Williams, Ch. J.
It is claimed, that the sum of 84 dollars, 50 cents, was paid, by the plaintiff, under an order of a surrogate’s court in the state of New-York; the effect of which was examined in a former trial of this cause between these par[365]*365ties. 10 Conn. Rep. 167. And the defendant now objects to this allowance to the plaintiff, because it was not a partnership debt; because it accrued since the commencement of this suit; and because it was paid by compulsion, as much so, as if taken by force; and the defendant cannot, therefore, be considered as receiver of this sum: there was no privity between them.
The defendant obtained this money of the plaintiff under a pretended decree of the surrogate; and obtained it, as has been decided, without law; but he ought not, under such circumstances, to be permitted to say, by way of defence, that it was wrongfully obtained, without the consent of the plaintiff; and therefore, that the plaintiff shall not recover it, in this suit.
He says further, that this money, thus paid by the plaintiff, was not partnership money; because it is now ascertained, that there were no partnership funds in his hands. There might have been in the plaintiff's hands the avails of the joint funds, and this money may have been these avails, although upon a final settlement, nothing was due to the defendant. But however that may be, this sum of 84 dollars, 50 cents, was demanded, by the defendant, in his claim before the surrogate, as the avails of the joint property; as such, it was, by the surrogate, awarded to him; and as such, it was, (though reluctantly,) paid, by the plaintiff, to the defendant; as such only, could the defendant have received it. He ought not, then, now, to be permitted to say, that in the settlement of this joint concern, he did not receive it as from the joint funds, and ought not to account for it in a final settlement of these concerns. And in addition to this, the auditors allowed only half of that sum, treating it, therefore, as joint property.
Another objection which the defendant makes to this allowance, is, that it was paid since suit commenced; and the rights of the parties ought not to depend upon, or be varied by, facts, which have arisen since action brought. The great object of the action of account, is, to obtain a settlement of the mutual accounts of the parties; and a final settlement cannot be effected, unless such allowances are made. One of the parties may know of debts, which are due, and which ought to be paid, and which he may be compelled to pay during the progress of a suit. From the nature of the connexion, it seems as if these payments ought to be allowed upon the settlement of the accounts, as much as payment on a note, which had been made [366]*366by the party himself. There is an obligation upon every partner or joint debtor to pay the debts of the concern; and if he does it, he must owe the concern so much less.
But we do not rely upon general reasoning only. There is high authority iu support of such an allowance. Lord Mansfield says: “In a writ of account, the first judgment is quod computet; and on such account, all articles of account, though incurred since the writ, shall be included, and the whole brought down to the time when the auditors make an end of their account.” Robinson v. Bland, 2 Burr. 1086. The. claim of the 84 dollars, 50 cents, was, therefore, properly allowed.
As to the due-bill and the note. By the facts, as found upon the remonstrance, they seem to stand upon the same grounds., Both were given, by Peck, for advances made by the defendant, towards the joint concerns, over and above his proportion; and there seems to be no good reason why they should not go into the general account, unless the fact that a due-bill and note were given, should prevent it. Now, if upon an annual settlement, rests had been made in the account, and a balance brought forward, it could not be successfully claimed, that this would prevent that balance front going into the next year’s account, if it remained unpaid. Now, a due-bill, coupled with evidence that it was given upon such a settlement, is nothing more. It does not any more contain a promise to pay, nor does it merge the account: it only shews that he balance was then adjusted, but not paid. No reason, then, exists, unless that the instrument might remain outstanding, why this sum should, not be allowed as an item iu the partnership account. Its character is not changed. The moment it is shewn to be a part of that transaction, that moment, the party shews a right to. have it take its place in the partnership account. Though the instrument may remain outstanding, yet as it is not negotiable, payment can always be shewn, by an allowance in and payment of the account. And indeed, the auditors, in such cases, may, with propriety, enter such allowance upon the instrument, and thus prevent any ill consequences which might arise therefrom. This item, therefore, ought to have been allowed, by the auditors. And although the note contains an express promise to pay, still, since such notes are no longer treated as specialties, the mere fact that a note was given, will not be such [367]*367evidence of payment as to prevent the allowance. It is a mere security for the debt; but it still remained a debt, arising out of the partnership concerns: and there seems to be no good reason why such a debt should not bo included in the final adjustment of the joint concerns.
It is said, that as a suit must have been brought upon the note, in the same manner as if it had been given upon any other consideration; therefore, it cannot be allowed. It is true, that a suit would be so brought upon the note; but in this account, the claim does not rest upon the note alone, but only as connected with the partnership concerns. It is not the note which is allowed, but the debt for which it was given, arising out of the joint concern. Another construction would make the giving of a note a cash payment. In Preston v. Strutton & al., exrs., 1 Anstr. 50. where a bill was filed for relief against a promissory note, given upon the settlement of a partnership account, the partnership still continuing, the court said, that when the account is once liquidated and a note given, note must be paid, unless a second account has been taken, and the balance found the other way. Here, a second account has been taken, and the balance found the other way. The court, therefore, are of opinion, that these items ought to have been allowed, by the auditors.
