Coudrey v. Gilliam

• Decision Date: 31 May 1875
• Citation: 60 Mo. 86
• Parties: JOHN N. COUDREY, Respondent, v. THOMAS E. GILLIAM, Appellant.
• Court: Missouri Supreme Court

60 Mo. 86

JOHN N. COUDREY, Respondent,

v.THOMAS E. GILLIAM, Appellant.

Supreme Court of Missouri.

May Term, 1875.

Appeal from Chariton Court of Common Pleas.

C. W. Bell, with Chas. Hammond and A. W. Mullins, for Appellant.

As to accounts between partners, the statute generally begins to run upon the dissolution of the partnership. (Patterson vs. Brown, 6 Mon., [Ky.] 10; Bisphan vs. Price, 15 How. [U. S.], 162, 178; Cochran vs. Rogers, 10 Pick., 112; Coalter vs. Coalter, 1 Rob. [Va.], 79; Sto. Part., 386, note 4 to § 233; Didier vs. Davidson, 2 Barb. Ch., 522.)

The cases which hold otherwise are in the main those construing a statute of limitations which expressly excepts from its operation accounts between merchants. These cases under our statute are inapplicable. The case of Massey vs. Tingle, (29 Mo., 437) expressly holds that as between partners the statute may be invoked.

Here the parties closed out their business in the year 1866, and the suit was not commenced until the 6th of June, 1872. There is no evidence that Gilliam ever admitted an indebtedness to Coudrey, or ever promised to pay him anything after the year 1866, but, on the contrary, he expressly denied any indebtedness to him. If Gilliam had collected the whole of the note, or more than his interest in it, Coudrey might have required Gilliam to have accounted to him, Coudrey, for his part of the amount so collected. But this could not open up all the matters connected with the partnership, the amount of capital contributed by each, and the amount withdrawn, etc., in the year 1866.

Kinley & Kinley, for Respondent.

I. The petition will support a verdict after trial, on the merits, especially since no objection was raised to it by demurrer.

II. Plaintiff's right of action is not barred by the statute of limitations. (Massey vs. Tingle, 29 Mo., 437.) The rule as to merchants' accounts has nothing to do in this case. This is settlement of partnership alone.

After dissolution each partner becomes, as to the firm assets, tenant in common. (Hogendobler vs. Lyon, 12 Kans., 278; Sto. Part., §§ 322-8.) He also becomes a trustee. (Cranshaw vs. Marsh, 1 Swanst., 506; 11 Ves., 5; Pomeroy vs. Benton, 57 Mo., 531; Colly. Part., § 182; Sto. Eq. Jur., §§ 468, 623; Kelly vs. Greenleaf, 3 Sto. R., 93.) Gilliam and Coudrey both owed the firm, and, therefore, as to those amounts, were trustees, and hence, could not invoke the statute of limitations. (Ricord's Adm'r vs. Watkins, 56 Mo., 553; Keeton vs. Keeton's Adm'r, 20 Mo., 530; Kane vs. Bloodgood, 7 Johns., 110.)

Gilliam recognized his fiduciary relation by agreeing from time to time to settle, and led Coudrey to suppose he would do so, and is thereby estopped from pleading the statute.NAPTON, Judge, delivered the opinion of the court.

This suit was brought on June 6th, 1872. The facts stated in the petition in this case are, that plaintiff and defendant on the 26th of May, 1865, entered into copartnership in selling merchandise, for one year from the date of the articles, each putting in the concern an equal amount of capital, and agreeing to share the profits and bear the losses equally; that the business was carried on until the 26th of May, 1866, when the said partnership was dissolved by the terms of the articles, and by mutual consent. The petition further states that there were uncollected notes and accounts in plaintiff's possession, amounting to $543.28; that defendant has a note against one Blevins for $66.25; that defendant is indebted to said firm in the sum of $1500, (and an account is filed to show this) and that the plaintiff is indebted to the firm in the sum of $300 (another account is filed to show this). The petition further states that no settlement of the accounts and matters of copartnership has been made between plaintiff and defendant, though plaintiff has repeatedly requested such settlement, but said defendant at all times refused.

The petition further states that there are no debts due and owing by said firm in said business. Plaintiff therefore asks that an accounting be taken of all the late copartnership dealings, and the same be finally settled between him and defendant, and if defendant be found owing plaintiff anything on said settlement, that he be adjudged to pay the same, plaintiff being ready and willing, and hereby offering to pay any sum that on said settlement may be found due and payable from him to defendant. It is further asked that the notes and accounts aforesaid be placed in the possession of some suitable person for collection and distribution, and for all orders &c., that to the court may seem proper.

