Gray v. Kerr

• Court: Ohio Supreme Court
• Writing for the Court: WILLIAMS, J., (after stating the facts as above.)
• Citation: Gray v. Kerr, 46 Ohio St. 652, 23 N. E. 136 (Ohio 1889)
• Decision Date: 10 December 1889
• Parties: GRAY v. KERR.

23 N.E. 136

46 Ohio St. 652

GRAY v. KERR.

Supreme Court of Ohio.

December 10, 1889

Error to district court, Belmont county.

James W. Gray, the plaintiff in error, on the 24th of April, 1878 commenced his action in the court of common pleas of Belmont county to obtain the settlement of the accounts of a copartnership theretofore existing between the parties, and to recover whatever balance might be found due him thereon. The petition states that the agreement of copartnership was entered into in April, 1864, whereby the partners agreed to furnish each an equal amount of the capital, and to share equally the profits or losses of the business. The plaintiff furnished $1,653.05 of the capital, while defendant only furnished $488.55; the latter agreeing to pay the former interest on the difference. The business of the partnership comprised the purchase and sale of two rafts of lumber, and nothing more. The whole of the lumber was sold at a net profit of $1,256.83. The plaintiff charges that in May and June, 1864, the defendant drew out $352 of the capital by him invested, and became indebted to the firm in the sum of $2,330.60, while the plaintiff's account showed him to be a creditor of the firm to the amount of $152.43; and he avers there is due him $1,241.02, with interest from January 1 1867, and also interest on $758.25 (the amount of the capital upon which the defendant agreed to pay the plaintiff interest) from June 3, 1864. The answer admits the agreement of partnership as stated in the petition, and that the partnership terminated, and denies the other averments of the petition. The defendant also pleads the statute of limitations in two separate defenses,-one alleging that the plaintiff's cause of action did not accrue within 6 years; and the other, that it did not accrue within 10 years next before the commencement of the action. The allegations of new matter in the answer were denied by a reply; and at the spring term, 1881, by agreement of the parties, the case was referred to a referee, ‘ to hear and determine the same, to state an account between the parties, and report his findings of fact and conclusions of law separately.’

On the 7th day of March, 1883, the referee filed his report, in which conclusions of fact are stated as follows: ‘ The copartnership was formed at the time and on the terms in the petition set forth. The capital was furnished by the partners in the amounts shown in the petition, to-wit: James W. Gray $1,653.05; James Kerr, $488.55. Of the capital furnished by James Kerr, he drew out, May 19, 1864, $350.00; June 3, 1864 $2.00. The business stock of the copartnership consisted of two rafts of lumber,-one bought May 9, 1864, for $2,065.00 and one, May 23, 1865, for $1,262.50. The sale of this lumber, partly as rough lumber, and partly as dressed, constituted the partnership transactions. These sales continued, as shown by the books and evidence, until the last of the year 1865, when the partnership transactions, so far as the sales of lumber were concerned, practically ceased; the plaintiff going into another business, and the defendant continuing the lumber business. During the time of the sales of the lumber, and from that time continuously until the present, the plaintiff, by agreement and at the instance of the defendant, was the custodian of the only book in which the partnership accounts were kept, and he made the entries therein, and, having no office, the book was kept at the house of the plaintiff, remote from the firm's place of business, but adjacent to the house of the defendant, the plaintiff and defendant occupying a double dwelling-house during the time of the sales, and for some time subsequent. The personal and social relations of the parties were friendly until a comparatively short time before suit was brought. At the close of the sales of lumber the plaintiff had charge of the collecting and settlement of the partnership accounts for lumber sold, and continued to have charge of it until the bringing of this suit. After the close of the year 1866, no report was made to defendant of the progress of the settlement. No accounting was ever had between the parties. At or near the close of the year 1866, the defendant claims that his impression was that something would be due him. The plaintiff claims that the defendant was indebted to him, but there was no mutual understanding between them. The main difference between the parties rests on a question arising out of the sale of $1,500.27 of lumber to Hanes & Wilson. This sale was concluded Nov. 28, 1865, and was a kind of closing-out sale. It was paid for as follows: Dec. 9, 1865, check, Wheeling Bank, $200; May 14, 1866, check, Wheeling Bank, $1,300.27. The testimony as to which of the parties got this latter check is conflicting, and depends entirely on the parties. The check cannot be found, although search has been made for it; but the referee is of the opinion, and so finds, that the weight of testimony is in favor of and sustains the conclusion that the defendant got the check of $1,300.27. The referee finds that at the close of 1865 there were outstanding claims amounting in round numbers to the sum of $2,600.00. Of this sum all but $337.98 was collected during the first six months of 1866. Of this, again, $36.40 has not been paid, leaving $301.58, which has been collected and settled, as follows:

