Dampf's Appeal , 1884 Pa. LEXIS 159 ( 1884 )

Mr. Justice Green

delivered the opinion of the court,

In this case the bill was filed by the daughter of a deceased partner, against the surviving partners of her father, alleging the partnership and asking a decree for an account and for general relief. The complainant never was a member of the firm and did not claim to have been. Administration had been granted upon the deceased partner’s estate and the administrators would in all ordinary circumstances, be the proper persons to call for a settlement of accounts. But they having been applied to by this plaintiff to file a bill declined doing so on the ground that the surviving partners had accounted and the plaintiff either could not, or would not, point out any property or assets which had not been accounted for, and thereupon they were made defendants in the bill filed by the plaintiff. The question whether a bill for the settlement of partnership accounts will lie against surviving partners at the suit of a distributee of a deceased partner, when there are administrators competent to act but who decline to act, is not raised on this record and we do not decide it. Passing this by and returning to the pleadings we find that the surviving partners filed an answer in which they denied their liability to account to the plaintiff, on the ground that as to the real estate held by the firm, she had sold and conveyed all her estate and interest therein to them by deed in fee simple for a full consideration, and as to the personal estate of the firm they had taken from her, acting by her husband as attorney in fact, a full release and discharge, from all claim against them as surviving partners, and that prior to doing so they had exhibited to the administrators, and also to the plaintiff and her husband a detailed statement of the assets of the firm and that there were no assets unaccounted for. Just here it is proper to say that this answer does not aver either a stated or a settled account, or that there was a settlement which resulted in a balance of the same amount as the sum paid over to the plaintiff, and for which the release was given. Had a stated or settled account been pleaded it would undoubtedly have been in bar of a recovery unless it was specially attacked. In addition however to the answer of the surviving partners the administrators of the deceased partner filed an answer, in which they stated that prior to the giving of the release by the plaintiff to the surviving partners the latter had made a detailed statement of the assets of the firm, which they the administrators, believed to be an accurate statement, that they had access to all the books, papers, statements and accounts of the firm and that the same were examined by them, and further that they had never found a single item of property not accounted for by the surviving partners. They also alleged in the third paragraph of their answer, that they had not refused to proceed to compel the surviving partners to properly account, but that said partners had properly accounted. They also say that when the plaintiff applied to them to join her in a proceeding to compel an account, they offered to do so if the plaintiff would inform them of any property which had not been accounted for, and that this was not done, and they had no knowledge or information of any such property. A copy of the release given by the plaintiff was annexed to the answer.

In this state of the pleadings the court declined to appoint a master or examiner generally, but ordered the cause to be referred to an examiner to take testimony on the question of the defendants’ liability to account, with liberty to rebut on the part of plaintiffs. It seems to us this was the correct practice. A denial of liability to account, on the part of the defendants, put that question at issue at once. It is a preliminary question which, when raised, requires disposition prior to any hearing on the merits. This is familiar doctrine in the equity practice and was expressly ruled by this Court in Collyer v. Collyer, 2 Wr., 257, and Christy’s Appeal, 11 Norr., 157. The propriety of such a reference was more manifest in this case, because of the fact that the legal representatives of the deceased partner themselves asserted, both the release by the plaintiff to the surviving partners and the fact that the defendants had accounted and that they knew of nothing for which the defendant partners were liable to account. The release was annexed by copy to the answer, and on its face it purports in consideration of $3,855, to release the surviving partners from all claim against them as such. In addition to this the widow of the deceased partner, who was also the guardian of his only other child and was made defendant in both capacities, filed an answer admitting that she had refused to join in the plaintiff’s bill because she was informed that the defendants had accounted, and she was unable to receive information from plaintiff of any item of property for which they were accountable. It thus appears that the legal representatives of the deceased partner who were properly entitled to call for an accomrt declined to do so, alleging that the defendants had accounted and that there was nothing for them to account for within their knowledge; the widow and guardian of one of the children who was interested in both capacities to demand an ac-. count refused to do so for similar reasons, and the surviving partners expressly denied all liability to account and exhibited a release from the plaintiff of all claims against them as such. In such circumstances it is idle to say that there is not at least a prima facia case of non-liability to account which requires disposition prior to a hearing of the merits.

In the order of reference the burden of proof was put upon the defendants, and the plaintiff was given full opportunity to rebut the defendants’ proofs. Subsequently the parties appeared before the examiner and the defendants gave in evidence the deed from the plaintiff for her interest in the real estate, and the release acknowledged and under seal, discharging them from all claims against them as partners, and rested. The plaintiff was then at liberty to give any evidence she chose, to impeach either of these papers, or to show that they should not have efficacy to deprive her of her right to an account. But for some reason which is not explained, she did not do so, and the hearing before the examiner closed without her giving any testimony whatever. When the report of the examiner came before the court below the state of the record was, that all the answers filed denied, some expressly, and others impliedly, any liability to account, for reasons plainly stated, and the testimony taken sustained the answers. The answer of the surviving partners was responsive to the bill, and was, moreover, sustained by corroborating proof. The record exhibited a release, apparently competent, discharging the surviving partners from all liability as such, to account to the plaintiff, and it is entirely unimpeaclied, after a full opportunity to impeach it had been offered to tlie plaintiff. She could have attacked it by her original bill, or by a supplemental bill after answer filed, or by proofs before the examiner. She did neither. What then was the court below to do with the case ? Manifestly nothing but dismiss the bill. How can we say this was error when we have nothing before us to impeach either the answers or the release ? We cannot arbitrarily say the release was either void or inoperative, without evidence to affect it. It seems to us the court below was correct in its action and therefore

The decree is affirmed.

Trunkey and Sterrett, JJ., dissented.