Mac Nair v. Ragland, 7 N.C. 139, 3 Mur. 139 (1819)

May 1819 · Supreme Court of North Carolina

7 N.C. 139, 3 Mur. 139

Ebenezer Mac Nair v. Thomas Ragland and others, Executors of the last will of Richard Kennon, deceased.

From Orange.

Bill filed by a surviving' partner against tlie executors of the acting partner of a firm, for an account and settlement of the partnership transactions. By the articles of copartnership, the acting partner was to collect whatever debts might'be due at the termination of the parnership, and account for the same as he received them, or as often as tlie other partners should require. The partnership was dissolved on 4tli August, 1774, except as to such matters as necessarily related to the settlement of their accounts, the collection of their debts, and closing of their-affairs. The books and papers were left in the hands of the acting partner, and in April, 1777, he exhibited a balance sheet, shewing, 1st. The sum due to the other partners for stock advanced by them. 2d. The amount of moneys, securities for money, and property belonging to the firm. In July, 1777, the acting partner made a payment in part to tlie other partners for stock advanced by them, and they being British subjects, shortly afterwards were obliged to leave the State, in consequence of tlie then existing hostilities. The bill was filed in 1800, and the Defendants pleaded the statute of limitations, and stated in their plea, that in April, 1777, their testator stated and settled an account with the other partners ; which stated account is the balance sheet before mentioned,: That the cause of action, if any, accrued to the other partners at that time, and that more than three years have run since that time, & c.

Plea overruled with costs: for the acting partner was bound to collect tlie debts, and settle the business of the firm, and account as often as the other partners should require. No such requisition was made until about the time of filing the bill. The acting’ partner was a trustee for the others: he received tlie moneys and property of the firm in that character, and he was liable to pay when they should require it: and it was only when they required it, and he refused, that his fiduciary character was put an end to, and the statute attached.

Ebenezer Mac Nair, of the City of Richmond, in Virginia, filed his bill in the Court of Equity for the District of Hillsborough, and charged that on the 24th day of August 1771, his brother, Ralph Mac Nair, late of Hillsborough, Merchant, entered into partnership with Richard Kennon, of Chatham Comity, for the purpose of carrying on trade-as Merchants and partners, in Chatham County, under the firm of “ Richard Kennon and Company,” agreeably to the articles duly executed by them, and written in the words and figures following, to wit,

“ Articles of Copartnership entered into this 24th day of August, A. “ D. 1771, between Ralph Mac Nair and any person he may hereafter take “ in with himself, on the one part, and Richard Kennon,. on the other “ part, witnesseth : First, That the said Copartnership shall commence “ on the 15th day of October next or before, if the said Ralph Mac Nair’s “ fall goods come to hand, and shall continue as long as the parties are “ inclined; they the said Ralph and Richard sharing each the equal half “ of all loss and gain by the trade carried on underthese articles. Second, “ That the said Ralph Mac Nair shall charge to the new Company whatever goods he can'supply from his next fall and spring cargoes, to be “ delivered at Hillsborough, at the rate of seventy per cent, advance from “ the sterling- cost, for Virginia money; and Virginia money in room of “ sterling, for the packages, and no more. That for the future supply of “ the store, he the said Ralph Mac Nair shall import goods twice a year, « agreeable to schemes or orders by the said parties mutually made out “ for that purpose,.and shall charge them at the same rate as above men- “ tioned; allowing twelve months credit for all the goods they supply, “ and charging interest for what is not paid in that time ; and allowing a “ discount for what is paid before. Andthatin case of goodsbeingtaken “ or lost, or the store being otherwise disappointed of goods, or at other “ times assortments be wanted, they shall be purchased wherever the “ parties shall judge best for the advantage of the concern. Third, That “ the new Company shall allow the said Richard Kennon for the land and “ improvements whereon he now lives in the County of Chatham, called “ Stony I-Iill, whatever they shall be found to have cost him, valuing the “ goods paid to workmen and others, for building-, improving, &c. at the “ rate of 133 1-3 proclamation money advance from the sterling cost, “ which shall be guessed at by tbe parties. He also shall charge whate- “ ver goods he may have on hand at the commencement of tins Copart- “ nership, at the rate of seventy per cent. Virginia money from the ster- “ ling cost; and the currency articles at what they shall have cost him at “ that place : also Ms household furniture and bay horse. All which ar- “ tides shall remain afterwards in equal Copartnership, in the same man- “ ner as every thing else belonging to the concern. Fourth, That the “ said Richard Kennon shall reside at Stony Hill, or at whatever place “ the parties may tiiink proper to remove the store to, and take upon him “ the management of the concern, with such assistance as they may think " necessary. For which services he shall be allowed at the rate of forty " pounds proclamation money per annum, out of the profits of the trade: “ and shall charge liimself after the rate of 133 1-3 per cent, advance for u proclamation money from sterling-, and no more, for all the goods he “ may want for himself and his negroes; every other expence attending “ the business, coming as a proper charge against the concern. Fifth, “ That the firm of the Company shall be Richard Kennon and Co : and « neither of the parties shall be able to discontinue the trade without « giving twelve montlis notice to Hie other. That an inventory shall be “ regularly taken once a year about the first of July, and a true state of « the affairs made out, of which a copy with a list of the debts deemed « bad, shall be delivered to the said Ralph Mac Nair. And that the said “ Richard Kennon shall collect whatever debts may be due at the termi- « nation of this Copartnership, and finally settle the affairs of the concern “ with what assistance they shall think necessary: and shall account for « the same as he receives it, or as often as the said Ralph Mac Nair shall « require. Lastly, That in case of the death of either party, an inven- “ tory shall be immediately taken, in which the goods on hand, debts, « houses, and every other thing belonging to the concern shall be valued “ as in the next preceding inventory; and that the debts due by the « store being first paid oflj the share of the deceased partner shallbe paid « to his heirs as it shall be collected, or in two equal yearly payments, the « first term of payment to be after the expiration of two years after such “ decease. In witness whereof the parties have hereunto set their hands « and affixed their seals the day and year first above written.

