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Accounting. Fulton Superior Court. Before Judge McKenzie.
1. " 'An account stated is an agreement between persons who have had previous transactions, fixing the amount due in respect of such transactions, and promising payment.' Ward v. Stewart, 103 Ga. 260, 262 (3) (29 SE 872); Moore v. Hendrix, 144 Ga. 646 (87 SE 915); Borders v. Gay, 6 Ga. App. 734 (65 SE 788). Bouvier defines an account stated as 'An agreed balance of accounts. An account which has been examined and accepted by the parties.' An account stated establishes the creditor's claim and entitles him to bring an action on it as a liquidated demand; and in the absence of fraud or mistake an account stated is conclusive upon the parties. Phillips v. Ableson, 60 Ga. App. 558, 559 (4 SE2d 411)." Martin v. Mayer, 63 Ga. App. 387, 399 (11 SE2d 218).
2. "A party objecting to a stated account shall surcharge and falsify. The former is to allege omission; the latter is to deny the correctness of certain of the items rendered. One palpably fraudulent item casts suspicion upon the entire account." Code 37-306. To surcharge is to allege an omission; to falsify is to deny the correctness of certain items rendered. Warner Robins Sun v. Clary, 98 Ga. App. 500, 502 (106 SE2d 57). A mistake in an account stated must be raised by the pleadings and sustained by proof to the same degree of certainty as equity requires to correct a mistake. Tate v. Gairdner, 119 Ga. 133 (2) (46 SE 73).
Where, as in the present case, the partners in a partnership composed of three persons have an accounting or settlement as to their obligations to the partnership and the obligations of the partnership to them, and it is determined upon the accounting that one of the partners is indebted to the partnership in a stated amount, and he gives his note for this amount payable to the partnership, it is conclusive upon him, and he cannot thereafter assert any claim against the partnership for salary and expenses which had accrued prior to such settlement in the absence of a plea and proof of fraud or mistake. See also Annotation 11 ALR 604; 75 ALR 1289.
3. Code 75-107 relating to the dissolution of partnerships does not state all the means known to the law for dissolving a partnership as "[e]very change in the personnel of a partnership, such as the withdrawal of a member or admitting a new one, works a dissolution. 20 R.C.L. 954, 178; Richards v. Butler, 65 Ga. 593, 598 (2); Preston v. Garrard, 120 Ga. 689, 690 (48 SE 118, 102 ASR 124, 1 AC 724)." Harwell v. Cowan, 175 Ga. 33 (1) (165 SE 19). See also Fenner & Beane v. Nelson, 64 Ga. App. 600, 606 (2) (13 SE2d 694). "No partner, by assigning his interest or otherwise, may introduce a new partner without the consent of the others, unless such power be reserved in the contract." Code 75-204. And while, where a partner without the consent of the other partners sells all or part of his interest in the partnership as such, as distinguished from specific firm assets, it might be that such facts may constitute proof of the dissolution of the partnership by withdrawal of the selling party; yet the partnership may continue for the purpose of accounting and settlement (see Cody v. Cody, 31 Ga. 619 (2)), and the party purchasing such partnership interests purchases them subject to any such accounting between the partners, particularly so where such sale was made without the consent of, and without notice to, the other partners.
4. Where the partner, who in the settlement executed his note to the partnership on January 25, 1961, had prior thereto sold to a third party on July 12, 1960, one-half of his interest in the partnership, and subsequently to the settlement and on the 19th day of December, 1961, executed to the same third party a conveyance of the remainder of his interest in the partnership, all without notice to or consent of the other partners, in which later conveyance the selling partner covenanted that both conveyances "were made free and clear of any indebtednesses, claims or liens whatsoever" and that the selling partner "agrees to hold" the purchaser "harmless on account thereof" and in which last sale agreement it was also provided that nothing in the agreement "shall affect in any way whatsoever the indebtedness due by" the seller to the partnership as evidenced by the note and that the agreement shall not "affect in any way the indebtedness due" the seller "by said partnership in the approximate amount of $10,400 [the amount of the salary and expenses claimed] and said parties shall have the right to negotiate and settle their respective rights and liabilities in so far as these two particular claims are concerned, irrespective of any agreement and provision herein contained," these provisions in the conveyances, even if construed to have a contrary purpose as between the selling partner and the third party purchaser, could have no effect upon the rights of the other partners in the firm assets, of which the note evidencing the indebtedness of the selling partner to the partnership is one, and for which share of the indebtedness the other partners have a prior claim on the firm assets before the third party purchaser may receive the share of the selling partner. The purchaser can acquire as against the other partners no greater interest in the partnership as such than the selling partner would be entitled to upon final accounting had between the three partners.
5. The evidence in the present case authorized the factual conclusions reached by the trial judge and those stated in this opinion. Accordingly, the trial court did not err in holding the partnership interests sold by Stone to McBrine subject to the indebtedness owed the partnership by Stone in the final accounting by the partners, and, in holding that Stone was precluded from recovering or setting off or recouping the alleged claim for services and expenses in the final partnership accounting.
6. In deciding this case and rendering this opinion we have pretermitted all questions as to whether or not the appeal was dismissable because there was no appeal from a final judgment, or because the transcript of the proceedings certified by the court reporter were filed too late, as well as the question of whether or not the enumeration of error should not be considered because the errors complained of were not Separately enumerated.
