Singer v. Heller

Cole, J.

On tbe record in this case, tbe question presents itself, whether tbe final judgment was not defective and erroneous for failing to specifically dissolve tbe partnership. Tbe judgment states, by way of recital, that “judgment dissolving tbe copartnership having been heretofore rendered reserving tbe claim for damages,” etc., it is adjudged that tbe said defendant recover nothing of tbe plaintiff on bis counterclaim. The judgment contains a clause stating that it appeared by tbe stipulation of the parties that tbe assets of tbe copartnership bad been divided between tbe parties, thus fully disposing of all tbe property of the firm, and obviating all necessity for any other or further action of tbe court upon that subject. But correct practice doubtless required that tbe partnership should be dissolved in tbe final judgment, because, under tbe code of procedure, there is properly speaking no such thing as an interlocutory judgment, tbe only judgment authorized being one which finally disposes of and determines tbe rights of tbe parties. Sellers v. Union Lumbering Co., 36 Wis., 398 . Tbe counsel on neither side, however, object to the form of tbe judgment, but have treated it as one disposing of all of tbe rights of tbe parties and practically dissolving the partnership.

Though tbe judgment does not in express terms decree a *547 dissolution, and may be informal in that respect, yet it probably should, under the circumstances, be regarded as really adjudging a dissolution. Counsel liave seen fit so to treat it; and, from the nature of the actual clauses of the judgment, this may be its necessary effect. At all events, as no objection is taken that the judgment does not in a more positive manner dissolve the partnership, we are disposed to regard it as really amounting to a dissolution, without deciding whether the judgment would be held proper had an objection been taken to it on that ground. It is certainly apparent that there has been a complete division of the effects and assets, and a final winding up of the affairs of the concern. And therefore the judgment may be deemed as substantially adjudging a dissolution, in the form in which it now stands. This brings us to a consideration of the other questions in the case.

The law seems to be well settled, that a court of equity will dissolve a copartnership when the disagreements and disputes between the parties have become so violent and lasting as to prevent any beneficial effects from the continuance of the connection. Bishop v. Breckles, 1 Hoff. Ch. R., 534; Collyer on Part., §§ 296 and 297; Story on Part., § 287. The successful management of the business of a copartnership depends so essentially on mutual confidence and harmony of views between the partners, that when these are wanting, cooperation becomes impracticable. In Bishop v. Breckles, the assistant vice-chancellor, while observing that it requires more than the mere will of one party to justify a dissolution, still seemed to think that the continuance of the union should not be enforced when dissension had marred all prospect of the advantages contemplated at its formation. And this view is rational and in accordance with legal principles. For it would seem absurd to continue a partnership when it appeared that the parties refused to act together, or permit each other to act separately, in transacting the business of the concern.

"What is a proper remedy by the injured party for a viola *548 tion of tbe articles of a copartnership by the other partner, or for rendering a termination necessary before the period prescribed, is quite an interesting question; but one which, from the view we have taken of the case on the merits, we do not find it necessary to decide. The defendant, under his counterclaim, seeks to recover damages in the nature of profits for not continuing the partnership for the time fixed; and he insists that these damages should be assessed or ascertained by a court of equity after dissolution has taken place and all the assets have been divided. Indeed, the cause is retained for the sole purpose of recovering these damages. We do not say that a court of equity, having taken jurisdiction for one purpose, will not retain the cause in order to do complete justice, and assess such damages if the facts seem to waruant its doing so. A court of law would seem to be the more appropriate forum for assessing the damages for a breach of contract; but possibly a court of equity, under some circumstances, will afford the relief. It is proper to remark that the case of Bagley v. Smith, 10 N. Y., 489 , was an action at law for the breach of a contract to continue the partnership. And the case of Wilson v. Johnstone, Law Reports, 16 Equity Cases, 606, to which we were also referred upon this point, was where a partnership was prematurely determined; and the vice-chancellor held that if the incoming partner had paid a premium, he was in all cases entitled to have a proportionate part of the premium returned, unless he had released his right to it, or there had been an actual or implied release of the right to be a partner, including such a deliberate and serious breach of the partnership contract as might be considered equivalent to a repudiation of it altogether. But it is obvious that these cases do not have any very direct bearing upon the question whether the defendant could recover damages by way of anticipated profits for a premature dissolution of the partnership caused by the misconduct of the plaintiff. But we pass the question, as we are satisfied *549 tbat the defendant has made out no case for such relief, assuming that he could have it in the action. Eor, upon the evidence, we are clearly of the opinion that it was not the conduct of the plaintiff alone which caused the disputes and disagreements, but that both parties are equally responsible for that state of feeling. ¥e have reached this conclusion after a careful examination of all the testimony, and upon full consideration of the exhaustive arguments by counsel of the questions of fact. "We cannot enter Upon a discussion of the evidence upon the point. But we are satisfied that early in the year 1874 there was a feeling of mutual distrust and suspicion existing between the parties, for the existence of which both were measurably responsible. From that time on, they both seemed insensible to their duties and obligations as partners. They refused to act together in purchasing stock for their business, and entirely failed to treat each other in an open, considerate and friendly manner. There was misconduct on both sides, and each deviated far from the course of duty he ought to have pursued towards his partner. This being the case, we do not think that either should recover damages for any profits which would have been realized from the business which was broken up by the fault of both parties.

By the Cov/rt. — The judgment of the county court is affirmed.