Amos W. Hammond, plaintiff in error, vs. Alfred Hammond, defendant

Supreme Court of Georgia1856-08No. No. 97

20 Ga. 556

Summary · law.co

Holding. The court affirmed the judgment below, overruling the demurrer because the suit was neither barred by the statute of limitations nor by equity principles regarding stale demands, given that partnership business remained unfinished when the claim was brought.

A partner in a mercantile firm sought an accounting from another partner. The defendant challenged the claim on two grounds: that it violated the statute of limitations and that it constituted a stale demand under equity principles. The court held that neither defense applied because partnership agency relationships continue as long as partnership business remains unfinished, including the collection of debts owed to the firm and payment of debts owed by it. Since such business was still pending when this suit began—including uncollected notes and outstanding obligations—the statute of limitations had not begun to run against the accounting claim between partners.

The court reasoned that an accounting suit between partners is really a claim by the partnership against its members rather than between the members themselves. Because each partner acts as an agent of the partnership for all its business, the partner's agency does not terminate until all partnership affairs are resolved. As long as agency continues, the statute of limitations does not commence. The evidence showed that debts were collected and paid within six years before suit and that a substantial note remained outstanding at the time of filing, confirming that partnership business was still active.

Summary generated by law.co from the public-domain opinion. The opinion text itself is public domain.

Key issues

Whether a partner's accounting claim against co-partners is subject to the statute of limitations
When partnership agency terminates and the statute of limitations begins to run
Whether an accounting suit between partners constitutes a stale demand in equity

Procedural posture

The defendant demurred to the bill filed by the plaintiff, and the lower court overruled the demurrer; the defendant appealed.

Authorities cited

No cited authorities resolved to law.co cases yet.

Opinion · public domain

majority opinion

By the Court.

Benning, J.

delivering the opinion.

One of the grcunds of the demurrer was, that the bill was barred by the Statute of Limitations; another was, that the bill was barred by the principles of equity relating to stale demands. These two were the only grounds insisted upon in the argument before this Court.

It is very doubtful whether a suit by one partner in a mercantile partnership against the other partners, for an account, is within the Statute of Limitations at all; whether it is not rather within the exception of the Statute — an exception which includes all “ such accounts as concern the trade of merchandise between merchant and merchant, their factors or servants.” See Robinson vs. Alexander, (8 Bligh; Ang. Lim. ch. 15, §§13, 14.)

However, we do not find it necessary to decide this question.

Each member of a partnership is its agent, to do all of its business. A part of the business of every partnership, is the payment of its debts and the collection of its credits. As long, therefore, as there are debts of a partnership to be paid or credits of it to be collected, there is business of the partnership remaining to be done. There may be debts and credits of a partnership existing after a dissolution of it; and as long as there is any business of the partnership remaining to be done, the agency of each partner being, as it is, an agency to do the whole partnership business, continues. Rut as long as an agency lasts, the Statute of Limitations does not begin to run, as to the matters of the agency, between the principal and the agent; therefore, as long as there are debts of a partnership to be paid, or credits of it to be collected, the Statute of Limitations does not begin to run,, as to the account between the partnership and any of its members.

And when the Statute does not run as to the account between the partnership and the members, it does not run as-to the account between one partner and the other; for in reality, that account is between, not one partner and the other,, but between the partners and the partnership. He owes the partnership so much — the partnership owes him so much— not he owes the other partners so much, the other partners-owe him so much. His suit is against the partnership.

In 1847, 1850, 1851, Alfred Hammond, the partner whose-representative is the complainant in the bill, collected debts due the partnership. In 1853, he paid a debt due from it. The bill was commenced in January, 1853; so, that within six years of the commencement of the suit, there had been in existence debts due to and from the firm. Nay more : at the very time when the suit was commenced, there was still outstanding a large note not due, belonging to the firm, on Amos W. Hammond, the partner who is the defendant in the bill.

It is therefore manifest, that according to the principles above stated, the suit, when commenced, was not barred; by the Statute of Limitations.

And for the same reasons, the suit was not barred by the-principles of Equity relating to stale demands. It cannot with truth be said of the complainant, that “ there has been. gross laches in prosecuting rights or long and unreasonable acquiescence in the assertion of adverse rights.” (2 Story’s JEq. §1520.) One large item in the account to be settled, was not due ev.en when the suit was commenced. We affirm tlje judgment of the Court below over-ruling the demurrer.