Quillen v. Titus
| Decision Date | 10 April 1939 |
| Docket Number | Record No. 2034. |
| Parties | E. M. QUILLEN AND J. M. DARNELL v. G. N. TITUS. |
| Court | Virginia Supreme Court |
Present, Campbell, C.J., and Holt, Hudgins, Gregory, Eggleston and Spratley, JJ.
1. PARTNERSHIP — Accounting and Settlement — Withdrawals. — Withdrawals made by a partner from the assets of the partnership are not debts against him in favor of the partnership. They are mere items in the account ascertaining the interest of the partner in the assets of the partnership and they are to be deducted from the net interest of the partner in the partnership.
2. PARTNERSHIP — Accounting and Settlement — Withdrawals — Effect of Contract Conveying One Partner's Interest — Case at Bar. — In the instant case, a suit for dissolution of a partnership and for an accounting, appellee, after the filing of the bill, sold his interest to appellants, the remaining partners, under a contract which provided that there was excluded from such sale appellee's account with the partnership, including any and all claims of appellee against the partnership and any claims of the partnership against appellee. The contract also provided that an account between the parties should be settled in the pending suit. The trial court decreed that certain withdrawals made by appellee were not debts due by him to the partnership.
Held: That the general rule that withdrawals by a partner were not debts against him, but were items in the account ascertaining the interest of the partner in the partnership assets, was not applicable, for the reason that the parties, by their contract, had rendered it inapplicable.
3. PARTNERSHIP — Accounting and Settlement — Partners Dealing at Arm's Length — Case at Bar. — In the instant case, a suit for dissolution of a partnership and for an accounting, appellee, after the filing of the bill, sold his interest to appellants, the remaining partners, under a contract which provided that there was excluded from such sale appellee's account with the partnership, including any and all claims of appellee against the partnership and any claims of the partnership against appellee. The contract also provided that an account between the parties should be settled in the pending suit. The decree of reference, apparently drawn by counsel, directed the commissioner to take, state, settle and report an account showing the account of appellee with the former partnership.
Held: That since the decree of reference apparently was drawn by counsel, and it was plainly inferable that the contract was prepared by counsel, it must be concluded that the parties were dealing at arm's length.
4. CONTRACTS — Construction — Construed as Written in Absence of Ambiguity. — Where there is no ambiguity in a clause of a contract it is the duty of the court to construe it as it is written.
5. PARTNERSHIP — Relations Inter Se — Right of Each to Voice in Business. — All action of a partnership is based upon the agreement of the partners. Each partner has a voice in the conduct of the business.
6. PARTNERSHIP — Relations Inter Se — Salary — Right of Disabled Partner — Case at Bar. — In the instant case, a suit for dissolution of a partnership and for an accounting, appellee, after the filing of the bill, sold his interest to appellants, the remaining partners, under a contract which provided that there was excluded from such sale appellee's account with the partnership, including any and all claims of appellee against the partnership and any claims of the partnership against appellee. The contract also provided that an account between the parties should be settled in the pending suit. For several years prior to the sale of appellee's interest he had been inactive because of ill health, and about two years prior to the sale his salary, which had been fixed by an agreement between the partners, was cut off at the instance of another partner. Appellee assigned cross-error to the refusal of the trial court to allow his claim for salary for this two-year period.
Held: Error. The mere fact that, in the opinion of one partner, appellee was disabled did not change his status as a partner, and unless there was an agreement to the contrary his rights were fixed.
7. PARTNERSHIP — Relations Inter Se — Salary — Disability of One Partner. — The fact that one partner is disabled by sickness from rendering any service does not give another partner, who performs it all, a claim for compensation, for such sickness is one of the risks incident to the relation.
