Moore v. Rawson

• Decision Date: 02 March 1904
• Citation: 185 Mass. 264,70 N.E. 64
• Parties: MOORE v. RAWSON et al.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

185 Mass. 264

70 N.E. 64

MOORE v. RAWSON et al.

Supreme Judicial Court of Massachusetts, Suffolk.

March 2, 1904

COUNSEL

George R. Swasey and Michael J. Dwyer, for plaintiff.

Warner Warner & Stackpole, for defendants.

OPINION

BRALEY J.

Between March 14, 1872, the time when the bill was filed, and the coming in of the master's report, this case has been pending before the court for more than 30 years. Those originally connected with it, either as counsel or appointed as masters to hear the parties on the issues to be tried have been removed by death. A part of the pleadings have been either lost or destroyed, and the books of account of the partnership, kept at the office in Boston, and showing all its business transactions, were damaged almost to the point of destruction by the great fire of November, 1872. The defendant Daniel G. Rawson, the only member of the partnership who was familiar with the business of the firm and the contents of the books, became insane, and died without ever having given his evidence in the case; and the bookkeeper, who knew of its business transactions as shown by the books of account kept by him, also died before his testimony was taken. The masters to whom from time to time the case had been referred did not live to make any report though in one instance all the evidence had been submitted and arguments made. In the beginning the plaintiff asked for the usual accounting arising upon the dissolution of the partnership, but as the case proceeded it broadened into an additional demand for actual profits received by the defendants from the use of his capital after dissolution. But no supplemental bill was filed, the defendants conceding that the plaintiff might have, under the original bill, equitable relief commensurate with his claims, subject, however, to any defense that they might interpose. On January 25, 1897, the case was again referred to a master, and his report, as amended and confirmed by an interlocutory decree of February 20, 1903, together with all questions of law raised and stated either in the report or open under the decree have been reserved for our decision.

It is plain from this brief recital of the history of the course of litigation that in any attempt now made to determine the questions raised many obstacles would be found, and embarrassments arise, not only by the death of witnesses, but from the absence of important evidence which had perished without any fault of the parties. But out of such testimony as could be found and presented the master has succeeded in making certain findings of fact, and in stating the rights of the parties, in a full and clear report. Though the plaintiff took a very large number of exceptions, it does not become necessary to take them up in detail, as they may be grouped and considered under the classification presented in the report and at the argument.

