Summary
In Bremner v. Leavitt, 109 Cal. 130, [41 P. 859], we have this general statement of the controlling principle in such cases: "In an action for an accounting between partners, all matters relating to and growing out of the partnership relation of the parties, and for which an accounting is sought, however varied they may be in their nature, taken together constitute but a single cause of action, and may properly be embraced in a single count in the complaint."
Summary of this case from Sing v. O'DellOpinion
Department One
Appeal from a judgment of the Superior Court of Lassen County. W. T. Masten, Judge.
COUNSEL:
Spencer & Raker, for Appellant.
Goodwin & Goodwin, and Shinn & Shinn, for Respondents Leavitt and Woodson.
F. C. Spencer, for Respondent Bremner.
JUDGES: Van Fleet, J. Harrison, J., and Garoutte, J., concurred.
OPINION
VAN FLEET, Judge
Defendants Bremner and Woodson demurred to the complaint, and their demurrers were sustained. Plaintiff refused to amend, and a judgment of dismissal was entered against him, from which he appeals.
The demurrers were improperly sustained. The action is for an accounting and winding up of the affairs of a copartnership. The demurrers were upon several grounds, but the only ones that seem to be insisted upon are that the complaint is uncertain; that several causes of action are improperly united; and that the complaint contains several causes of action not separately stated; and it was upon the latter ground, as evidenced by the order of the court below, that the complaint was held bad. But the complaint is not amenable to either of the objections made. In our judgment it states but one cause of action, and is free from uncertainty. It states various different matters and transactions between the several members of the partnership as to which an accounting is asked, but they are all matters relating to and growing out of the partnership relation of the parties, and, taken together, constitute but a single cause of action. While they are separate and independent matters in the sense that they are varied and different in character, they are not separate causes of action, but integral parts of one and the same cause. Respondents have very evidently fallen into confusion as to what constitutes a separate cause of action in such a case. It is alleged, for instance, among other matters for which an accounting is prayed, that at the time of the formation of the partnership it was agreed that the firm should pay to plaintiff the sum of one thousand dollars, with interest, etc., which has not been paid; that the defendants Leavitt & Woodson have failed to devote their time and services to said partnership business as agreed, by reason of which the business of said partnership has suffered loss and damage, and that said defendants have devoted all their time and energies to other enterprises, in which they have made large profits, for which they should be required to account to said partnership; that plaintiff has personally paid debts of said partnership for which he has not been reimbursed, and that he has furnished personal property to said partnership for which he has not been paid. These matters, and others of a like nature, are regarded and characterized by respondents as "a complete jumble of causes of action."
It is perfectly obvious that they do not constitute separate and distinct causes of action. They are proper matters to be alleged as grounds for an accounting between the partners, but they are all parts of the same general subject matter, and constitute but one general cause of complaint. It was perfectly competent for the partnership to assume and promise to pay to plaintiff the indebtedness of a thousand dollars alleged, and in that event it became an obligation of the partnership, for which plaintiff is entitled to an accounting. (Herman v. Paris , 81 Cal. 626.) The code provides that a general partner who agrees to give his personal attention to the business of the partnership may not engage in a business which gives him an interest adverse to that of the partnership, or prevents him from giving to the business of the partnership the degree of attention which would be advantageous to it, and that a partner violating this obligation may be called upon to account to the partnership for the profits of such adverse business. (Civ. Code, secs. 2435- 38.) It was, therefore, proper for plaintiff to allege the violation by defendants of their obligation in this regard as one of the grounds of his action, and upon which he desired an accounting; and the fact that the breach of this obligation by the defendants resulted in damage to the plaintiff does not constitute it a separate cause of action at law for damages, [41 P. 860] as contended by respondents. Such damages are but an incident of the general cause of action assigned. Partners cannot sue one another at law for any breach of the duties or obligations arising from that relation. This can only be done in chancery by asking a dissolution and accounting, and, if damages accrue from any cause in such proceeding, they must be adjusted by some appropriate method in that tribunal. (Stone v. Fouse , 3 Cal. 292.) Equity does nothing by halves, but gives full relief in such cases. When it undertakes to adjust the differences between partners, it adjusts them all. "The whole subject matter in controversy between the parties, which includes all the partnership transactions of each and all the partners, is the subject of the adjudication, and the account and decree must include all these matters, and leave nothing open for future litigation or controversy. Equity will not adjudicate causes piecemeal." (Griggs v. Clark , 23 Cal. 427.) The same general considerations apply to the other matters alleged. It is not only proper, but necessary, to set forth in such an action all the transactions of the firm and its members sought to be included in the accounting, however varied in their nature, and, taken as a whole, they go to make up and constitute the plaintiff's cause of action.
It may be that some of the matters alleged are not relevant or material to the cause of action stated, and do not tend to constitute proper subject matter for an accounting between the parties. Such matter, however, should have been made the subject of a motion to strike out. It does not affect the sufficiency of the complaint, and cannot be reached by demurrer. If it exists, it will not impede the administration of proper relief, since it may be eliminated on the trial, as evidence will not be received upon immaterial matters.
The judgment is reversed and the cause remanded, with directions to the lower court to overrule the demurrers and permit defendants to answer.