24 Ky. 506 | Ky. Ct. App. | 1829
Lead Opinion
delivered the opinion of the Court.
These are cases relating to a partner1’ ship formed for the purpose of conducting a grocery and commission business, in the town (now city) of Louisville. At its formation the partners had great confidence in the honesty of each other, Colmesnil being the husband of Honore’s daughter. At the period of filing the original bill, confidence had been supplanted by suspicion and mutual jealousy, and in the progress of the cause, a spirit of crimination and recrimination, whether well founded or not, is manifested, rarely equalled and perhaps never surpassed. Frauds of the blackest die in relation to the accounts of Colmesnil individually, and to the manner in which Colmesnil kept the accounts of the firm, are attributed to him by Rouore, and in return Colmesnil charges Honoré with bringing forward claims, and swearing to them, destitute of truth and justice. Unfortunately, the parties scarcely agree in any one important fact, and what is yet more unfortunate, their transactions are so enveloped in darkness, that it is nearly impossible for the court to elucidate them and to administer justice.
It is clear from the bills and answers, that in April, 1817, the parties entered into partnership under the style of John A. Honoré and Colmesnil, for the purpose of doing business as grocery and commission merchants in Louisville, for an indefinite period. The terms of the partnership were not reduced to writing, and in relation to these the partners do not agree in any one point. Honoré contends, it was mutually agreed that each partner was to contribute to the firm the whole of his monied capital, that profit and loss' were to be apportioned according to the capital advanced, and that he was to have a reasonable rent for his store and warehouse, in which the business pf the firm was to be transacted. Colmesnil states the terms
Had there been a written contract providing for the existence of the partnership, and defining the rights of the partners respectively, no difficulty could have arisen. In the absence of such a contract, and in the absence of all proof showing an express agreement by parol, “the partnership as regards its regulation, is governed by the contract implied by law, from the relation of the parties. Without an express agreement, the concurrent opinion of all the writers on the civil law, is, that the loss must be equally borne, and the profits must be equally divided.” See Gow on partnership, 10. The same author proceeds to state a case in which Lord Ellenborough directed an issue to ascertain the interest of a son, whose father told him on his coming of age, he should have a share in the father’s business; the son having acted as a partner between five and six years, leaving it to the jury to say, under the particular circumstances of the case, what was a fair proportion, and the jury only gave one fourth part of the profits. But Lord Eldon was dissatisfied with the result of this issue, alleging that, “as no distinct proportion was ascertained by force of any express contract between the parties, they must, of necessity, have been equal partners, if partners in any thing.” There is nothing in this cause to induce a belief that a gratuity was intended, and we perceive no principle upon which to restrict either partner from claiming half the profits. But before these profits are divided, the capital of each partner and the debts and expenses of the firm must be deducted.
Before we enter into the consideration of the aecounls> there are several questions of law made in the progress of the cause, in the circuit court, which will disposed of. Some of them are so intimately con-with the accounts, that they will be embraced in the consideration of the accounts. And,
1st. The complainant Honoré filed his original bill February, 1820, praying for a dissolution of the partnership,and a settlement of its affairs. On the 23d February. 1820, a decree was rendered by consent, dissolving the partnership and appointing a commissioner divide the goods and wares belonging to the firm, between the partners. In May, 1820, the complainant filed an amendment to hisbill; in August, 1821, he filed another, and in April, 1823, he filed another; to the filing of which last the defendant excepted. We are opinion that the court correctly overruled the exceptions of the defendant. Filing amendments depend on the discretion of the court, and unless that discretion has been abused to the injury of the party complaining, this court will not control it. The matter brought forward in the amendment excepted to, is important, some of it had not been before exhibited, the complainant swore he had obtained part of it since his last preceeding amendment; the procrastination likely to result, was calculated to damage the complainant as much, if not more than the defendant, and in the settlement of extensive mercantile transactions, the business of years, it is not to be presumed that the parties can immediately lay their fingers on all important papers which may elucidate complicated accounts, and bitter controversies which grow out of them. Under these considerations, we cannot say that the court erred in permitting the amendment of April, 1823, to be filed.
2d. On the 26th of February, 1820, the court apP°'in*ed commissioners “to examine and state the accounts, claims and demands of complainant and defendant, in relation to the copartnership and individually, an(j report.” By the order appointing commissioners, the parties respectively were to have access to the books and papers of the firm, either party was to be allowed to make explanations in regard to them, and to adduce evidence, written and oral, before the commissioners. The parties were directed to produce,
On the 20th of May, 1820, the commissioners made their report to court, in which they state, among other things, that they had, after hearing witnesses, gone into an investigation of the accounts between Honoré and Colmesnil, previous to the copartnership, and they proceed to state how those accounts stand in the ledger or book of Honoré; and they say, from the books and papers exhibited, relating thereto, they cannot discover any material error. They proceed to state what appears on the book, to-wit: the execution of a note by Honoré to Colmesnel, for $2252, payable 1st of June 1816, and the giving of a check by Honoré in favor of Colmesnil, for $557 55, which was paid, they say, as per Honore’s bank book, on the 18th December, 1815, and which, with the said note, balanced the account. They next speak of an account commencing November 14, 1815, entered in Honore’s ledger, exhibiting a balance in favor of Colmesnil, for $283 49, which sum, with the amount of the note and interest, are brought into an account exhibited by Colmesnil against Honoré, upon the settlement of which, on the 12th April, 1817, a balance is left in favor of Colmesnil, amounting to $1287 55, which, with interest up to the 26th January, 1820, making an aggregate of $1491 35, is credited to Colmesnil, and debited to Honoré, on the books of the firm.
