Moley v. Brine

The members of a partnership contributed to the common stock in unequal proportions, with an agreement that the profits should be equally divided between them. Upon the dissolution of the partnership the assets were insufficient to pay back the contributions of the several members in full. Held, that the assets must be divided in the proportions of the contributions, and the deficiency borne by the partners equally. Held, also, that the fact that one of the members of the firm was a minor made no difference.

Bill in equity to close up a partnership. At a former hearing, before Wells, J., the plaintiffs relied on an agreement signed by the three partners, of which the following is a copy: “ Agreement made this third day of August A. D. 1871, between J. B. Brine, P. J. Moley and E. F. Jackson. The partnership heretofore existing under the firm of Brine Bros. & Co. is hereby dissolved. E. F. Jackson is alone authorized to sign the name of the firm in liquidation, make collections, pay bills, receive money and draw checks, until the old business is settled as hereafter arranged. The other partners shall assist is closing up the business, except as aforesaid. From collections and assets, E. F. Jackson is to receive the sum advanced by him, $4874, without interest. The balance of assets and property, after paying debts, to be divided between Messrs. Brine and Moley, according to their interest in the business; that is to say, $1800, without interest, to Moley, and the balance to Brine. Brine takes the store and business. Brine and Moley assume the risk of all accounts and contracts up to August 1, 1871. All money drawn from the business after August 1,1871, by P. J. Moley and E. F. Jackson is to be deducted from the above portion.” Under that agreement Jackson had begun to liquidate the affairs of the firm prior to the filing of this bill. It was then ordered: 1st. That that agreement “ be set aside and annulled as an agreement, the said Brine being a minor at that date, and having elected to avoid the same on that ground; and that said writing be taken to have no further or other effect filian as evidence upon the question of the actual transactions and relations between the parties.” 2d. “ That the case be referred to a master to hear the parties and report to the court hia findings as to the actual relations between the parties and their respective rights in and to the funds and assets that are now in or that may come into the hands of the receiver; and also to state the accounts between them.” The master’s report stated the following facts: The partnership was formed about July 1, and was dissolved by mutual consent on August 4,1871. At the formation of the partnership, Jackson contributed to the common stock $4874, Holey $1800, and Brine $882, and it was agreed that each should receive one third of the profits. During the continuance of the partnership, Jackson drew out $34, Holey $100, and Brine $673.15. There were no profits of the partnership, and the assets were not sufficient to pay back in full the original contributions. At the final hearing, before Colt, J., the plaintiffs contended that, no agreement being shown as to the division of the common stock upon a dissolution of the partnership, each partner was entitled to the amount of his contribution and interest, and that the deficiency in assets should be borne by the partners equally. The defendant' contended: 1st. That the assets should be equally divided among the three partners, without regard to the amounts contributed by each. 2d. That if such was not the rule, then the deficiency should be borne by the several partners in proportion to the several amounts contributed by them, and that the defendant should not bear any part of the deficiency. The case was reported for the consideration of the full court; such order or decree to be entered as the case required.