128 Ky. 570 | Ky. Ct. App. | 1908
Opinion of the Court by
Affirming.
In the spring of the year 1886 appellee John H. Wilson was engaged in the practice of law in Barbour-ville, Knox county, Ky. His services were secured by the Louisville & Nashville Railroad Company after that corporation had decided that it would construct a branch railroad from Corbin, on the main line of its Knoxville division, up the Cumberland river, into the coal fields of Bell and Harlan counties, or through Cumberland Gap into the coal fields of Wise and Lee counties, Ya. After appellee Wilson had learned that the road would be constructed, he could readily see that the coal-bearing properties along the line of the proposed road would of necessity rapidly advance in price, and that the purchase of the lands at the low prices then prevailing, and before it became known that the road would be constructed, would prove a very profitable investment. Appellee had formed the acquaintance of his coappellee, M. J| Moss, some time prior to 1886, who was engaged in the practice of law in Bell county, and was well acquainted with the inhabitants of that county, and especially the landowners along the line of the proposed railroad. Ac
Thereafter appellee Wilson filed his petition in the Bell circuit court, alleging the existence of a partnership'between him, Moss, and Boreing. To this.petition appellee' Moss and the heirs, devisees, and personal representatives of Vincent Boreing were made defendants.' The petition, • after setting forth the death of Boreing, the dissolution of the, partnership by reason thereof, and the'qualification of his administrators under the will, alleges that it was agreed at the inception of the partnership enterprise that Vincent Boreing should furnish the money necessary to acquire the lands, and that he (Wilson) and Moss •should contribute in aid of the enterprise their services and assistance, and, when the- land was sold, Boreing- should receive the various sums of money which he had advanced from time to time in making
To appellee Wilson’s petition, appellee Moss, on December 7, 1903, filed his answer, counterclaim, and cross-petition, making appellants cross-defendants, and joined in the prayer Wilson for a settlement of the partnership accounts. Appellee Moss also set forth in his answer and cross-petition the unsettled and uncertain state of the partnership accounts, as well as the fact that Boreing* had furnished in the .purchase of the lands $30,000, but that the exact amount was unknown to áppellee. Pie also alleged that he had paid in about $7,500, but that Wilson had paid in only about $1,475. Both the petition of-appe-1lee Wilson and the answer and cross-petition of appellee Moss alleged that Boreing had received-large sums of money in the way of rents and proceeds from -the sale of lands and timber involved in the. controversy, the exact amount of which they did not
On January 13, 1904, the appellants herein filed their answer to the original petition of appellee Wilson, and also their reply to the answer, counterclaim, and cross-petition of appellee Moss, denying and putting in issue every material allegation of those pleadings. Thereafter certain amended pleadings were filed, and, among them, one by appellee Wilson asking for the appointment of a receiver to take charge of the property during the litigation. Responsive pleadings were then filed and the issues joined on all the material allegations of the several amendments. The court appointed a receiver, who qualified and is now in charge of the property. The parties then proceeded with the taking of testimony, and the special judge, Hon. John McChord, called a special term of the court in the month of July of that year, at which to hear the case.
On July 28, 1904, one of the administrators, John R. Boreing, presented and filed' his affidavit with the clerk of the Bell circuit court, in which he claimed that appellants could not get a fair trial of their cause before said special judge. The latter decided that the affidavit was insufficient and declined to vacate the bench. After this affidavit was filed, the case was continued to the October term for further preparation, and was then submitted and tried. The court held that a partnership existed between Wilson, Moss, and Boreing; that in the settlement Vincent Boreing’s estate should be charged with the sum of $3,000
This appeal involves the determination of the following questions: (1) Did the special judge err in refusing to vacate the bench? (2) Did the transaction between appellees and Vincent Boreing constitute a partnership ? (3) Was A. H. Melcon, who purchased the machinery on the Tuckehoe lease, competent to testify for appellees, and did.the court err in charging the estate of Vincent Boreing with the sum of $3,000 paid by said Melcon for said machinery? (4) Did the court err in charging the estate of Vincent Boreing for the 500 acres of partnership land sold by Boreing to the Bell County Coke & Improvement Company, and fixing the sum to be charged at $20,000? (5) Did the court err in charging the estate of Vincent Boreing interest at the rate of 8 per cent, on said sums
First. On July 28,1904, appellant John R. Boreing, for himself and- his coappellants, filed the following affidavit, in* which he set forth legal grounds why the special judge should vacate the bench:
