Wendell v. Clark

• Decision Date: 03 March 1922
• Citation: 134 N.E. 608,240 Mass. 562
• Parties: WENDELL v. CLARK.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

240 Mass. 562

134 N.E. 608

WENDELL

v.CLARK.

Supreme Judicial Court of Massachusetts, Suffolk.

March 3, 1922.

Appeal from Superior Court, Suffolk County; William Cushing Wait, Judge.

Suit by M. Rogers Wendell against John T. Clark for an accounting. From interlocutory and final decrees in favor of defendant, complainant appeals. Affirmed.

The case was referred to a master to hear the parties and hear evidence and to report his findings, with such facts and questions of law as either party may request, but he was later directed to report his findings with reference to plaintiff's right to any recovery or accounting and to take no further action until further order. The accounting was sought with reference to dealings in stocks under an agreement for the sharing of profits and losses, plaintiff requesting a firm of stockbrokers to take over the account from brokers through whom the dealings were carried on, and claimed to have subsequently liquidated the partnership business by selling the securities under the advice of such brokers, and sought to prove conversations with a member of such firm of brokers for the purpose of showing reasons why particular stock was not sold. The master excluded the evidence and plaintiff objected to the report because of such exclusion, and because of the exclusion of evidence that plaintiff delayed bringing suit because defendant had been in poor financial circumstances up to the time of bringing of the suit.Roger S. Warner, of Boston, for appellant.

Frederick Foster and Herbert L. Barrett, both of Boston, for appellee.

BRALEY, J.

The bill alleges, the answer admits, and the master finds that the parties at some time prior to October, 1908, entered into an agreement to trade in stocks through Francis Henshaw & Co., a firm of stockbrokers. The account was opened by and always stood in the name of the plaintiff, who deposited therefor certain bonds and shares of stock. The defendant, an employee of the firm, was to supervise the account, and all profits and losses were to be shared equally. The master, while finding these facts, did not pass upon the question of partnership, but left it for the decision of the court. It was a question of fact within his province to decide. But whether treated as a partnership, or as a joint adventure for their mutual benefit, either party if dissatisfied could demand an accounting. Forina Co. v. Karnheim, 134 N. E. 605, and cases cited.

The defendant terminated his employment some time in April, but the plaintiff did not know it until immediately prior to November 4, 1910, when without consulting the defendant and without his assent, he caused another firm of stockbrokers ‘to take over the account,’ pay the amount due, and receive the securities. The plaintiff contended before the master, and contends here, that as a result of the defendant's management he has suffered large losses, for one-half of which he should be reimbursed. The securities having been taken over and the agreement having been expressly limited to the term of the defendant's employment, the joint undertaking ended ‘on or about November 14, 1910,’ when the plaintiff either is shown to have known, or to have had at his command full sources of information relating to, their speculations shown by the books of Henshaw & Co. It is at this time that his right to an accounting for alleged mismanagement accrued. Kennedy v. Porter, 109 N. Y. 526, 17 N. E. 426. The present suit was begun by writ dated May 18, 1919, and the statute of limitations has been pleaded. The rule sometimes applied, that the statute does not begin to run as between partners after dissolution until the partnership debts have been liquidated, has no bearing in the case at bar, as there were no outstanding obligations. Riddle v. Whitehill, 135 U. S. 621, 10 Sup. Ct. 924, 34 L. Ed. 282. The defendant also was not a liquidating partner, or adventurer, and no actual fraud having been shown, and the relations of the parties at that time having become adverse, the bill cannot be maintained, unless the defendant's letters interrupted the statute. Farnam v. Brooks, 9 Pick. 212, 245;Sawyer v. Cook, 188 Mass. 168, 74 N. E. 356;Sunter v. Sunter, 190 Mass. 499, 456, 77 N. E. 497.

The plaintiff as previously said did not consuit the defendant before transferring the securities and made no complaint concerning the defendant's conduct until February 1, 1915,...