Erben v. Heston

Opinion by

Mr. Justice Mitchell,

Appellant and appellee were partners and though their contributions to the capital were very unequal, they agreed as found by the referee that “ all expenses of said business, and all losses and damages were to be sustained, paid and borne by and out of the gains and profits arising from said business; and in case the profits should become deficient, then by the said parties in equal portions; and all net gains and profits were to be divided equally between them.” Becoming insolvent the firm made an assignment for creditors, and plaintiff in addition, made an individual assignment to the same trustees who realized a considerable sum for the creditors out of plaintiff’s individual assets. The creditors released the firm and the partners individually from all further claims, and the referee found that the release was in consideration of the two assignments. This finding is sufficient answer to the argument of appellant that plaintiff’s individual assignment was voluntary and uncalled for and therefore could not afford any basis on which to charge defendant.

The main claim of defendant however is that as the creditors released without receiving payment in full and plaintiff therefore has not paid more than his proper half of the debts, he would not be entitled to contribution on general principles and cannot derive any right against his partner from the creditors’ release of both. But no such question arises. The creditors having accepted settlement and given releases are out of the case. Whether they were paid in full or in part only is not material except as it may bear on the amount involved. Plaintiff’s bill is founded on the defendant’s express agreement in the partnership articles. By it the parties agreed to divide the losses equally, and they have not done so. On the contrary plaintiff has paid more than his share, and is for that reason entitled to be reimbursed. Authority is not needed for so obvious a proposition, but a ruling on the subject will be found in Emerick v. Moir, 124 Pa. 498.

The recent case of Bunting v. Bunting, 199 Pa. 27, has no bearing on the present contention. It decided that there was no implied relation of suretyship among general partners to a special partner by which one of the former was bound to make good to the latter a loss on his capital occasioned by the failure of another to pay his indebtedness to the firm. The present case does not deal with implied obligations of any kind, but with the express contract of the parties.

Judgment affirmed.