The appellee was admitted to the practice of law in the year 1881, and during the succeeding period of nine years had been actively engaged in the business of his profession, first at Sanborn, and thereafter at Sheldon, O’Brien county, Iowa. In the year 1890 his business appears to have been well established, and of growing importance. The plaintiff was admitted to the bar in June, 1890, and on July 28th of the same year the parties entered into a written contract of partnership, which writing, omitting caption and signatures, is in the following words:
This agreement witnesseth: That W. D. Boies, party of the first part, and George W. Roth, party of the second part, have this day entered into a contract of partnership for the practice of the law in its various branches at Sheldon, Iowa, under the firm name of Boies & Roth, in the following manner and upon the following conditions: Second party upon the payment of five hundred dollars ($500), the receipt of which is hereby acknowledged, is admitted as a partner having and holding a one-third interest in and to the library, safe, typewriter, and all office fixtures and furniture, and to be entitled in the future to receive one-third of the profits of the business of the firm, first party the other two-thirds; second party to have no interest whatever in first party’s present business now pending, or in cases wherein he has beenPage 256retained, or collections or other business except such collections as now appear upon the collection register with no cross (x) in the ■ No.’ column.
Part Second. It is agreed that first party, at his option, at any time may retire from the firm, and in that case second party shall pay him eight hundred dollars ($800) for his interest in the library, office fixtures, and furniture, together with such additional amount as may be agreed upon for property placed in the office by the firm after this date, and in case an agreement cannot be made in relation to the said additions made then the same to be divided according to the interests of the partners; the said amounts to be secured by first mortgage on the whole library, office fixtures and furniture to be paid in equal payments of one and two years at eight per cent., after maturity.
It is further agreed as a partial consideration of ‘ Part Second ’ that in case first party shall retire from the firm that second party shall finish, conclude, and carry on the business of the firm then on hand, and pay to first party one-third of the proceeds arising therefrom. ■ The amount earned by the firm while in existence is to be divided in proportion to the respective interests of the partners. First party always reserves the option to dispose of his interest to some other lawyer, provided such lawyer shall be acceptable to second party as a partner. In case first party elects to retire from the firm and second party is not willing to perform the conditions of the contract in relation to the purchase of first party’s interest as above set forth, then first party shall have the right to pay the second party the $500.00 paid by him to enter the firm, and second party shall retire therefrom, and the partnership stand dissolved.
On April 27, 1903, this action was begun by the appellant, who alleges that said partnership continued until June 1, 1901, when it was dissolved by mutual consent, and that during the entire period of said partnership the greater part of its earnings and income had been paid to and received by the appellee, by whom no accounting had ever been made to him. He asks that an accounting be had, and that he have judgment against appellee for his proper share in the fruits of the partnership. The appellee’s answer admits
The second count of the answer charges that plaintiff neglected the partnership business and gave his time largely to the conduct of his own private affairs and those óf his family relatives, and that the time thus lost by him during the last six years of the partnership was reasonably worth $2,000 per year, for which allowance should be made in the accounting.
The third count of the answer alleges that during said last-mentioned period the plaintiff had earned large sums of money in business dealings and transactions and in services rendered for others, with which earnings and profits he should be charged in the accounting.
The fourth count of the answer repeats the charge that plaintiff neglected the business of the firm, and alleges that by reason thereof defendant was compelled to perform and did perform work and service beyond what would have been required of him had plaintiff done his full duty under the contract, and that his extra or additional service so performed was reasonably worth $12,000. At the close of the trial appellee amended his answer by alleging that prior to the making of the written contract, and as a part consideration therefor, plaintiff orally agreed to devote his entire time and energies to the business and to the study and practice of law, but in fact, after said partnership had Tjeen performed, he neglected the firm business, and gave his attention and time to his private business to such extent that the value of his service to the firm was greatly diminished, and that on or about November 1, 1899, the parties entered into an agreement by which, in consideration of his failure to give his time and attention to the firm business, plaintiff was to make no claim to any partnership interest in the fees or money earned by the defendant after May 15, 1894.
