Opinion of the Court. been dissolved by the acts of the defendant; but that, as each partner was permitted by those articles to draw out of the partnership $125 a month for personal expenses, the defendant should have been allowed the sum of $3000 as personal expenses for the two years during which he conducted the business of the firm; and that the judgment should be modified by deducting one half of this sum, and, so modified, be affirmed for the sum of $10,540.53. 9 Utah, 236. The defendant appealed to this court. Mr. J. M. Wilson for appellant. Mr. J. G. Sutherland, Mr. A. Howat and Mr. C. W. Bennett were on his brief. Mr. Joseph L. Rawlins for appellee. Mr. Parley L. Wil liams was on his brief. MR. JUSTICE GRAY, after stating the case, delivered the opinion of the court. Much of the argument for the appellant was devoted to a discussion of conflicting evidence, which is not open to examination by this court, its authority upon appeal from the Supreme Court of a Territory being limited to the question whether the facts found by that court support its judgment. Haws v. Victoria Co., 160 U. S. 303; Harrison v. Perea, ante, 311. The principal question of law discussed in the opinion of the Supreme Court of the Territory, and at the argument in this court, was whether a partnership, which by the copartnership articles is to continue for a specified time, can be dissolved by one partner at his own will without the assent of the other before the expiration of that time. It is universally conceded that a contract of partnership, containing no stipulation as to the time during which it shall weight of authority. Story on Partnership, §§ 275, 276; Story Eq. Jur. § 673; Lindley on Partnership, [bk. 4, c. 1, (5th ed.)] p. 575, § 2; Ferrero v. Buhlmeyer, 34 How. Pract. 33; Pearpoint v. Graham, 4 Wash. C. C. 232; Peacock v. Peacock, 16 Ves. 49; Cash v. Earnshaw, 66 Illinois, 402; Van Kuren v. Trenton Co., 13 N. J. Eq. 302." Opinion of the Court. continue in force, does not endure for the life of the partners, or of either of them, nor for any longer time than their mutual consent, but may be dissolved by either partner at his own will at any time. Peacock v. Peacock, 16 Ves. 49; Crawshay v. Maule, 1 Swanst. 495; Neilson v. Mossend Iron Co., 11 App. Cas. 298; 3 Kent Com. 53; Story on Partnership, § 269. Upon the question how far the status or relation of a partnership, which by the partnership agreement is to continue for a certain number of years, can be determined by one partner without the consent of the other before the expiration of that time, there has been some difference of opinion. The principal reasons and authorities in favor of the posi tion that a contract of partnership for a definite time cannot be dissolved at the mere will of one partner are stated or referred to in the opinion of the Supreme Court of the Territory in this case, reported in 9 Utah, 236. Those which support the opposite view may be summed up as follows: A contract of partnership is one by which two or more persons agree to carry on a business for their common benefit, each contributing property or services, and having a community of interest in the profits. It is in effect a contract of mutual agency, each partner acting as a principal in his own behalf and as agent for his copartner. Meehan v. Valentine, 145 U. S. 611. Every partnership creates a personal relation between the partners, rests upon their mutual consent, and exists between them only. Without their agreement or approval, no third person can become a member of the partnership, either by act of a single partner, or by operation of law; and the death or bankruptcy of a partner dissolves the partnership. 3 Kent Com. 25, 55, 58; Wilkins v. Davis, 2 Lowell, 511. So an absolute assignment by one partner of all his interest in the partnership to a stranger dissolves the partnership, although it does not make the assignee a tenant in common with the other partners in the partnership property. Bank v. Carrolton Railroad, 11 Wall. 624, 628; Marquand v. New York Manuf. Co., 17 Johns. 525, 528, 535. No partnership can efficiently or beneficially Opinion of the Court. carry on its business without the mutual confidence and cooperation of all the partners. Even when, by the partnership articles, they have covenanted with each other that the partnership shall continue for a certain period, the partnership may be dissolved at any time, at the will of any partner, so far as to put an end to the partnership relation and to the authority of each partner to act for all; but rendering the partner who breaks his covenant liable to an action at law for damages, as in other cases of breaches of contract. Skinner v. Dayton, 19 Johns. 513, 538; 3 Kent Com. 54, 55, 62; Cape Sable Co.'s Case, 3 Bland, 606, 674; Monroe v. Conner, 15 Maine, 178, 180; Mason v. Connell, 1 Whart. 