Trump v. Baltzell

Le Grand, C. J., delivered the opinion of this court. These are cross-appeals from a decree of the chancellor, passed in a cause in which the facts, as alleged in the bill, are substantially as follows: Thomas and Philip Baltzell entered into a copartnership with William B. Trump, and the terms under which it was to exist and be conducted were specified in writing. These were, so far as the questions in this case are involved, that the Baltzells and Trump were to contribute to the capital an equal amount, constituting in the whole the sum of fourteen thousand dollars. The partnership was to last for three years.

It was stipulated by the third article of the agreement, that all expenses relating to the business of the firm were to be taken out of its funds, and a regular expense account should be opened on the books of the firm, and each and every article charged as the expense accrued. The fifth article was in these words: — “The said William B. Trump binds himself not to take out of the business or stock in trade of the said firm of William B. Trump & Co., more than seven hundred dollars per annum, in goods, or money, or both.” The bill further states, that as the time fixed for the dissolution approached that matter became one of negotiation and arrangement between the parties constituting the firm, and resulted in an arrangement by which the Baltzells were to become possessed and entitled to all the stock, debts and assets of the firm, pay its debts, and to Trump, the sum of fifteen thousand five hundred dollars; that the Baltzells faithfully complied with all their obligations under the contract. That after they came into possession of the books they discovered certain entries therein wholly unauthorised by the terms of their copartnership; that on the leger of the firm an account had been opened against Trump, in which he was charged with various items amounting in the aggregate to the sum of twenty-one hundred dollars; and that for the purpose of balancing the account, Trump, on the first day of February 1838, whilst the negotiation of the terms of the dissolution was pending, credited the account by an entry of $2100, for expenses, there being no evidence on any of the ³⁰³ books showing in what manner such expenses had been incurred. The answer admits most of the facts stated in the bill, and claims the credit of $2100 as compensation allowed to Trump, at the rate of $700 per annum, under the articles of copartnership, for his personal services in the supervision and conduct of the business.

It does not apppear from the testimony in the cause, with any great degree of certainly, whether the credit of $2100 had been entered on the leger when the terms of dissolution were agreed upon. It bears date the first day of February, and the agreement for dissolution was executed on the ninth of the same month. Had Trump stood charged on the books with the $2100 at the time the terms of dissolution were agreed upon, we would be of the opinion that the settlement contemplated a release of that indebtedness, and, we think, the case of Patterson vs. Martin, 6 Iredell, 111, is a sufficient authority for it; but if the terms of dissolution were settled on the supposition that the account of Trump had been properly balanced, when, in point of fact, the credit had been improperly and fraudulently entered, then we are of the opinion, that the Baltzells are entitled to