1. Partnership: modification of contract: dissolution: evidence. I. The first pertinent inquiry relates to the time when the partnership relation between the appellant and the ap-pellee ceased to exist. As to this there is but slight question in the pleadings; the appellant alleging, as we have seen, the date of the dissolution to have been June 1, 1901, while the appellee asserts it to have taken place on May 18, 1901. This difference of about two weeks is not very material except as it affects certain fees earned and possibly certain collections made during that period. The amendment to the answer does not in terms or by necessary implication withdraw the previous allegation as to the date of the dissolution, nor does it allege that a dissolution took place prior to May 18, 1901, but says, in effect, that by express agreement or tacit understanding of the parties after May 15, 1894, appellant was to receive nothing from the firm business except what he himself earned, and that he did in fact receive and retain to his own use all of that part of the earnings and income to which he was entitled. In other words, the amendment sets up, not a dissolution of the partnership prior to May 18, 1901, but a modification of the contract between them by which appellant was no longer entitled to receive a one-third share of the combined earnings. It is true that in his testimony on the trial appellee says that from 1891 to 1901 he and the appellant “ did not have very much in common ” in business, and “ that the partnership was practically dissolved then or before, . . .■ not, perhaps, as a matter of law, but for all practical purposes.” Yet in the same connection he says: “The partnership continued until the year 1901. During that period I gave no notice of dissolution. I think there were a great many suggestions of dissolution in the manner in which the business was carried on. I do not think I ever gave him notice in so many words of the dissolution of the partnership, or that it would have to come to an end until May 18, 1901.
2. Same: modín* tract^evi-con" deuce. II. Having found that the partnership was not dissolved prior to May 18, 1901, we next inquire whether the parties to the contract ever agreed upon any change in its terms and conditions. The burden is upon A A appellee to establish such change by at least a fair preponderance of the evidence, and this, we are quite clear, he has not done. Certain it is that no such agreement exists in writing. Nor is there any attempt to show such an oral agreement except as it is sought to be drawn from a conversation which took place between the parties under the following circumstances: During or prior to the year 1899 the parties, as already stated, made an investment in a tract of land which seems not to have been closed out until 1901. At some time while this enterprise was still in hand, the subject of their proportionate interests therein became a matter of dispute between them. Bespecting the date of the origin of this controversy there is some discrepancy in the record; but, in our view of its nature and effect, the matter of date is not of controlling importance. In the course of the talk concerning this investment appellant spoke of his “ half ” interest in the property. This remark was the opening of a short and somewhat heated discussion, which the appellee relates as follows: Now this was the first intimation of any sort or kind from Mr. Both that he claimed a half interest in the matter, or the first knowledge or thought that I had that he claimed more than a third interest. I said to Mr. Both: “ What do. you mean by your half of-the Tarr land?” “Why,” he. says, “ I mean that I am entitled to half of that land. That was not a partnership matter. And I.am entitled to it, and am going to have it.” I said: “ You are not going to have it, and I don’t understand by what process of reasoning you arrive at the conclusion that you are entitled to it as a matter of law or as a matter of right, and especially under the con
3 Same - interest hí eámmgíof the other. III. It is next urged by the appellee that in any event the manner in which the business of the parties was carried on will justify the finding of an implied agreement that aPPe^anl should have no share in the earnings the appellee after May 15th, 1894. It appears that appellant married on the date here named, and it is claimed by the appellee that appellant thereafter gave his time very largely to the management of his own property and that of his wife, and that his conduct with reference to the alleged partnership business was consistent only with the theory that he had and claimed no interest therein. The record affords no substantial support for'this theory. Indeed it is not a little difficult to understand the nature of .the relationship between the parties as contended for in appellee’s brief. A partnership in which neither ,party has any interest,in the labor or service which the .other -renders in the business for which they are associated together would be an anomaly unknown to law or equity. That a partnership did exist between these persons for years after the date mentioned is, as we have seen, not only conceded by the pleadings and by the appellee as a wit-nes on the stand, but the record is full of evidence that they continued during all of those years to hold themselves out to the world as partners, occupying the same office and using the same firm name.
4» Same. It is true that appellee, as the senior and more experienced member of the firm, conducted practically all of the trial business and such other business as required personal attention away from home, , 11 -» » and as is quite usual where a lawyer m an established practice takes in a junior partner, lately admitted to the bar, it fell to the latter to keep the office and look after collections and correspondence and attend to the lesser matters which would be neglected or lost
Some claim is also made in argument upon the oral agreements and understandings alleged to have been had between the parties prior to the making of the written contract. This evidence, if admissible at all, goes no further than to show that appellant, in entering the partnership, undertook and promised to the best of his ability to give his time, study, and service to the partnership business, but whether any such express agreement or understanding was or was not had, it adds nothing to the obligation to be implied from the contract as it is written.
5 Same-estop-pel-Counsel further suggest that the conversation between the parties, to which reference has already been made as having taken place not earlier than November, 1899, estops plaintiff to claim any share in the income arising from the services rendered by appellee after May 15, 1894. We discover no element of estoppel in the matter here referred to. Nor is an estoppel pleaded.
