Lockwood v. Roberts

• Decision Date: 19 May 1898
• Citation: 50 N.E. 517,171 Mass. 109
• Parties: LOCKWOOD et al. v. ROBERTS.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

171 Mass. 109

50 N.E. 517

LOCKWOOD et al. v. ROBERTS.

Supreme Judicial Court of Massachusetts, Suffolk.

May 19, 1898

COUNSEL

Elder, Waite & Whitman, for appellant.

Hutchins & Wheeler, for appellees.

OPINION

HOLMES J.

This is a suit against a surviving partner, brought by the special administrators of the estate of a deceased partner, for a receiver and an account. The case has been before a master and afterwards before a justice of this court on the master's report of his findings and of the evidence. It comes here on appeal from so much of the final decree only as overrules the third exception to the master's report, and disallows the defendant's claim for $8,910.20 interest.

The claim for interest arises in this way: The defendant Roberts, took the deceased partner, Niles, into partnership in an established publishing business in 1872. The cash and accounts receivable, amounting to $56,254.43, were treated as cash lent to the firm, and were credited as cash to Roberts. Certain house rents also were put in by him as they were collected from time to time, and also were credited to his account. On the other side he was charged with the cash which he drew. So long as a balance remained in his favor upon the account kept in this way, he was credited with interest upon the books, but after that he was not credited with any. In other words, no profits were credited in the account, and all drafts were treated as drawn against the other items above mentioned. The drafts of Niles, on the other hand, necessarily were against profits as he had nothing else to draw against. But, as there had been no division of profits, almost all the items on his account were debits. The accounts of both partners at the end showed a large debit balance for this reason, although the firm had been making money.

The books were kept by Niles, or by a bookkeeper under his direction, and the defendant says that he did not know how the account was made up, and testifies to an agreement with Niles by which he was to have interest at 7 per cent. on any money he had in the business over and above what Niles had. A memorandum was found in Niles' handwriting, but unsigned computing interest at 5 per cent. on yearly balances. The profits were considerable, and, of course, if his share had been credited to Roberts, or had been set against his drafts, it would have made a great difference in the interest account. This difference...