Gleason v. White , 34 Cal. 258 ( 1867 )


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  • By the Court, Rhodes J.:

    A partnership has an existence separate and distinct from that of the several partners and their respective estates. It has its own assets, debts and credits, and makes and performs its own contracts. The partners manage the concern (in the absence of special provisions to the contrary), collect its dues and pay its debts, for the benefit of the partnership. They do not become liable individually until the partnership makes default. While the partnership subsists, one or more of the partners may be indebted to it, or it may, on the other hand, be indebted to one or more of the partners, but the members of the firm are not the debtors or creditors of each other as partners. When the partnership is dissolved by the death of one of the partners, its assets, debts and credits remain as distinct from those of its late members, until its affairs are wound up, as before the dissolution. The surviving partner is to proceed and wind up the affairs of the partnership, pay its debts out of the assets, if sufficient, and divide the residue, if any, among those entitled to it. (Probate Act, Sec. 198.) When the affairs of the partnership are wound up, and, upon striking a balance, it is found that one partner has drawn out more than he was entitled to, or that another has paid more than his proportion of the debts, if there is a deficiency of assets, then the relation of debtor and creditor between the surviving partner and the representative of the deceased partner arises. There is but one balance between them, as there is only one settlement of the partnership business. There is no such thing as a partial balance as between the partnership and its late members. The surviving partner may from time to time divide between the executor or administrator of the deceased partner and himself, and pay over such sums as he may have on hand which are not needed for the payment of the partnership debts. The Legislature, in directing such payments to be made, have demoninated them “ balances,” employing the term in a sense different from that which it has in mercan*264tile usage. But, as already remarked, there is only one settlement, one balance of account between the partnership and the partners or their representatives. Until that is struck the surviving partner cannot be said to he either the debtor or creditor of the estate of the deceased partner on account of the partnership dealings, though the surviving partner or the estate of the deceased may he either a debtor or creditor of the partnership while it is being wound up, as they may have been before its dissolution. The liability, therefore, of the estate of the deceased partner to the surviving partner is dependent upon the settlement of the partnership. The surviving partner’s claim is contingent, within the meaning of section one hundred and thirty of the Probate Act, until the partnership affairs are settled, and then the claim becomes absolute.

    The claim must be presented within ten months after it becomes absolute. It therefore becomes necessary to ascertain whether it is alleged in the complaint that the affairs of the partnership were settled, and if settled, at what time. It is alleged that within ten months after the administrator’s notice to creditors the “ plaintiff had an accounting with defendant as the representative of his deceased partner, and upon such accounting it was admitted by defendant that the sum of one thousand three hundred and forty-five dollars was then due to said plaintiff from said estate ; and plaintiff alleges that the partnership affairs were not, at the time of said accounting, fully settled,” etc. This is an allegation that the partnership affairs were not then settled. The object of the allegation is beyond the reach of any reasonable surmise. It is further alleged that on the 1st day of February, 1866, “ upon as full examination as he could make, plaintiff found that his late partner, at the time of his decease, was indebted to him in the sum of one thousand one hundred and seventy-eight dollars and seventy-seven cents, for which amount he, on the 9th day of May, 1866, presented his claim to the defendant, as administrator,” etc. It is doubtful whether this is a direct and positive statement *265of the fact in question, but it is aided by the further allega^ tion “ that the said sum so claimed as due him is after a full statement of all the affairs of the partnership, that is to say, after the payment of all debts due by said firm and the collection of all its assets.” By a fair construction these allegations amount to an averment of the settlement of the affairs of the partnership and the time of such settlement. The statute—the limitation of ten months for the presentation of claims against the estate—does not commence running until the claim becomes absolute. The delay in the settlement may be unreasonable, and if so the administrator has his remedy, but that matter cannot be litigated in this action.

    Judgment reversed and the cause remanded, with directions to the Court below to overrule the demurrer, with leave to the defendant to answer.

Document Info

Citation Numbers: 34 Cal. 258

Judges: Rhodes

Filed Date: 7/1/1867

Precedential Status: Precedential

Modified Date: 1/12/2023