Mr. Justice Trotter
delivered the opinion of the court.
The appellants have assigned the following errors:
1. That the bill presents no case upon which any decree can be founded; and it is urged in support of this objection, that there is no prayer for an account to be taken between the two firms, but a decree for a sum certain upon a stated account. It is a well settled principle, that one partner cannot sue his copartner at law for any matter touching the partnership contract. The reason of this rule lies in the difficulty of adjusting long standing and complicated accounts in the courts of common law, and the necessity of disclosures on oath of matters resting necessarily within the private knowledge of the parties. This necessity ceases, however, where the parties have themselves made a settlement and agreed upon the balance; and the partner in whose favor the balance is so found, may recover it by an action at law. The principle thus stated would be decisive of this question if it was not for the peculiar relation of the parties in this suit to each other. Goosey and Dart, two of the members of the firm of C. Dart & Co., are also members of the firm of Markham & Co.The balance stated on the settlement and claimed in the bill, is, [356] therefore, due' from them to themselves and Samuel Calvit. It is, therefore, a contract which cannot be enforced at law, because one cannot sue one’s self. The remedy is, therefore, in equity, “ where, for the purposes of substantial justice, the court can look behind the forms of the transactions to their substance, and treat the different firms exactly as if they were strangers.” Story’s Eq. Juris. 631. And where an individual is a common partner in two concerns, no legal contract can arise between the partnerships, and, therefore, no engagement entered into, or debt incurred by one, to or with the other, can be enforced at law. This we take to be a conclusive answer to this objection.
■ 2t» The second error relied on for reversing this decree, is the refusal of the chancellor to make an interlocutory decree, and direct an account to be taken between the two firms. The bill expressly charges that an account had been taken, and that the sum claimed was agreed between the parties to be the true balance due the house of C. Dart & Co. It is true the answers deny that this was a final settlement. But the allegation of the bill is supported by the positive and consistent testimony of Smith, the agent of C. Dart & Co., who states, that he and Markham were engaged laboriously, for the period of one entire week, in the examination of the books. In this he is supported by the admissions in the answers, that the settlement was made, as well as by the exhibits of Markham’s letter, and the power of attorney from Goosey to Markham, to execute a mortgage for the balance stated on the settlement. If the settlement stated by Smith was not final, and so agreed upon, why did Markham and Goosey acquiesce in it for so long a time? And why do they, as late as 1830, acknowledge it to be so? In a case before Lord Hardwick, he decided that if one merchant send an account current to another, in which a balance is made due to himself, and the other keep it two years without objection, it will be considered a settled account. 2 Ves. Sen. 230. It is not the actual signing of the account by the parties, that makes it a stated one; it is acquiescence and length of time without objection, and this binds. 2 Atkyns, 252. There is no reason, therefore, to doubt that this was a final settlement; and there was, consequently, no necessity for an interlocutory order, unless the appellants have, [357] by their answers and proofs, laid a ground to surcharge and falsify the account. Have they done so? Both Markham and Goosey charge that some of the articles in the account were overcharged, and that several credits to which they were entitled, were overlooked. But there is no one article or credit specified. This general charge of error is not sufficient. In the case of Taylor v. Haylin, 2 Bro. Ch. C. 210, Lord Thurlow stated the rule upon this subject to be, that if accounts are impeached on the ground of error, you must specify some one error, and prove that, and that is a ground to surcharge and falsify. This rule was subsequently recognised and enforced in the case of Chambers v. Goodwin, 9 Ves. Jun. 266. In that case, it was said by the complainants, who wished to impeach an account which had been stated and found against them, that in the accounts pretended to be settled, several manifest errors and overcharges existed. But the court said this general way of charging error will not do; some error must be specified. This rule is founded in the obvious injustice of permitting the party to come at the hearing with proof of errors of which his adversary has heard nothing, and could not, therefore, be prepared to meet. The chancellor was, therefore, right in refusing to open the account.
Free access — add to your briefcase to read the full text and ask questions with AI
Mr. Justice Trotter
delivered the opinion of the court.
The appellants have assigned the following errors:
1. That the bill presents no case upon which any decree can be founded; and it is urged in support of this objection, that there is no prayer for an account to be taken between the two firms, but a decree for a sum certain upon a stated account. It is a well settled principle, that one partner cannot sue his copartner at law for any matter touching the partnership contract. The reason of this rule lies in the difficulty of adjusting long standing and complicated accounts in the courts of common law, and the necessity of disclosures on oath of matters resting necessarily within the private knowledge of the parties. This necessity ceases, however, where the parties have themselves made a settlement and agreed upon the balance; and the partner in whose favor the balance is so found, may recover it by an action at law. The principle thus stated would be decisive of this question if it was not for the peculiar relation of the parties in this suit to each other. Goosey and Dart, two of the members of the firm of C. Dart & Co., are also members of the firm of Markham & Co.The balance stated on the settlement and claimed in the bill, is, [356] therefore, due' from them to themselves and Samuel Calvit. It is, therefore, a contract which cannot be enforced at law, because one cannot sue one’s self. The remedy is, therefore, in equity, “ where, for the purposes of substantial justice, the court can look behind the forms of the transactions to their substance, and treat the different firms exactly as if they were strangers.” Story’s Eq. Juris. 631. And where an individual is a common partner in two concerns, no legal contract can arise between the partnerships, and, therefore, no engagement entered into, or debt incurred by one, to or with the other, can be enforced at law. This we take to be a conclusive answer to this objection.