Another question now arises, what effect is thins mistake of the auditors to have upon the award? Is it to open the whole account; and are the parties to be permitted to re-examine all the items? Or is this an error, which may be corrected? This action is so seldom resorted to, in England, that very little light is to be derived from the books upon this subject; and if no technical rule forbids, it must be settled upon such principles as will best promote justice between the contending parties. As no authority has been found upon this subject, it is proper to inquire, whether our statute interposes any difficulty. It requires, that the auditors shall liquidate and adjust the accounts, and award that the party in whose favour they find the balance to be due, shall recover the same, and shall make report, &c., and on the return and acceptance of the report, the court shall render judgment, that the party in whose favour it is made, shall recover the sum found due, with his lawful costs, Stat. 33. tit.
Free access — add to your briefcase to read the full text and ask questions with AI
Williams, Ch. J.
It is claimed, that the sum of 84 dollars, 50 cents, was paid, by the plaintiff, under an order of a surrogate’s court in the state of New-York; the effect of which was examined in a former trial of this cause between these par[365]*365ties. 10 Conn. Rep. 167. And the defendant now objects to this allowance to the plaintiff, because it was not a partnership debt; because it accrued since the commencement of this suit; and because it was paid by compulsion, as much so, as if taken by force; and the defendant cannot, therefore, be considered as receiver of this sum: there was no privity between them.
The defendant obtained this money of the plaintiff under a pretended decree of the surrogate; and obtained it, as has been decided, without law; but he ought not, under such circumstances, to be permitted to say, by way of defence, that it was wrongfully obtained, without the consent of the plaintiff; and therefore, that the plaintiff shall not recover it, in this suit.
He says further, that this money, thus paid by the plaintiff, was not partnership money; because it is now ascertained, that there were no partnership funds in his hands. There might have been in the plaintiff's hands the avails of the joint funds, and this money may have been these avails, although upon a final settlement, nothing was due to the defendant. But however that may be, this sum of 84 dollars, 50 cents, was demanded, by the defendant, in his claim before the surrogate, as the avails of the joint property; as such, it was, by the surrogate, awarded to him; and as such, it was, (though reluctantly,) paid, by the plaintiff, to the defendant; as such only, could the defendant have received it. He ought not, then, now, to be permitted to say, that in the settlement of this joint concern, he did not receive it as from the joint funds, and ought not to account for it in a final settlement of these concerns. And in addition to this, the auditors allowed only half of that sum, treating it, therefore, as joint property.
Another objection which the defendant makes to this allowance, is, that it was paid since suit commenced; and the rights of the parties ought not to depend upon, or be varied by, facts, which have arisen since action brought. The great object of the action of account, is, to obtain a settlement of the mutual accounts of the parties; and a final settlement cannot be effected, unless such allowances are made. One of the parties may know of debts, which are due, and which ought to be paid, and which he may be compelled to pay during the progress of a suit. From the nature of the connexion, it seems as if these payments ought to be allowed upon the settlement of the accounts, as much as payment on a note, which had been made [366]*366by the party himself. There is an obligation upon every partner or joint debtor to pay the debts of the concern; and if he does it, he must owe the concern so much less.
But we do not rely upon general reasoning only. There is high authority iu support of such an allowance. Lord Mansfield says: “In a writ of account, the first judgment is quod computet; and on such account, all articles of account, though incurred since the writ, shall be included, and the whole brought down to the time when the auditors make an end of their account.” Robinson v. Bland, 2 Burr. 1086. The. claim of the 84 dollars, 50 cents, was, therefore, properly allowed.
As to the due-bill and the note. By the facts, as found upon the remonstrance, they seem to stand upon the same grounds., Both were given, by Peck, for advances made by the defendant, towards the joint concerns, over and above his proportion; and there seems to be no good reason why they should not go into the general account, unless the fact that a due-bill and note were given, should prevent it. Now, if upon an annual settlement, rests had been made in the account, and a balance brought forward, it could not be successfully claimed, that this would prevent that balance front going into the next year’s account, if it remained unpaid. Now, a due-bill, coupled with evidence that it was given upon such a settlement, is nothing more. It does not any more contain a promise to pay, nor does it merge the account: it only shews that he balance was then adjusted, but not paid. No reason, then, exists, unless that the instrument might remain outstanding, why this sum should, not be allowed as an item iu the partnership account. Its character is not changed. The moment it is shewn to be a part of that transaction, that moment, the party shews a right to. have it take its place in the partnership account. Though the instrument may remain outstanding, yet as it is not negotiable, payment can always be shewn, by an allowance in and payment of the account. And indeed, the auditors, in such cases, may, with propriety, enter such allowance upon the instrument, and thus prevent any ill consequences which might arise therefrom. This item, therefore, ought to have been allowed, by the auditors. And although the note contains an express promise to pay, still, since such notes are no longer treated as specialties, the mere fact that a note was given, will not be such [367]*367evidence of payment as to prevent the allowance. It is a mere security for the debt; but it still remained a debt, arising out of the partnership concerns: and there seems to be no good reason why such a debt should not bo included in the final adjustment of the joint concerns.
