be equally divided between Turnipseed, Clawson, Green, John and Thomas Goodwin.” Upon this last agreement, there can be no controvei^r, that the parties are equally entitled to share in the profits, and as it respects the first, if not quite so definite as the last, it is sufficiently certain. One half the profits are to be divided between Turnipseed, Clawson and Green, and it is very certain, that the parties contemplated an equal division of the half of the profits, because, by the very terms of the contract, these three persons were to furnish the money for the purchase of the lands, and certainly in equal proportions. Such was the complainant’s understanding of the contract, as he alledges that he called on the other two, and they refused to furnish their proportion of the money, and such is clearly the legal interpretation of the agreement. A failure or refusal to make the necessary advances, would doubtless have been good cause for putting an end to the partnership, but as long as it subsisted, a larger advance by one partner, than it was his duty to make, would be compensated by allowing him interest on such excess, or it might furnish a cause of action for a breach of the articles of co-partnership. It could not vary the terms of the co-partnership. This was the point decided in Boyd v. Mynatt, 4 Ala R. 79, which is in principle analagous to this case.

We think with the Chancellor, that the proof is not very satisfactory as to the amount advanced by either of the parties, and this remark applies as well to the complainant as to the two others. We can see no reason for disturbing-the account in this particular. To authorize parties who have accounted before the Master, to raise objections-to the account in this court, the error should be distinctly pointed out. So far as we can judge from the record, the decree is quite as favorable in this respect to him, as he could ask.

The book kept by the complainant of his expenses, disbursements, &c. was certainly not evidence for him, without further proof. It appears to have been a private .memorandum book, kept by the complainant, and although he was treasurer of the company, that does not make the book evidence against the other members. It was his private property, to which the others had not access, and cannot therefore be evidence against them.

It is further objected, that by permitting the note on Elston, which was handed to Clawson to purchase a tract of land, upon an agreement between the complainant and Claw-son, to sell and divide the profits, to be taken into the account, the Chancellor has deprived him of the benefit of his contract with Clawson. If this be so, certainly the Chancellor is not to blame. The allegation of the bill is, that the complainant handed to Clawson, a note upon one Allen Elston, for $1100, which was given upon the purchase by Elston of part of the land of the partnership, upon an agreement that Clawson should purchase a tract of land with the note, and sell and divide the profits with him. A motion was made, to dismiss the bill for multifariousness, upon the ground that it united distinct matters, in which all the defendants had not a common interest. This objection should have prevailed, if the design was to obtain from Clawson a discovery as to the land purchased with the Elston note, and to claim for the complainant individually, a share of the profits. The Chancellor, by a liberal interpretation of the bill, considered, that the object of the allegation was to bring this note, thus received by Clawson, and which was partnership property, into the settlement of the partnership accounts. So considered, the allegation was consistent with the general scope,' and purposes of the bill, and relieved it from the objection which would otherwise have been fatal to it; and in the settlement of the accounts, it has been charged to Clawson, as so much of the partnership effects, received by him. The complainant cannot now be permitted to say, that he has been deprived of the benefit of his contract with Clawson, when he has voluntarily, by his own act, waived all right to it, by thus charging him, with the note, as so much of the partnership property in his hands, to be accounted for.

It is also proper to remark, that it was not competent for two of the partners, thus to deal with the partnership funds, to the prejudice of the other partners; and if the object of the bill had been, to claim the lands thus purchased, with the partnership money, as partnership property, a very different question would be presented. That however, was not the purpose of the bill, and the other partners appear to have waived their right to the land, and to be content Avith requiring Clawson to account for the money.

The Tallapoosa lands, stand in the same predicament with the rest, being purchased during the continuance of the partnership. If it were true that the other partners refused to advance money for their purchase, a fact which does not appear, it would not, as already observed, dissolve the partnership. We are not able to discover any error in the decree of the Chancellor, and it must therefore be affirmed.