McElroy v. Whitney

• Decision Date: 30 June 1906
• Citation: 12 Idaho 512,88 P. 349
• Parties: HUGH E. MCELROY, Administrator of the Estate of JOHN G. WHITNEY, Deceased, Plaintiff and Appellant, v. W. G. WHITNEY, Surviving Partner, Defendant and Appellant
• Court: Idaho Supreme Court

88 P. 349

12 Idaho 512

HUGH E. MCELROY, Administrator of the Estate of JOHN G. WHITNEY, Deceased, Plaintiff and Appellant, v. W. G. WHITNEY, Surviving Partner, Defendant and Appellant

Supreme Court of Idaho

June 30, 1906

DEATH OF PARTNER-DUTY OF SURVIVING PARTNER-APPOINTMENT OF REFEREE-POWER AND DUTY OF REFEREE IN REPORT-COURT MAY ADOPT REPORT OF REFEREE AS ITS FINDINGS-SALARY MAY BE ALLOWED SURVIVING PARTNER WHEN.

1. Upon the death of one partner, the surviving partner may continue the partnership business by and with the consent of the executor or administrator of the estate of the deceased and the approval of the probate court.

2. Unless by consent of the executor or administrator of the estate of the deceased partner, and the approval of the probate court, it is the duty of the surviving partner to settle the affairs of the copartnership as speedily as the best interests of the business of the copartnership will permit.

3. Where the complaint and answer pray for the appointment of a referee to take an accounting of the affairs of the copartnership and report his findings to the court as to the indebtedness of one to the other, and such report or findings show such indebtedness, and that all of the partnership affairs have been considered by the referee, the court may adopt such findings as the findings of the court.

4. Whilst 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.

(Syllabus by the court.)

APPEAL from the District Court in and for Elmore County. Hon Lyttleton Price, Judge.

Plaintiff commenced his action for an accounting. Referee appointed and reported in favor of plaintiff. Report and findings adopted by the court and judgment rendered accordingly. Both plaintiff and defendant appeal. Affirmed.

Judgment affirmed, with costs awarded to plaintiff and appellant McElroy.

Richards & Haga, for Appellant Whitney.

Where the court fails to find on all the material issues, the judgment must be reversed. (Wood v. Broderson, ante p. 190, 85 P. 490; Standley v. Flint, 10 Idaho 629, 79 P. 815.)

In case of reference, the parties are entitled to a statement from the referee of all the items of account between them, in order that either may, if he thinks proper, except to any particular item. The referee should state the account in detail, by items, times, dates, etc., and show the items claimed as well as those allowed. It is not sufficient on such a reference to report the testimony en masse, and the amounts in the aggregate, with no reference to items claimed and disallowed. (Gage v. Arndt, 121 Ill. 491, 13 N.E. 138; Dewing v. Hutton, 40 W.Va. 521, 539, 21 S.E. 780; McCampbell v. McClung, 75 N.C. 393; Sharpe v. Eliason, 116 N.C. 665. 21 S.E. 401; Brockman v. Aulger, 12 Ill. 277; Craig v McKinney, 72 Ill. 305; Ransom v. Winn, 18 How. 295, 15 L. ed., 388; Newcomb v. White, 5 N. Mex. 435, 23 P. 671; O'Neil v. Perryman, 102 Ala. 522, 14 So. 898; Hurdle v. Leath, 63 N.C. 366; Cameron v. Bank, 4 Tex. Civ. App. 309, 23 S.W. 334; Pack v. Mighell, 3 Wash. 737, 29 P. 556; 24 Am. & Eng. Ency. of Law, 2d ed., 234; 17 Ency. of Pl. & Pr, 1037; Gapen v. Gapen, 41 W.Va. 422, 23 S.E. 579; Nims v. Nims, 20 Fla. 204.)

The findings referred to in the order of reference do not mean findings as to what items should be allowed or disallowed either party. It shows clearly that the referee was to report to the court the result of his examination of the books and the taking of the account, and that upon the account having been taken. Properly classified and balanced, the court itself would make such findings and enter such judgment as would be proper in the premises. The order directing the accounting was based upon the decision in Bradshaw v. Morris, 20 Mont. 214, 50 P. 554.

The Montana statute on this question is practically identical with ours. (See, also, Murphy v. Patterson, 29 Mont. 575, 63 P. 375.)

Frank Martin and Hugh E. McElroy, for Appellant McElroy.