It is said, that as a suit must have been brought upon the note, in the same manner as if it had been given upon any other consideration; therefore, it cannot be allowed. It is true, that a suit would be so brought upon the note; but in this account, the claim does not rest upon the note alone, but only as connected with the partnership concerns. It is not the note which is allowed, but the debt for which it was given, arising out of the joint concern. Another construction would make the giving of a note a cash payment. In Preston v. Strutton & al., exrs., 1 Anstr. 50. where a bill was filed for relief against a promissory note, given upon the settlement of a partnership account, the partnership still continuing, the court said, that when the account is once liquidated and a note given, note must be paid, unless a second account has been taken, and the balance found the other way. Here, a second account has been taken, and the balance found the other way. The court, therefore, are of opinion, that these items ought to have been allowed, by the auditors.
Another question now arises, what effect is thins mistake of the auditors to have upon the award? Is it to open the whole account; and are the parties to be permitted to re-examine all the items? Or is this an error, which may be corrected? This action is so seldom resorted to, in England, that very little light is to be derived from the books upon this subject; and if no technical rule forbids, it must be settled upon such principles as will best promote justice between the contending parties. As no authority has been found upon this subject, it is proper to inquire, whether our statute interposes any difficulty. It requires, that the auditors shall liquidate and adjust the accounts, and award that the party in whose favour they find the balance to be due, shall recover the same, and shall make report, &c., and on the return and acceptance of the report, the court shall render judgment, that the party in whose favour it is made, shall recover the sum found due, with his lawful costs, Stat. 33. tit. 1. s. 2.
It will not be claimed, that the party in whose favour the award is, shall recover the balance found due at all events; for that would make it imperative on the court to accept the re[368]*368port; and the remonstrance must, therefore, be adjudged insufficient. But as the court are to render judgment on the return and acceptance of the report, it is manifest, that the court may accept or reject the report, as the case requires. Accordingly, the uniform practice has been, for the court to hear any objections to the report, and accept or reject it, as it was or was not founded upon legal principles. If, then, the court are to act upon this report, they must examine and act upon each part of it-upon every item upon which it is founded-provided there are questions of law arising upon them. It would seem to follow, that if the court were bound to examine each particular item, they might reject one or more of these items, when they were so distinct that this could be done, without interfering with other parts of the account. And if they can thus modify the report, and are not bound to adopt every part of it, it would seem to follow, that they may, under other circumstances, compel the party in whose favour a mistake is, which they cannot correct, so to modify it, that justice may be done to the party aggrieved. A report of auditors can be of no higher nature than a verdict of a jury; and no reason occurs, why the court should not exercise a general superintendence over the one, as well as over the other, to prevent the effects of mistakes. In cases of a mistaken verdict, where the plaintiff will consent to waive an advantage which he has thus acquired, the court will not, of course, set aside the verdict, and compel the parties to commence anew. And nothing is found in the statute, or in the principles of the common law, which forbids the application of a similar rule, in case of the report of auditors, if justice requires it.
How then, stands this case? After a long protracted litigation, the parties have been heard before the tribunal constituted for such a case. After a full investigation of the subject, that board have found a sum due to the plaintiff. The defendant has made his objections to this report; which have been examined by this court, who find a mistake to have intervened in two small items of the account. Shall the whole proceedings of the auditors be therefore set aside, and this contest be renewed? Shall the parties be permitted again to litigate questions, which have been settled, in such a manner, that no objections have been made to them? Or shall such a course be taken as will correct a trivial error, so that justice shall be done to both [369]*369parties? If the mistakes of which the defendant complains, can be corrected, without opening the whole case, the defendant cannot complain; for his objections are removed. If the plaintiff in whose favour these errors have occurred, consents to waive the benefit of them, he cannot complain. Justice is done, and a long continued controversy is terminated.
The superior court is, therefore, advised to accept the report of the auditors, provided that the plaintiff deduct the amount due upon the note and due-bill, mentioned in the remonstrance, at the time of the award. And if the plaintiff refuse to make such deduction, the court is advised to reject and set aside the report.
In this opinion the other Judges concurred.
Report accepted conditionally.