The commissioners then notice the firm transactions and say, that they have no means of ascertaining the stock of the parties, except from a stock memorandum book produced by Colmesnil and denied by Honoré, from which it appears that Honoré contributed, as stock, $6876 88, and Colmesnil $5037 '59. They report a balance in favor of the firm, of $26,386 15; their examinations extending down to the 26th of January, 1820. From the condition of the books and in consequence of' there being no stock, merchandize and other proper accounts opened and continued in the ledger of the firm, the commissioners say it is impossible to render a correct mercantile report. They present severa] accounts as the result of their labors.
In March, 1824, the complainant, with leave of the court, filed various exceptions to the report of the commissioners; and upon filing his exceptions, the cause came on for final hearing, and was heard at the same term, during which the exceptions were- filed, but no decree was rendered until the ensuing term, when the court quashed a part of the report and affirmed the balance, with an addition for store and warehouse rent, omitted by the commissioners. The defendant, Colmesnil objected to the complainant’s'filing exceptions to the report of the commissioners, and being overruled, filed an exception to the opinion of the court. The ground of objection relied on by Colmesnil, is, that the exceptions came too late, and that in case they should be sustained, be would suffer irreparable injury from the death of one clerk and removal of another, who had testified before the commissioners.
We are not apprised of any law which puts the re-, port of commissioners beyond the revision of the court, at any time, when good reasons can be offered for calling it in question. We would not permit a report to be set aside, in part or whole, so as to prejudice the rights of litigants. Cases may happen, where a party relies entirely for success or defence on the matters reported, and would be surprised and subjected to entire loss, if he were not permitted, after seting aside a report, to strengthen his cause by taking depositions or by obtaining another reference to commissioners. In such cases, it would be the duty of the court,on the application of the party, to afford him an opportunity to take and present his .proqf and points relied on. But we cannot conceive a case where either parly, as matter of right, can force the court to recognize an erroneous.report, when there exists in the cause, evidence by which it can be corrected. As a matter of practice, we concede that circuit courts may establish rules, within which, parties, shall be bound to except to reports; and if exceptions are not filed within the prescribed time, they maybe rejectedif offered thereafter. Even in that case, we are of opinion, that the court is not bound to consider the report as conclusive, but may disregard it, partly or entirely, if there be evidence showing that it is erroneous.
The death of the witnesses, cannot change the principles of the law, and it may be remarked, that his affidavit, as to the facts he could establish by them, were they living, shews in part, at least, he has the depositions of others filed in the cause upon the same points. Moreover, he ought not to have failed taking the depositions of his witnesses while living. He' cannot
It is perfectly clear, that much new matter was' brought before the court by the several amendatory bills, and the answers thereto, after thé commissioners had made their report; and this new matter, could not therefore, have been submitted to the consideration of the commissioners. We are of opinion, under such circumstances, that the investigations of the commissioners were premature, and that the court ought to have referred the accounts to the same or other commissioners, after all the new matter, and various contested claims of the parties had been exhibited; or if not, that the court itself should have sifted these claims, presented after the report; and allowed such as were supported by proof, and disregarded, the Others. It does not appear; that the court did either; On the contrary, the court made the refort of the commissioners, the basis of its decree,' after deducting largely from the sum allowed by the commissioner to Colmesnil, as stock. Thus the various claims set up by Honoré, after the report; received no attention; of were disallowed by the court in silence.-
We are of opinion, that the court was right in dis" regarding the memorandum stock book;as it is called; and that the commissioners were wrong in considering its contents as evidence against Honoré, consequently; that so much of the report as was predicated upon the authority of the memorandum stock book should have been set aside. The court modified the report on this subject, by reducing the allowance to Colmesnil, and permitting that made to Honoré, for his stock, to stand. Regarding the memorandum stock book, as no evidence, it leaves the settlement of the amount of stock, furnish"
It is clear that the partnership was not formed, until April, 1817, after the return of Honoré fromNew-Orleans, with a valuable cargo; in the barge Despatch, Upon the formation of the partnership, this cargo was delivered to the firm. Honoré claims the proceeds of the sales of this cargo as his stock, and if it be allowedtohim, he gets its value in Louisville, as fixed by the selling prices, subject to deductions hereafter to be mentioned. Colmesnil contends that Honoré is only entitled to credit in his stock account, for the suhis paid by him for the cargo in New-Orleans, and the expenses of transportation to Louisville; and if Colmesnil succeeds, Honoré will be deprived of the increased value of the cargo in the Louisville market, It may be asked, who was the real owner of the cargo, on the arrival of the barge Despatch; in Louisville, in the spring 1817? It is certain, that Honoré was. How then shall he be deprived of the value of the cargo, at that time and place? It is insisted, on the part of Colmesnil, that it is to be done upon an agreement between the partners; that the partnership, wheii formed, should relate back to the commencement of the voyage, by the barge. Is there any proof of thist It is not contended, that there is any positive proof of it; but it is said, that the circumstances fender such an inference irresistable. Colmesnil admits in his answer, filed, 20th June, 1823, that although he and Honoré had conversed upon the subject of forming the partnership before the voyage was commenced; yet the terms were not then agreed on, and that Honoré, upon his,return, might have refused to enter into the partnership. Under such an admission, the circumstances should be very conclusive, to justify the court in depriving Honoré of the enhanced value of the cargo, in Louisville. According to Colmesnil’s admission, he would not have been under any moral, much less legal oligation, to pay Honoré any part of the loss, had the barge sunk, and the cargo been destroyed on its way up the river; As he would not have beeri
The connexion and good feelings, which subsisted between the parties, at that time, and some other' circumstances, presented in the brief of Colmesnil’s attorney, furnishes some ground for such a presump1tion; but we think they áre not sufficiently strong, to justify us in depriving Honoré of the full value of his goods, at the time they were delivered over to the firm in Louisville, without his receiving any adequate consideration. It would protract this opinion, to a most tiresome length, were we to give all the reasons which operate,torenderthe circumstances relied on by Colmesnil's counsel, inconclusive,-and we shall not attempt it. We rest satisfied, that we are promoting the ends of justice, by giving Honoré, the value of the cargo in Louisville, at Ihe time it was delivered to the firm; to be ascertainedif practicable, by the sums for which it sold, according to the books of the firm, and if it cannot be so ascertained, then to be fixed by commissioners to be appointed for that purpose, who shall be authorized to examine the books, and hear additional testimony and evidence and report to the court.
