Coffey v. Coffey

The main question is whether the contract dated March 10, 1908, is a bar to this action. The master has found that the contract was drawn up and agreed to by the respective attorneys of the plaintiff and the defendant after a series of conferences, [and] that there was no fraud or deceit practised or attempted by either party thereto.” The question therefore is, as stated by the master, simply one of construction.

The partnership began about May 1, 1902, and continued until March 10, 1908, when it was terminated by mutual agreement. The business which was carried on in the city of Newburyport in this State consisted, in “ no-license ” years, of the sale of “ soft drinks, cigars, etc.,” to which was added, in <£ license ” years, the sale of intoxicating liquors, under licenses granted to the firm. The “ license ” years were from May 1,1903, to May 1, 1904, and from May 1, 1905, to May 1, 1907. The business was very profitable during “ license ” years, but at other times it barely paid expenses. By mutual agreement the defendant assumed the entire business management, making all purchases, paying all bills, making all deposits in the bank and drawing all checks, and keeping the books of the firm, “ so far as any were kept.” The plaintiff acted as bar tender and did such other *484inside work as the business required. This arrangement continued until May, 1907, when the defendant withdrew from the active management and “ ceased to take any part in the firm affairs, but commencing July 3, 1907, and continuing to the dissolution of the partnership, the firm business dealing in soft drinks and cigars, was conducted by ” the plaintiff in his own name. From May 1, 1903, to the .close of the last “ license ” year on May 1, 1907, the firm leased the rooms over their store known as the Adams House. These rooms were in part occupied by the plaintiff with his family, and in part rented to lodgers. The rent of such rooms as were let was collected by the plaintiff until May, 1905, after which time it was collected by the defendant.

The master has found that during the entire time of the partnership up to May, 1907, there was no proper division of profits. Each party was to draw $15 a week during the license years, and $10 a week during other years, but no balance ever was struck to determine the respective interests of the partners in the accumulated profits except as follows: In August, 1906, the plaintiff, having frequently theretofore requested of the defendant an accounting but all to no avail, and suspecting that he was being defrauded of his share of the profits, employed an expert accountant to examine the books and accounts of the firm and make a report. The expert did so; and the master has found that the report of the expert was exhaustive and that it presented a fair and equitable account of the real standing of the partners in so far as it was possible to strike a balance by any available data or to arrive at any basis of settlement. On April 4,1907, the defendant for the purpose of making a division of the profits accumulated up to that time, taking as a basis therefor the amount of money on deposit in a national bank on the previous day, without his partner’s knowledge or consent, drew a check to his own order for $4,427.26, which check he deposited to his own personal account. Subsequently, on June 19,1907, he drew a check payable to the order of the plaintiff, as his share of the profits, of $4,852.26. The defendant indorsed the plaintiff’s name thereon and deposited the same in a national bank in Newburyport" to the plaintiff’s order without his knowledge, the plaintiff not being made aware of this transaction until *485informed by the bank in July, 1907. “ The difference in the amounts of the two checks was accounted for by the defendant in consequence of charging to himself certain loans made by him out of partnership funds and other money amounting to $425, for which he admitted liability.” This division left a small balance in the bank to settle the partnership business. The master has found “ this act on the part of the defendant arbitrary and based on no proper accounting. It was 'simply a division of the partnership balance then standing to the credit of the partnership in the bank.” Before the agreement of March 10, 1908, there seems to have been no other settlement between the parties.

During the existence of the partnership “ many checks ” had been “ drawn by the defendant perhaps for business purposes, but the checks themselves and the books containing them have disappeared and no memoranda to show the purpose for which they were used is in existence. Also that a number of checks have been indiscriminately torn from the check books in evidence and no memoranda made of same on stubs and no satisfactory explanation given.” The master also finds that some checks and at least one account book were missing, and generally that the books and accounts were not well kept.

With this history behind them and under these circumstances the parties signed the contract dated March 10, 1908. What is the fair construction of it? The defendant contends that it provides for a full and final settlement of all partnership affairs and all matters of dispute between the parties. The plaintiff contends that it “ was intended for and provided only for the settlement of certain partnership assets fully set forth therein, and in no sense provides for the settlement of any matters in dispute prior to May 1,1907,” and that it is in no way a bar to the right of the plaintiff for an accounting for the period before that time.

The document recites that whereas the parties have been engaged as partners in the liquor and hotel business, and have agreed to terminate the partnership, and “ the affairs of said firm are still unsettled,” that “ it has assets on hand and demands and claims due it, and unsettled firm matters which have to be adjusted and closed up,” now therefore, “ in order to bring about *486a final and full settlement of the business affairs of said firm,” they enter into the agreement, each binding himself faithfully to carry out the same.

It then provides in the first clause that the liabilities of the firm are to be paid out of the funds of the firm; in the second clause that the liquors which were on hand May 1, 1907, shall be appraised by persons to be chosen for that purpose; that any liquors which may have been taken from the stock since May 1, 1907, or any money collected on claims of the firm since May 1, 1907, by either of the partners, shall be accounted for; that the ‘‘ furnishings in the Adams House belonging to the firm as also the ” fixtures “ and other personal property in the stores and store houses, and also any uncollected claims of the firm,” shall be appraised by the above mentioned appraisers; in the third clause, that the rent for the stores and the Adams House which may have been paid by either member of the firm shall be considered a firm liability; in the "fourth clause, that the appraised property may be apportioned between the parties by their mutual consent or by the appraisers; in the fifth clause, that the fees of the appraisers shall be paid out of the funds of the firm; and in the sixth clause, that after the division of the personal property at its appraised value, “the balance of the firm money shall be divided between the parties, so that after taking into account any accounting for liquors or moneys collected or claims settled as provided in this instrument, there shall be a balance arrived at between the parties.”

Briefly summarized, the purpose of the instrument is to make a final and full settlement of the firm affairs and to that end it provides for the distribution of the liquors which were on hand May 1,1907, the end of the last license year, and of the other personal property, for the payment of the liabilities of the firm including the rent of the store and Adams House and the fees of the appraisers. Nothing is said about the accounting by either party for any money collected before May 1, 1907. The sixth clause provides for liquors or for money collected “ as provided in this instrument,” that is for liquors taken and money collected since May 1, 1907.

It is to be noted that this instrument was not signed hastily or inadvisedly, but after many conferences and under the advice *487of counsel. It was the declared purpose of the instrument to make a final and full settlement of the affairs of the firm. Just before May 1,1907, the plaintiff had received a check for several been conducted wholly by the plaintiff for about eight months, and he had made nothing. The next year, from May, 1907, to May,1908, was to be a no-license year, and the firm had concluded to dissolve. There was no occasion for a partial settlement. A final and full settlement was the thing desired, and it was to be brought about by this agreement. The only accountability for money collected was to be confined to money collected after May 1, 1907. We are of opinion that everything was merged into this agreement. Such is the interpretation suggested by the circumstances and such is its plain language. thousand dollars as the share of the profits up to that time said by the defendant to be due him. Since then the business had

It is admitted, as the master states, that the division provided for in this contract has taken place. The only remedy of the plaintiff is upon the contract.

The result is that the decree must be reversed and the bill dismissed. It is

So ordered.