■ 2t» The second error relied on for reversing this decree, is the refusal of the chancellor to make an interlocutory decree, and direct an account to be taken between the two firms. The bill expressly charges that an account had been taken, and that the sum claimed was agreed between the parties to be the true balance due the house of C. Dart & Co. It is true the answers deny that this was a final settlement. But the allegation of the bill is supported by the positive and consistent testimony of Smith, the agent of C. Dart & Co., who states, that he and Markham were engaged laboriously, for the period of one entire week, in the examination of the books. In this he is supported by the admissions in the answers, that the settlement was made, as well as by the exhibits of Markham’s letter, and the power of attorney from Goosey to Markham, to execute a mortgage for the balance stated on the settlement. If the settlement stated by Smith was not final, and so agreed upon, why did Markham and Goosey acquiesce in it for so long a time? And why do they, as late as 1830, acknowledge it to be so? In a case before Lord Hardwick, he decided that if one merchant send an account current to another, in which a balance is made due to himself, and the other keep it two years without objection, it will be considered a settled account. 2 Ves. Sen. 230. It is not the actual signing of the account by the parties, that makes it a stated one; it is acquiescence and length of time without objection, and this binds. 2 Atkyns, 252. There is no reason, therefore, to doubt that this was a final settlement; and there was, consequently, no necessity for an interlocutory order, unless the appellants have, [357] by their answers and proofs, laid a ground to surcharge and falsify the account. Have they done so? Both Markham and Goosey charge that some of the articles in the account were overcharged, and that several credits to which they were entitled, were overlooked. But there is no one article or credit specified. This general charge of error is not sufficient. In the case of Taylor v. Haylin, 2 Bro. Ch. C. 210, Lord Thurlow stated the rule upon this subject to be, that if accounts are impeached on the ground of error, you must specify some one error, and prove that, and that is a ground to surcharge and falsify. This rule was subsequently recognised and enforced in the case of Chambers v. Goodwin, 9 Ves. Jun. 266. In that case, it was said by the complainants, who wished to impeach an account which had been stated and found against them, that in the accounts pretended to be settled, several manifest errors and overcharges existed. But the court said this general way of charging error will not do; some error must be specified. This rule is founded in the obvious injustice of permitting the party to come at the hearing with proof of errors of which his adversary has heard nothing, and could not, therefore, be prepared to meet. The chancellor was, therefore, right in refusing to open the account.
3. The third error assigned is, that a final decree was made without taking an account between the members of the firm of C. Dart & Co. The force of this objection arises from the supposed want of proof of title in Calvit’s executors, to the whole of the debt claimed. It is assumed that there is no other method of ascertaining this fact, than the one pointed out in the assignment of the error. In ordinary cases, this is undoubtedly true, and that one of several partners cannot claim the whole of any debt due his firm. He can only recover it for the benefit of the firm. But this case may, as we conceive, well claim to be an exception to this rule. It surely does not lie with Markham to urge this objection, because he has no connection with, or interest in the concerns of the firm of C. Dart & Co. The only other members of the firm of Markham & Co., are Goosey and Dart, and they are the only persons interested to urge the settlement of the affairs of the firm of C. Dart & Co. But they are parties to this suit, and are expressly charged to be indebted to Calvit in a much [358] larger sum than is claimed by the bill. It is true that Goosey’s answer denies that he is indebted to the firm, and that he claims to be a creditor of the same. But it is evident from the whole of his answer, that he founds his claims against the firm of C. Dart & Co., upon a failure to comply with its engagements to deliver goods to the firm of Wm. F. Markham & Co., as stated ini his answer. This we deem altogether evasive; and, independent of this averment in the answer, it is evident he could lay no claim to any part of the sum decreed to Calvit’s executors. But, independent of this circumstance,'the allegation in the bill is fully supported by the consistent and satisfactory testimony of the witness, James M. Smith. Goosey does not deny that Calvit furnished the entire capital of the firm, nor (hat he, Calvit, paid the debts of the firm to a much larger amount than the sum claimed by his representatives. How then does the transaction present itself? Calvit paid in all the capital, and discharged with his individual funds all the debts of the firm. It is now insolvent, and for a much larger amount than the sum due from Markham & Co. Do not these well established facts prove Calvit to be a creditor of the firm for a larger sum than the firm can ever pay ? And is he to be put in a worse condition than any other creditor who stood uncon* nected with it? Can any one doubt, in view of all the proofs in this cause, that Calvit is entitled to the whole of this debt? If the chancellor’ had the power to order an account to be taken between Goosey, Dart and Calvit in this cause, could such an order have put it better in the power of Goosey and Dart to contest Calvit’s claim in equity? But if the bill had prayed an account as contended for, it would have been subject to demurrer for uniting distinct and separate causes of action, and, therefore, the chancellor had po authority to order an account taken. 2 Mad. 294. We are, however, perfectly satisfied, from the proofs in this canse, that Calvit is entitled to this debt. Smith proves that Dart was a debtor to the firm of upwards of 6000 dollars, and that Goosey was likewise indebted, but in a much smaller sum. But it is objected to this testimony, that it was of a secondary nature. It is sufficient to remark, in answer to this objection, that Smith is admitted to have been the mutual agent of the several members of the firm of C. Dart & Co., to settle the accounts of [359] the firm, and.it does not, therefore, lie with Goosey to urge the objection. For all the purposes of this suit, it may, therefore, be safely affirmed that there has been a settlement; and though it was not final, it was, as we think, sufficient to establish Calvit’s title to the debt sued for.
The only remaining objection to the decree, which it is deemed necessary to notice, is the one that the chancellor founded his judgment upon the testimony of a single witness. This has been disposed of in the opinion expressed upon the second ground of error. Smith’s testimony, in all its material statements, is fully sustained by the answers, and the collateral proofs furnished by the exhibits in the record.
Let the decree of the court below be affirmed with damages and costs.