The complainant filed a paper, purporting to be an account of the sales of the cargo,-of the barge Despatch, amounting to more than $ 16,1000, alleging that it was-correctly taken from the books óf (he firm, and called on the defendant; to answer, whether it was not correct, and, if incorrect, to point out the particular errors.
The defendant in his answer, gave a general denial of the correctness of the account of sales filed by the complainant, but declined going into particulars upon the ground, that he was advised it was unnecessary. He adds that no account Of the sales of said cargo was kept, and that it is impossible for him or any one else, to make out an account approximating the truth from any data on the books or in existence. If such be the fact, it results from a looseness in the transaction of mercantile affairs, which is believed not to be very common with skilful merchants, and it is somewhat sur
We also observe in the account filed, that there is a commission of $816 57, and storage amounting to $300, in all $1116 57, charged in favor of the firmón account of the cargo of the Despatch claimed by Honoré. Such charges, if to be found on the books, cannot be justified upon any other ground, than that Honoré was the exclusive owner individually of that cargo. As the individual owner, the charges are proper,, and should-be deducted from the proceeds of sales, and the balance left, Honoré is entitled to. as capital put into the partnership trade. But it is difficult to imagine a sufficient reason for keeping a commission and-storage account for goods owned by the firm, when it is said by the defendant that an accurate account of the sales were not kept. W e are therefore, of opinion, that the court erred in fixing the amount of Honore’s stock, at $6875 88. as reported by the commissioners from, th.e memorandum stock book.
Honore’s stock in trade must be ascertained by the value of the cargo of the barge Despatch, to be estimated according to the prices received for it on sales made-thereof by the firm, acting in the character of a commission house, deducting therefrom commissions and storage. Commissioners roust be appointed.to make the es-. tímate, and in doing so,.they are to have access lo the books land papers of, the.firm^and if these are insufficient to enable them to ascertain the value of the cargo as aforesaid, they may receive such additional proof and evidence as the parties may offer. After deducting commissions and storage, to the balance left, must be added $1400 for the barge Despatch, and any other
The allowance to Honoré of rent for his store and warehouse is correct. The terms of the partnership are not definitely established by any evidence 5 and consequently, we must decree that, which in the absence of satisfactory evidence, the law will imply. The firm had the use of Honore’s store and warehouse. He should receive an equivalent for it. We do not find that equivalent in the superior services of Colmesnil. The unsatisfactory and defective manner in which the books have been kept, so that it is impossible according to the report of the commissioners fortified by other testimony, to make out from them a complete statement of the business of the concern, is a sufficient answer to his claim to be exhonerated from the payment of rent. The rent must be paid out of the profits of the firm.
In regard to the barging business, in which Honoré and Colmesnil were jointly concerned previous to the
It was improper to have blended the accounts subsisting between Honoré and Colmesnil individually, with the transactions of the firm, on the books of the firm; and we apprehend that it has been the cause of some confusion, and has rendered the accounts less intelligible.
The accounts of each partner, with the firm, should he kept in the books of the firm; but the individual accounts between the partners, should be kept as separately as individual accounts between a partner and an entire stranger to the firm. Some of the accounts of Colmesnil, which he has entered to his credit as stock, seem to us to have been properly chargeable to Honoré individually; such as those for provisions furnished the barge Despatch. In the reference again to be made to commissioners, they must state all such accounts as may be allowed by them as charges against THonore, individually.
In relation to the proceeds of 47 barrels of pork, $577 63, charged by Colmesnil, as part of his stock, it appears to us that it was bought for Honoré, and' that he designed paying for it through Fishli, but that Colmesnil, instead of applying the money received by him from Fishli, in payment for the pork, applied it in discharge of his o.wn claims against Honoré, who has never paid for or furnished funds to pay for the pork. Consequently, Cplmgsnil is entitled to the sum of
Honoré claims $640, as a payment made Musson for the cargo of the Despatch, being the proceeds of 64 barrels of flour. He will be allowed this.in the asrerv t.ainment of the amount of his stock, according to the principles already laid down, but it is very doubtful whether it ought to be allowed him. Colmesnil contends that these 64 barrels of flour were joint property; if so, half of the $640 should be passed to his credit, and charged against Hgnore. There is such a want of proof in relation to this flour, that we cannot form a satisfactory opinion concerning it; and we shall, therefore, leave it to be disposed of by the commissioners who shall again pass on the accounts.