8. PARTNERSHIP — Relations Inter Se — Right of Partner to Recover for Expenditure on Partnership Realty — Case at Bar. — In the instant case, a suit for dissolution of a partnership and for an accounting, appellee, after the filing of the bill, sold his interest to appellants, the remaining partners, under a contract which provided that there was excluded from such sale appellee's account with the partnership, including any and all claims of appellee against the partnership and any claims of the partnership against appellee. The contract also provided that an account between the parties should be settled in the pending suit. Appellee assigned as cross-error the refusal of the trial court to allow him compensation for labor and expenditure upon certain land belonging to the partnership. There was no doubt that the partnership received the benefit of appellee's labor and expenditure, and an exhibit filed showed that he expended the sum of $852.29 on the land.
Held: That appellee was entitled to have credit for the sum expended by him.
Appeal from a decree of the Circuit Court of Augusta county. Hon. Joseph A. Glasgow, judge presiding.
The opinion states the case.
G. H. Branaman, for the appellants.
C. G. Quesenberg, for the appellee.
In February, 1922, G. N. Titus and E. M. Quillen formed a partnership to operate a nursery business at Waynesboro, Virginia, with an agreed investment of $14,000. Under the terms of the agreement, Titus was the owner of three-fourths of the business, and being an experienced nurseryman, was the propagator of the nursery stock. Quillen was the owner of a one-fourth interest and was to perform certain ministerial duties. Each partner was to receive as salary the sum of $100 per month.
Under the terms of a contract bearing date July 21, 1924, Titus sold to J. M. Darnell one-third of this three-fourths interest in the partnership. After the admission of Darnell into the partnership, he was assigned the position of salesman, and the salary of each of the partners was fixed at $150 per month.
In 1926, Titus, on account of ill health, withdrew from active participation in the business and remained inactive until February, 1933, when at the instance of Quillen, his salary was cut off. This action resulted in strained relations between the partners, and on December 27, 1934, Titus filed his bill of complaint against Quillen and Darnell, praying for the dissolution of the partnership, that a receiver be appointed to take charge of the partnership affairs, that an accounting be ordered, and that complainant be reimbursed such sums as may be due him.
To the bill of complaint, Quillen and Darnell filed their answer, denying the allegations asserted therein.
No action was taken upon the bill, for the reason that on January 8, 1935, Titus, Quillen and Darnell entered into a written agreement whereby Titus sold his interest in the partnership to Quillen and Darnell, for the sum of $40,000, payable $5,000 in cash within ten days from date of agreement and the balance in seven annual installments bearing interest at the rate of six per cent, said debt to be secured by a deed of trust upon the property.
The contract contained provisions for the necessary transfers and conveyances to carry out the agreement, and also contained a clause which is the crux of this case. That clause in the contract is as follows:
"Sixth: The parties expressly stipulate and agree, however, that there is excluded from the above sale and purchase the account of George N. Titus with said partnership, including any and all claims and demands of George N. Titus against the partnership and any claims or demands of the partnership against the said George N. Titus; that an account between these parties shall be settled in the pending chancery suit of George N. Titus against the parties of the second part in the Circuit Court of Augusta county and upon such settlement the party of the first part will pay any sum found owing by him to the partnership and on the other hand the parties of the second part will pay any sum found owing by the partnership to the said Titus."
By agreement of counsel, R. E. R. Nelson was selected as the commissioner to execute the decree of reference, and after the taking of voluminous evidence, he filed his report on November 30, 1937.
The commissioner found against the contentions of Titus, that he was entitled to compensation for nursery stock planted on the "Ellis Land," that he was entitled to salary at the rate of $150 per month for a period of twenty-three months, and that under the terms of the contract of sale, he was in no wise...
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Smith v. Smith, 0678-85
...S.E.2d at 337. Where there is no ambiguity in the terms of a contract, we must construe it as written, see, e.g., Quillen v. Titus, 172 Va. 523, 530, 2 S.E.2d 284, 287 (1939); Potts v. Mathieson Alkali Works, 165 Va. 196, 224, 181 S.E. 521, 532 (1935), and we are not at liberty to search fo......