Opinion
(December Term, 1847.)
1. Where A. is a partner in two distinct firms, neither firm can sue the other for an amount alleged to be due.
2. If A. be insolvent, the proper course is for the firm claiming to be the creditor firm to charge him on his books for the amount believed to be due.
3. If A. be insolvent, then the accounts of the creditor firm should be adjusted, and a bill may be brought by the remaining members of that firm against the debtor firm, to recover the amount due from the latter after deducting what may be due to A. if anything, upon the adjustment of the accounts of the creditor firm.
CAUSE removed from the Court of Equity of WAKE, at Fall Term, 1847, by consent of parties.
Miller and G. W. Haywood for plaintiffs.
W. H. Haywood for defendant.
The bill is filed by Hugh Rogers, George W. Lowe, and John C. Rogers, against the same John C. Rogers and Walter L. Otey. It states that Hugh Rogers, George W. Lowe, and John C. Rogers were copartners under the name of John C. Rogers Co., that John C. Rogers and Walter L. Otey were copartners in a house of entertainment in Raleigh, called the Eagle Hotel, under the name of Rogers Otey; that the firm of John C. Rogers Co. sold to the firm of Rogers Otey to that of John C. quantities of wood for the use of the hotel, and, for the accommodation of Rogers Otey, accepted their bills, and were compelled to pay them, and likewise lent money to that firm; that upon all their transactions a balance is due from the firm of Rogers Otey to that of John C. Rogers Co., amounting, as the plaintiffs believe, to the sum of $2,000, though they cannot ascertain it precisely; and because the plaintiffs, cannot, by reason that John C. Rogers is a member of each firm, have an action at law, the bill prays that the defendants John C. Rogers and Walter L. Otey "may answer what amount is due from the said firm of Rogers Otey to your orators, and that they may be decreed to pay your orators what may be justly due," and for general relief. (32)
John C. Rogers did not answer the bill. The other defendant, Otey, put in an answer, in which he states several matters of defense, tending to show that John C. Rogers had used the effects of Rogers Otey to a large amount for the use of himself and the other plaintiffs, and that he and they were heavily in debt to this defendant. After replication and commissions, the cause was set for hearing, as between Otey and the plaintiffs, and was transferred to this Court.
It is unnecessary to consider the various matters stated in Otey's answer that might affect the merits of the controversy, as between him and the other parties, as it is impossible there can be any decree for the plaintiffs on this bill. It seems to have been drawn upon some vague sort of notion that the firms are in the nature of corporations, and that one of them might have a decree against the other, as firms. Still, it does not pray that the payment of the debt to John C. Rogers Co. shall be decreed out of the effects of Rogers Otey, for it does not allege that there are such effects, and, on the contrary, it looks behind the names of the firms to the persons who compose them, and seeks a decree that John C. Rogers and Walter L. Otey, who constitute "Rogers Otey," shall pay the debt to the same John C. Rogers, Hugh Rogers, and George W. Lowe, who constitute "John C. Rogers Co." The bill therefore involves the absurdity of a man's having a personal decree against himself for a sum of money; and that too, coupled with a decree against another person in such a manner as to enable the (33) supposed creditors to raise the whole debt out of this latter person, although, as between that person and his partner (who is also a partner in the other firm), it might appear, upon taking the accounts of their firm, that the latter holds the fund out of which the debt ought to be paid. Without taking the accounts of the partnership of John C. Rogers Co., it cannot be told whether the partners, Hugh Rogers and Lowe, have a right to more of the assets of that firm, or could call even on John C. Rogers to make good this debt. And without taking the accounts of Rogers Otey it cannot be told which of those two persons, as between themselves, ought to pay the debt. Now, under this bill, none of those accounts are sought or can be taken, for it is a bill which supposes the two firms to be yet subsisting and to be, as well as the individual partners, all solvent. Supposing that to be so, and that this debt is just, it is easy for the persons composing John C. Rogers Co. to redress themselves, John C. Rogers himself might appropriate the assets of Rogers Otey to the payment of John C. Rogers Co. He may be charged with this debt on the books of John C. Rogers Co., and that will entitle him to a credit for that amount with Rogers Otey. If Otey will not consent to it, there is the alternative, when partners disagree, of dissolving and filing a bill to take the accounts, upon which the debts must all be first paid. If, however, John C. Rogers should refuse to become paymaster to a John C. Rogers Co., or be already so far a debtor to that firm that the other members, Hugh Rogers and Lowe, are unwilling to take him alone for the debt of Rogers Otey, then their course is to stop their business, and upon the settlement of it this debt of Rogers Otey will, as a part of the assets, be allotted to one of the partners in his share, and he can have relief on his own bill. But in the present state of things the Court does not see, nor can the accounts be taken that will enable the Court to see, who is the proper person to pay and receive this money. It may be that John C. Rogers' is the hand, in the firm of Rogers Otey, (34) from which the money ought to go, and also that in the other firm which ought to hold it. There can, therefore, be no decree for the plaintiffs. Not one against Otey alone, because no several liability on his part is alleged, nor anything to exempt John C. Rogers from paying, or contributing to the payment of the debt. And not one against Rogers by himself, or jointly with Otey, because it would be to pay to John C. Rogers himself, jointly with others, and for that reason would be repugnant, absurd, and void.
PER CURIAM. Bill dismissed with costs.