We have already stated that the settlements of the barging business, as made by the parties, ought not to be molested. Honoré charges Colmesnil with having collected various sums of money for him, and that Colmesnil was indebted to Honoré various sums for advances, &C. for which he, Honoré, received no credit in the settlement pf the barging concern. All items charged by Honoré against Colmesnil, of date prior to the settlement, we are disposed not to allow, because of the lapse of time, and the presumption arising from the settlement and the execution of the note against such items, when now brought forward; but for all moneys collected by Colmesnil for Honoré, individually, and for all sums laid out and expended by Honoré, forColmesnil, since that settlement, and which he, Honoré, can satisfactorily prove, before the commissioners to be appointed, we are of opinion,, he should be allowed credit as a set off against the debt of $1481 35, allowed already to Colmesnil. We will not enter upon an examination of the various accounts brought forward by Honoré; some of which,, or items in some of which, probably ought to be allowed him as originating since the date of the settlement aforesaid. We shall leave them to be disposed of by'commissioners; as also, the claims set up by Horiore, upon the ground that Colmesnil has collected from the debtors of the firm, more money than he accounted for.
The pleadings in this cause, show that there were three negroes purchased of Beamon. The decree should have divided’, or sold these negroes and divided the proceeds of sale, if it appears from the firm books that they were purchased on joint account, which we infer to be the case from the record before us.
It appears at one time, the firm owned horses, drays, &c. It does not satisfactorily appear, from any account filed or other paper, what became of the proceeds of their sale. From the foregoing view of this cause, it results that the court ought to have recommitted the accounts of the parties, for a report conformable to the principles here settled. It has not been done, it must yet be done; for in the condition of the accounts, as they now stand reported on, it is impracticable to render such decree, as will meet our ideas of law and justice. Upon the return of the case to the circuit court? that court will, therefore, make ari order referring the’ accounts to commissioners, with instructions to report thereon? as required by this opinion;- and that court will also give the commissioners power to hear and take evidence; which must be reported to the court, as well as the statement of the accounts.
In respect to the real estate, purchased for the part-hers, with the funds of the firm, as also the bank stock in the commercial bank of Louisville, these may be left to the control of the partners, each having the right to control his individual interest. We are óf opinion that the funds of the firm, used in the accumulation of this property, were appropriated by the con
Colmesnil was authorized to collect the debts, and settle the open accounts of the firm with its debtors, after the dissolution. He was required to report his proceedings to the court, and did so; Commissioners
In addition to the duties already prescribed for the commissioners, we direct that they report, from an examination of the books and papers of the firm, the amount of profit, realized by the concern, the accounts of each partner, with the firm, for money or goods, charging- each partner with any money or goods which he may have received, and which has not been entered on the books of the firm, to his debif. The commissioners will, in their report, likewise enlarge or diminish the profits to more or less than the sum warranted, by an inspection of the books and papers, so as to correct any mistakes in entries, or any omissions to make proper entries. This we conceive to be proper, because of the concurrence in the testimony, that the firm books have been kept in an unskilful and unsatisfactory manner. To accomplish these ends, the commissioners must be authorized to take and hear testimony, which they will also report. In like manner,'the commissioners will report all such other accounts as may be necessary to a correct adjustment, understanding and settlement of the business of the firm.
In settling the accounts of Colmesnil, as agent for the firm, it would be proper, not to allow him credit for interest, on debts paid for the firm, for time running after he had on hand sufficient funds of the firm, to pay the debt. He should be charged with all sums received for the firm as interest. If he collected any jnlerest on the money due the firm, he is as much
To the report made by the commissioners upon Col mesnil’s accounts, as agent for the firm, exceptions were filed by both parties. The court made some allowanees to Colmesnil, which were rejected by the commissioners. We do not perceive any errors in the additional allowances made by the court, unless it may be in the item for turnpike stock. That must be rejected, if it should be ascertained that the stock is not properly the property of the firm. The court did not allow all the claims set up by Colmesnil, regarding some of his vouchers as insufficient. To say the least, the rejected vouchers produce a strong impression that the firm will gain, and Colmesnil loose, individually, in consequence of these rejected claims. Therefore, on the reference to commissioners, he may strengthen his vouchers, by parol proof of their correctness, if he can produce any. Colmesnil had paid over to Honore, according to the commissioners’ report, §2000, in notes on the bank of the commonwealth, in November, 1824. The commissioners gave Colmesnil rridit for §2000. The court, at the instance of Honore, reduced the credit to §1000, by ordering Colmesnil to pay Honore §1000 in specie, in addition to the §2000 in notes, upon the ground, that the notes, at the time' of payment, were not worth more than that sum. Colmesnil objected, and excepted to this opinion of the court, and insisted that Hon-ore should be compelled to. restore the §2000 in notes, if he was required to pay §2000 in specie. In this, exception, we think Colmesnil may be right. Honore, while asking justice, should be compelled to do it; if he voluntarily received the bank notes, without fraud or mistake, knowing for what they were paid him, and made no reservation at the time, on account of the depreciation of the notes, be should account for them at their nominal value. But if, at the time they were received, he stipulated that Colmesnil should not be allowed credit for more than their real value, then the court was right. From what appears, we are inclined to the opinion, that the court erred; but as the evidence is not clear, and has not been reported by the commissioners, who made the allowance of §2000
Colmesnil claimed compensation for his services, which was refused. Upon the dissolution of the co-partnership, it would have been most regular, to have appointed a disinterested person, as agent, to collect and settle debts, and close the affairs of the concern, Such agent would be entitled to compensation for his serv'ces) without doubt. As this was not done, but a member of the firm appointed, there would have been no impropriety in making him compensation for his services, in case they were faithfully rendered, and no particular cause exists for refusing it. The court below must, therefore, make Colmesnil an allowance ^or services, as agent for the firm, the whole to be paid by the firm, or half to be paid by Konore, if on consideration of the facts, under the above rule, they think him entitled. Honoré endeavored to make Col-m.esnil account for all debts due the firm, not collected, It is true, that if debts are lost by the negligence of Colmesnil, acting as agent for the firm, such negligence wou^ noi onlj furnish a good reason for rufusing to pay him, as agent, but ought to render him accounts-, ble to Honoré, for the loss sustained. But delay, mereíf proceeding with the collection of debts, cap-, not have the effect of rendering Colmesnil chargeable with their amount, if they be thereafter collectable. a§ent f°r extinct firm, he is subject to the control of the chancellor. He may be compelled to proceed under orders of court, or he may be superseded ^ ano^er appointment. This course we deem not regular; and if it shall finally appear, that any losses -have been sustained by his negligence, it will then be proper to make him account for them. It may here be remarked, that the court should take an account of the uncollected and unpaid debts, due to and from the firm, and by superintending the agent, have the whole closed with all practicable speed. When a partnership has been dissolved, by decree of court, as this has been, and from the disagreements among the partners, it becomes proper for the court to appoint an agent, to wind up the partnership concerns, such agent is
We have thus laid down such principles, in regard to the accounts and the most important items, as will, we trust, by being observed, enable the circuit court to settle this perplexing controversy, according to right and justice.