“The affiant, John R. Boreing, says that he is one of the defendants in the above styled cause, and is the only one taking an active interest in the defense herein;. that his codefendants., Julia T. Williams, Sallie Boreing, Belle Young, James M. Boreing, May Mielcon, and this affiant are the only devisees of Yin-cent Boreing, deceased. The other defendants, to wit, A. H. Melcon, J. M. Williams, and Joseph Young are nominally defendants only, the husbands of affiant’s married’ sisters. This affiant says he does not believe Hon. John McChord, the special judge appointed and-commissioned herein to try this cause, by Hon. J. C. W. Beckham, Governor of the Commonwealth of Kentucky, can- or will give these defendants a fair and impartial trial of the issues herein, or that he can or will impartially try and decide the issues between the plaintiff, J. H. Wilson, and the cross-plaintiff, M. J. Moss, on one side, and these defendants, the brother and sisters of this affiant and himself, on the other. This affiant’s belief is based upon the following grounds: He says that since the last term of this court he has learned, and he avers it to he true, that the said special judge-, John McChord, is an attorney and representative of. the Louisville & Nashville Railroad Company, a corporation owning and1 operating a line
“Affiant further says that the said' Louisville & Nashville Railroad Company, under contract with three of the lessors of the property in controversy in this action, has built a spur or a short railroad from the Louisville & Nashville main track at Four Mile, Ky., up Four Mile creek, and throughl and over the
“Affiant further says that he is reliably informed and believes it to be true that the said special judge, John McChord, has been approached for the purpose of having C. W. Metcalf appointed special commissioner in this cause for hearing proof and settling the alleged partnership accounts between the plaintiff, Wilson, the cross-plaintiff, Moss, and Vincent Boreing ’s estate, and that said judge has promised to make said appointment in event it is determined .by his (the said special judge’s) decision that a partnership ever existed between said plaintiff, Wilson, ■ cross-plaintiff, Moss, and Vincent Boreing, and that affiant believes that said special judge has already, from his expressions of opinion made outside of the court and in conversations, determined to adjudge, and decide that said partnership did exist, and that the appointment of Metcalf is. to follow as one of the steps in
“The application for the appointment of receiver was tried when the defendants had' no time or opportunity for preparation of the defendants ’ side of the ease, and at a time when defendants’ attorneys’s (D. B. Logan’s) office had just been destroyed by fire, and his office furniture, books, and papers turned upside down in a heap, and said attorney overworked and illy prepared for the presentation of a defense to-the motion. These facts were known to the judge, as well as to the plaintiff, "Wilson, and cross-plaintiff, Moss, and their attorneys, and the necessity for a receiver, affiant believes, was wholly lacking, and that his appointment was improvident, and entails cost alone, without benefit, to the owners of the property in controversy; and that the application for a receiver was made alone to annoy the defendants and this affiant. This affiant expects to file ground's- and make a motion for continuance of this cause to enable defendants to prepare this cause for trial. The grounds and reason for the motion will be fully stated in: the affidavits in support thereof, and this affiant does- not believe that the present special judge, Hon. John McChord, will impartially or fairly try or decide the said motion because of reasons hereinbefore stated. Affiant says the foregoing statements are true as he verily believes. •
“Wherefore this- affiant and his codefendants ask that upon consideration of these reasons the special judge decline to hear or try further motions herein, or to try this- case, and for other proceedings according to law and the practice of this court. ”
Passing the question whether or not this affidavit was filed in time, we will proceed to the discussion of
The second point is that the Louisville & Nashville Eailroad Company, under contract with certain lessors of coal lands in controversy in this action, bad built a spur track up Four Mile creek, and it was possible that litigation mighfarise with that railroad in connection with those matters, and, if such controversy should arise, the special judge would not impartially or fairly decide the matters involved in this litigation. If a reason such as this were sufficient to require a special judge to vacate the bench, we doubt if any special-'judge would ever be able to preside in a case
The next point is that the special judge had shown favoritism, both personally and socially, towards appellees Moss and Wilson and their attorneys. This is not the kind of favoritism that disqualifies a judge from acting. It is only judicial favoritism that disqualifies a judge. The time has not come in this State when -the ordinary courtesies and amenities of life are to be dispensed with. Erom time immemorial it has been customary for visiting judges to be entertained by members of the bar. Wherever a judge is called, there are necessarily some lawyers with whom he is on terms of intimacy more or less pronounced. The fact that he seeks the company of those who are most congenial cannot be construed as an evidence of judicial corruption. It is no infrequent thing for members of the bar throughout this State, who practice before this court, to be entertained by members of the court while in attendance thereonand we may further say it not infrequently happens that immediately after a visiting practitioner before this court has been thus' entertained his host has gone,.to. the con