6‘ ^tween^art-compensation for services. IV. Having concluded that the partnership continued undissolved and unchanged by any subsequent agreement of the parties from its inception until May 18, 1901, the main question left for our consideration has reference to the matter of accounting. Preliminary to this it is proper to notice the claim of the appellee that he be credited for
As we have already noted, the contract implies the inferiority in value of the appellant’s services, and adjusts the division of income accordingly. As the experienced member of the firm, appellee took upon himself, as both parties apparently expected him to do, the leadership of the firm business, the control and management of its most-important affairs, and, as is usually the case in instances of this kind, the position of the younger member became largely that of collector, clerk, and office keeper. But in all this there was at no timé prior to November, 1899, any,suggestion by either person to the other that the agreed ratio of division of the income was not satisfactory. Appellee says that during this time he did not think appellant entitled to one-third of the earnings of the firm, and did not think he would demand it, but the subject was not mentioned, and he does not claim himself to have then had any very definite idea as to just what appellant’s rights in the firm were. His present contention that' appellant should have nothing in excess of the receipts from the collections and office business, and that he himself should have all of the income arising more directly from his own services since 1894, does not appear to have then been formulated, for he concedes that on several occasions from 1894 to 1901 he paid over to appellant sums ranging from $100 to $1,000. He does not claim that these were loans, but says that he expected appellant to be charged therewith in settling up their partnership business, and we think this conduct is explicable only on the theory of appellee’s recognition of appellant’s right to share in the general income of the firm. The force of this conclusion is emphasized by the fact that none of these pay
„ „ 7. Same: atten-partner‘t^private business. Allied to the claim thus considered is a further proposition that appellant should be charged with the value of time lost- by him in the pursuit of his private business and with the value of services . rendered by him to his wife and to his other relatives in caring for their property and investments. It is undoubtedly true that appellant gave some of his time to the care of the private business of himself and family. But both partners were thrifty and prosperous, and each had individual property and investments to which he gave some portion of his attention, though the time thus taken by the appellant more especially in the last two years of the partnership was probably in excess of that taken by the appellee. So, also, both of them indulged in an occasional vacation. The testimony as to lost time deals almost entirely in general statements and rounded estimates. Scarcely a specific instance of such loss is given, and nowhere is pointed out a specific instance of loss of business by reason of any negligence or inattention to the office. It is shown that the collection business of the firm fell off quite materially during the last few years of the partnership, but there is a failure of testimony to show that such
8. SAME. This observation is likewise applicable to the further claim made by the appellee that in any event the value of the services rendered by appellant in caring for the property interests of his wife and relatives should be accounted for to the firm. Such services were not of a professional character, and his earnings therein were not partnership property. This question was considered by the Illinois court in Metcalfe v. Bradshaw, 145 Ill. 124 (33 N. E. 1116, 36 Am. St. Rep. 478), where it is held that moneys received by one of a firm of lawyers for services as administrator pf several estates were not partnership property. The court says: "The defendant by acting as executor or administrator engaged in no business or enterprise which can be regarded as in any. sense in competition with his firm, or which involved the use for his own advantage of anything belong
To make an entirely satisfactory accounting upon the record furnished us is not an easy matter. Neither party has attempted to state in a single comprehensive account all of the items of receipts and expenditures during the nearly eleven years of the firm’s existence. Appellant has attempted to cover the entire business by stating the account in various condensed groups or schedules, and from a combination of these computes a balance in his favor of something over $11,000. Appellee’s counsel content themselves with denying in whole or in part certain items of receipts and expenditures set forth in the appellant’s schedules, and make a list of other items with which appellee should be credited. The trial court’s judgment is accompanied by no findings of fact showing what items it allowed or disallowed. We regret that the parties did not see fit to have the books and accounts referred to some competent person for a complete and detailed statement of the same. With such a statement before us each disputed item and the effect of its allowance or rejection upon the general result could be readily seen, and the true balance determined with comparative ease. This court cannot attempt to go through books and accounts and build up in opposing columns of debt and credit every item of business in the whole history of an active partner
Amount paid by one Severson . $119 50
“ “ “ “ Nurk . 29 00