3d. Colmesnil has filed exceptions to the opinion of the court, overruling his objections to the reading of all depositions taken and filed by Honoré, since the first reference of the accounts. We think the court was right in overruling his objections upon every ground, except that which alleges he had no notice of the time and place of taking the depositions. We have not deemed it necessary to examine each deposition and notice, to see whether any deposition can be found, taken without notice to Colmesnil. If there be any such on the return of the cause, Colmesnil must specify it, when that court must give leave to retake it. The exception in regard to want of notice, fires at the lump of Honore’s depositions, in the hope of hiring some one. We are not disposed to consider it on account of its generality.
There are other exceptions filed on both sides, which do not deserve particular notice. There is nothing of importance in the cause, which does not fall within the operation of the plainest principles, or some rule or direction herein prescribed.
4th. The manner in which the decree has been rendered in this cause, is very objectionable and erroneous. It endeavors, by reference to a report which underwent considerable modifications, to ascertain the extent and amount of money which Colmesail should pay to Honoré. The maxim of ilId cerium est quod cerium reddipotest,” should very rarely, if ever, be applied to judgments and decrees. A judgment or decree, upon its own face, should show what the court has decided. The paper referred to, is not spread on the record, and numerous evils might grow out of tolerating the practice of deciding causes, by reference to the evidence filed, instead of giving an authoritative decree defining clearly, what was required of the par
The decree of the circuit court is reversed, and the cause remanded for proceedings to be had in conformity to this opinion. And as the court erred in relation to both parties, the costs in this court must be divided.
The Counsel for Honoré, presented- the following petition, for a modification of the opinion of the court.
The counsel for Honoré, have carefully examined the opinion delivered by the court in this cause, and they are impressed with the belief, that it is not, in all respects, precisely correct. They beg leave respectfully, to submit such remarks and suggestions, as will recall the attention of the court to these particulars, in which they think that opinion ought to be altered or modified.
It must be very evident, that Honore’s contribution of capital, to the partnership stock, greatly exceeds that of Colmesnil. And the question becomes an interesting one, how the profits are to be divided? Are they to be distributed equally,or rateably, according to the proportions, in which the partners have contributed?
This is the doctrine of the civil law, as laid down by Brown, by Pothies,and byKent. See 1 Brown Civil law, 379; 3 Kent’s Commentaries, 7, and the referrence there given to Pothier. But it is not so much our purpose, to contest the general rule of law, laid down by the court on this subject, as to shew, that there are facts and circumstances in this cause, which render that rule inapplicable. That general rule is, that where the parties have been silent and made no agreement to the contrary, that the profits of a partnership, are to be equally divided among the partners, though their shares of contribution, may have been very different and unequal. Upon reason, and authority, the rule is very questionable. If it can be maintained, it must be on the ground, that the partners having agreed to unite, and having agreed to unequal contributions of capital, and on that basis to form a partnership, must, ex vi termini, be understood, in law, as agreeing to an equal division of profits; if they make no stipulation to the contrary. So that the inference, or rule of law, which entitles the minor contributor, to an equal share of profits, is predicated upon the assent or agreement of his partner, implied or express, to admit
What then, is the case of Honoré and Colmesnil? Is it the case of a partnership, where the parties have agreed upon an Unequal contribution of capitalt There is no proof, of any such unequal contract, and the court certainly cannot infer such a one. Prom the simple fact of partnership, the law can infer nothing but an agreement for equal advances of capital. Such must be understood, to be the agreement of the parties here. The court says, that “no gratuity” was intended, and the answer of Colmesnil, confirms the inference of law, that he was to contribute as much capital as Honoré. But if nothing is to be gathered from the cootradictousness of the bill and answer, the inference of law is conclusive.
