Bass v. Cates

39 S.E.2d 550, 74 Ga. App. 363, 1946 Ga. App. LEXIS 537

• Court: Court of Appeals of Georgia
• Decided: September 19, 1946
• Docket: 31258.
• Status: Published

Opinions

Parker, J.

(After stating the foregoing facts.) It is a general rule that an action at law can be maintained by one partner against another partner, on a demand growing out of a partnership transaction, where there has been a settlement of the partnership and a balance struck, or where the affairs of the partnership have been so settled that the jury can, without an equitable accounting, ascertain the amount due as the balance owing by one partner to the' other under a settlement made by them. Paulk v. Creech, 8 Ga. App. 738 (5) (70 S. E. 145); Little v. Moore, 55 Ga. App. 570 (190 S. E. 811). It was alleged by the plaintiff that the partnership, out of which the alleged indebtedness arose, had been dissolved by mutual consent on a named date before the filing of the suit. These allegations with others in the petition were sufficient to bring the case within the rule stated, and the grounds of the demurrers alleging that the suit was not maintainable at law because the indebtedness sued for grew out of a partnership transaction were without merit.

The record does not show why the court sustained the demurrers, or whether they were sustained on only one or more grounds. After carefully considering the petition and the demurrers, it seems to ns that a cause of action was alleged in each of the counts, and that it was error to sustain the demurrers for any reason and dismiss the case.

Count one was based on the contract of sale made on January 1, 1942, by the plaintiff to the defendant. Although it stated a definite consideration of $5000 cash and $24,690.60 secured by notes and a bill of sale, it made reference to the original agreement between the parties and recited that “the terms therein contained are hereby specifically made a part of this instrument.” The terms expressed in the first agreement, all of which became a part of the final sales contract, included the provision that Cates would pay Bass “the actual book value of the interest purchased as shown by the partnership books.” It was alleged that certain notes held by the partnership, with an actual book value of $30,100, in which the plaintiff had a one-half interest, were not included in the audit on which settlement was made, either as notes or in any other item therein, and that the plaintiff had been paid no consideration whatever for his interest in said notes, and that the amount named as the consideration of the bill of sale did not include any sum paid by the defendant to the plaintiff for the notes. We think it clear that count one alleged with sufficient fullness and definiteness an indebtedness by the defendant to the plaintiff predicated upon the contract óf sale.

In Manry y. Hendricks, 66 Ga. App. 442 (18 S. E. 2d, 97); 192 Ga. 319 (15 S. E. 2d, 434), an action was brought for an indebtedness growing out of the dissolution of a partnership. It was based on the contract entered into by the parties in consummating the dissolution. The suit was for an amount that the retiring partner owed the partnership at the time of the dissolution, over and above the amount which he claimed to owe, it being alleged- that the true indebtedness of such partner to the partnership had been concealed by him and misrepresented to the other partner who purchased his interest. In construing the petition in that case, this court said that, while it contained allegations appropriate to an action for damages for fraud and deceit practiced by the defendant upon the plaintiff, the action was in fact a suit by one person against another, who had formerly been the plaintiff’s partner, upon an indebtedness, and that the indebtedness was one for which an action would lie by reason of the contract entered into between the parties in consummating the dissolution of the partnership. We think that the principle thus stated in the Manry case applies to the case at bar. While no fraud or deception or misrepresentation was alleged against the defendant in the instant case, the petition clearly alleged an error or mistake in the audit, resulting in the plaintiff receiving less than he was entitled to receive, represented by the sum for which the suit was filed. If, as a matter of fact, as alleged in the petition, the book value of the assets of the partnership was $30,100 more than the audit showed, the plaintiff, who was the owner of a one-half interest therein, would be entitled to recover pne-half of that amount as a part of the purchase-price for his interest, as contemplated and provided under the dissolution agreement. It matters not how the mistake occurred or who made the error, if, in truth and in fact, there was an error as alleged by the plaintiff.