381, 388; Slemmer's Appeal, 58 Penn. St. 168, 176; Blake v. Dorgan, 1 Greene (Iowa), 537, 540; Solomon v. Kirkwood, 55 Mich. 256, 259, 260. According to the authorities just cited, the only difference, so far as concerns the right of dissolution by one partner, between a partnership for an indefinite period and one for a specified term, is this: In the former case, the dissolution is no breach of the partnership agreement, and affords the other partner no ground of complaint. In the latter case, such a dissolution before the expiration of the time stipulated is a breach of the agreement, and as such to be compensated in damages. But in either case the action of one partner does actually dissolve the partnership. A court of equity, doubtless, will not assist the partner breaking his contract to procure a dissolution of the partnership, because, upon familiar principles, a partner who has not fully and fairly performed the partnership agreement on his part has no standing in a court of equity to enforce any rights under the agreement. Marble Co. v. Ripley, 10 Wall. 339, 358. But, generally speaking, neither will it interfere at the suit of the other partner to prevent the dissolution, because, while it may compel the execution of articles of partnership so as to put the parties in the same position as if the articles had been executed as agreed, it will seldom, if ever, specifically compel subsequent performance of the contract by either party, the contract of partnership being of an essentially personal character. Batten on Specific Per Opinion of the Court. formance, 165-167; Lindley on Partnership, bk. 3, c. 10, § 4; Pomeroy on Specific Performance, § 290; Scott v. Rayment, L. R. 7 Eq. 112; Satterthwait v. Marshall, 4 Del. Ch. 337, 354; Reed v. Vidal, 5 Rich. Eq. 289; Somerby v. Buntin, 118 Mass. 279, 287. Especially where, by the partnership agreement, as in the case at bar, the defendant is to supply all or most of the capital, and the plaintiff is to furnish his personal services, the agreement cannot be specifically enforced against the plaintiff, and will not be enforced against the defendant. Stocker v. Wedderburn, 3 K. & J. 393, 404; Buck v. Smith, 29 Michigan, 165. In the somewhat analogous case of a contract of hiring and service, it is well settled that a court of equity cannot compel the performance of the service, although it may in some cases enforce a negative stipulation not to serve any third person within the time agreed. Dietrichsen v. Cabburn, 2 Phil. Ch. 52, 59, and cases cited; Lumley v. Wagner, 1 D. M. & G. 604; Wolverhampton & Walsall Railway v. London & Northwestern Railway, L. R. 16 Eq. 433, 440; Whitwood Chemical Co. v. Hardman, (1891) 2 Ch. 416; Davis v. Foreman, (1894) 3 Ch. 654; 13 Law Quarterly Review, 306; Tobey v. Bristol, 3 Story, 800, 824. We are not prepared, therefore, to assent to the opinion of the court below that a partnership for a definite time cannot be dissolved by one partner at his own will, and without the consent of his copartner, within that time; and consequently that the partnership between these parties was not dissolved on February 1, 1888, when the defendant assumed exclusive possession and control of the business and property of the partnership, and excluded the plaintiff from any participation therein. But it is unnecessary to express an opinion upon this point, because, however it might be decided, it would not affect the conclusion in favor of the plaintiff in the present case. Even if the partnership should be considered as having been actually dissolved at that date, yet the dissolution did not put an end to the plaintiff's right to his share in the property and the profits of the partnership. In a case in which both parties, Opinion of the Court. in their pleadings, assumed the partnership to have been dissolved, this court, speaking by Mr. Justice Miller, held that drunkenness and dishonesty on the part of one partner and his consequent exclusion from the business did not authorize his copartner, "of his own motion, to treat the partnership as ended and to take himself all the benefits of their joint labors and joint property," or exempt him from responsibility to account to the excluded partner. Ambler v. Whipple, 20 Wall. 546, 555, 557. And in a later case, the court, speaking by Mr. Justice Woods, said: "However the question may be decided, whether one partner may by his own mere will dissolve a partnership formed for a definite purpose or period, it is clear that upon such a dissolution one partner cannot appropriate to himself all the partnership assets, or turn over the share of his partner to another with whom he proposes to form a new partnership." Pearce v. Ham, 113 U. S. 585, 593. A partner who assumes to dissolve the partnership, before the end of the term agreed on in the partnership articles, is liable, in an action at law against him by his copartner for the breach of the agreement, to respond in damages for the value of the profits which the plaintiff would otherwise have received. Bagley v. Smith, 10 N. Y. 489; Dennis v. Maxfield, 10 Allen, 138. In a court of equity, a partner who, after a dissolution of the partnership, carries on the business with the partnership property is liable, at the election of the other partner or his representative, to account for the profits thereof, subject to proper allowances. Ambler v. Whipple, and Pearce v. Ham, above cited; Hartman v. Woehr, 3 C. E. Green (18) N. J. Eq.), 383; Freeman v. Freeman, 136 Mass. 260; Holmes V. Gilman, 138 N. Y. 369; 3 Kent Com. 64. In the case at bar, by the terms of the agreement in writing, dated February 3, 1886, under which the partnership was formed, it was to continue for five years, that is to say, until February 3, 1891; the plaintiff was to contribute $5000, and the defendant $20,000, to the capital; the defendant lent the plaintiff the sum of $5000, for which the plaintiff gave his promissory note, payable at the end of the five years; the plaintiff was to have the general management of the business; each VOL. CLXVIII-22 |