Colmesnil then, was under obligation to contribute as much as Honoré contributed. .If he has not done so, it seems to us, to be unjust and unreasonable, that he should profit, and his partner loose by his breach of obligation; that the partner, who is thus wronged, should be compensated for that wfong, and that the one who is in default, should suffer all the consequences of that default, seems to be too plain for argument. But how is this to be effected? Is it by compeilingthe defaulting partner, to pay interest upon the amount of his deficit, or by resorting to, and applying that appropriate and natural rule of equity-, which divides the profits of the concern, in the same proportions, that the actual capital was contributed? We think that the latter, is the proper mode, and that the partner in default, can have no cause to complain of it. He has violated good faith and his contract, and a court of equity, will be careful, and will make sure, that he shall not gain by it, or his partner loose. There can be no hardship in the application of this rule to Mr. Colmesnil; but on the contrary, all the circumstances of the case, emphatically demand it, and mark him as a fit subject for its operation. He was the active partner in the house. He had the charge and keeping of the books of the concern. He made no entry, and kept no account of stock; his little hidden book, rejected by the court, can only be remembered as a trick and a fabrication, and shews the means by which he endeavored to beguile and deceive, and to conceal
In addition to the modification, relative to the division of profit, between Honoré and Colmesnil, we conceive the deductions, directed by the court, to be made from Honore’s capital, should not be made. After the partnership was established upon the funds which were deposited at, or previous to the 12th April, 1817, any advances made by the firm, on account of either partner, should be charged to his individual account, and should constitute ilems to his debit, in an account current, as they would do, were he a stranger. The stock is a continual and permanent fund, the account current, varies each day, or may vary each hour. It is to be balanced by debits and credits, or is ultimately to be settled out of the profits of the concern, should abalance stand to the debit of either partner, upon the termination of the concern.
We .would also remark, that there is no time fixed by the court, when the assumed settlement of the concern of the barge Mary, was entered on or concluded. The 1st of June, 1816, certainly is not that time. The note for $2262 was payable on that day, but the terms of the note prove incontestably, that it had been executed prior to that date, though Colmesnil has sworn
The check carries no evidence of a settlement. • It is dated 18th December, 18.15, and does not balance the account, for Colmesnil is still compelled to charge money lent, to force that balance. But bow can it be said, that there was a settlement at this date, when an account is charged as acontinuatipn of a date anterior November, 1815. All this pretended settlement is'in Colmesnil’s own hand writing, The court seem to intimate, that there was a settlement between Honoré and Colmesnil on the 12th April, 1817. It is respectfully suggested, that the record indicates no such fact. If there ever was a settlement, it was on the 14th November, 1815. The note for $2252, had been executed prior to that time. It should have then been surrendered; for at that date Colmesnil obtains a credit for his moiety of the barge, and he no longer had any claim upon the note. On the 10th November, he brings this into account, and first debits Honoré with the price of the barge, which conclusively shews that the contract of purchase was prior to that date. All accounts subsequently predicated upon this note, are erroneous; all charges forintereat are incorrect. If the accounts were settled on the 18th December, 1815, how could there be a balance of $283, on the 14th November antecedant, not included in that settlement. The pretended balance of $1491 36, is not correct; for how can Colmesnil pretend to charge interest up to 12th April, 1817, or to any later date, when he was debtor to. Honoré, even supposing these items of his accounts established, for the large sums he drew from Fishli, and upon which he paid no interest. Colmesnil’s accounts are so barefacedly false, that all should be rejected. He puts a false date to his debits for the money drawn from Fishli, as will be seen by comparing Fishli’s account with Colmesnil’s. This could only be done as a pretext for charging Honoré with interest. The court say, the allowance to Honoré of rent
if the court consider there ever was a settlement of the business of the barge Mary, we hope the time when, will be pointed out, and that all matters subsequent to that date, will be left open for adjustment by the commissioners.
The allowance to Colmesnil of ‡577 for pork, is not thought correct, because there is no proof that the pork cost that sum; and we hope, that the court will leave it to be proved.
With respect to the application of the. funds of the firm to Colmesnil’s private speculations in real estate, the Court, it is believed, have overlooked the proof. Tarascon’s account and various others, Barbaroux, Cawthorns, &c., all shew-the application of the property and money of the firm by Colmesnil to his individual use, without chargingi;the same to his individual debit. We would -trust, this would not be excluded from investigation.
The court does not intend to preclude Honoré from proving before commissioners, any sums of money, or any profit realized by Colmesnil, by brokerage or exchange; yet as many things are mentioned particularly, and this is omitted in the catalogue of duties imposed upon the commissioners, it might be thought it was not open for investigation.
In relation to the commonwealth’s paper received by Honoré from Colmesnil,.it is thought, that the fair construction of Honore’s receipt, is that he received the paper to.be accounted for by him at its value, and not at.its nominal amount. If there have been collected any debts by Colmesnil in commonwealth’s paper, such as he was authorised so to collect from the necessity of the case, then it would be proper for this sum to be applied in part, or in whole, to the extinction of Honore’s proportion of the paper so collected. To the extent of such collection, he has a right to demand payment in kind, and equity would compel him to recover a moiety in kind. But should the sum paid Honoré in paper, exceed his proportion, then it would seem that Co\-.
Rehearing
The counsel for Colmesnil. filed, the following petition for a re-hearing.
In regard to the suggestions made by Honore’s counsel, I would remark, that it by no means appears, that his “contribution of capital, to the partnership stock, greatly exceeds that of Colmesnil.”
The amount of the proceeds of the cargo of the barge Dispatch, is not ascertained, the amount paid by Colmesnil and by the firm, on account of that cargo, is large, and it may well be doubted, whether Honore’s stock, after it shall he ascertained in the manner db rected by the opinion, will exceed §500.0,
The stock of Colmesnil will amount, at least, to that sum, when ascertained as directed by the opinion; indeed, the record exhibits proof to authorize the assertion, that Colmesnil did contribute at least $5000. But how are the profits to be divided? If the parties have stipulated on that subject, their stipulation must govern; if not, the profits should be equally divided, or the losses equally borne; the áuthorities cited in the brief and referred to by the court, fully maintain this position.
The bill distinctly states, that the profits were to he equally divided; the answer admits it, and the discrepancy between them, with respect to the capital, consists in this, that Honoré alleges they were each to advance the whole of their monied capital, and Colmesnil contended that the capital was to be equal; both concurring in the statement that each was to participate equally in profits and losses.
