White v. Moore
| Decision Date | 24 June 1947 |
| Docket Number | 9851. |
| Citation | 43 S.E.2d 299,130 W.Va. 390 |
| Parties | WHITE v. MOORE. |
| Court | West Virginia Supreme Court |
Syllabus by the Court
1. The liability of all partners for the payment of a debt incurred during the existence of a general partnership continues after its dissolution.
2. After the dissolution of a general partnership, when no adjustment of its accounts is necessary to determine the merits of his claim, a partner who pays with his own funds a valid partnership debt may, in an action at law, recover from the other partner his proportionate share of such debt.
3. In an action at law instituted by one partner, after dissolution of the partnership, to recover from the other partner his share of a debt of the firm incurred before it was dissolved, and later paid by the plaintiff, evidence introduced by him showing the creation of the debt during the existence of the partnership, the reason it was paid, and the manner of payment after dissolution, is admissible to establish the liability of both partners for its payment. Such evidence is not within the rule which renders inadmissible declarations or admissions by one partner of the existence of a partnership debt, made after dissolution of the firm, in the absence of the other partner to fix liability for such debt upon such other partner.
J McGraw Warder and J. B. Fisher, both of Charleston, for plaintiff in error.
Mahan White, Higgins & Laird, of Fayetteville, for defendant in error.
This action was instituted before a justice of the peace of Fayette County, West Virginia, by the plaintiff, Everett White, to recover from the defendant, Robert H. Moore, one half of an alleged partnership debt of $229.44 which the plaintiff contends accrued while he and the defendant were partners and which the plaintiff, after the dissolution of the partnership, paid to the Treasurer of the United States in settlement of a claim filed by the Office of Price Administration for overcharges received by the partnership in that amount from sales of beer. From a judgment for $114.72 and costs in favor of the plaintiff the defendant obtained an appeal to the Circuit Court of Fayette County.
The trial of the case in that court resulted in a directed verdict for the plaintiff in the same amount. Upon that verdict the circuit court entered the judgment of which the defendant complains in this Court.
The evidence with respect to the material facts is not conflicting, and the questions which arise upon this writ of error are questions of law.
The plaintiff and the defendant were general partners during the period October, 1943, to May 17, 1945, and as such operated a restaurant known as the Gauley Tavern at Gauley Bridge in Fayette County. In connection with this business they sold various kinds of beer in bottles. Prior to the formation of the partnership, and during the month of April, 1943, the defendant and a man named Biern had operated the same business by the name of Gauley Tavern, as partners, until the plaintiff purchased Biern's interest in October, 1943. By a regulation of the Office of Price Administration, the maximum price at which beer could be sold in various types of bettles at the Gauley Tavern during the period of the partnership between the plaintiff and the defendant, which existed from October, 1943, to May 17, 1945, when the defendant disposed of his interest, was the price which had been charged between April 4 and April 10, 1943, for each type of bottled beer. During this period the price of beer at the Gauley Tavern was 13 cents for a small standard bottle, 18 cents for a small premium bottle, 32 cents for a standard quart bottle, and 42 cents for a premium quart bottle.
From the time the plaintiff purchased the interest of Biern and became a partner with the defendant in October, 1943, until May 17, 1945, when the defendant sold his interest and ceased to be a partner, the price charged by them for beer sold at the Gauley Tavern was 15 cents for a small standard bottle and 20 cents for a small premium bottle, or 2 cents for each bottle in excess of the maximum price allowed by the regulation. The price charged for the beer in a standard quart bottle was 35 cents and in a premium quart bottle was 45 cents, or 3 cents for each such bottle of beer above the authorized price. Those prices were obtained by the plaintiff and the defendant because of a misunderstanding of the regulation and apparently in the belief that they were permitted by it. With the knowledge and the consent of the defendant, the plaintiff, on two or three occasions, discussed the matter with the representative of the local price and rationing board of the Office of Price Administration in Fayette County for the purpose of ascertaining and determining the authorized price of the different types of bottled beer sold by the plaintiff and the defendant at the Gauley Tavern.