It is the correct practice in suits for an accounting to dispose of all matters in bar of an accounting before the account is stated or a reference ordered. The ordinary decree in an accounting case is that an account shall be taken. (1 Ency. of Pl. & Pr. 102.)

As nothing in bar of the accounting was stated in the answer, the court entered its interlocutory decree directing an accounting. This decree amounts to an absolute disposition of the issues made by the pleadings, and nothing remains but the accounting. The reference was "the whole issue," and this included the making of the findings. There was no other issue left in the case. (Idaho Rev. Stats. 1901, secs. 3493, 3494.)

Our law requires the surviving partner to promptly close up and settle the partnership business. (Rev, Stats. 1901, sec. 4216.)

The general rule is well established that the surviving partner is entitled to no salary as surviving partner. He can only charge for services outside the scope of the partnership business. (Loomis v. Armstrong, 49 Mich. 521, 14 N.W. 505; Starr v. Case, 59 Iowa 503, 13 N.W. 645; Brown's Appeal, 89 Pa. 139.)

STOCKSLAGER, C. J. Ailshie, J., and Sullivan, J., concur.

OPINION

STOCKSLAGER, C. J.

This is an appeal from the district court of Elmore county. The action was commenced in Canyon county and transferred to Elmore county for trial, the reason for which is not shown by the record. It is shown by the complaint that John G. Whitney, deceased, and W. G. Whitney were general partners doing business at the town of Payette, under the name and style of the Payette Nursery. That on or about the fourth day of January, 1891, John G. Whitney died intestate, and that on the seventh day of October, 1901, the probate court of Ada county duly issued to plaintiff letters of administration upon the estate of said decedent; that he duly qualified. That upon the death of John G. Whitney, defendant W. G. Whitney took possession and control of the copartnership, as surviving partner, for the purpose of settling the affairs of the partnership, and except as herein admitted has failed and neglected and refused to account to plaintiff and his predecessors or to the personal representatives of said decedent. The copartnership property is set out in the complaint: "That the interest of this estate in the nursery stock, notes, accounts, personal property and indebtedness due said partnership at Payette, Idaho as plaintiff is informed and believes, was of great value, to wit, of the value of more than $ 20,000."

The eighth allegation is: "That the plaintiff is informed and believes said defendant has received from the property of said decedent, in the possession of defendant, as surviving partner, more than the sum of $ 17,441.63 in money, and has accounted to the said estate for not more than the sum of $ 12,441.63, and affiant states upon information and belief that the said defendant has failed and neglected to account to plaintiff or to the personal representatives of the estate of John G. Whitney, deceased, for a large balance of indebtedness due said partnership in notes and accounts, the exact amount thereof being to plaintiff unknown; and plaintiff alleges upon information and belief that the defendant has failed, neglected and refused to account to plaintiff or to the personal representative of said decedent, for the sum of more than $ 5,000, received by the defendant as surviving partner as aforesaid, the same being property of and belonging to the estate of said decedent John G. Whitney."

The ninth allegation is: "That plaintiff has demanded an accounting from said defendant and the payment to plaintiff of the money in the hands of defendant, prior to the commencement of this action, particularly on the twenty-second day of March, 1902, and at numerous times prior to said date, and that the defendant has failed, neglected and refused to make such accounting or to pay said money to plaintiff."

The tenth allegation is: "That at the time of the death of said decedent said defendant was indebted, as plaintiff is informed and believes, to the said decedent and to the said partnership to the amount of more than $ 2,984 (the exact amount thereof being to plaintiff unknown), on account of money of the said partnership received by defendant and converted to his own use."

The eleventh allegation is: "That, as plaintiff is informed and believes, defendant has failed to account to the estate of said decedent for a large amount of nursery stock of the value of more than $ 3,000, and has failed to account for a large amount of personal property, consisting of notes and accounts, the value being to plaintiff unknown, and that plaintiff has reason to believe and therefore alleges that defendant has received into his possession a large amount of property of said estate, the exact nature and character of which is to plaintiff unknown, and that defendant should be required to disclose the same and account therefor to this plaintiff."

The next allegation is that upon information and belief no settlement of the said copartnership business or accounts has ever been made between said defendant and plaintiff or the personal representatives of decedent, and that although requested to make such settlement, defendant refuses to come to a final settlement with respect thereto, and has also refused to render to plaintiff any account of the property of the said partnership in the hands of defendant as surviving partner. Then follows prayer for an accounting of all copartnership dealings and transactions from the time of the commencement...