The rule of law laid down in the opinion, seems not to be seriously contested, but an attempt is made, to show that there are facts and circumstances in this case, which render that rule inapplicable.
These facts and circumstances do not exist, and the difference, in favor of Honoré, in amount of capital, is altogether imaginary.
According to Honore’s own statement of the terms, Colmesnil was to contribute “all his monied capital;” he did contribute largely, and there'is po proof, or circumstance from which it can be inferred, that he did not put in the whole of his monied capital.
The amended bills of Honoré, and sworn to by him, would show that Colmesnil’s means, when the co-partnership was formed, were very limited, and he has labored most excessively to sustain that allegation by proof.
No other than an equal distribution of the profits can be directed, if regard is to be paid, either to the agreement of the parties, or to the well settled principles of law, if such agreement did not exist.
It is also suggested by the counsel of Honoré, that ■ all advances made by either partner, after the 12th of
This would be so obviously unjust, that I scarcely conceive it necessary to respond. Ifis not presumable that the whole capital could be immediately employed 5 if, therefore, the co-partners made advahees as the business of the firm required them, and in a reasonable time after the co-partnership was formed, the purposes of the firm were as well answered as if the money had been paid at its commencement. It must have been upon-the supposition that the advances made by Colmesnil, subsequent to the 12th April, 1817, constituted no part of his stock, that the counsel for Honoré .have assumed the fact of the great difference in favor of Honoré, in capital advanced.
It is suggested that the court has not designated th.e period when the settlement between the parties took place, in respect to the .concern of the barge Mary. The period alluded .to by the court, was doubtless, when the balance of $283 49, was found due to Colmesnil. I would respectfully suggest, that the propeí period to be fixed by the court, would be the winter of 1819-20, at which period, the accounts were re-examined and settled by Tyler and Stewart, at the request of the parties.
I do not believe it can be necessary for me to respond to the charges, that the accounts of my client are “barefacedly false,” that “he put false dates to his debits,” &c. It will be sufficient to say that there 'is not a syllable of proof to support the charge, and it must have been based upon the bare assumption of an adversary, whose conduct in this business deserves any thing, rather than commendation.
The allowance made to Honoré, for store and warehouse rent, is exorbitant, according to the proof in the cause; yet as the object of my client is to terminate this controversy, I hope the court will consider that point as at rest.
The allowance to Colmesnil of $577, for pork, is so obviously correct, that I will not add any thing on that point, to the suggestions already made to the court-in the brief.-
By the opinion of the court, the claim of Honoré, for pretended applications of company funds to private purposes, by Colmesnil, is put to rest; it is suggested by Honore’s counsel, that the claim should be left open, i trust not. I would invite the court to the strictest scrutiny of the testimony on this point, and if my client is at all culpable, hold him to the most rigid account; if, on the contrary, the claim is groundless, false and fabricated, as I believe it to be, let it remain as it is, rejected.
The counsel for Honoré are mistaken when they say, “the court does not intend to preclude Honoré from proving, before commissioners, any sums of money, or any profit realized by Colmesnil, by brokerage or exchange.” If the intention of the court is to be ascertained by what they have said, or by what would be right, had they said nothing on the subject, then this point, as the last one noticed, has been properly put to rest.
The parties were fully prepared on these points,and no reason is assigned and now appears, why they should be left open for further proof. It is desirable that there should be an end of. the controversy, and.that the duties of the circuit court and its commissioner, after the return of the cause, should be simplified as much as possible, and not that the whole subject should be • left at large¡
With respect to the ‡2000 of Commonwealth paper, received by Honoré, I would say, that the disposition directed by the opinion, comports with equity and justice, and is far preferable to the mode pointed out by the counsel of Honoré. Should the facts turn out as the counsel suppose, Honoré will not be prejudiced, because the circuit court will direct that he shall receive his proportion of Commonwealth’s paper, in kind, and he will have the benefit of its appreciation.
rí he only remaining point to be noticed, is the objection to ah allowance to Colmesnil, for his services, as agent, in wi.ridi.ng up the concern. The reasons given in.-the opinioft. For this allowance, are so satisfactory, that it is-needaess to say more.
: Xhe reasons urged against it, are based upon mistake ;•* Honoré was not “turned out of his own ware-
bouse and commission business,” Colmesnil eÓrmnenced business in another house, and Hon'ore continued business in the house which had been occupied by the firm. No profit resulted to Colmesnil from the use of the company funds; so soon as the funds accumulated, Honoré received his proportion; on the contrary, the court must perceive that Colmesnil will sustain a heavy loss in consequence of this agency. For it is settled by the opinion, that his receipts of depreciated paper, must be accounted for by him, as specie.
In addition, it may be remarked, that the responsibility imposed on him, was immense; for want of diligence, by mistake-, or from other causes, he might and probably has, rendered himself liable to-make good; losses which have occurred-, and it would be a violation of every principle of justice, equity or morality, to say that he should not be compensated.
Having briefly noticed the suggestions for a modification of the opinion, I would now most respectfully ask the court to reconsider so much of the opinion as "settles the cargo of the barge Despatch, to be the sole . roperty of Honoré.
If I did not firmly believe that the cargo of tha*" barge was joint property, and that the facts and cir” cumstances of the case clearly demonstrate it so to be, I would forbear to trouble the court in a re-examination of the question. But, believing as I do, that it was the property of the firm, a sense of duty constrains me to present, in a hasty and brief manner, the proofs in support of that opinion.
I do not pretend to controvert that the cargo was purchased in New-Orleans, by Honoré, and upon his own account; it was procured from G. Musson, and from others, upon his credit.
