Hyre v. Lambert

• Decision Date: 19 November 1892
• Citation: 37 W.Va. 26,16 S.E. 446
• Parties: HYRE et al. v. LAMBERT.
• Court: West Virginia Supreme Court

16 S.E. 446

37 W.Va. 26

HYRE et al.

v.LAMBERT.

Supreme Court of Appeals of West Virginia.

Nov. 19, 1892.

Bill in Equity—Necessary Allegations—Partnership—Accounting — Suit for Settlement —Decree—Application of Assets — Right of Copartner to Compensation for Services.

1. In a bill in equity the plaintiff should distinctly allege the facts constituting his claim to relief, and, where they are stated to be oninformation, he should allege that he believes them to be true.

2. In a suit in equity for an account, brought by one partner against the other after the termination of the partnership, both partners, defendant as well as plaintiff, are regarded as actors, and the accounts must be stated by the commissioner, and the rights of the several partners must be finally passed on by the court as if each partner were a plaintiff filing a bill against his copartner.

3. In a suit between partners for a settlement it is error to give a final decree for one partner against another for the payment of money when it appears that debts due from the firm remain unpaid or unprovided for, unless the plaintiff will deduct the amount of such debts from the sum which he seeks to recover, or unless some good reason be shown for a departure from the general rule.

4. The assets of a firm are to be applied in the following order: First, in payment of the debts and liabilities of the firm to persons who are not partners; second, in paying to each partner ratably what is due from the firm to him for advances, as distinguished from capital; third, in paying to each partner ratably what is due from the firm to him in respect of capital; fourth, the ultimate residue, if any, is divisible among the partners in the proportion in which profits are divisible under the partnership contract.

5. Under ordinary circumstances, and in the absence of an agreement to that effect, one partner cannot charge his copartners with any sum for compensation, whether in the shape of salary, commission, or otherwise, on account of his own trouble in conducting the partnership business; and in this respect a managing or acting partner is in no different position from any other partner.

(Syllabus by the Court)

Appeal from circuit court, Tucker county.

Bill by Rebecca A. Hyre and James H. Hyre, her husband, against James H. Lambert, to settle a partnership, and divide the assets. There was a decree in favor of defendant. Plaintiffs appeal. Reversed.

W. B. Maxwell, for appellants.

Dayton & Dayton, for appellee.

Holt, J. This is a suit in equity in the circuit court of Tucker county, brought on March 21, 1887, by Rebecca A. Hyre and James H. Hyre, her husband, against James H. Lambert, to settle a partnership which had been carried on by Rebecca A. Hyre, the wife, and defendant, Lambert, from June, 1884, to 15th August, 1885, when it was dissolved by Mrs. Hyre selling her interest to Jesse H. Fansler. On)2th May, 1887, the cause was heard on bill, answer, general replications, exhibits, and argument of counsel, and referred to Commissioner Adams to take proof, and settle the partnership accounts remaining unsettled between the plaintiff Rebecca A. Hyre and the defendant, and report to court the balance, if any, found due from one partner to the other, together with any other matter deemed pertinent by himself, or required to be specially stated by the parties. On 14th April, 1888, the commissioner returned his report, showing a balance due plaintiff Mrs. Hyre of $299.76. To this report defendant excepted, and the court, without passing upon the exceptions, on 16th May, 1888, recommitted the cause to Commis sioner Adams, with directions that he hear proof of and settle the partnership accounts between plaintiff and defendant, including their mercantile partnership, and report the same to court. On the 5th day of August, 1889, the commissioner returned his second report, to which plaintiff excepted, and also tendered and asked leave to file an amended bill. The cause was finally heard on 12th March, 1890. The court refused to permit the amended bill to be filed; overruled plaintiff's exceptions to the commissioner's report; confirmed the same decreeing that plaintiff Rebecca A. Hyre, as a married woman, is indebted to defendant, Lambert, in the sum of $446.46, with interest from 25th July, 1889, till paid, and costs of suit, "which said sum, together with the costs of this suit, he will be entitled to recover of and from the said Rebecca A. Hyre, a married woman, in any proper suit instituted for the purpose, and which said sum and costs are a lien upon her separate personal estate, and a charge upon the rents, issues, and profits of her separate real estate, if any such real or personal estate she has." From this decree the plaintiff has obtained this appeal.