But .counsel for appellant rely particularly upon the allegation in the affidavit that affiant was informed, and believes and charges, that the special judge had repeatedly stated and declared to persons outside the courthouse and in private conversation that he had no doubt of the existence of a partnership between Boreing, Wilson, and Moss, “and that he had become satisfied of this fact before he had heard half of the testimony on plaintiff’s application for a receiver tried last January”; that whether or not a partnership existed was a vital issue in the case, and that this issue could not he fairly and properly tried by a judge who had already formed and expressed his opinion that such partnership did exist; that the special judge stated to William Ayres, one of the attorneys for appellees, that before he was half through tire presentation of his side he (the special judge) was of the opinion that a partnership did in fact exist, and that when said Ayres finished his speech he was conclusively convinced of same; that • said special judge was thanked very much by said Ayres for the compliment in graceful terms. For the purpose of determining whether or not the facts above alleged are sufficient to disqualify the special judge, we must take into consideration the fact that appellees in this action, not only sought a settlement of the
The last point relied on- in the affidavit is the allegation that the special judge intended to appoint C. W. Metcalf special commissioner for the purpose of hearing proof and settling the partnership accounts; that
A careful reading of the whole affidavit leads to the conclusion that it does not come up to the requirements of the law. In German Insurance Co. v. Landrum, 88 Ky. 433, 10 Ky. Law Rep. 1039, 11 S. W. 367, 592, the rule is thus stated: “While the Legislature has said that, if an affidavit ‘is made by the litigant that the judge will not afford him a fair trial, he shall not preside, the facts upon- which this general averment is made must appear, and they must be such as brings the case within the legislative meaning.” In this case no such facts are stated. The affidavit is made up of mere inferences, suspicions, and conjectures, and does not comply with the provisions of the Code as- interpreted by this court. We are therefore of the opinion that the special judge did not err in refusing to vacate the bench. . ■ .
• Second. .Did the transaction between appellees- and Vincent Boreing constitute a partnership?
The record-in this case consists of-.about 2,00.0 pages of typewritten matter. :A large part of the evidence
It would extend this opinion to too great length to give anything like a brief abstract of the testimony. Suffice it to say that the writings signed by Vincent Boreing, and the letters which passed between him and Moss and Wilson, show conclusively that the contract between them was that lands along the route of the proposed extension of the Louisville & Nashville Railroad Company were to be purchased for their joint benefit; that the legal title thereto was to be taken in the name of Vincent Boreing, and held by him in trust for himself Moss; and Wilson; that the information with reference to the proposed line of railway was to be furnished by Wilson; that Wilson and Moss were to do the greater portion of the work in connection with the selection of lands, the perfection of the titles, etc.; that the main portion of the capital necessary to finance the enterprise was to be furnished! by Vincent Boreing; that before there'was a division of profits the amount of money furnished by each party, with interest of not less than 7 per
It is insisted by'Counsel for appellant that profit sharing is not a conclusive test of partnership, but that the real test is that of mutual agency; that the record herein shows that Vincent Boreing did not give to Moss or Wilson the power to represent him at all events, but their action was always subject to review by him; that on this account the element of mutual agency was lacking, and therefore no partnership contract existed. It is true that profit sharing is not a conclusive test of partnership. It is still, however, an important consideration as an item of evidence tending to prove a partnership; for an agreement to share profits is an essential element of every true partnership, and, though its presence is not conclusive that a partnership exists, its absence is conclusive that a partnership does -not, exist. The reason that profit sharing is not conclusive is that parties to a contract may frequently agree that .the compensation of one of them, shall be equal in amount to a certain proper
We cannot undertake to discuss the numerous cases cited in the briefs for appellants. Each case depends upon its particular facts. After all, the intention of the parties is- the controlling element. When the-parties intend a co-ownership of the profits of a business, a partnership necessarily follows. But, however great the diversity of opinion among the courts, the law is well settled that where the parties, by their acts,.
Third. Was A. H. .Melcon, who purchased the machinery on the Tuclcehoe lease, competent to testify for appellees, and did the court err in charging the estate of Vincent Boreing with the sum of $3,000 paid by said Melcon for said machinery?
