Stone v. Boone

The opinion of the court was delivered by Horton, C. J.:

The petition avers a dissolution of partnership, a settlement between the parties, an accounting, and the finding of a balance. The affidavits of H. Gove (one of the plaintiffs) for the attachment and service by publication, and other proof introduced on the hearing of the motion to discharge a part of the attached property, make it quite clear, 'however, that the profits of $9,587.30, alleged to be due the plaintiffs from the defendant, are on an unsettled partnership account. In short, it is the sum, in the language of one of the plaintiffs, “that upon an accounting the defendant will be indebted to the plaintiffs.” As the partnership, by the provision of the supplemental contract of November 22d, 1879, was to .continue only to February 1, 1880, and as there is no pretense that it was extended after that date, we may assume that it was dissolved as alleged.

Two questions are therefore presented by the record: First, Does it appear that the claim upon which the attachment was issued is á “debt or demand arising upon contract, judgment or decree?” If it does not so appear, the second is, Did the *340 cause of action for the unascertained profits of the partnership arise wholly within the limits of Kansas?

The first inquiry is answered in the negative, in Treadway v. Ryan, 3 Kas. 437 ; yet, the writer of this opinion is compelled to say that only for that decision, the length of time that has elapsed since it was announced and the action of the legislature since, he would be disposed to hold that, upon principle, the contrary doctrine is the law. The case has no support, as he thinks, either in reason or the authorities. (Humphrey v. Matthews, 11 Ill. 471 ; Goble v. Howard, 12 Ohio St. 165 .)

The writer’s views on this subject are as- follows: The proviso in subdivision 1 of § 190 of the code has reference to debts or demands founded upon contract, judgment or decree, and actions sounding in tort. An action after dissolution of a firm by one partner against a copartner for an accounting, and to recover an unascertained balance, is really an action founded on contract. A partnership is the combination by two or more- persons, of capital or labor, or skill, for their common benefit, and is usually constituted, as between the parties themselves, by an agreement between them to share the profits and losses of their joint undertaking, whether it have reference to a trade or business, or merely to some particular adventure. Each partner has a kind of latent but vested interest in his share, and a proportionate claim against every partner who withholds his share, and the process of accounting and adjustment gives no title, but only ascertains its extent and measure. The claim for the to-be-ascertained balance is based upon the contract to share the profits and losses, and it no more arises out of transactions with third persons than the claim of the principal against an agent for goods and merchandise sold by the latter. If a balance is really due a partner upon the dissolution of a firm, if he has a just claim for money, such balance and such money are to be ascertained and restored to him through the proceedings of a court .on account of the contractual relations of the members of the firm, and the failure or refusal of the de *341 .fendant member or members to comply with the contractual terms of the partnership. But it is unnecessary to pursue ■this line of argument.

There seems to be running through the entire body of judicial decisions the doctrine that judges ought not to disturb prior rulings of the same court, except for cogent reasons; as some express it, “only where the decision is flatly absurd or unjust,” as the certainty of the rule is often more important than the reason of it. The decision of Treadway v. Ryan, supra, was declared in 1866; it has stood unchallenged for nearly fifteen years; it has been copied and referred .to in various text-books as the law of this state; and in 1870 the legislature reenacted the section of the code of 1859 interpreted by that decision, (Laws 1870, ch. 87, §4;) therefore it is not improper to say the law-making power of the state adopted the judicial construction given to the statute by the supreme court in 1866. Hence, it is not wise to disturb the decision by establishing another rule, although such rule seems sounder in principle.

We pass now to the second question. It appears from the testimony that the zinc ore was smelted at the zinc works at Weir City, in Cherokee county; that the spelter was shipped east to New York, Chicago, La Salle, and other places outside of the state, and sold by defendant, who resided at Chicago, Illinois. The proceeds of the sales were received by the defendant at his place of business in Chicago, and disbursed by him from that point. On February 2, 1880, after the close of the partnership, large sales to purchasers had not been accounted for to defendant; at least, at that time all the proceeds had not been collected. The alleged settlement in February was merely the exhibition of a statement to the partners by -J. H. Gross, who had the management of the business of the firm at the zinc works, of an approximate estimate of the partnership; some items of this statement were unsatisfactory to plaintiffs; at the institution of this suit defendant was out of the state; no final or other balance had been struck; no demand had been made upon *342 defendant in the state for any particular balance; the product of the zinc works had been, sold outside of the state; the money had been collected by defendant outside of the state; the defendant resided outside of the state; the default of defendant to account, if any default occurred, was outside of the state. The selling of the spelter, and the collection of the proceeds by the defendant, were within the literal terms of the articles of partnership, as the defendant was constituted the financial agent or manager of the firm; therefore, in all these matters, he committed no wrong and violated no right. Upon these facts, it cannot be said that the cause of action established on the motion to discharge a part of the property, arose wholly within the limits of this state.

The counsel for. plaintiffs contend that the court had no legal right of authority to inquire, on a motion to discharge the property, whether the cause of action arose wholly within the-state, upon the theory that subdivision one of §190 of the' code confines such inquiry to the trial of the issues joined upon-the pleadings. "We think otherwise. The trial referred to at the close of the subdivision, is the trial (hearing) on the attachment; • any other construction defeats the purpose of the statute, and is contrary to its spirit. The other causes of attachment do not have to be proved on the trial of the issues in the action, and we perceive no good reason for holding.that the exception was intended by the legislature in subdivision one.

The order and judgment of the district court will be affirmed.

All the Justices concurring.