dently no claim upon the defendants. But, leaving Came out of the question, the defendants have a claim against the plaintiff for something, because, if nothing can be got of Came, then the loss by him is to be borne equally by the other two, probably; so that the defendants would have a right to call on the plaintiff to pay them such a sum as would equalize their losses by Came. But if Came is made a party, and is responsible, then, when he pays in what he owes, the plaintiff can recover his balance of $101.20, while the defendants would be getting the balance of $748.71 which remains due to them. Even if the loss by Came were to be borne by the other two partners, not equally, but in proportion to the sum invested by each, then it will be seen that there would be a balance due from the plaintiff to the defendants, provided they must lose the amount due from Came.

Assuming that the written articles of agreement do not include and regulate such losses as this, still, how should the partners who are associated together, and are to share the profits and losses equally, adjust a loss by the failure of one of their own number to pay or share his proportion of the general loss, otherwise than by sharing such loss equally between them? Raymond was as much the surety of Came to the company as Putnam & Chase were; and, if this is a joint debt to the other members of the firm, then in case of loss they would all share the loss equally. But we do not need to decide this question here, as in any event this plaintiff can recover nothing of these defendants. If not amended, the bill must be dismissed, with costs; and, if amended, the defendants will be entitled to their costs to this time.

In this way it will be observed that the same result is reached that the defendants contend for in their answer, though in a different way; not by contradicting the written articles of agreement, but by applying and enforcing them.

Let us illustrate the principle involved in this case by a simple example, which we will suppose: Three partners go into company. A. puts in $2,000, and B. and C. $1,000 each. A. is to draw interest on $1,000 of his capital, and they are to divide the profits and share the losses equally; and at the close each is to share in the assets in proportion to the amount of his investment or share of the capital stock. Suppose at the end of two years they close up, and find they have made a profit of $3,000. They divide the profit equally, and take $1,000 each. This leaves the capital stock so that each has what he invested.

But suppose, at the end of two years, on closing up, they have lost $3,000. This is to be borne equally. The share of each to lose is $1,000. Now, it will be seen at a glance that it makes no difference whether each pays in his share of the loss in cash, and then divides the assets in proportion to the amounts invested, or offsets the loss against his capital stock before he receives his share of the assets. They have lost $3,000 out of $4,000 of capital, which leaves the as

J

sets only $1,000. The result will be precisely the same if A. takes the whole of the $1,000 that is left, and the others take nothing, that it would be for each to pay in $1,000 (his share of the loss) and then to divide, and A. take $2,000 and B. and C. $1,000 each. The share of loss for B. and C. is just equal to the capital stock, and A.'s loss is just half his capital stock.

But suppose the loss to be $6,000, which would be $2,000 more than all the capital stock; then, as between themselves, B. and C. must - pay each $1,000 more, beside losing all their capital stock, while A. loses nothing but his capital stock, because his stock is double theirs, and his share of the loss is only the same as theirs. In all these cases we are considering the liability of the partners as among themselves, and not as to third persons.

But again: Suppose A. has $2,200 of the stock, B. $1,100, and C. $700, making $4,000 capital, as before, with the same conditions as before, and at closing they find a loss of $3,000. If each pays in his share of the loss ($1,000), that restores the capital stock, so that each can have just what he invested. But if, instead of paying in the loss, they offset that against their investment, then A. would be entitled to receive of the assets $1,200, that being his share of capital above his share of loss; B. would be entitled to receive $100, that being the amount of his stock above his share of the loss; C. would owe $300, that being the amount that his capital stock falls short of making his proportion of the loss. Now, if C. pays his $300, and thereby shares his proportion of the loss, then A. and B. can get what belongs to them; the $1,000 of assets and the $300 paid by C. making $1,300, which will give A. his $1,200 and B. his $100. But suppose A. has the $1,000-all the assets except the $300 due from C.-in his hands, and C. becomes bankrupt and fails to pay his $300; how does the case stand between A. and B.? A. has got all the assets. B. has got nothing. B. calls on A. to divide with him in proportion to their capital stock. But the company still owes A. $200, and it owes B. but $100. If this loss by C. is to be borne by A. and B. in proportion to their several amounts of capital stock, then neither could claim. anything of the other, because, although B. has received nothing, while A. has received $1,000, yet the amounts they have lost over and above their $1,000 each is now just in proportion to their capital stock, namely, two to A. to one to B. But if this loss by C. is to be borne equally between A. and B., then A. could rightfully call on B. for $50, in order to equalize their loss by C., after having shared equally in the general loss by the company. That would be very much like the case before us, though here the defendants would have some claim upon the plaintiff in any event, if Came should not pay in the amount he owes the company; but, if he does pay, then all parties will get their dues.

The bill to be dismissed, unless amended.

LAMB v. ROWAN.

(Supreme Court of Mississippi, 1903. 81 Miss. 45, 35 South. 427.)

JOHNSTON, Special Judge. This case is here on Lamb's appeal and Rowan's cross-appeal from the final decree of the chancery court of Copiah county settling a partnership accounting between Lamb & Rowan and providing for the sale of the partnership property. On April 3, 1889, E. A. Rowan began the suit in the chancery court of Copiah county for a partnership accounting and for the sale of the property belonging to the firm of Lamb & Rowan. It is stated in the bill that Rowan and Lamb formed a partnership in October, 1883, for the purpose of carrying on a sawmill business in Copiah county near the town of Beauregard, on the Illinois Central Railroad, and that they afterwards built another sawmill and a planing mill near Wesson. The business was discontinued in the year 1894, though there was no formal dissolution of the partnership. It is averred in the bill that large profits were made in the business, which was conducted directly and indirectly by Lamb, and that on accounting Lamb would owe the firm not less than $20,000, and that the firm would be largely indebted to Rowan. Lamb denied in his answer that there was any partnership between himself and Rowan. Pending this proceeding the partnership property was placed in the hands of a receiver.

