Mcmahon v. Brown
| Decision Date | 24 October 1914 |
| Citation | 219 Mass. 23,106 N.E. 576 |
| Parties | McMAHON v. BROWN. |
| Court | United States State Supreme Judicial Court of Massachusetts Supreme Court |
Oct 24, 1914.
C. A Batchelder, of Fitchburg, for appellant.
Thos. L. Walsh, Chas. B. O'Toole, and Jas. H. Walsh, Jr., all of Fitchburg, for appellee.
The master reports that the defendant admitted the material allegations of the first, second, third, fourth, sixth seventh and eighth paragraphs of the bill, but denied the allegations of the fifth paragraph. It followed from these admissions as the master has found, that a partnership existed in which the profits and losses should be shared equally between the partners Charles H. Brown, Jr., and the defendant. McMurtrie v. Guiler, 183 Mass. 451, 67 N.E. 358. It was terminated May 22, 1906, when its business and assets were transferred to a corporation which also assumed all liabilities, but the report states that no adjustment or settement between the partners was then or at any time thereafter made. The defendant under his first exception contends, that if upon an accounting any sum whatever was shown to be due from him the amount belonged to the corporation. But 'assets' of a partnership ordinarily mean the property of the partnership originally contributed or which has been subsequently acquired on account of the firm for the purposes of its business. Scott v. McKinney, 98 Mass. 344; Reed v. Hanover Branch R. R., 105 Mass. 303, 304. And the right to an accounting between themselves after dissolution, and the payment of any balance due from one partner to the other upon a winding up, is not an asset of the partnership. Harvey v. Varney, 98 Mass. 118; Wiggin v. Brand, 202 Mass. 141, 88 N.E. 840. The master moreover has found as a fact, that neither partner considered 'their accounts with each other in reference to * * * the business had been adjusted, canceled or paid.' The intention to make a transfer to the corporation of this mutual liability is thus negatived, and the evidence not being reported the finding is conclusive. The second exception relates to the question whetehr certain items of the account as stated by the master are barred by the statute of limitations. The controversy over this question centers on the fifth paragraph of the bill, and embraces the merits of the defendant's contention under the third exception. The partnership apparently was formed in June, 1899, but the report states that the plaintiff asked only for an accounting from January 1, 1902, to May 22, 1906, the date of dissolution, and the time when the master finds the right matured. It is also stated that the firm at the formation of the partnership intended each member should withdraw from the business an equal amount yearly whether denominated as salary or expenses or profits, but neither was to take his salary in full unless warranted by the business, and that no amount to be withdrawn as salary was agreed upon for the year 1902. It was not until the following year that the annual salary was fixed by an agreement which remained unchanged until December 31, 1905, when a reduction was made, and the salary then established continued until the firm dissolved. The books having shown the transactions of the partners, and the amounts each had withdrawn during the life of the partnership, the master found that during the year from January 1, 1902 to December 31, 1902, the defendant withdrew funds largely in excess of the sum withdrawn by his partner, and also during the succeeding years overdrew his salary under each of the agreements. In stating the account the master has charged the defendant with all moneys withdrawn and credited him with the amount due for salary except for the year 1902, where credit is given only to the extent of the sum withdrawn by his copartner. It is contended, that the master erred because the books show that for the year ending December 31, 1902, the accounts were closed by charging the...
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