Jones v. Marshall

• Decision Date: 30 September 1913
• Citation: 24 Idaho 678,135 P. 841
• Parties: EMMA JONES, Administratrix of the Estate of FRANCIS C. JONES, Respondent, v. JOHN MARSHALL, Appellant
• Court: Idaho Supreme Court

135 P. 841

24 Idaho 678

EMMA JONES, Administratrix of the Estate of FRANCIS C. JONES, Respondent, v. JOHN MARSHALL, Appellant

Supreme Court of Idaho

September 30, 1913

PARTNERSHIP-DUTIES OF SURVIVING PARTNER-COMPENSATION TO SURVIVING PARTNER-EVIDENCE.

1. The rule adopted in this state that where a case has been heard in the trial court wholly upon depositions and documentary evidence, and no witnesses appeared and testified, the appellate court will examine and weigh the evidence for the purpose of determining the preponderance thereof, will not be applied in any case where witnesses have appeared and testified before the trial court, although the greater part of the case was heard on depositions and documentary evidence.

2. Evidence in this case examined and held sufficient to support the findings and judgment.

3. The general rule of law that the surviving partner is not entitled to a salary or compensation for managing and settling up the partnership business is subject to some exception in a case where the partnership consisted of persons engaged in professional employment, such as attorneys at law, and where the firm had contracted to perform certain services and had collected the compensation therefor, or where litigation is necessary for the protection of fees earned or of property belonging to the partnership.

APPEAL from the District Court of the Eighth Judicial District for Bonner County. Hon. John M. Flynn, Judge.

Action by the administratrix of the estate of a deceased partner against the surviving party for an accounting and settlement of the affairs of the partnership, and for judgment and decree for the amount due the estate. Judgment for the plaintiff. Affirmed.

Judgment affirmed. Costs awarded to respondent.

G. H Martin, for Appellant.

A surviving partner is entitled to charge for expenses and services in carrying on firm litigation. (30 Cyc. 697; Sterne v. Goep, 20 Hun, 396; Newell v Humphrey, 37 Vt. 365; Congdon v. Callahan, 115 Tenn. 285, 112 Am. St. 833, 89 S.W. 400, 1 L. R. A., N. S 643, 5 Ann. Cas. 659; Converse v. Hobbs, 64 N.H. 42, 5 A. 832; Lamb v. Wilson, 3 Neb. (Unof.) 496, 92 N.W. 168; Little v. Caldwell, 101 Cal. 553, 40 Am. St. 89, 36 P. 107-109; Bufford v. Ashcroft, 72 Tex. 104, 10 S.W. 346; Brownell v. Steere, 128 Ill. 209, 21 N.E. 3.)

A distinction should be made between such a case as this and the case of ordinary commercial partnerships. Where the earnings are the result of professional skill and labor, a different rule as to compensation to the surviving partner should be adopted than in a case of a commercial partnership. (Steere v. Goep, supra; Lamb v. Wilson, supra; Justice v. Lairy, 19 Ind.App. 272, 65 Am. St. 405, 49 N.E. 459.)

"There is a disinclination to allow pay to a surviving partner for winding up; but the tendency is to deal with such cases on the particular circumstances rather than by absolute rules." (Thayer v. Badger, 171 Mass. 279, 50 N.E. 541.)

A surviving partner will be entitled to contribution for the reasonable expenses of the litigation as part of the expenses of winding up the partnership affairs. (22 Am. & Eng. Ency. Law, 226; Lee v. Dolan, 39 N.J. Eq. 193.)

The partnership with all its incidents is held to continue for the purpose of settling the partnership affairs and until that is effected. (22 Am. & Eng. Ency. Law, 211; 30 Cyc. 659; Am. Bonding Co. v. State, 40 Ind.App. 559, 82 N.E. 548.)

E. W. Wheelan, for Respondent.

Only a small portion of the testimony was taken before Judge Flynn, who finally decided the case, pursuant to the stipulation entered into between the parties. It has been held that in such cases this court will consider all the testimony, and make its own findings of fact, conclusions of law, and judgment. (Roby v. Roby, 10 Idaho 139, 77 P. 312; Stoneburner v. Stoneburner, 11 Idaho 603, 83 P. 938; Spofford v. Spofford, 18 Idaho 115, 108 P. 1054; Van Camp v. Emery, 13 Idaho 202, 89 P. 752; Council Improvement Co. v. Draper, 16 Idaho 541, 102 P. 7; Parsons v. Wrble, 19 Idaho 619, 115 P. 8.)