In Paulk v. Creech, supra, on page 743, this court said: “Of course, in any case, if the partnership has been closed and the- accounting settled, and one partner has been required to pay an item that was overlooked [italics ours], he may recover contribution, where there has been a settlement and a balance struck which is agreed to. The partner in whose favor the balance lies may sue in assumpsit.” 7 Am. & Eng. Enc. Law, 361, is cited. Assumpsit may be either express or implied. “Express assumpsit is an undertaking made orally, by writing not under seal, or by matter of record, to perform an act or to pay a sum of money to another. Implied assumpsit is an undertaking presumed in law to have been made by a party, from his conduct, although he has not made any express promise.” BouvieT’s Law Dictionary (1914), p. 269.

An action on an implied assumpsit for money had and received may be maintained where the defendant has received money which the plaintiff, in justice and good dealing, is entitled to recover, and which the defendant is not entitled in good conscience to retain. Dobbs v. Perlman, 59 Ga. App. 770 (2 S. E. 2d, 109); Sheehan v. Augusta, 71 Ga. App. 233 (30 S. E. 2d, 502). In an action for money had and received, it is not necessary to allege a demand and refusal to pay. Jasper School District v. Gormley, 57 Ga. App. 537, 544 (196 S. E. 232); Morgan v. Hutcheson, 61 Ga. App. 763, 772 (7 S. E. 2d, 691). In Dolls v. Perlman, supra, it was held that, “In an action for money had and received, because the defendant is in possession of money which was paid the defendant because of a negligent mistake of the plaintiff, a cause of action is made out and a right to recover demanded, unless it appears that the negligence of the plaintiff amounted to a violation of a positive legal duty owing the defendant.” That ease was a suit by stockbrokers for the difference in the selling price and the'actual market value of stock of the defendant sold by them for the defendant. It appeared that day they made a mistake in selling the defendant’s stock as stock in a new corporation, when as a matter of fact it was stock in the old corporation, and had a value of only about one-sixth the value of the stock in the new corporation. It was held that the plaintiffs were entitled to recover, although they were negligent and themselves made the mistake which enriched the. defendant. If it be conceded that the plaintiff in the case at bar was negligent to a degree, as alleged in the demurrers, this would not bar a recovery, under the ruling in the Dolls case, unless such negligence amounted to the violation of a positive legal duty. We do not think that any negligence properly chargeable to the plaintiff went that far, and the error or mistake in the audit in this case was not made by the plaintiff. Applying the rule of law announced in the Dolls case to the case at bar, we think that count two of the petition stated a cause of action. “The strictest good faith is required among partners.” Code, § 75-201. Although a suit for money had and received is a legal action, it is founded upon the equitable principle that no one ought unjustly to enrich himself at the expense of another, and thus it is a substitute for a suit in equity. Jasper School District v. Gormley, 184 Ga. 756, 758 (193 S. E. 248). Where one partner bought the interest of his copartner in the partnership assets, which seemed larger than they really were, by reason of a mistake in the books, and the mistake was unknown to both partners, and neither was in laches respecting its discovery, and where the purchase of such interest was at a price based on an erroneous set of books, the Supreme Court held “that the consequences of the mistake ought in equity to be corrected, where it could be done without injustice to the selling partner.” Branch v. Cooper, 82 Ga. 512 (9 S. E. 1130). That decision '•“based the correction of such mistake upon natural justice and equity,” as was said in Whittle v. Nottingham, 164 Ga. 155, 159 (138 S. E. 62). If, as alleged in count two of the petition, the plaintiff did not receive any consideration for the sale and transfer of his one-half interest in the notes of the partnership, and the defendant collected the money on said notes, the action for money had and received, as alleged in said count, was maintainable. None of the authorities cited by the defendant in error requires a different holding in this case.

The plaintiff stated a cause of action in both counts of the petition, and the court erred in sustaining the demurrers and in dismissing the action.

Pursuant to the act of the General Assembly, approved March 8, 1945, requiring that the full court consider any case in which one of the judges of a division may dissent, this case was considered and decided by the court as a whole.

Judgment reversed.

Sutton, P. J., MacIntyre and Gardner, JJ., concur. Broyles, C. J., and Felton, J., dissent.