A. H. Melcon testified that he paid the latter $3,000 for certain machinery which had been forfeited by the Tuckehoe Coal Company. It is contended that this testimony was incompetent, for the reason that Vincent Boreing was dead at the time it was given, and that such testimony will establish a claim against the partnership for the machinery so purchased. Subsection 2 of section. 606 of the Civil Code of Practice provides that no' person shall testify for himself concerning any verbal statement of, or any transaction with, or any act done or omitted to he done by, one who is dead when the testimony is offered to be given, except for the purpose and to the extent of affecting one who is living, and who, when over 14 years of age and of sound mind, heard such statement, or was present when such transaction took place, or when such act was done or omitted, unless an agent of the decedent, with reference to such act or transaction, shall have testified against such person with reference thereto, or he living when such-person offers to testify with reference thereto. Mlelcon was a party defendant to this action. He did not testify for himself. He
But it is insisted that under subsection 7, section 606, Civ. Code Prae., which provides.that “the assignment of a claim by a person who is incompetent to testify for himself shall not make him competent to testify for another, ” and the interpretation thereof by this court in the cases of Alexander’s Ex’rs v. Alford, 89 Ky. 105, 20 S. W. 164, 12 Ky. Law Rep. 1179, and Whitlow’s Adm’r v. Whitlow’s Adm’r, 109 Ky. 573, 22 Ky. Law Rep. 1179, 60 S. W. 182, Melcon was incompetent as a witness. In this case, however, Mel-con is not seeking to recover the machinery in question, nor has he sold or transferred it to any one else who is seeking to recover. The only question involved is: Did' he pay the sum of $3,000 to Vincent Boreing for the machinery? For this purpose he testified, not for himself, or for any one to whom he had sold the machinery, but for the appellees, who were adverse parties. The fact that his testimony would be incompetent in an action to recover the machinery does not make it incompetent for the purpose for which it was given. There is nothing in the cases above referred to that conflicts with this view.
Fourth. Did thé court err in charging the estate of Vincent Boreing for the 500 acres of partnership land sold by Boreing to the Bell County Coke & Improvement Company, and in fixing the sum to be charged at $20,000?
- It appears from the record that Boreing sold 500 acres of the partnership property and 500 acres of his own property to the Bell County Coke &.Improvement
“London, Ky.,'January 25, .1890.
“My Dear Moss: I will be up Monday morning. You had better close with Brackett, if you. can, on any terms that we can. stand; also with the other parties there that we want to buy. * * * I think you will do well to give Pour Mile special attention for the next day or two. My plan is to organize a company and sell them the Mrs. Green property and enough of Four Mile property to make 1,000 acres, and when that is worked we will form another Pour Mile proper. My present plan is to put the Pour Mile property in at $40 per acre and to stock at $100,000 and take a liberal share of the stock ourselves. I simply mention this in advance, that you may be thinking about it; but nothing to any one about the Mrs. Green purchase.”
On Miarch 25, 1890, Boreing executed and delivered title bond to the 1,000 acres in question to the Bell County Coke & Improvement Company. On the same day a meeting of the board of directors was held, and the following resolution was passed: “On motion it was ordered that the treasurer be directed to pay over to Vincent Boreing all money received by him, to an, amount not to exceed $55,000, this being for purchase price of 1,000 acres of land to be deeded by said Boreing to the company; the treasurer retaining 5 per cent, (of) amount received by him for incidental expenses. ” At the annual meeting of the stockholders of said company, held January 13,1903, the record of the proceedings shows the- following: “Vincent Boreing hereby executes and tenders a deed of conveyance to the Bell County Coke & Improvement Company for
A copy of the deed made by Boreing to the company on January 13,1903, is filed with the record. It recites that the boundary conveyed contains 1,000 acres, and that the consideration is $55,000, of which sum $39,120 was paid in cash and stock issued and to be issued by said company, and a note of said company for $15,880 to said Boreing, to be paid 12 months from date of deed, with interest from March 25, Í890, at 6 per cent, per annum, which note was made a lien on the entire 1,000 acres of land. Five hundred acres of the land embraced in this deed are shown to have been partnership property. The consideration for the entire tract is put at $55,000, with no recital of a different valuation of one part of the land as compared with another. The treasurer’s books of the company show that Boreing received in all about $17,000 in cash. At the various meetings of the company he had been voting 1,111 shares of ■ stocky which were valued at
But it is contended that it would be unjust to charge Boreing’s estate with this amount and interest, for the reason that a portion of the purchase' money, amounting to $15,880, was not shown to have been paid. We think, however, that the record fully sustains appellees in their contention that Boreing received in stock and cash ah amount in excess of $20,000, and that good faith requires that these payments so made should be applied on the debt due upon the partnership land before any application thereof is made to the land owned by Boreing individually. 22 Am. & Eng. Encyc. of Law (1st Ed.) p. 1086. But where the firm, and also one of the partners, are creditors of the same person, the duty to exercise good faith towards his copartners requires the creditor partner to apply a general payment made to him upon the firm account. Lindiey, in his work on Partnership (second American edition, page 568, side page, 236), says: “Before leaving the subject of appropriation of payment, it may be as well to advert to a question of some difficulty which arises when a person indebted to a firm, and also to an individual
Nor do we think that Moss and Wilson should now be required to take the stock, or any portion thereof, which Boreing received as a part consideration of the land in question. He sold the land as if it were his own. He received, the consideration as if it were his own. He thereby converted it to his own use. He kept this stock for a period of 12 years. During that time he managed and controlled it as his own. His heirs and devisees cannot at this late day insist that the appellees shall accept their portion of this stock which he should have given to them at the time the transaction- took place,' and which they might have
From a careful reading of the record concerning the question involved under this heading, we are convinced that the judgment below is supported by the law and the facts.
