Wright v. Cudahy

Mr. Justice Waterman

delivered the opinion oe the Court.

This is a bill by an alleged partner for contribution from his alleged copartner.

It is urged by counsel that it is also a bill for exoneration; that is, that by the payment of partnership debts by the defendant Cudahy, the complainant Wright may be relieved from the burden of debts now resting upon him It can not be called or maintained as a bill for an accounting, as not only is there no dispute as to the accounts, but all the transactions concerning which the controversy is, were personally carried on by the complainant in his name, and ostensibly not as a partner, and the entire accounts were kept by Wright, and are in the possession of the complainants. The defendant is' not asked to account for anything; he is asked, simply, to pay into the hands of a receiver, to be appointed, the amount of the unpaid indebtedness of the alleged firm, viz.: the sum of $357,937.45, that the same maybe distributed among such creditors.

The total loss upon the transactions described in the bill was $582,107.41, of which Wright, prior to his failure,

paid.......................................$202,520.49

His assignee has since paid.................. 18,754.44

There was deducted from a certain check...... 2,895.03

Total amount paid by Wright----........ $224,169.96

Leaving amount unpaid................. 357,937.45

Wright, according to his claim, should pay of the total loss $291,053.70; deduct $224,169.96; leaves $66,883.74 as the amount which, according to his claim, he ought, as between him and Cudahy, to pay.

We are in this case confronted-with the question whether a bill of this kind can be maintained by a partner who has not paid his share of the firm indebtedness, there being no partnership assets.

We have been referred to no case, and we are not aware of any, in which such a bill has been entertained.

Courts sit for the redress of grievances, and they act only at the instance of those who have a right to insist that they shall.

What grievance of the complainants, or either of them, is shown by the bill filed in this cause, and what right have those who brought this bill to require the court to give to them redress ?

The complainant,Wright, says thathe has paid $224,169.96 of firm indebtedness, leaving $357,937.45 unpaid; which unpaid amount rests, a heavy burden, upon him, and which the defendant Cudahy should remove; but, if the allegations of the bill be true, the burden of the unpaid debts rests also upon Cudahy, and is to him as burdensome as it is to Wright. Wright does not offer to pay one-half of the firm indebtedness if Cudahy will pay the other half. It is not claimed that Cudahy owes Wright anything; the insistance is that Cudahy owes firm creditors a large sum, and does not pay them; a decree that Cudahy pay anything to Wright is not asked. Clearly, then, it is the firm creditors who alone have a right to complain; it is they alone to whom injustice is being done. The bill is for the benefit of parties who do not ask for relief, who are not parties to the proceeding, and may never become so. If the bill could be maintained for the benefit of firm creditors, it would amount to giving such creditors an opportunity to prove their claims in a court of equity, and deprive Cudahy of the right to deny the partnership, and, consequently, the existence of any claim against him in a court of law and before a jury.

If the allegations of the bill be true, each of the unpaid creditors may maintain a suit at law and obtain judgment against Cudahy. Why, then, should a court of equity suffer Cudahy to be drawn before it for their benefit. The creditors have only a right of action at law against the partners, on which they may obtain judgment, and then satisfy the judgment out of the joint or private property of the partners. Ladd v. Griswold et al., 4 Gil. 25-37.

The rule as to the maintenance of a bill for contribution by a co-surety seems to afford a guide in such a case as this.

It is only a surety who has paid more than his proportion of the joint obligation who can maintain a bill for contribution by his co-surety. Adams’ Equity, 7th Am. Ed., 269; Brandt on Guaranty and Suretyship, Sec. 287; Lyttle v. Pope, 11 B. Monroe, 309; Van Patten v. Richardson, 68 Mo. 379; Ex parte Gifford, 6 Vesey, 805; Gross v. Davis, 87 Tenn. 226.

In Hodgson et al. v. Baldwin et al., 65 Ill. 532, 537, the court say:

“ The first point made by plaintiffs in error is, that one partner, assuming this association' to be partnership, can not, when the partnership funds are exhausted and it is still in debt, compel a copartner, by bill in chancery, to contribute toward the discharge of the joint indebtedness, the party suing not having himself paid his own ratable share of such debt.

Counsel seem to consider this a bill for contribution by one or more partners against their copartners, and has so argued the case. Was it such a bill, the authorities he has cited would sustain his position. The doctrine is well settled, when two or more are jointly, or jointly and severally, bound to pay a certain sum of money, and one or more of them is compelled to pay the whole debt, or more than his or their share, those paying may recover from the delinquents the proportion they ought to pay.

This principle is quite familiar, and was recognized by this court in Johnson’s Adm’rs v. Vaughn, ante, 425.”

We are therefore of the opinion that Wright, not having paid his share of the alleged firm indebtedness, this bill can not be maintained.

The complainant Wright admits that it was given out to the world that the partnership between him and Cudahy had been dissolved, but he says that in fact there was no dissolution. Upon the fact of a dissolution, as was represented, the burden rests upon him who declares that his representations were untrue. The apparent is presumed to be the real until it is shown to be otherwise. The presumption of dissolution is based upon the statement of each of the partners, that the firm had been dissolved.

The testimony before the chancellor was partly oral and partly by depositions; the finding of the court below comes to us, therefore, with the force and effect of the verdict of a jury. We perceive in the evidence no sufficient reason for reversing the conclusion of the Circuit Court as to the facts, and its decree is affirmed.