U.S. Supreme Court
Consaul v. Cummings, 222 U.S. 262 (1911)
Consaul v. Cummings
Argued November 6, 1911
Decided December 11, 1911
222 U.S. 262
The law implies equality between partners, and does not favor claims of the survivor for services rendered after dissolution of the firm and which lead to efforts to prove disparity.
Each partner is bound to devote himself to the firm's business, and there is no implied obligation on the part of the other partners to pay him more than his proportion for performing his duty, and this rule applies to a surviving partner completing the business of the firm.
While equity at times makes exceptions to the general rule that a surviving partner is not allowed compensation for winding up the affairs of the copartnership, this case does not fall within such exceptions.
A limited partnership formed by two lawyers to prosecute claims against the government, one of whom had already secured the claims and the other of whom was to attend to the prosecution, held not to be one in which either the lunacy or death of the former would amount to a dissolution or entitle the survivor to extra compensation for prosecuting the claims after such events to a successful conclusion, the partnership gains being payable in solido and dependent upon success, and the record showing that the deceased partner did not at any time aid materially in the prosecution of the claims, and was not expected to.
A surviving partner of a law firm prosecuting claims under powers of attorney from the claimants to the deceased partner cannot retain the business individually and claim that the powers to the deceased partner were revoked by his death; he must account to the representatives of the deceased partner for his share of the fees.
If the defendant should have previously accounted, but wantonly refused or neglected so to do, interest is properly chargeable from the filing of the bill. chanroblesvirtualawlibrary
If a defendant did not except to a ruling fixing a date for calculating interest on an account, and asked to be allowed interest on advances from the same date, he is deemed to have acquiesced in the ruling, and cannot complain of it in this Court.
A curator and administrator of a deceased member of a partnership who has no power of sale is not chargeable with laches because he waits until the surviving partner has realized the assets of the copartnership before demanding an account. The interests of his ward and intestate are founded in contract, and cannot be destroyed by mere nonaction.
33 App.D.C. 132 affirmed.
The facts in these cases are fully set out in the decisions in the various appeals reported in 17 App.D.C. 269, 24 App.D.C. 36, 30 App.D.C. 540, 33 App.D.C. 132. Only what is material to an understanding of the assignments of error need be now stated.
George B. Edmonds was an attorney in Washington, practicing in the Court of Claims. Under agreements to pay contingent fees, and giving him power of substitution, he represented a large number of clients, who had claims pending in that court and before Congress. A schedule was attached to a contract made in 1888 by Edmonds with Gilbert Moyers, also an attorney, in which they agreed "as special partners to prosecute these claims in Congress and before the court." The fees and expenses were to be equally divided. Edmonds also stipulated therein that said "Moyers shall represent and be associated with me in the prosecution of the said claims as joint attorney of record."
Edmonds was adjudged a lunatic in 1891, and Cummings was appointed his committee. There had only been a few collections, and most of the claims were still pending at the time of Edmonds' death, in 1896. By virtue of appropriations made in March, 1899, Moyers collected a large amount in May, 1899. Cummings made a demand on him for a settlement, and Moyers several times promised to make a statement, explaining that the delay chanroblesvirtualawlibrary
was caused by bad health. Nothing having been done, Cummings was appointed administrator of Edmonds on August 22, 1899, and on September 16, 1899, filed a bill for accounting. Among other things, Moyers, in his answer, claimed that Edmonds, in consideration of money advanced by him in ignorance of the lunacy proceedings, had conveyed to Moyers all his interest in the fees that might be collected. This transfer he claimed operated as a dissolution of the firm. The court ordered an accounting; Moyers appealed. That decree having been affirmed, the case was referred to a master. He found that Edmonds had not sold his interest in the fees and that the partnership had not been dissolved, but allowed Moyers credit for the amount advanced in 1892. He found that the fees earned aggregated about $26,000, and after deducting the expenses and allowing Moyers credit for the advances, found balance in favor of complainant, with interest thereon, from September 16, 1899, the date Moyers should have accounted. Moyers, on the appeal, offered no objection to this award of interest, but claimed that, under the same rule, interest should have been allowed him on the advances made in 1892. The Court of Appeals sustained this view and directed that, in restating the account, interest should be allowed Moyers on these advances from, say, January, 1893, to September 16, 1899. On a subsequent hearing, the account was thus restated. On a later appeal, the court held that, as Moyers had taken no exception, this ruling was conclusive. The court also held that Moyers was entitled to credit for expenses advanced in claims which were finally disallowed by the court.
During the litigation, other claims were pending in the Court of Claims. But in view of the controversy over the fees, Moyers abandoned some of them, and on his advice a few of the claims were put in the hands of attorneys associated with Moyers in business. They made collection, but the master charged Moyers with the proportion of the chanroblesvirtualawlibrary
fees thereon due Edmonds under the original contract. Other claims were withdrawn by clients and placed with attorneys not connected with Moyers in business. Congress passed additional acts of appropriation, by virtue of which some of the other claims in the schedule were collected. These items were included in the master's final statement of account. This was approved by the chancellor and affirmed on appeal. The case is here on numerous assignments of error, all of which have been abandoned except those in which Moyers' administrators claim that (1) he should have been allowed compensation for services after the dissolution of the firm; (2) that he should not have been charged with interest from September 16, 1899, but only from the final decree of November, 1908, when for the first time the amount due was made certain, and (3) the refusal to dismiss the bill on the ground of complainant's laches. chanroblesvirtualawlibrary