An action was brought by the First National Bank of Atlanta as executor of the estate of Wallace R. Paige, deceased, and David G. Warner, against William A. Stone and J. Harvey Chesnut (whose rights are not material in the present appeal) seeking an accounting and declaratory judgment as to the rights of the parties arising out of the assets of a partnership composed of Paige, Warner and Stone which operated certain oil and gas wells on lease. Robert C. McBrine, who had purchased Stone's interest in the partnership, intervened. After a hearing upon which certain depositions, documents, and a stipulation of fact, were introduced in evidence and oral testimony heard, the trial judge entered the following order (deleting the parts not here material): "The above and foregoing matter coming on to be heard without a jury in open court by agreement of all parties; and, after hearing testimony and consideration of the stipulation of fact and the depositions submitted by agreement of all parties, the court does hereby make the following findings of fact:
"1. The partnership, known as W. P. & S. Oil Company, composed of David G. Warner, Wallace R. Paige and William A. Stone, was dissolved on July 17, 1960.
Wallace R. Paige One-Third William A. Stone One-Sixth
"3. The interests of Robert C. McBrine and William A. Stone, as above, were subject to the repayment of $7,806, the amount agreed upon by Warner, Stone and Paige on January 25, 1961, as Stone's indebtedness due the 'partnership' referred to as W. P. & S. Oil Company. This is true, even though the books might show a larger indebtedness because the parties are bound by this agreement and said McBrine is entitled to the benefits of the agreement in view of his later agreement with Stone and McBrine is now entitled to 1/3 of any sums hereafter paid by Stone on said indebtedness.
"Further, the interest of the former partners and assigns were subject to the interest of J. Harvey Chesnut, the same being a 1/8 working interest, less completion costs in the partnership properties known as the Hal Claggett and Ashley properties. The court finds that the expression 'working agreement,' as used, to mean the revenue for gas produced less royalties and expenses directly attributable to the production and distribution of said gas, but not to include other overhead.
"4. There was no express agreement between the said partnership and any partner for the payment of compensation for services and any claim for the reasonable value of services by the partners was waived by conduct of the parties, including the agreement of January 25, 1961.
"5. William A. Stone subsequently transferred his remaIning 1/6 interest to Robert C. McBrine who thereafter owned a 1/3 interest in the partnership assets, subject to the agreed indebtedness due the 'partnership' by William A. Stone and also subject to the rights of J. Harvey Chesnut.
"Now, therefore, it is ordered, adjudged and decreed by the court as follows:
"(a) That accountants regularly employed by the partnership prepare a statement of its assets and liabilities as of the date of dissolution of the partnership and a statement setting forth the interest of J. Harvey Chesnut in certain partnership properties known as the Claggett and Ashley properties. In addition, said accountants shall prepare a statement of accrued net revenue, deducting therefrom completion costs, due J. Harvey Chesnut through this date. But, statements shall be submitted to the court for approval.
"(b) Upon approval of the foregoing statement, the assets now remaining of the partnership shall be distributed as follows:
"2. The plaintiffs, together with Robert C. McBrine and the personal representative of the estate of J. Harvey Chesnut, are granted 60 days to present to the court for its approval a plan for the division of the remaining partnership assets among the plaintiffs and Robert C. McBrine and the personal representative of the estate of J. Harvey Chesnut, deceased, in the proportions that the interest of each bears to the other as shown by the foregoing statement as of the date of dissolution of partnership, but allocating to said Robert C. McBrine the 1/6 interest then owned by William A. Stone and later assigned to Robert C. McBrine.
"(3) Should the plaintiffs, Robert C. McBrine and the personal representative of J. Harvey Chesnut, deceased, fail to submit an acceptable plan for the division of the remaining partnership properties within the foregoing time, the court will thereupon appoint a receiver to take charge of the remaining partnership property and to effect a division thereof in accordance with the foregoing proration.
"(c) A temporary injunction against the sale or alienation of the partnership properties heretofore granted by the court is continued and in force, but the same may be modified from time to time by the court upon application of any of the parties hereto or to preserve the interest and properties formerly belonging to the partnership.
"(d) The costs of court and court reporter's fees, including the preparation of transcript, shall be paid by all parties. It is so ordered, This 28th day of July, 1967."
The appeal is by William A. Stone from this order and his sole enumeration of error is that "the court erred in entering its order and judgment of July 28, 1967." The depositions and documentary evidence attached thereto were sent up as a part of the record. The transcript of the proceedings, pertaining to the hearing and containing the references that show the introduction in evidence of the depositions and documents attached thereto and certified by the court reporter was filed on September 22, 1967. The notice of appeal was filed on August 17, 1967. On September 18 (the last day for filing the transcript of the proceedings, the 30th day having fallen on a Saturday), the trial court entered the following order: "For good and sufficient cause shown and, it appearing that the court reporter has not filed with the clerk the transcript of proceedings before the court on April 24, 1967, it is ordered and adjudged that the time within which the Clerk of Fulton Superior Court shall have to transmit the transcript of evidence and proceedings in this case to the Supreme Court of Georgia is hereby extended up to and including October 10, 1967."
The appellant in his brief filed in this court stated: "The error enumerated is as to the order and judgment of the court below dated July 28, 1967, which, insofar as appellant is concerned, raises the following issues of law:
"1. In the light of all the facts and circumstances and the specific agreement of Stone and McBrine to the contrary, is the one-third interest in the partnership conveyed to McBrine by Stone 'subject to the repayment of $7,806,' as held by the court?
"2. In the light of Paragraph 4 of the partnership agreement and under the evidence adduced, was the court authorized to find that there was 'no express agreement' for the payment of compensation for services and that any claim therefor was waived?"
Edward P. Ellis, Walter W. Calhoun, Joe W. Gerstein, for appellees.
J. Ralph McClelland, Jr., for appellant.
Friday May 22 18:54 EDT

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