Manning v. Reilly

• Decision Date: 01 January 1878
• Citation: 50 Tex. 99
• Court: Texas Supreme Court
• Parties: HUNT & MANNING v. B. W. REILLY.

50 Tex. 99

HUNT & MANNING

v.B. W. REILLY.

Supreme Court of Texas.

1878.

APPEAL from Smith. Tried below before the Hon. M. H. Bonner.

May 22, 1871, H. C. Hunt and H. C. Manning, editors and proprietors of the National Index newspaper and job office at Tyler, Texas, formed a partnership with B. W. Reilly, publisher. By the terms of the partnership Hunt and Manning were to “furnish all the necessary material for the publication of said newspaper and for job work of the office for one year from this date,” damages from loss by fire excepted. Reilly was to publish and mail the newspaper and do all the job work of the office, &c., for the term. Hunt and Manning were to take half the proceeds, and Reilly the other half. A clerk was to be employed and the money to be divided weekly. The contract contained full details for the management of the business.

About two months after the formation of the partnership, July 18, 1871, the presses, type, material, &c., of the office were seized by judicial process, in a suit by G. W. Whitmore against S. D. Wood and said Hunt and Manning, as defendants. This put an end to the business of the partnership.

April 12, 1874, Reilly brought suit in the District Court of Smith county against Hunt and Manning, alleging the contract of partnership, its breach by Hunt and Manning, and damages therefrom.

The defendants pleaded that the business was not stopped by their voluntary act, but by the suit of Whitmore; that defendants proposed obtaining other material for the business, but that Reilly voluntarily left the town and rendered them no aid in the further publication of the paper, when again commenced.

The case was continued for several terms of the court.

September 16, 1876, the defendants asked that an auditor be appointed to state the partnership account between the parties.

At same term the cause was submitted to the court without a jury, and on September 20, 1876, the district judge, in a written opinion, rendered judgment for plaintiff for $1,010 and costs. Motion for new trial was overruled and defendants appealed.

The facts in evidence sufficiently appear in the opinion.

W. H. Herndon, for appellants.

I. There was, by the terms of the articles of agreement introduced in evidence and described in the petition, a copartnership entered into between appellants and appellee on the 22d of May, 1871, for the period of one year. (Bradshaw v. Apperson, 36 Tex., 138.)

II. It is submitted that the partnership was dissolved by the injunction and seizure of the Index office and property on the 18th of July, 1871, which rendered it impracticable and impossible to carry on the business longer. (Werner v. Leisen, 31 Wis., 169;Carroll v. Evans, 27 Tex., 262; Story on Part., 6th ed., secs. 290-294, 311, 312, 319, and footnotes; Renton v. Chaplain, 9 N. J. Eq., (1 Stock.,) 62.)

III. The copartnership being dissolved by legal process of 18th July, 1871, and there being unsettled accounts in favor of the firm and liabilities against it, an auditor should have been appointed by the court, when applied for by appellants, to have taken an account of the partnership effects and liabilities and made his report, the refusal of which was error. (Whitaker v. Bledsoe, 34 Tex., 402.)

IV. After dissolution of partnership, the partners became tenants in common as to the partnership property, and neither has the right to sell the interest of the other in such property, unless by special agreement or to pay partnership debts. (Hogendobler v. Lyon, 12 Kan., 276; 38 Tex., 225;42 Tex., 38.)

For rule for settlement of partnership affairs, see Lusk v. Graham, 21 La. Ann., 159; Chambers v. Crook, 42 Ala., 171; and the familiar elementary principles found in our reports and in Story on Partnership.

V. If the positions assumed be correct, then the appellee could not recover damages for a breach of the articles of copartnership, such as for services per month during the time of partnership, much less afterwards; nor for loss of time, or for expenses of house rent, &c. The remedy of appellee was against his partners for an accounting, and if they were indebted to him, to recover from it, to wind up the business, dispose of the assets, and divide the profits or share the losses, if any.

In no event could he recover speculative, remote, or consequential damages. (Sedg. on Dam., p. 104, note 2, and pp. 105, 106, and notes, with cases cited; 2 Pars. on Cont., 455, et seq., and foot-notes; Ashby v. White, Smith's Lead. Cas., 266; Dale v. Grant, 34 N. J. L., p. 142.)

Jones & Henry, for appellee.--One partner may maintain an action against another for breach of articles, and the damages may include profits which would have accrued from conducting partnership business. (1 Pars. on Cont., 6th ed., p. 194; Bagley v. Smith, 10 N. Y., 489; 13 Am. Rep., 438; Griffin v. Colver, 16 N. Y., 489; Hadley v. Baxendale, 9 Exch., 341; Sedg. on Meas. of Dam., 5th ed., p. 77, note 1, and note 1 to p. 100.)

We submit, that the record shows there was a clear breach of contract by the appellants, to the damage of appellee, and that the evidence shows he was entitled to recover much higher damages than were awarded him by the judgment of the court.

GOULD, ASSOCIATE JUSTICE.

This suit was brought by Reilly to recover of Hunt and Manning damages for an alleged breach of an agreement, the legal effect of which agreement was a partnership between the three, in the publication of a newspaper, for twelve months from May 22, 1871, Hunt and Manning, on their part, agreeing to furnish everything in the way of materials; Reilly to do or furnish at his own expense all the work; the proceeds, after paying a book-keeper, to be equally divided between Reilly on the one side and Hunt and Manning on the other. The publication was carried on under the agreement from May 22 to July 18, 1871, when the press and materials were seized and placed in the hands of a receiver, at the suit of one Whitmore, instituted against Hunt and Manning and one Woods, but not against Reilly, the defendants in said suit being enjoined from further use of said press and materials.

Appellants claim that the legal effect of the injunction was to dissolve the partnership; that they were not liable to plaintiff for any damages resulting from this forced dissolution; and that his only remedy was to have a settlement of the partnership. The answer to this claim is, that, having entered into...