The first error assigned is that the court refused to permit plaintiffs to file their amended bill. This involves a question of equity pleading. It is a bill for an account, filed by one partner against the other after the termination of the partnership; therefore both partners, defendant as well as plaintiff, are regarded as actors, and the accounts must be stated by the commissioner, and the rights of the several parties must be finally passed upon by the court, as if each partner was a plaintiff filing a bill against his copartner; and it Is usual for the plaintiff to formally and expressly submit himself to a decree for any balance that may be found against him, but such formality is not necessary, and was not used in this case. The bill cannot be amended so as to make an entirely new case, either as to parties or ground of suit. See Pickens v. Knisely, 29 W. Va. 1, 11 S. E. Rep. 932. Neither could this be properly called an "amended bill." It is a mere statement that plaintiffs had in their bill stated a fact as they understood it, but that defendant has by a great preponderance of evidence established such fact to be otherwise, "and the plaintiffs now, by this amendment, desire to accept the version of said partnership as proven by the defendant, and consent and agree that said partnership was wholly settled except as to said lumber, timber, and saw-log part thereof, as proven by said defendant." If such fact has been clearly proven by defendant, he does not need plaintiffs' admission of it; and, if plaintiffs desire to admit it, it can be done without an amended bill; and if they can amend and desire to amend their bill in that particular, they must do so by express allegation of the fact, one way or the other, or if, as at present, better advised and informed, allege that they now believes it to be true. The filing of such amended bill was therefore properly refused.

The facts, as we are to take them forthe purposes of this appeal, to be gathered from the pleadings, proofs, and commissioner's report, are as follows: Some time in June, 1884, plaintiff Rebecca A. Hyre, wife of plaintiff James H. Hyre, formed a partnership with defendant, James H. Lambert, for the purpose of carrying on a general retail mercantile business near Red Creek, Tucker county, W. Va., including the buying, sawing, and selling of lumber. A stock of goods costing about $1,500 was bought and paid for by defendant, Lambert. Plaintiff, the wife, through her husband, paid Lambert her half of the cost of the goods, and the partners were to share equally the profit and loss. Defendant, Lambert, was the acting partner. In February, 1885, the partners made a settlement of their private or personal accounts in the store, in which it was ascertained that plaintiff owed the store about $200, and defendant, Lambert, about $600. These two accounts were adjusted, leaving $200 coming to plaintiff. On thel5th day of August, 1885, plaintiff Rebecca (in contemplation of a sale of her interest in the stock of goods to one Jesse H. Fansler) and her partner, Lambert, made and signed the following paper: "August 15, 1885. James H. Lambert and Rebecca A. Hyre have this day settled in full all of our individual accounts up to this day and date, leaving a balance due to Rebecca A. Hyre of $64.83, which is the amount of her entire account over and above.7. H. Lambert's amount." One controversy was whether the $200 found due Mrs. Hyre in the February settlement was taken into this August settlement; Mrs. Hyre claiming in her bill that it was not included, but that both sums were due her; Lambert claiming that the $200 were included, and that only the $04.83 were due. The commissioner, in his second report, —the one complained of, —gives Mrs. Hyre credit for both sums. About 15th August, 1885, Mrs. Hyre sold her interest in the stock of goods on hand in the storehouse and mill to Jesse H. Fansler, and Fansler, with defendant, Lambert, as his surety, " executed to Mrs. Hyre his two obligations for $348, payable respectively on the 1st day of March, 1886, and 1st day of March, 1887, for the balance. The notes and accounts due the firm, amounting to about $2,300, as charged in the bill, were turned over to defendant, Lambert, to settle, collect, and pay the firm debts, and the balance divide equally between himself and Mrs. Hyre, the plaintiff. In his first report, Commissioner Adams treated the mercantile and milling partnership as fully settled on the 15th day of August, 1885, but that the partnership in the saw-log business had not been settled. On this basis ne made up his account, charging Lambert for money received on sale of partnership lumber with $1,124, crediting him with money paid out on partnership debts on account of lumber, $654.13, leaving a balance in Lambert's hands of $460.87; and reported as due Mrs. Hyre, one half, viz., $234.93, and the amount due on August settlement, $64.83; making a total due Mrs. Hyre of $299.76. This, plaintiff claims, is the true statement of the account. This report was excepted to by defendant, Lambert, because it failed to charge him with all collections made by him upon the notes and accounts of the firm which...