Before considering them, it becomes necessary to ascertain the plaintiff's legal standing, and his right to demand and receive and accounting from the defendants. The contract of partnership signed by the parties dated January 1, 1870, was formed 'for the purpose of the manufacture and sale of boots and shoes,' and among other stipulations provided that 'this firm shall be dissolved at the expiration of any year hereafter (within the term of three years aforesaid) by the written consent and wish of any three members of said firm giving notice of such consent or wish in writing at such termination of any such years to each of the members thereof.' Dissatisfaction over the conduct of the business by the plaintiff appears to have arisen between him and Daniel G. Rawson, and after a dispute over the affairs of the firm, on December 20, 1871, notice was given to the plaintiff by his partners, Daniel G. Rawson, W. B. Fay, and C. S. Goddard, of their intention to terminate the partnership at the expiration of the year 1871, as provided in the argeement. The master finds and reports that under ordinary conditions the dissolution took place, and the account should be stated, as at the close of business December 31, 1871, 'but the destruction of the principal books of account by fire, the death of parties and witnesses, * * * make it impossible to state an accurate account as of December 31, 1871.' 'The master has endeavored to state the account of December 20, 1871, which was the date of the firm's annual taking of stock.' No exception is taken to this ruling, and it must be treated as having been accepted by the parties. Upon all the evidence before him he finds and reports that at that time the amount due the plaintiff, exclusive of good will, upon a winding up and settlement of the affairs of the firm, was $13,529.58. As the defendants took no exceptions to the report, this finding must be considered acceptable to them, and of this sum they paid into court, for the use of the plaintiff, December 27, 1873, the amount of $12,483.63. It is the contention of the plaintiff that this sum should be increased by the value of his interest in the good will of the business, and also by the addition of profits which accrued subsequently on his share of the assets in their use by the defendants. Before the formation of the partnership the defendant Daniel G. Rawson was a manufacturer of boots and shoes, and carried on business under the name of 'D. G. Rawson & Co.,' with a factory at Worcester and an office in Boston. In the articles of partnership it was stipulated that the place of business, as well as the name and style of the firm, should be the same; and by force of the agreement, if there was any property in the trade-name, it passed to the firm, without being distinctly enumerated. Sohier v. Johnson, 111 Mass. 238-242; Whitcomb v. Converse, 119 Mass. 38-43, 20 Am. Rep. 311; Boon v. Moss, 70 N.Y. 470-473. After the dissolution by the enforced withdrawal of Moore, no change was made, but the defendants continued the business as before until December 31, 1872, when a new partnership was formed, consisting of four persons, three of whom were the retiring partners of the old firm, and the defendants in this case. No change, however, was then made either in the firm name, which continued to be that of 'D. G. Rawson & Co.,' or in the place where the business was located, and the defendants took over the assets of the old firm, not for the purpose of liquidation, but for use in their business. And the customers who had patronized the first continued to trade with them and the second partnership. The plaintiff retired not only from the firm, but also from the business that it carried on, while the defendants retained the old place of business, and conducted it, under the old firm name. In other words, no change, apparent or real, was made in an enterprise which was transferred bodily from the old partnership to the new, except that one partner was obliged to retire under the terms of the old contract, and after a short period, by a new agreement, another was taken in his place. The attitude of the defendants up to the time of the payment of the money into court was evidently that of a general denial of any right of the plaintiff to an accounting. Their conduct and motives in dissolving the firm are stated in their second answer in the words, 'And they did so by reason of the incapacity, inattention, and inefficiency of the plaintiff in the affairs of the firm, and these defendants found it necessary to the safety and interests of the firm to close the partnership.' No evidence was introduced to support this allegation, and the master reports that 'up to the time of dissolution the plaintiff had devoted himself faithfully to the business of the firm,' and during its existence he had sold substantially 'eighty-five per cent.' of all goods made by it, and 'had a very substantial influence in building up the established list of customers.' A trading partnership that had apparently achieved this large measure of success in its business, an appreciable part of which was due to the skill and ability of the plaintiff, might have a good will that upon dissolution would form a valuable part of its assets; and the plaintiff now contends that such good will existed, and that his interest therein is to be valued and added to his share of the assets already found.

When he demanded that his share in the assets of the firm should be paid over, it was not necessary for him to specify the various items that made up the property of the partnership in which he claimed his rights as a partner, in order to save himself from the possible defense of having waived any claim that there was a good will to the business. At the dissolution the interest of the partners in the assets of the firm became several, and subject only to the payment of the debts of the partnership and a proper settlement of the accounts between them. Yale v. Eames, 1 Metc. 486, 487; Sanborn v. Royce, 132 Mass. 594, 595; Pratt v. McGuinness, 173 Mass. 170, 53 N.E. 380; Bank v. N. O. & Carrolton R. R. Co., 11 Wall. 624, 20 L.Ed. 82. The general demand made by him was sufficient and broad enough to include its entire property. He was not asked to give a particular enumeration of the various items comprising it, but the attitude of the defendants towards him is well stated in the words of Daniel G. Rawson, who, at the interview in which the demand was made, 'denied that there was anything of value to which the plaintiff had any right.' Hoxie v. Chaney, 143 Mass. 592-594, 10 N.E. 713, 58 Am. Rep. 149. If the defendants had would up and adjusted the affairs of the partnership by a sale of all of the property, and for the accomplishment of this refult they had sold the business as a whole, and as designated by the firm name, the good will would have passed,...