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Schane v. Conrad





APPEAL from the Circuit Court of Cook County; the Hon. GEORGE J. SCHALLER, Judge, presiding.


In an action for an accounting, judgment in the amount of $16,017.90 was entered in favor of plaintiff and against defendant Gilbert Conrad, but plaintiff was denied an accounting from defendant Repro Supply Company, Inc. Plaintiff appeals, contending (1) that the judgment was less than he was entitled to receive and that the procedure employed by the trial court deprived him of a complete adjustment of all accounts; and (2) that he was also entitled to an accounting from defendant Repro Supply Company, Inc.

Alleging the existence of an oral contract of partnership and/or joint venture between himself and Gilbert Conrad, plaintiff sought an accounting of and a judgment for 50% of profits earned during the period encompassed by such agreement. Later, in an amended complaint, plaintiff sought an accounting from the corporation upon the theory that it was the repository of all business profits, assets and accounts, including those attributable to the partnership.

It appears from the evidence adduced by plaintiff that Conrad, doing business as Repro Supply, had for many years been engaged in the sale and servicing of photocopying machines when, in 1967, he and plaintiff entered into a partnership in which they were to divide equally the profits generated by new accounts solicited and serviced by plaintiff. In addition, plaintiff was to be paid a monthly draw of $1,000 to be credited against his share of the partnership profits. Plaintiff succeeded in securing two new accounts, which to the exclusion of other business done by Conrad, formed the basis of the partnership. Conrad, and later his wife, kept the only set of business records pertaining to partnership transactions and, although he believed the enterprise to be profitable, plaintiff was unaware of the amount of money due him as he never consulted such records. Early in January 1971, the partnership terminated and, later that same year, Repro Supply was incorporated by Conrad.

At the close of plaintiff's case, the trial court stated that a prima facie showing of an oral partnership agreement had been made, and defendants then produced evidence to refute the existence of such agreement *fn1, which included testimony from Conrad, his accountant and others concerning the amount of profits generated by the partnership transactions. Plaintiff cross-examined each witness thoroughly and both sides introduced into evidence portions of Conrad's Federal income tax returns for the years in question. These documents were individual rather than partnership returns, and each revealed his annual net profit based upon the year's gross receipts less the amounts expended in paying commissions and other business expenses.

During the course of closing argument, plaintiff argued that the evidence established an oral partnership agreement and, therefore, that he was entitled to a subsequent accounting from defendants. The trial court refused any such hearing, stating that at the close of plaintiff's case it had ordered defendants to render an accounting; that the accounting had been accomplished through the testimony of Conrad and his accountant and the former's business records; that plaintiff had the opportunity to correct or amplify such accounting, as Conrad had twice submitted to pretrial deposition during which plaintiff cross-examined Conrad on the basis of documents tendered by him during discovery; and that plaintiff had failed to move for sanctions because of any failure of defendants to fully comply with the court's discovery order.

When plaintiff asserted that defendants had not tendered cash journals for the years in question, the trial court replied that it would have required the production of such journals had counsel requested them. In response thereto, plaintiff reasserted his contention that the law nevertheless entitled him to a further and separate hearing in which defendants should render a complete adjustment of all accounts.

The trial court then found as follows: That a partnership existed between plaintiff and Conrad; that the partnership was in existence from October 1967 through December 1970, and each partner is required to account to the other for that period; that insufficient evidence was introduced as to the financial dealings between plaintiff and Conrad during the 1967 existence of the partnership; "that no consideration to stating an account in their dealings in 1971 is given because of the actions of plaintiff in his self-dealing in the Seeburg account, as well as the declaration of Conrad dissolving any partnership or other relationship"; and that plaintiff was not entitled to an accounting from the corporate defendant. The court stated the account as between plaintiff and Conrad as follows:

"I. Net Income Declared by Defendant: 1968 — $ 2,440.71 1969 — 40,915.73 1970 — 15,816.66 __________ $59,173.10

II. To state true net income, the commissions to the plaintiff should be added: 1968 — $ 7,355.00 1969 — 10,729.30 1970 — 9,053.00 __________ $27,137.30

III. Plaintiff's one-half of $86,310.40=$43,155.20 Minus amount plaintiff received - 27,137.30 ___________ Balance $16,017.90"

Based on these findings, the trial court rendered the judgment appealed from in favor of plaintiff against Conrad, individually, in the amount of $16,107.90.


• 1 Plaintiff's sole contention on appeal is ...

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