Hayes v. Reese , 1860 N.Y. App. Div. LEXIS 203 ( 1860 )

By the Court, E. Darwin Smith, J.

The interest of a partner in the partnership property consists in his ratable proportion of the assets of the copartnership after the payment of all its debts. In a suit in equity for a settlement of the copartnership affairs no decree can rightfully be made for the payment by one partner of any sum to another, except upon this basis. A decree, upon a final accounting between partners, that one shall pay an ascertained balance to another, assumes that the sum so decreed has been duly ascertained to be due to such partner upon a full settlement of the partnership accounts and after payment of all the partnership debts. Such is the necessary force of the judgments recovered against the plaintiff in this action, set out and described in his complaint. It is stated in the complaint that “all of said judgments were rendered for the defendant’s share of the copartnership profits decided to be in the hands of the plaintiff.” There could be no profits till the debts were paid, or at least the amount could not be ascertained and legally declared. The character, description and amount of the partnerskip debts was a subject, therefore, within the necessary and legitimate scope of the suits and controversies which resulted in the recovery of the judgments aforesaid, against the plaintiff. It is a fundamental rule that the judgment or decree of a court of competent jurisdiction is not only final as to the subject matter thereby determined, but also as to every other matter which the parties might have litigated as incident to or essentially connected with the subject matter of such litigation. This rule applies to every subject within . the legitimate purview of the original action, both in respect to matters of claim and of defense. (Le Guen v. Gouverneur, 1 John. Cas. 436. Embury v. Conner, 3 Comst. 511, 522. Haire v. Baker, 1 Seld. 357. Davis v. Tallcot, 2 Hernan, 184.) The answer of the defendant ’Reese is therefore clearly sufficient, and presents a complete defense to this action. The remedy for the plaintiff in respect to the matters set up in this complaint, I think, can only be had by a bill of review, or supplemental bill in the nature of a bill of review. (Lube’s Eq. Plead. 170, 182. 3 Hoff. Ch. Pr. 8. 2 Barb. Ch. Pr. 90.)

[Monroe General, Term, December 3, 1860.

The judgment of the special term should therefore, be reversed, and judgment be given for the defendants, upon the demurrer.

Smith, Johnson, and Knox, Justices.]