There were filed with said petition five exhibits, one containing a copy of the articles of copartnership, the second a list of the notes referred to, the third an account with defendant to the firm, running down to Dec. 31st, 1866, with one item on Dec. 1st, 1871, as follows: “Apples of T. Sanders (on note) $22,” fourth, an exhibit of plaintiff's account with the firm, and, lastly, an itemized account referred to in the petition, running down to 1872.

The answer of defendant denies his indebtedness and then states, “that he ought not to be held liable to pay plaintiff on his said supposed cause of action, because he charges and avers that said supposed cause of action arose more than five years before the commencement of this suit.”

The record states that the case was submitted to the court on the petition, answer and reply, and the court having heard the testimony and not being sufficiently advised, etc., appointed J. L. Applegate as referee, to examine the books and accounts, and report to the court the state of accounts between the parties. At a subsequent term, the referee reported, and found a balance due plaintiff of $530.78.

This report was approved by the court, and a judgment was given for the sum, with interest, and an order made that the notes and accounts uncollected be sold by the sheriff, and the proceeds divided.

It is necessary to a proper understanding of the only point presented by this case, to state so much of the evidence as pertains to this point, which was entirely confined to the statements of the parties.

Coudrey, the plaintiff, testified, that after the dissolution in May, 1866, the goods left on hand were boxed up and stored until fall, and were then opened and sold at auction or private sale, but not entirely. The remainder left was divided between them. The last sale was December 17th, 1866. “The notes and accounts were not divided. I was to take them and settle up the business. I collected claims and charged them to myself on the books, and when Gilliam got any, charged them to him.” Again he says, “In the fall of 1871 Gilliam purchased some apples of T. W. Sanders, and Sanders came to me and said Gilliam told him to have the amount entered on note due by him to Gilliam and Coudrey. I gave him credit accordingly. The last item prior to this charge is dated December, 21st, 1866. The Sanders credit was entered December 1st, 1871. I told Gilliam about it. All business of the firm, advancement of money, purchase of goods, etc., are contained in the books produced. I had conversation with Gilliam in the fall of 1871, and asked for a settlement. We fixed two weeks from that time. Shortly afterwards Gilliam told me he could not settle then, as it was the week of the Keytesville fair, and we then agreed upon the week after, as I understood him. From the dissolution up to the time of commencing this suit, I collected what I could on the notes and accounts of the firm, and en tered the collection on the books of the firm. The books contain all such collections. The last collection was entered June 8th, 1872. It was the agreement made between Mr. Gilliam and myself at the time of the dissolution, that I should take the books, notes, accounts, etc., and settle up the business.”

The defendant, Gilliam, testified as follows: “The books were kept by Coudrey. I drew my checks against the cash entries in my memorandum book. Coudrey put the amount down on one side, and I kept the other side. I bought some apples of Sanders, and wanted to pay him, but he said, no; he owed Gilliam and Coudrey. I came down and saw Coudrey, and the amount was credited. Coudrey furnished me list of notes and accounts;never furnished me regular balance sheet; furnished me several little statements I could not understand.”

This was all the evidence in the case, and after hearing the evidence the court, as heretofore stated, referred the matter to Applegate, to make out the partnership accounts, and report the result.

The only objection relied on in this court, and indeed the only objection made below on the motion for new trial and in arrest, was that the action was barred by the statute of limitations, five years and upward having elapsed since the dissolution of the partnership. The partnership was dissolved on the 26th of May, 1866, and this action was commenced on the 6th of June, 1872.

It was well observed by Judge Scott, in the case of Rector's Heirs vs. Rector's Adm'r, (20 Mo., 538) “that the application of the statute of limitations, in courts of equity, to matters of trust, is made difficult from the contrariety of opinion which prevails in relation to it. Whilst all admit that an express or direct trust is not subject to be barred by the statute, a difficulty is experienced in determining what trusts fall under the denomination of express or direct trusts, as well as in ascertaining the period of limitations to be applied after the character of the trust is determined.”

Hence, the same learned judge said, in the case of Massey vs. Tingle, (29 Mo., 438) “We know no principle which declares that the statute of limitations begins to run against an action to adjust and settle partnership accounts, from the time of its dissolution. When the account, or an item in the account, is barred, must be determined from the facts in relation to it. The application of the statute must...