Crudo v. Guida

KNIGHT, J. Defendant appeals from a judgment for plaintiff based on an indebtedness growing out of the dissolution of a partnership. The principal questions involved relate to matters of pleading and proof.

The action was filed in the justice’s court, the complaint being in the form of a common count, alleging that defendant became indebted to plaintiff in the sum of $200 for money had and received from one Harry Friend, for plaintiff’s use and benefit. Answering, defendant denied the allegations of the complaint, and by way of special defense and cross-complaint alleged that plaintiff and defendant were partners in the real estate business in Redwood City; that there had been a dissolution of the partnership, but no accounting of settlement between the partners; that the claim sued upon by plaintiff arose out of partnership business, and that in fact plaintiff was indebted to defendant in a sum exceeding that claimed by plaintiff; wherefore defendant prayed “that an accounting be had between the parties settling their respective rights and obligations; [and] that until such accounting is had this action be dismissed. . . . ’’ Plaintiff’s answer to the cross-complaint consisted merely of a denial that he was indebted to defendant in any sum. Upon the filing of said answer the cause was certified to and subsequently tried in the superior court. Judgment was entered in plaintiff’s favor for the sum for which he sued, and denying the relief prayed for in the cross-complaint. The basic findings were: That the partnership was dissolved by the parties on June 22, 1938; that “as a part of the transaction dissolving [29]said partnership, said defendant and cross-complainant sold his rights in said business together with the furniture and good will thereof, excepting therefrom one desk which became the sole property of said defendant; and said parties then and there divided and distributed between them the remaining assets of said business excepting the claim or right to real estate broker’s commission of Four Hundred ($400.00) owing and to be paid by the Friend Realty Company, Incorporated, to said partnership; that upon said dissolution and division of assets, it was agreed between said parties that when paid by said Friend Realty Company, Incorporated, said sum of Four Hundred ($400.00) Dollars should be divided between said parties hereto; that all the affairs of said partnership have been and were on said June 22, 1938, fully accounted for and settled, except as hereinabove found respecting said sum of Four Hundred ($400.00) dollars.”

Defendant’s first contention is that the complaint failed to state a cause of action in that it contained no allegation that there had been an accounting or settlement of the partnership affairs. There is no merit in the contention. Where, as in the case of Dukes v. Kellogg, 127 Cal. 563 [60 Pac. 44], cited by defendant, the complaint alleges facts showing the formation of a partnership and it appears that the subject matter of the action involves a partnership transaction, it is then essential to allege also that there has been an accounting and settlement of the partnership affairs. But obviously that rule has no application to a case such as this, where the action is based on the theory that a final settlement has been had and the complaint is in the form of a common count for money had and received. If under such circumstances a defendant claims that the debt sued upon is part of unsettled partnership transactions he may, as was done here, raise the issue by way of special defense or cross-complaint, or both.