Opinion
14383.
DECEMBER 1, 1942.
Equitable petition. Before Judge Palmer. Muscogee superior court. July 18, 1942.
Ed Wohlwender Jr., for plaintiff. R. M. Arnold, for defendant.
Where it appears from the petition that a contractual duty rests upon a party defendant to furnish an accounting of the affairs of a partnership, and such party has the books and records in his possession and refuses to produce them, the plaintiff is entitled to bring a petition in equity, seeking an accounting.
No. 14383. DECEMBER 1, 1942.
R. E. Floyd brought his petition against R. E. Farish Jr., for an equitable accounting, injunction, and winding up of the affairs of a partnership. He alleged, that he and defendant entered into a written contract of partnership, which contract provided for the organization of a business to be known as "Pear Orchard Cleaners;" that they had been conducting this business since January 19, 1941; that the business was very lucrative, and his interest was reasonably worth $6,000; that the partnership had around $4,000 in cash, besides owning a plant, machinery, and equipment which they used in the business; and that under the terms of the contract he was entitled to half of the assets. He attached as a part of his petition a copy of the partnership agreement, which contained the following provision: "It is agreed that there shall be a quarterly accounting of the profits or losses of said business, which shall be shared and borne equally by each of the parties hereto." It was alleged that the defendant "has in his possession the said sum of money, together with all the records including the books and receipts for disbursements of the company," and has refused to account to the plaintiff for his lawful share of the profits and assets of the business. The prayer was, for injunction against disposal of the assets and interference with them; for receivership; for accounting, including sale of the partnership assets and division between the partners; and for general relief.
The defendant demurred on the grounds, (a) that there was no equity in the petition; (b) that there were no allegations which would entitle the plaintiff to the relief prayed for; (c) that no cause of action was set forth; (d) that the plaintiff was endeavoring to dissolve and terminate the partnership otherwise than in the manner provided for by its terms; and that for all of these reasons the plaintiff had no right to maintain or prosecute the action. During the argument on the demurrer the plaintiff's attorney stated to the court that he insisted only upon his claim and prayer for an accounting. The court sustained the general demurrer and dismissed the action, and the plaintiff excepted.
The only question presented for our decision is whether or not, under the petition, the plaintiff was entitled to an accounting. It is observed that the partnership agreement provided that the partners should give to each other a quarterly accounting of the profits or losses of the business, which should be shared and borne by each of them. Therefore a contractual duty rested upon the defendant, who had the books, records, and money of the partnership, to give to the plaintiff an account of the affairs of the partnership every quarter, so that he might know what profits were made or losses were sustained. The defendant in his brief and argument took the position before this court that the petition did not set forth a cause of action for an accounting either at law or in equity, for the reason that no facts were alleged which would indicate that something would be due to the plaintiff if an accounting were had. In support of this position the following cases were cited: Gould v. Barrow, 117 Ga. 458 ( 43 S.E. 702); Calbeck v. Herrington, 169 Ga. 869-873 (152 S.E. 53); Southern Feed Stores v. Sanders, 193 Ga. 884 (2), 886 ( 20 S.E.2d 413); Stephens v. Berry Schools, 188 Ga. 133 (2) ( 3 S.E.2d 68).
An examination of those cases shows that in none of them was there a contractual duty resting upon one or both of the parties to give an accounting, as is provided in the contract involved in the case before us. It was held by this court that when one party calls upon another for an accounting, it must be made to appear that there is something in the hands of the defendant due to the plaintiff; but the situation here is different, as we have stated. Where a contractual duty rests upon a party, as in the case now before us, to furnish an accounting of the affairs of a partnership, and such party has the books and records in his possession, and refuses to produce them, the plaintiff is entitled to bring an action seeking for an accounting. In Southern Feed Stores v. Sanders, supra, this court said: "Where it appears from the petition that the defendant was to keep the books, and the plaintiff was refused access to them, no bill of particulars is required. Newcomb v. Wagoner, 35 Ga. App. 29 ( 132 S.E. 117); Hogan v. Walsh, 122 Ga. 283 ( 50 S.E. 84)." Even if the defendant had only unreasonably neglected to render this accounting, he could be required to do so. See 1 C. J. 629; 1 C. J. S. 660, § 27. Therefore, in our opinion, the court erred in sustaining the general demurrer.
Judgment reversed. All the Justice concur.