No definite understanding, however, was reached during the negotiations. Several days after the defendant sold his interest in the partnership the local board called upon the plaintiff for a report or an audit of the sales of beer made by the partnership during the period July 1, 1944, to April 15, 1945, including the number and the kinds of bottles and the price received for each bottle of beer. The plaintiff informed the defendant of this action of the board. The defendant stated that he had no audit to make, that he had sold his interest in the business, and that he did not consider that he had violated any law or that he owed anything in connection with the sales of beer by the partnership. The plaintiff then prepared the report from the partnership records and submitted it to the board.
On July 27, 1945, the plaintiff received a written notice from the local price panel acting for the Office of Price Administration, addressed to White and Moore, that the overcharges computed from the audit of sales of beer from July 1, 1944, to April 15, 1945, amounted to $229.44 and that a certified check or a money order payable to the Treasurer of the United States in that sum, should be mailed to it on or before August 15, 1945. After receipt of the notice the plaintiff conferred with the defendant, who refused to pay any part of the charge. On July 30, 1945, the plaintiff, having been informed that unless the claim was paid action for three times the amount would be instituted, made payment of the account with his own funds and obtained a receipt from the local board. He seeks to recover one half of this payment of $229.44 from the defendant in this action.
Upon the trial of the case in the circuit court the plaintiff testified to the foregoing facts in connection with the claim of the Office of Price Administration for the overcharges made by the partnership during the period July 1, 1944, to April 15, 1945, and the manner in which he satisfied the account. The authorized prices for the kinds of bottled beer sold during that period and the prices charged for them by the partnership were established by the testimony of other witnesses. Those facts were not denied by the defendant, who testified as a witness in his own behalf. He also admitted that the prices charged by him and the plaintiff were 15 cents and 20 cents instead of 13 cents and 18 cents for the bottled beer sold at the Gauley Tavern during practically all of the period July 1, 1944, to April 15, 1945. His contention is that the prices of 15 cents and 20 cents per bottle were permitted by the regulation. That contention, however, is not sustained by the evidence.
Two principal errors are assigned by the defendant to reverse the judgment of the trial court.
The first assignment is that the claim of the Office of Price Administration, an agency of the Federal Government acting in its behalf, was not a partnership debt. Though the defendant does not deny the clearly established fact that the transactions out of which the overcharges arose occurred during the existence of the partnership or his knowledge of or participation in them as a partner of the plaintiff, he insists that the postponement of the determination and the assessment of the amount until after May 17, 1945, when he disposed of his interest, removed the transaction from the category of partnership obligations. In short, he contends that the obligation, if valid, is the debt of the plaintiff or of the new partnership between the plaintiff and the purchaser of the interest formerly owned by the defendant and not the debt of the partnership which formerly existed between him and the plaintiff, and that he is not liable for any part of it. This position is not well founded in fact or in law. The acts which gave rise to the liability for the overcharges were performed and completed while the plaintiff and the defendant were partners, and the liability of the partners to pay a claim based upon a definite and clearly ascertainable number of sales at fixed unit rates attached during the existence of the partnership. The postponement of the determination of the amount of the claim of the levy of the assessment, and of the demand for payment, until after that relation was dissolved by the action of the defendant in selling his interest to a third person, does not change the nature of the claim or destroy its character as a partnership debt. The evidence discloses a valid claim against the partnership for the full amount of which each of the partners was liable to the claimant. Harris v. Welch, 87 W.Va. 154, 104 S.E. 277; Weimer v. Rector, 43 W.Va. 735, 28 S.E. 716. The plaintiff and the defendant were equal general partners and, as between them, each was liable for one half of the entire amount. Teter v. Moore, 80 W.Va. 443, 93 S.E. 342; Sperry v. Tulley, 76 W.Va. 106, 84 S.E. 1067....
To continue reading
Request your trial