While the general rule is that the surviving partner is not entitled to a salary or compensation for managing and settling up the partnership business, it has its exceptions when a partnership has been carried on for some time after a dissolution by death and such continuance has proved to be beneficial. (McElroy v. Whitney, 12 Idaho 512, 88 P. 349; 22 Am. & Eng. Ency. of Law, 220-226.)

AILSHIE, C. J. Sullivan, J., concurs. STEWART, J., Dissenting.

OPINION

AILSHIE, C. J.

This action was brought by the plaintiff, as administratrix of the estate of Francis C. Jones, against John Marshall, as surviving partner of the law firm of Jones & Marshall. This firm had been in the practice of the law at Sandpoint, and upon the death of the partner Jones, the survivor Marshall was left with a large law business, consisting of general litigation, collections, insurance, and a considerable amount of real and personal property which had been acquired as fees in the law business and which was at the time partnership property. The action was for general accounting and settlement.

It appears that Jones died on January 8, 1907, and this action was commenced on the 25th of October, 1907. The case never reached final judgment, however, until the 17th of July, 1912. It appears that after the issues were formed, the case was referred to a referee to take testimony and report the same, together with findings, to the court. This was done, and after the report was made further evidence was taken before Hon. R. N. Dunn, one of the judges of the eighth district. For some reason the case was not yet finally submitted, and subsequently by stipulation the evidence which had been taken before Judge Dunn was extended, and further oral testimony was submitted before Judge Flynn and other depositions were taken, and the whole case was at last submitted to Judge Flynn, who considered the evidence taken before the referee, the depositions, the evidence which had been submitted before Judge Dunn, and the evidence which was submitted in his own court before him personally, and he thereupon made findings of fact and conclusions of law and entered the judgment from which this appeal is taken.

The trial court made separate findings on each disputed item, either allowing or rejecting the same or reducing it, as the justice of the case appeared to him. After considering the whole matter, he found that the defendant was indebted to the plaintiff as administratrix of the estate of her deceased husband in the sum of $ 3,118.70, and entered judgment accordingly. The defendant has appealed from the judgment and has brought up the evidence only which deals with the particular items which he contends were either improperly allowed or rejected.

In the first place, it has been suggested that under the rule announced by this court in Roby v. Roby, 10 Idaho 139, 77 P. 213, and followed in Stoneburner v. Stoneburner, 11 Idaho 603, 83 P. 938, Spofford v. Spofford, 18 Idaho 115, 108 P. 1054, Van Camp v. Emery, 13 Idaho 202, 89 P. 752, Council Improvement Co. v. Draper, 16 Idaho 541, 102 P. 7, and Parsons v. Wrble, 19 Idaho 619, 115 P. 8, it is our duty to examine and weigh the evidence in this case as though it were being originally tried before this court. The fact that oral testimony was introduced before Judge Flynn who rendered the decree in this case is a sufficient and complete answer to the contention made in this respect. This court has never departed from the rule that it will not disturb a judgment entered upon conflicting evidence where any part of the evidence has been given by the witnesses in person before the trial court. The rule applied in the foregoing cases applies only to a case where no witnesses were produced before the trial court or where the whole case was submitted on depositions, report of referee, or documentary evidence, and no witnesses appeared and testified before the court. We are governed, therefore, in this case by the general rule governing this court in cases of conflicting evidence.

The record that is presented to us here is voluminous, containing evidence bearing on a great number and variety of items of debit and credit. Our examination and consideration of the errors urged in appellant's brief and the evidence introduced touching the matters complained of convinces us that we would not be justified in disturbing the findings of the trial court or reversing or modifying the judgment and decree entered thereon. There are some items referred to on which we might arrive at a different conclusion from that reached by the trial court if we were considering them as a court of original jurisdiction; but, taking the record as a whole, upon the whole account as it is presented here, we are strongly persuaded that the trial court reached an equitable and just conclusion in the case and that the judgment ought to be affirmed. In this connection we may here observe that in considering this case and reaching the conclusion above announced, we have considered it in the light of the law as the rule is contended for by appellant with reference to the right of a surviving partner of a law firm to compensation for closing up pending litigation for which fees have been collected and in prosecuting claims for the collection or protection of fees that had been partially or wholly earned. This principle of law was at least recognized in McElroy v. Whitney, 12 Idaho 512, 88 P. 349. The statute of this state, sec. 5554, Rev. Codes, makes it the duty of the surviving partner to settle the business and affairs of the partnership without delay, and account with the executor or administrator and pay over such balance as may from time to time be payable. Under ...