Meaher v. Cox, Brainard & Co.

37 Ala. 201

• Court: Supreme Court of Alabama
• Decided: January 15, 1861
• Status: Published

Opinion

R. W. WALKER, J.

Whatever may be the proper construction of the 12th clause of the articles, when taken isa connection with the 7th, it is admitted on-both sides, that, by the agreement, the accounts are to be adjusted* monthly, and the cash balances-paid over. Whemthe defendants were called on to pay the balances, as stated* by the auditors, they did not object to- the accounts, omt’he ground that they were made up in¡ part of cash, and iin fart of uncollected debts, without distinguishing, the cash-from the debts; nor did they then, nor db they by their answer, express a willingness to pay the cash balances, according to- the stipulation in the articles; Oh the contrary, the answer must be understood as insisting, that the business of the partnership cannot be successfully conducted, if the 7th clause of the articles is carried out as’it is written ; and the unwillingness 'of' the ''.defendants'’ to abide by and execute that term of the agreement! is apparent. If, in adjusting the accounts, an'd ascertaining tire balances to be paid over, the auditors did not proceed id 'the'manner directed bjr the articles,j this fact should ha-vé.been pointéd out, and the proper correction aské'd' by the ;defendants, when called on for payment .bjhtho complainants. "But, instead of this, they made no reply-td the communications upon the subject sent to them by, tbe complainants ; and when applied to with a-.proposition from the complainants to terminate’ the partnership, they refuséd’to saywhether they would accede to it or not.

Looking, at the whole case, it pretty ’'plainly appears— first, that the'defendants 'do not intend.to carry out one of the terms 'of the agreement,,'.-but' insist' that, ip. order to carry on the partnership business; this feature of ;the agreement must be either disregarded or changed j second, that they have refused, ini the .instances specified’, to correspond with the complainants, on.matters connected’ with their business ; and,', third, that the state of feeling Between the parties justifies the apprehension, that the business eaimot be continued to the mutual advantage of the partners^ "While, therefore, it maybe true, as said by the. chancellor, that.the defendants have not committed such acts of misconduct,, or bee.u guilty of such .willful violation of the-’ terms .ofithe contract, as wonld authorize-the court to decree a dissolution "for "that cause; yet we thipk that -the combination of circumstances .above enumerated does justify a dissolution.in this particular .case;; .which is not <jne in which there is any joint property, which might be sacrificed by a sale;.or whei-e.it is probable-that a dissolution would inflict material injury on either party-; and in which, moreover, it is obvious, from the ¡very nature of-the undertaking, that good' will, confidence, and .concert of effort, (important elements of success in every partnership;) are indispensable to the profitable management of tbe 'business. — See J Story’s Equity, § G73; Cbllyer on Fartm §§ 297, 291, 119, and notes ; Story on Partcn. 275, 289, 290, and notes ; Waters v. Taylor, 2 Ves. & B. 299 ; Baring v. Dix, 1 Cox, 212 ; Bishop v. Breckles, 1 Hoff. Ch. 534.

[2.] The elause providing for the submission to arbitra-¿ion of all matters of dispute, has nothing to do with the question, whether equity should decree a dissolution. No mere agreement to refer a controversy to arbitration, can oust the proper courts oí their jurisdiction — Collyer on Partn. §§ 250-51, 253, and notes 5 Stone v. Dennis, 3 Por. 531 ; 1 Story’s Eq. § 670.

t [3.] As .partnerships are founded in personal confidence and delectus per-sonarivm, it is a settled principle, that no partner, and no majority of partners, can introduce a new member, without the consent of the others. But in this ease, afterthe complainants succeeded to the interests of ¿he persons .originally composing the firm of Cox, Brainard & Co., the defendants recognized and treated them as partners, and continued the business, in conjunction with them, under the .original agreement. This was quite sufficient to make thenoinphiinants partners; and the original articles remained operative, -as between them and the defendants. See Rowland v. Booyer, 10 Ala. 690; Cowles v. Garrett, 50 Ala. 349.

[4.] We do not deem it necessary to add anything to what is said by the chaucellor, in support of the propose tio-n. that the agreement constituted a partnership inter sese. We cite, however, as sustaining that view, Champion v. Bostwick, 18 Wend. 175 ; and Pattison v. Blanchard, 1 Seld. 186.

With these explanations and additions, we approve of- and adopt the opinion of the chaucellor.

Decree affirmed.