Fifth. Did the court err in charging the estate of Vincent Boreing at the rate of 8 per cent, on said sums of $3,000 and $20,000, from the time they were- received by him?
While appellees contended below that the rate of interest agreed upon between them and Vincent Boreing as to advancements was 7 per cent., in view of certain letters of Boreing to the effect that 8 per cent, was the rate agreed upon, the lower court held that each of the partners should receive interest, on the advancements made by him to the firm, at the rate of
In the case of Farmers’ & Shippers’ Leaf Tobacco Warehouse Co. v. Head & Switzer, 29 Ky. Law Rep. 328, 93 S. W. 17, this court said: “The transactions between the parties involved $100,000. They covered a period of 10 years — from 1894 to 1903, inclusive. There had never been a settlement between them. It is not contended but that appellees shipped to appellant and its predecessors all the tobacco bought by them with the means advanced to them. The tobacco was supposed to be sold for an increased price generally Appellees were led to believe that the venture was making some money. They claim .to have not kept books, but relied on appellant’s books to show the' transactions. Taking appellant’s books as the basis of settlement, and applying the facts, showing the agreement between the parties, to the rules of law that should obtain, we cannot say that the chancellor erred in his conclusions. The apparént large discrep
But counsel for appellants contend most earnestly that the deed from Boreing to the Bell County Coke & Improvement .Company shows that $15,880 of the purchase money was a deferred payment bearing 6 per cent.', interest from the 25th day of March, 1890, and' that it is improper to charge Boreing’s estate with 8 per cent, on the money received by him, when the deed show's that a portion of the purchase price has not been received, and his estate is only entitled to 6 per cent, interest on the deferred payment. As said before; however, Boreing received in cash and stock more than sufficient to pay for the 500 acres qf partnership property included in the 1,000 acres conveyed by him to the Bell County Coke & Improvement Company, and it was his duty first to apply the payments so made to the liquidation of the partnership debt. While as between the Boreing estate and the Bell County Coke & Improvement Company, the lien to secure the deferred payment of $15,880 and interest is upon the entire 1,000 acres of land, in so far as it affects the settlement of this partnership, the lien covers only the land owned by Boreing individually; he having received the full value, of the partnership property, which should have been applied to the payment of the debt due the partnership.
Sixth. Did the lower court properly overrule .the motion of appellants to set aside those portions of the
Counsel for appellants complain most earnestly of the action of the trial court in singling out the two items of $3,000 and $20,000, and passing upon those questions, instead of referring them to the commissioner for the purpose of hearing proof and reporting thereon. They insist that the trial court should have awarded them a new trial, not only on this ground, but because of the facts alleged in certain affidavits and contained in the deed of Vincent Boreing to the Bell County Coke & Improvement Company dated May 3, 1890, purporting to convey a certain boundary of land, whose area is not stated, in consideration of $25,000, of which $12,500 was paid and $12,500 was to be paid in 12 months from March 1, 1890. We have carefully read the affidavits pro and con, and are of the opinion that the questions relating to the $3,000 and $20,000 transactions were taken up, heard,' and discussed by the trial court with the distinct understanding that he should- then and there pass thereon. Besides, the order of submission shows that the case was submitted on exceptions to certain depositions and “for hearing and trial in chief. ” Under these circumstances, without such an agreement and understanding1 between counsel for appellants and appellees, the trial court would have been justified in passing upon the questions referred to. It is quite evident from the record that the appellants were at all times relying upon the fact that, Vincent Boreing being dead, it would be impossible for appellees to establish their contentions. There is nothing to show that the evidence referred to in their affidavits in support of their motion for a new trial could not have been secured in time for the final hearing. The deed referred to' was. on record,
Upon a case involving so many questions of law and fact, and consisting of such a voluminous record, we think the trial court displayed admirable judgment in the conclusions he reached. After a careful exami