íhe second amended bill filed by Honoré, on oath; states that he had been concerned with Colmesnil for two years, prior to the commencement of nership, in running the barges Mary aj¡ this statement does not consist with hiá sole owner of both barge and cargo.
The court misapprehended the counsl nil, when they supposed that “his clair
It Was contended by Colmesnil’s counsel, and is now •confidently re-asserted, that the proof of his joint ownership of that cargo, was entirely satisfactory, if not conclusive.
Upon what principle of honesty or fair dealing, ean the fact of Honore’s accepting the draft of Musson, for $1447, after the commencement of the partnership, drawn in part payment of the cargo of the barge, and accepting it, as he did, in the name of the firm, be reconciled with his claim, to be the exclusive owner?
If the.cargo was his sole property, what right had be to accept'a draft, drawn upon himself only, in the name of the firm, and to pay that draft with company funds, without even charging himself to the company, With the account? Yet this was done, and it is proof of a strong character, to show that the cargo was company property», and had become so by agreement of the parties, upon the formation of the co-partnership.
Another fact of a conclusive character was relied on; Musson transferred the balance due him, by Honoré, for the cost of the cargo, to the debit of the firm, at a time when Honoré was in New Orleans; and the presumption is strong, therefore, that it was done by Honore’s directions. Musson had left the United States, it was impossible-'to take his deposition, to prove ■Honore’s directions; and the deposition of a clerk in the house, was taken to prove that the transfer was made without any directions; the deposition does not disprove the fact of Honore’s directing the transfer.'
Another fact was relied on, which is entitled to great weight; a short time previous to the dissolution of the co-partnership, Honoré, when called on by the arbitrators, to state the amount of capital paid in by him, declared that it amounted only to from 6 to $8000. If this statement was true, it was impossible that he was the sole owner of the cargo of the barge, which cost more than $8000 originally.
If Colmesnil was not joint owner of the cargo, why was he not credited, by Honoré, in private account, with the $,1120 63, which he paid on the draft of M. White & Co. in favor of M’Cbnnell, which draft was drawn in part payment of the cargo?
If Honoré was sole owner, why did he not open an account of sales of the cargo, upon the books of the firm? He was familiar, at that period, with the books, frequently examined and scrutinized them, and knew that no such account had been opened, and, therefore, that it would be impossible, ever to ascertain the proceeds of the sales. -It cannot be pretended, that he would have permitted the sales to have been made in this way, and the proceeds to be devoted to company uses, without any account being kept, or his receiving any credit therefor.
If Honoré was sole owner, it is a fact that he always was apprised of, yet, we find, that in his original bill, he set up no such claim; nor in his first, or second amended bills, though his second amended bill, was filed on the 23d May, 1820, three days after the auditor’s report was returned, and near three months after the answer to the original bill had. been filed, accompanied by Colmesnil’s exhibit of the stock account, made up exclusively of items growing out of the pur
But can it be possible that this claim is just? When the auditors first met, they required the parties to submit their claims in writing; Honoré submitted bis, and amongst them, is no claim to the exclusive ownership of this barge and cargo. On the contrary, he claims $700, being half the cost of the barge, and this claim is under date of September, 1816; he claims $739 11, being half the amount of bill, for 35 crates of ware, (part of the cargo) under date 8th November, 1.816; he claims also $2000, being half of $4000 paid Musson, through Fishli, on account of the cargo. What was the answer to these claims? To the first, that he had been credited in stock account, with $1400, the whole price of the barge; to the second, that be had been credited by $1478 22, the whole cost of the crates of ware, and to the third, that he had been credited with the $4000.
Had he been ignorant before, of Colmesnil’s just claim to one moiety of the cargo, could he have remained so a moment after? It would seem impossible. Yet, in his second amended bill, filed subsequently, we find no claim set up by him. It seems to be impossible to reconcile these facts, with the idea, that Honoré was the exclusive owner of the cargo, of the barge Despatch, A variety of other circumstances might be referred to, entirely inconsistent with Hon-ore’s claim; it is hoped, however, that those already pointed out, will be found sufficient to authorize the court to grant a re-hearing on this point.
The response of the court, delivered by Judge Underwood, July 3d, 1829.
We have considered the suggestions made by the counsel for both parties, and only deem it proper to make a few remarks, by way of explanation, for the purpose of rendering the original opinion the more certain, and less liable to misinterpretation. The claim asserted by Honoré, fpr interest, on the excess of his stock, brought forward for in the petition oi his. counsel, i$ ppt allowed, It is uncertain what the
It was intended by the court, to preclude all investigation, upon the return of the cause, as to profits made by Colmesnil, in the exchange and brockerage business. It does not appear, that he and Honoré were ever partners in a business of that sort. So far as Colmesnil has admitted, that he applied the funds of the- firm, to making profit in that way, for the use and benefit of the firm, it would not be improper to regard it as sanctioned by Honoré, so as to give him a share of the profits, Cplmesnil states, that his profit was
The date of the check, given by Honoré to Colmeshil, to-wit: December 18, 1815, is the time, beyond which, the parties should not be permitted to go, in bringing foward accounts against each other. It is at that date, we presume, a settlement was made between the parties, and which ought not now to be molested. The commissioners allowed a balance, which appeared on Honore’s book, in favor of Colroesnil, subsequent to that date, and which was brought into, and mude a part of the sum of $1,491 35, allowed by them to Colmesnil. We' have sanctioned that balance, for reasons, satisfactory to us, and which would be useless to detail.
We have not deemed it necessary, to notice any other suggestion, as we shall permit the original opinion, td remain with this explanation.
