Murdock v. Mehlhop.

"2. John Mehlhop agrees to purchase all the right and interest of said John Murdock in stock, cash, notes, book accounts, and every thing connected with the business conducted by them, and agrees to pay him for said interest seven thousand two hundred and fifty dollars, in the following manner:

"3. Four thousand dollars cash in hand, one thousand dollars first day of October, one thousand dollars first day of November, one thousand dollars first day of Decem ber, eighteen hundred and sixty-six, and two hundred and fifty dollars on the first day of January, eighteen hundred and sixty-seven. Time payments to be made in notes satisfactorily indorsed or secured.

"4. Mr. John Mehlhop further agrees to assume and cancel all the debts of said firm and all liabilities now existing, or hereafter arising against said firm. 2. To free the said John Murdock from all responsibility and risk in connection with said debts and liabilities. And to accept in consideration therefor said John Murdock's interest in good will, stock, books, accounts, cash, lease of building, assets and every thing in connection with said business.

3.

"5. And it is further understood and agreed that when John Mehlhop carries into effect his part of said contract, a notice of dissolution of said partnership shall be published in the city daily papers, and that said John Murdock shall give up entire possession and control of every thing in connection with said business, and to sell unto the said John Mehlhop all his interest in and right to the said stock and assets of every kind and nature of the said firm of Mehlhop and Murdock."”

The notes in suit are those referred to in the contract of dissolution as being payable November 1st and December 1st thereafter. To support his cross claim, based on the account, the defendant relies upon the third para

Murdock v. Mehlhop.

graph in the articles of copartnership, and the second and fourth paragraphs in the contract of dissolution.

The position taken by the defendant is, that the articles of copartnership form, so to speak, the constitution or organic law of the firm, controlling the rights of the parties, and presumptively applying to all acts done by the parties as partners; that they cannot be ignored, but must have effect given to them; that by these articles the individual accounts of the partners formed a portion of the assets of the firm, that both parties knew this, and settled with that view; that by the contract of dissolution, all of the assets of the firm became the property of the defendant, including the personal account of the plaintiff to the firm, which account may be enforced by action or by way of cross demand. Such is the substance of the propositions maintained by the defendant.

It is admitted, that, in determining the rights of the parties, both the contract forming, and the one dissolving, the partnership must be considered. But the court are of opinion, the same as before, that the account of the firm against the plaintiff was not an asset of the firm within the meaning of the contract of dissolution, whereby plaintiff transferred to the defendant all his (plaintiff's) interest in the good will, assets, book accounts, etc.

Since the third paragraph of the articles of copartnership has been much discussed, both in the original arguments and on the rehearing, and as it constitutes the ground work of the defendant's case, it is proper briefly to notice it. It is plain that it gives each partner the right "to draw from the concern not exceeding $1,800 per annum for his personal expenses." It is then added, "that said personal accounts shall stand due the concern, in the same manner as any other account due by a party unconnected with the business."

What is the meaning of this last provision? Does it

Murdock v. Mehlhop.

mean, as the defendant contends, that if one partner shall draw out $1,800 for his personal expenses during the year, as he has a right to do, that the firm at the end of the year has a right to sue him therefor, the same as it might sue any other debtor? It is believed not. That view would result in this: the partner has a right to draw it out, and yet the firm has a right to sue him for it. Such an unreasonable construction should not be adopted if a more reasonable one suggests itself.

It will be seen that the parties contributed capital in different amounts. Mehlhop put in twice as much as Murdock. Now this clause, declaring the liability of the partners for their personal accounts, was inserted most probably with a view to make the parties liable as between themselves, to account for interest on the amount thus drawn out for personal expenses. And it might be admitted, without the admission at all involving the plaintiff's liability to the defendant, on the account, that one purpose of the provision in question was to make it the duty of both parties to make good to the capital of the firm any amounts which might be taken from it by them in the way of personal expenses.

But whatever may have been the real purpose of the latter portion of the third article, it would be unreasonable to hold, in view not only of the object but of the special provision of the contract of dissolution, that its effect would be to allow the defendant to recover the amount of the firm's account against the plaintiff, for his personal expenses.

The period for which the contract was formed, had not elapsed. The parties wished to dissolve the connection. They did so. They put their contract into writing. Mehlhop, the party who contributed the largest amount of the capital — the money partner — buys his copartner out. He buys his partner's "interest in the good will,

Murdock v. Mehlhop.

stock, book account, cash, lease of the building, assets, and everything in connection with the business." He is to get "entire possession and control" of every thing pertaining to the business. For the interest thus purchased, he agrees to pay $7,250 as follows: "$4,000, in cash; $1,000, on the first day of October; $1,000, on the first day of November; $1,000, on the first day of December, 1866, and $250 on the first day of January, 1867, time payments to be made in notes, satisfactorily indorsed or secured." Mehlhop is to pay all the debts of the firm. When Mehlhop carries into effect his part of the contract (gives the notes and gets them secured), a notice of dissolution is to be published, and Murdock is to surrender possession of every thing relating to the business.

When the partners concluded to separate, each undoubtedly knew the state of the personal accounts of the other as well as his own. The account now in controversy was on the books of the firm. What, if any thing, was the amount of the account against the defendant, does not appear. The last contract is not only one dissolving the firm, but it is evidently on its face a settlement of the affairs of the firm. The defendant, in effect, says to the plaintiff, "if you will go out, I will take all the property, pay all the debts, and pay you $7,250 for your interest, and this will close up the concern." The plaintiff accepted this proposition. The defendant's present position is, that he was not to pay $7,250, but that sum less $1,900. But such was not the contract. The contract was, that he was to pay the full sum of $7,250, and to pay it for the plaintiff's interest in the firm. If the firm, when in existence, could not have maintained an action against the plaintiff in respect to this $1,900, then it is plain that the defendant cannot now do so. But even if it could have done so, it does not follow that the defendant has the same right, for all

The State v. Lane.

the firm business, and, presumptively, this with the rest, was settled by the contract of the parties made at the time of the dissolution.

The parties must be supposed to be reasonable men, and to act as reasonable men would act under like circumstances. See the improbable results to which the defendant's view leads. According to his theory, he owes the plaintiff not $7,250, but that sum less $1,900, and yet he agrees to pay him the full sum of $7,250 (part of which sum is made up of the $1,900 in suit, which, on defendant's theory, then "stood due"); he pays the plaintiff $4,000 in cash, and says nothing (so far as the record discloses) about the $1,900 then due him; gives secured notes for the balance and does not deduct the $1,900 the plaintiff owes him, or obtain or require security therefor.

Affirmed.

THE STATE V. LANE.

1. Highway: UNCERTAINTY IN ESTABLISHMENT. The establishment of a road will not be held invalid on the ground that the petition therefor does not sufficiently state the commencement and terminus of the road, when these are made sufficiently certain from the record, plat and survey.

2.

EVIDENCE: ROAD RECORD. That a petition for a road is not produced nor offered in evidence in a prosecution for obstructing a highway, constitutes no valid objection to the admission of the road record, when it appears therefrom that the petition was presented, filed and acted upon.

Appeal from Clayton District Court.

TUESDAY, DECEMBER 15.

THE defendant was indicted for obstructing a highway. Plea, not guilty. On the trial, the State offered in evi