«RALPH MAC NAIR, (Seal.)

« RICH’D KENNON, (Seal.)

« Sealed and delivered in presence of “ John JU’ Clellan,

“ Arch’d Campbell.”

The bill then charges, that at the time these articles of copartnership were entered into, the Complainant was a copartner in trade with his brother Ralph, in the town of Hillsborough, and immediately afterwards he became a partner in the firm of Richard Kennon & Co. Richard Kennon retaining one-half of the interest in the said concern, and Complainant talcing one-third, and his brother Ralph retaining two-thirds of the other half.

That Complainant, with his brother Ralph, immediately afterwards, and from time to time, supplied Richard Kennon, as acting partner of the firm of Richard Kennon & Co. with goods to a large amount, until the 4th day of August, 1774, when it was agreed between the partners that the business of the concern should cease, as to all matters, except such as necessarily related to the settlement of their accounts, collection of their debts, and the closing of their affairs as copartners.

That agreeably to the article which required that Rich-ai'd Kcnnon should collect whatever debts might be due at the termination of the copartnership, and finally settle the affairs of the concern, it was also agreed on the said 4th day of August, 1774, that Kennon should immediately set about the collection of the company’s debts, and the settlement of all the affairs of the concern; and, for that purpose, all the books and papers belonging to the concern were left in his hands ,* that he proceeded to collect the debts and settle the business; and, on the 10th April, 1777, produced to the Complainant and his brother Ralph the balance account signed by him for Richard Kennon & Co. (a copy of which was annexed to the bill;) by which it appeared that the company’s property then in his hands, in money, securities for money, See. amounted to 3,0691. 0,9. 10d. ; and that the sum of 1,8531. 5s. 3d. was due to Complainant and his brother Ralph for goods furnished to the concern.

That Kcnnon was requested to continue the collection of the debts and the settlement of the business, and that on the 1st day of July, 1777, he made a payment to Complainant and his brother of 1411. 10s. Id.

That shortly afterwards, the Complainant and his brother, being merchants, trading to Great-Britain, and being natural born subjects of his Britannic Majesty,- were obliged to depart from the state, leaving the books, papers, property and business of the concern of Richard Kcnnon Sc Co. in the hands of Kennon, who was to proceed to collect the debts and settle the business of the concern.

That Ralph Mac Nair has died, having made his will and appointed Complainant his executor; that Richard Kennon having collected the debts due to the concern, and converted the money and the property of the concern to his own use, has also died,, having made his will and appointed Thomas Ragland, Boling Hines and Celia Ken-non his executors and executrix; who hare proved the will and taken out letters testamentary. That he died possessed of or entitled to a large personal estate, more than sufficient to satisfy the demands of the Complainant: that the books and papers of the firm of Richard Kennon & Co. also came to their hands, and that they refuse to come to any settlement with the Complainants. The bill prayed for an account, and that Defendants might be decreed to pay such sum as should he found due on such account.

