Opinion
No. 39889.
January 16, 1956.
1. Partnership — actions — between partners after dissolution — final accounting — settlement.
In order for a partner to sue at law for the balance allegedly due to him by another partner upon dissolution of the partnership, the plaintiff must prove that there has been final accounting and settlement between them of the partnership affairs.
2. Partnership — same — same — evidence — established final accounting — settlement — promise to pay balance allegedly due.
In suit by one partner against another after dissolution of a partnership to recover balance allegedly due after settlement, evidence warranted finding that there had been a final settlement of partnership's accounts between partners on dissolution and that as a result thereof, defendant promised to pay plaintiff a specified sum so as to entitle plaintiff to sue at law for balance allegedly due.
3. Partnership — evidence — justified modification of judgment appealed from.
In such case, evidence justified a modification of the judgment appealed from on ground that there should be deducted from the amount thereof, certain additional sales which occurred after the partnership was dissolved.
Headnotes as approved by Ethridge, J.
APPEAL from the Circuit Court of Warren County; R.B. ANDERSON, Judge.
John W. Prewitt, Vicksburg, for appellant.
I. To maintain an action at law for the balance allegedly due by another party on dissolution, the partner bringing the action must prove that there has been a balance struck between the partners completely settling the partnership accounts. In re Ainey's Appeal (Pa.), 2 Pennyp. 192; Burns v. Nottingham, 60 Ill. 531; Chadsey v. Harrison, 11 Ill. 151; Davenport v. Gear, 3 Ill. 495; Ditmore v. Nicholson (Tex.), 188 S.W.2d 414; Evans v. White (Miss.), 31 So. 833; Ivy v. Walker, 58 Miss. 253; Kelley v. Ramsey, 176 Ky. 584, 195 S.W. 1111; Miller v. Kemper, 107 Wn. 274, 181 P. 859; Murdock v. Martin, 20 Miss. 660, 12 Sm. M. 660; Porter v. Scheffsky, 139 Wn. 238, 246 P. 576; In re Powell's Succession, 14 La. Ann. 425; Price v. Smith, 116 Okla. 27, 243 P. 153; Remington v. Allen, 109 Mass. 47; Riarl v. Wilhelm (Md.), 3 Gil. 356; Russell v. Grimes, 46 Mo. 410; Saillent v. Densereau, 24 R.I. 255, 52 A. 1085; Sewell v. Cooper, 21 La. Ann. 582.
II. The principal instruction granted the appellee in this case reads as follows: "The Court instructs the jury for the plaintiff that if you believe from the preponderance of the credible evidence presented that there was an agreement made between the plaintiff and defendant at the time of the cessation of operations of the partnership, whereby the defendant agreed to pay the deficit as shown by the records in the amount of $499.10 to the plaintiff, then it is your sworn duty as jurors to find for the plaintiff." This instruction was erroneous for the reason that it failed to include the requirement that the jury find by a preponderance of the evidence that there was a final settlement of the partnership accounts and a balance struck. Further, the instruction is so loosely worded as to authorize recovery on the appellant's testimony alone. Ivy v. Walker, supra; 40 Am. Jur., Partnerships, Sec. 465.
III. It is error to grant an instruction which, as applied to the facts, is misleading, or well calculated to mislead, or which will tend to confuse the jury in the consideration of the issues in the case, and such instructions are grounds for new trial. Evans v. White, supra; Graham v. Brummett, 182 Miss. 580, 181 So. 721; 53 Am. Jur., Trial, Sec. 555.
Oscar P. LaBarre, Vicksburg, for appellee.
I. On dissolution, where one partner contributes the majority of the capital and the other supplies skill and labor, the capital is returned to the partner supplying it from the assets first and then the balance divided equally. Evans v. White (Miss.), 31 So. 833; Frigerio v. Crottes, 20 La. Ann. 351; Ivy v. Walker, 58 Miss. 253; Murdock v. Martin, 20 Miss. 660, 12 Sm. M. 660; Uhrig v. Redding, 150 Fla. 480, 8 So.2d 4; 40 Am. Jur., Partnership, Secs. 348, 465; Griffith's Outlines of the Law (Miss.), p. 371.
This is a suit in debt by one partner against the other, after the dissolution of the partnership. In October 1951 Fowler, the appellant, and Harrell, the appellee, entered into an oral partnership agreement to operate a business which would purchase and sell pecans. Both of the partners were to contribute their time and labor. With more experience in this work, Fowler's main contribution was his skill and labor. He also invested $1,261.31. Appellee Harrell invested in the business $5,201.69. The partners employed a bookkeeper, George Auter, to keep the books of the business.
After operating for several months, the partnership was dissolved in January 1952 by mutual agreement, and according to the testimony of appellee and his witness Auter, the accountant, which the jury accepted, the parties then reached a final accounting and settlement of the partnership affairs. Without detailing it, the net result was that appellant, Fowler, agreed to pay Harrell $499.10 in full settlement of the partnership accounts. Harrell sued Fowler in the County Court of Warren County for that amount. The issue of whether this was the agreement and settlement was submitted to the jury, and Harrell was given a judgment for that sum, which the circuit court affirmed.
(Hn 1) In order for a partner to sue at law for the balance alleged due to him by another partner upon dissolution of the partnership, the plaintiff must prove that there has been final accounting and settlement between them of the partnership affairs. 40 Am. Jur., Partnerships, Secs. 465, 466, 486, 487, 488; Ivy v. Walker, 58 Miss. 253 (1888); Evans v. White, 31 So. 833 (Miss. 1902). (Hn 2) However, the evidence was ample to warrant the jury in finding that there had been a final settlement of the partnership's accounts between the partners on dissolution, and that as a result of such settlement, appellant promised to pay appellee the sum of $499.10. This issue was submitted to the jury in a proper instruction based on appellee's theory of the case, and was resolved against appellant.
(Hn 3) Appellee's declaration had attached to it the accountant's statement of settlement between the parties. It reflected that from the $499.10 owed by Fowler to Harrell, there should be deducted for "additional sales" the amount of $33.20, which occurred after the partnership was dissolved, and that hence the amount owed by appellant was $465.90. The testimony of Auter is undisputed to the effect that appellant is entitled to this credit. For that reason, the judgment of the county court is modified and corrected so as to render judgment for appellee against appellant in the amount of $465.90.
Affirmed as modified.
Roberds, P.J., and Lee, Arrington and Gillespie, JJ., concur.