*

It is insisted for Rowan in a suggestion of error that interest should. be allowed to Rowan on the decree in his favor against Lamb rendered by the chancery court and corrected by this court on a former suggestion of error submitted by the appellant. The general rule, sustained by all of the authorities that have been cited by counsel and by many others which we have consulted, is that ordinarily interest is not allowed on a partnership accounting. To this there are some exceptions, where, in the discretion of the court, interest may be allowed. We are of the opinion that no interest should be allowed at any time during the period of this accounting. There is no point during this whole period that can be fixed equitably as the time when interest should be charged. The accounting in the chancery court shifted from one set of balances to another. The first report of the master was set aside by the chancellor. The second report of the master was materially modified by the chancellor on both sides of the accounts. And, finally, the balances found by the chancellor in the decree appealed from have been changed by this court, and different balances directed to be struck, which has not yet been done. During this whole period of time the accounting has been in progress. The accounts in the case show that the total sales of lumber amounted to over $180,000 during the existence of the partnership. And the accounts of each partner with the firm were in many instances com

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plicated and obscure, and so many items were controverted it was impossible to state the accounts with exactness.

We will notice other leading authorities on this subject. Judge Story said that interest is not allowable in partnership accountings until a balance has been struck on a settlement between the partners. Dexter v. Arnold, 3 Mason (U. S.) 284, Fed. Cas. No. 3,855. Vice Chancellor Sandford of New York, in Beacham's Assignees v. Eckford's Ex'rs, 2 Sandf. Ch. 116, after a review of all the authorities, came to the conclusion that there is no general rule established, but that the allowance or refusal of interest depends upon the circumstances of each particular case. Judge Sharswood, in Gyger's Appeal, 62 Pa. 79, 1 Am. Rep. 382, approved this rule, saying: "This seems much the safest principle to adopt in view of the confidential relation of the parties and the variety and complication of such accounts." Lindley says that the general rule is that interest is not allowed in partnership accountings. Lindley on Partn. (4th Ed.) 786. It is said in various cases that there is no fixed rule on the subject as to what circumstances may call for the allowance of interest. And it may be said that Judge Sharswood stated the rule correctly to be that each depends upon its own peculiar facts and circumstances. held in Buckingham v. Ludlum, 29 N. J. Eq. 350; Johnson v. Hartshorne, 52 N. Y. 173; Gyger's Appeal, 62 Pa. 73, 1 Am. Rep. 382. The following cases also hold this doctrine: Moss v. McCall, 75 Ill. 190; Tirrell v. Jones, 39 Cal. 655; Whitcomb v. Converse, 119 Mass. 38, 20 Am. Rep. 311; Tutt v. Land, 50 Ga. 339. It has also been held that a partner is not entitled to interest on money advanced to or deposited with the firm for its use, unless there be a special agreement to that effect. Lee v. Lashbrooke, 8 Dana (Ky.) 214; Day v. Lockwood, 24 Conn. 185; Desha v. Smith, 20 Ala. 747. We announce as our conclusion on this subject that the general doctrine is well settled that interest in an accounting between partners is not allowed. The exception is that a court of equity may allow interest where, in view of the particular facts of a case, it is just and equitable to make the allowance. All of the cases that we have examined hold in the broadest terms that in the exceptional cases the allowance or disallowance of interest in an accounting between partners is within the discretion of the court. Exercising this discretion according to our views and convictions of the circumstances of this particular case, we adhere to our former ruling on this question.

CHAPTER VIII.

RIGHTS AND REMEDIES OF CREDITORS.

SECTION 1.—AT LAW.

I. CREDITORS OF THE PARTNERSHIP.

MEECH et al. v. ALLEN.

(Court of Appeals of New York, 1858. 17 N. Y. 300, 72 Am. Dec. 465.) Appeal from the Supreme Court. The complaint averred these facts: In May, 1847, the plaintiffs recovered a judgment against one Taylor, upon his sole and individual indebtedness, for $8,650.65, which was duly docketed and became a lien upon his real estate. In 1848 Taylor died, seised of real estate in his own individual right, upon which said judgment was a lien. Taylor and one Hiram Pratt, who died in May, 1840, were in their lifetime partners in the business of common carriers upon the Erie Canal and the Great Lakes. A demand arose against them as such partners, which was in litigation when Pratt died, and upon which a judgment was recovered in the Supreme Court, and duly docketed on the 13th of May, 1842, against Taylor, as survivor of himself and Pratt, for $9,990.05, which judgment was assigned to and became the property of the defendant Allen after the death of Taylor and the recovery of the plaintiffs' judgment. In April, 1850, executions were issued upon both of the above-described judgments to the sheriff of Erie, who in virtue thereof, on the 4th of June, 1850, sold certain parcels of the real estate in the city of Buffalo, whereof Taylor died seised in his own right.

The plaintiffs attended at the sale, and gave notice to the defendant of the facts stated, claiming that their judgment was entitled to priority and that the money raised by the sale should be applied first to its satisfaction. The defendant became the purchaser at the sale. There is no other individual property of Taylor out of which the plaintiffs can obtain satisfaction of their judgment except the land. thus sold, and there is sufficient estate of Hiram Pratt, deceased, to satisfy the judgment of the defendant.

The complaint prayed that the land might be resold and the proceeds first applied to the payment of the plaintiffs' judgment, or that the defendant pay to them so much of the proceeds of the sale already had as would extinguish their judgment, with the costs of this