Stone v. Fouse

Heydenfeldt, Justice,

delivered the opinion of the court. Wells, Justice, concurred.

The District Judge sustained the demurrer, on the ground that one of the plaintiffs’ propositions for relief was such as can only be sought in a court of law, and the other only in a court of chancery. In this I think he is clearly in error. Although the written contract between the parties contains a covenant for stipulated damages, yet it is by this same contract that they are constituted partners, and partners cannot sue one another at law, in respect to any of the business or undertakings of the partnership.

It can only be done in chancery, by asking a dissolution and account. In such a proceeding, if by the failure to perform covenants, damages accrue, which would be legally considered as liquidated, they could be easily adjusted by a court of equity, and no question would be left for a jury to pass upon. Or in the event the damages are held to be unliquidated, an issue would be directed out of chancery, in order to have them ascertained by a jury. It is very certain that the plaintiffs cannot sue upon this contract in any form, without seeking an account and dissolution.

Judgment reversed and remanded.