“ “ “ “ Lowery . 75 00
“ “ “ city of Sheldon. 104 15
“ “ for electric light .■’ 108 00
“ “ to Clerk Martin ... 135 00
“ “ “ Clerk Armstrong .'. 30 00
“ « “ Heaphy .;..... 45 00
—■ making a total of miscellaneous overcharges and omitted credits of $645.65, for which amount appellee should have due allowance. Appellee is also entitled to credit for expenses. Unfortunately he kept no record of these items,
9. Same: dissoiu-up of the l£fsiness i extra compensation, At the date of the dissolution of the partnership, which for the purposes of the case we find to have been May 18, 1901, the firm had in hand a considerable amount of unfinished business, including several cases of importance. In some of these cases the work had been substantially completed, while others had not yet been brought to trial. Appellant claims that the entire fees received by the appellee in all cases on hand at that time must be accounted for, while appellee’s position is that he is not liable to account for any part of such business. It is the undoubted general rule of the law of partnership that upon the dissolution of a firm each member is under obligation to perform what work may be necessary for closing out the business without other compensation than his share of the profits. Denver v. Roane, 99 U. S. 355 (25 L Ed. 476) ; Smith v. Knight, 88 Iowa, 257. The rule is subject, however, to frequent exceptions, and, where the circumstances are such as to render it equitable that compensation in wages or an increased apportionment of profits be awarded to one of the partners, the court will adjust the account accordingly. Robinson v. Simmons, 146 Mass. 167 (15 N. E. 558, 4 Am. St. Rep. 299) ; Thayer v. Badger, 171 Mass. 279 (50 N. E. 541) ; Schenkl v. Dana, 118 Mass. 236. The exception is especially proper, where the partnership is between lawyers, and the work of- winding up its affairs is all cast upon one of them. In such cases the joint enterprise cannot be closed out by simply selling the partnership property, paying its debts, and dividing the remnant between the partners. The cases on hand must be followed through the courts and brought to completion, often with a large amount of labor and responsibility; and not infrequently the most valuable part of the service rendered the client is that which is performed after the dissolution. , Un
For services to O’Brien county. $5,000 00
For services to the Harker estate. 8,500' 00
For services to the Davidson estate. 5,000 00
Collected from Royce. 4,652 52
Collected from Bums..... . 200 00
Collected from Reynolds.. 250 00
Collected from Minden & Hickey. 50 00
Collected from Schelser.•.■. 800 00
Collected from Kearney.•. 150 00
Collected from Gould. 100 00
—all of which were collected by the appellee.
Of these items we think the fees in the case of Royce and Schelser had been substantially earned before the dissolution of the partnership, and that no deduction should be made therefrom for services after that date. As to the other items we are disposed to credit the appellee for services rendered after the dissolution of the partnership as follows:
Davidson estate .. $1,000 OO
In the Harker estate. 1,000 00
In the O’Brien county case. 2,500 00
Page 272In the Bums case.. . 200 00
In tbe Reynolds case. 150 00
In the Minden & Hickey case. 50 00
In the Kearney case. .¡.. .. . 100 00
In the Gould case... 100 00
This allowance, added to the other items already enumerated, makes a total of $9,245.65, by which sum the net proceeds of the business is reduced to $47,980.73. From this sum appellee expended for addition to library and office furniture still on hand and undivided $1,064.36, leaving net balance for distribution of $46,918.47. Of this sum the appellant was entitled to receive by the terms of the partnership contract one-third, or $15,639.47. He has received in fact $7,628.90, leaving a balance his due from the partnership business in the hands of the appellee of $8,010.92.
In the foregoing computation we have taken no account of the rights of the parties growing out of their investment in the tract of land known 'in the record as the “ Tarr Land.” It is shown without controversy that the land was sold by the parties at a profit, and the matter in dispute relates principally to the proportionate share therein to which they are respectively entitled. The appellant demands one-half, and the appellee concedes to him but one-third. There appears to have been no express agreement between them upon this subject, and, while the transaction was perhaps one not ordinarily within the scope of the partnership business, the land came to them through negotiations with a client for whom they had foreclosed a mortgage upon the property, and the value of their professional services were applied as part payment of the purchase price, and we think the conclusion justified that the parties treated such purchase as a partnership investment, and that the profits therefrom should be divided in the same proportion as their professional earnings. Granting appellee, therefore, two-thirds of the profits arising from the land transaction,
As the record discloses that there is a large number of uncollected and unsettled accounts due the firm, and that some addition to the library and office equipment was made during the existence of the partnership, and no provision having been made therefor in the decree of the district court, it will be necessary that this cause be remanded for further proceedings in harmony with this opinion, and for the entry of a decree making final adjustment of the partnership rights and distribution of its assets. The costs of this appeal will be taxed to the parties in equal share's.— Modified and remanded.