To this bill, the Defendants entered the plea of the statute of limitations, and therein stated, that in the life-time of Richard Kennon, to wit, on the 10th day of April, 1777» he stated and settled an account in writing with Ralph Mac Nair and the Complainant, and which was assented to by them, of and concerning the goods and stock which had been supplied to the partnership of Richard Kennon & Co. by Ralph Mac Nair and the Complainant, making a balance of 1,853l. 5s. 3d. then due to them in respect thereof; and also of and concerning the whole money, securities for money, and property of the partnership trade, and of and concerning the profits and gains made thereby; and it thereby appeared, that there then was in Richard Kennon’s hands, in money, securities for money, and other property belonging to the partnership trade, to amount of 3069Í. Os. lOd.: That the goods and stock were so supplied, and the monies and property, if collected and received, (which Defendants did not admit) were so collected and received by Richard Kennon, and the said account so stated and settled, and what was due from him to Ralph Mac Nair and Complainant, became due in the life-time of Richard Kennon, and more than three years before the filing of the bill or serving of any process to appear and answer thereto. That if Complainant, or Ralph Mac Nair, had any cause of action against Richard Kennon in his life-time, or against the Defendants since his death, for or concerning any of the matters or thing’s contained in the bill, the same did accrue above three years before filing’ the bill, or serving of process to appear and answer thereto : and that neither Richard Kennon, in his life-time, nor the Defendants, since his death, did at any time within three years before filing the bill or serving process to appear and answer thereto, promise or agree to come to any account for or to pay or any way satisfy the Complainant or Ralph Mac Nair, any money or other thing for or concerning the matters or things set forth in the bill: &c.

This plea being set down for hearing, was sent to this Court: and ^

Tayxor, Chief-Justice,

delivered the opinion of the Court:

The bill is brought by Ebenczer Mac Nair, surviving partner of Richard Kennon & Co. against the executors and executrix of Richard Kennon, for an account and settlement of the partnership transactions. The bill was filed in October, 1800, and in April, 1802, the Defendants entered a plea of the statute of limitations, which states, that in April, 1777, their testator stated and settled an account with the Complainant and the deceased partner, Ralph Mac Nair, making a balance of one thousand eight hundred and fifty three pounds, five shillings and three pence, due to the Complainant and Ralph Mac Nail’, for merchandize furnished to the copartnership ¿ and another balance of three thousand and sixty nine pounds and ten pence, in Kennon’s hands, for money, securities and property, if collected and received : and the plea avers, that the cause of action, if any ever existed, accrued more than three years before the filing of the bill. The real transaction between these parties is set forth in the bill and the articles of copartnership shew that this plea cannot be sustained. According to the fourth article of copartnership, Kennon was to manage the concern with such assistance as the parties might think necessary ; and by the fifth, he was to collect whatever debts might be due at the termination of the copartnership, and to account for i,«j same as he received them, or as often as the said Ralph Mac Nair shouldfrequire. The partnership was dissolved, by mutual consent, on the 4th August, 1774, except as to such matters as necessarily related to the settlement of their accounts, the collection of their debts, and closing their affairs as copartners ; and for these purposes, Richard Kennon was authorised according to the fifth article j and the books and papers were left in Ms hands, It was in pursuance of this authority, that in April, 1777, he exhibited a balance sheet, the paper set up in the plea, as a stated account, and while the business of collection was yet in progress and incomplete. A payment was made by Kennon in July, 1777, on account of the stock furnished : but the payments as'to the profits were to await the final collections and settlement. This was not effected until after the Complainants had been obliged to leave the state in consequence of hostilities. And until it were completed, Kennon had in his hands the moneys of the Complainant, refusing to pay them upon request. In this state of things the statute of limitations could not attach upon the demand. The statement furnished by Kennon, was to shew from time to time the progress he was making $ the moneys were received by Mm in the character of a trustee, liable to pay what he received, when Ms copartners should require it; and it was only when they did require it and he refused it, that the fiduciary character was put an end to. Upon any other construction, the statute would begin to run upon every separate sum, however small, as it was received by Kennon; and the Complainants could only recover such sums as were received within three years before the hill filed. The plea must be overruled with costs.