Smith v. Diamond

56 N.W. 922, 86 Wis. 359, 1893 Wisc. LEXIS 175

• Court: Wisconsin Supreme Court
• Decided: November 7, 1893
• Status: Published

Opinion

Eton, C. J.

The action involves only the transactions and dealings of the firm of Smith & Diamond, and of the partners with the firm, and the obligations and liabilities of each of such partners to the firm, and through it to each other. Neither partner can assert and enforce in this action any individual claim against his copartner, no matter how such claim arose or what the state of the accounts of each partner with the firm may be. The reason is plain. A partner has no claim against his copartner individually, on account of partnership transactions. If a partner is in arrears in his partnership accounts, he is the debtor of the firm, not of his copartner. Sprout v. Crowley, 30 Wis. 187. But if lie owes an individual debt to his copartner (as in the case just cited) the firm has nothing to do with it, and a claim therefor by the creditor partner cannot have any place in an action to dissolve the partnership and settle its affairs.

It is of no significance that the counterclaim is based upon a stipulation in the copartnership agreement. It is only a personal contract between the parties, with which the firm has no concern, and it might as well have been made at another time, or in respect to property in which the firm never had any interest. The counterclaim is not within the letter or spirit of the statute (R. S. sec. 2656),¹ is not the proper subject matter of equitable counterclaim in this action independently of the statute, and is not supported by any of the adjudications to which we have been referred. The demurrer should have been sustained.

By the Court.— The order appealed from is reversed, and the cause will be remanded with directions to the circuit court to sustain the demurrer to the counterclaim.

1 Sec. 2656, R. 8., provides that a counterclaim, to be pleadable, “must be one . . . arising out of one of the following causes of action:

1. A cause of action arising out of the contract or transaction-set forth in the complaint, as the foundation of the plaintiff’s claim, or connected with the subject of the action. 2. In an action arising on contract, any other cause of action arising also on contract, express or implied, and existing at the commencement of the action.” — Eep.