(1) May, 1867 $50 42

(2) July, 1868, cash 25 00

(3) March 19, 1869, cash 14 65

(4) _____, 1870, settlement 53 40

(5) June, 1871, organ 60 00

(6) _____, 1871, settlement 44 85

(7) Dec., 1873, settlement 21 72

(8) _____, 1875 31 54

‘ Item No. 1 is charged on the book to the defendant. The account in which it is credited has the following entry: ‘ 1867, May, by note to Kerr, $50.42.’ Items 2 and 8 make up an account against one H. Helling, and the evidence is that the last item was a settlement of some dealings between the plaintiff, or another firm of which he was a member, and the said Helling. Items 5 and 7 constitute the balance due against one Jager on August 16, 1865. None of these collections were reported to the defendant, nor did he see the book until 1875 or 1876. No demand was made on the defendant for a settlement until the year 1875 or 1876. The defendant, at the time the demand was made, or a firm of which he was a member, had claims against some firms of which the plaintiff was a member, and on pressing these claims the plaintiff claimed a balance. Some negotiations were had, but no settlement made. The referee finds that, if the account is not barred by the statute of limitations, the amount due the plaintiff from the defendant would be the amount shown in Exhibit A, hereto attached, and made a part hereof. The master finds that there was no refusal to account made by the defendant until after 1876, and then that the defendant claimed that he did not owe anything. In addition to the foregoing conclusions of fact, the referee finds that a reasonable time to collect and settle the accounts and claims of the copartnership would be not to exceed three or four years from the termination of the sales of lumber by it. The referee concludes, as matter of law, that four years from the close of the sales was sufficient time to set the statute running. This would start it in December, 1869; and as the action was not brought until April, 1878, the referee finds, as a conclusion of law, that the plea of the statute of limitations is sustained by the evidence, and that the action of the plaintiff was barred before it was commenced. As a further conclusion, the referee concludes that the defendant is entitled to a decree dismissing the bill of the plaintiff, with costs of suit.'

Exhibit A, referred to in the report, is as follows: ‘ If the claim is not barred by the statute of limitations, the master would find the amount due plaintiff from the defendant to be eleven hundred and one dollars and twenty-eight cents, ($1,101.28,) with interest on seven hundred and fifty-eight dollars and twenty-five cents from June 3, 1864, and on the balance thereof from the first day of January, 1877.’

Neither party excepted to the referee's report. At the next term of the court after it was filed, the plaintiff moved for judgment in his favor upon it; which motion the court overruled, and rendered judgment for the defendant. The plaintiff excepted, and prosecuted error to the district court to reverse the judgment, solely on the ground that the court erred in overruling his motion, and rendering judgment for the defendant. The judgment was affirmed by the district court, and the plaintiff seeks by this proceeding to reverse the judgments of the district and common pleas courts.

Syllabus by the Court

1. The obligation of a partner to account with his copartners after the dissolution of the partnership, where there has been no fraudulent application or investment of the partnership property by him, nor agreement making him the liquidating partner, or otherwise giving him possession or control of the partnership assets, is not a continuing or subsisting trust within the meaning of section 4974 of the Revised Statutes.

2. A cause of action in favor of one partner against his copartner for an account accrues upon the dissolution of the partnership, unless there is some agreement, express or implied, fixing a period for accounting beyond that time, or circumstances rendering an accounting then impracticable.

3. Actions of that class are governed by section 4985 of the Revised Statutes, and can only be brought within 10 years after the cause of action accrues.

J. C. Gray , for plaintiff in error.

L. J. C. Drennen , for defendant in error.

WILLIAMS, J., (after stating the facts as above.)

Was the plaintiff's action barred by the...