Abrahams v. Hunt

26 Pa. 49

• Court: Supreme Court of Pennsylvania
• Decided: July 1, 1856
• Status: Published

Opinion

The opinion of the court was delivered by

Lowrie, J.

This bill and answer would have been shortened and simplified if they had been confined to the true issue relative to the fairness of the settlement, and had left the particulars of the account to be brought out before the master, if an account should be decreed. The parties were copartners as drovers, and having disagreed, they separated, settled their accounts, divided their effects, and passed mutual releases. The plaintiff now demands a new account, on the ground that the settlement was unfair.

We think it very obvious that the plaintiff settled under considerable disadvantage. The defendant had all the funds and evidences of debt in his hands, and refused to make a division of them unless the plaintiff would agree that all the effects should be divided equally: though there was a serious dispute as to the terms of the partnership and as to the money invested and drawn out by each. This was very unfair. He had moreover the account books and refused to produce them, or to settle in any way except by abstracts of them produced by himself; and though those were admitted to be true, yet we cannot know that they contained the whole truth necessary to a fair settlement; and, so far as appears, the plaintiff had to take defendant’s word for the amount of money on hand.

This treatment was not only morally unfair, but it was a direct violation of the plaintiff’s rights: and it resulted, not in a settlement properly so called, but in a mere division of the effects among the partners, without any examination of the investments or accounts of the respective partners. The plaintiff’s interest in the funds and papers, and his right to inspect the books and vouchers, were at least equal to the defendant’s, and the settlement ought to have been conducted in such a manner that he could have had an equal opportunity to understand and show the extent of his interest. But this was not allowed him, and the fact that he had the aid of counsel does not compensate for this.

Such a settlement is plainly effected by means of a violation of the rights of the plaintiff as copartner, and is no.t binding, and the release founded upon it is good for nothing. Even when partners quarrel they must settle in good faith, with proper regard to the rights of each other in the mode in which the settlement is conducted. If they can no longer trust each other, they can choose a mutual friend.to moderate their quarrel. If they cannot agree on this mode of settlement, the law is open for their relief. But if they do attempt to settle, one cannot be allowed to have the benefit of a settlement obtained by an undue use of the power which he has acquired as a partner, with all the effects in his handsj and wrongfully withheld by him.

Decree. — This cause came on for hearing at the last January Term at Philadelphia, on an appeal from the decree of the Court of Common Pleas of Philadelphia, and was argued by counsel, and now, on mature consideration thereof, it is ordered and decreed that the said decree be reversed, and it is now here ordered and decreed that the cause be referred to John K. Findlay, Esq., as master, to state an account of the partnership dealings between the plaintiff and the defendant, and which upon the balance of said account shall be found to be due by either party to the other is to be paid accordingly, and the consideration-of the costs is reserved until after the report of the master.