17 Ala. 306 | Ala. | 1850
The plaintiff in error, who was also the complainant below, filed his bill in the Chancery Court of Bus-sell county against the defendant, Barnett, who was his guardian, for an account of certain funds of the complainant alleged to have come into the hands of the defendant, and for the profits, which he charges accrued upon the investment of a large proportion of said funds in the mercantile concern of Kyle & Barnett, of which said firm said guardian was a member.
It clearly appears from the record that át several times, between the months of October 1838, and March 1841, there was invested in said concern, of monies belonging to the complainant, the sum of five thousand six hundred and seventy-seven dollars. It also appears that within said periods the defendant invested some of his individual funds in said concern, and that fair profits had been derived, and which were several times ascertained and apportioned between the partners. The concern did not however deal exclusively on its cash, but the goods were purchased partly on credit. It further appears that pending the operations of the concern, the defendant agreed with his son, John N. Barnett, to let him have one half of the profits which should accrue to the defendant, less the lawful interest upon the cash capital invested. The defendant also received other sums of money belonging to his ward derived from the hire of slaves, and also boarded and educated the plaintiff. The chancellor decreed an account to be taken of the profits, under the following directions: 1. That the register ascertain and report the amount of cash invested by the defendant in the mercantile establishment of Kyle & Barnett, and what part of said business was done on cash and what on credit, and that be separate and report the profits on the cash and the profits on the credit, allowing the same rate of profit on each. 2d. That he report the amount of interest on the cash invested by the defendant during the time it remained in said concern, and what part of said cash capital was the money of the complainant, and that he deduct said amount of interest from the profits made on said
1. On the part of the complainant it is insisted, that he should be entitled to the profits made upon the credit as well as upon the cash of the concern, in proportion to the amount of his funds invested. In this wo do not concur. There is nothing in the record from which it may be infered that the credit which was obtained was based upon the capital thus employed, oven if such fact was material to this inquiry. On the contrary, it is pretty satisfactorily shown that the parties could have obtained it irrespective of this fund. Credit, in one sense, is itself capital, and perhaps is more frequently based upon the fidelity and punctuality of the party in discharging his.engagements, and the effi
2. But it is further contended for the complainant, that the guardian having invested his funds in the mercantile establishment of Kyle & Barnett, he should be entitled to the profits after allowing reasonable expenses, and that his rights should not be affected by the arrangement made between the guardian and John N. Barnett, whereby the latter was to receive for his personal attention to the business one half the guardian’s share of the profits, after deducting interest upon the cash capital invested. Now we are not prepared to hold that the guardian, after investing the ward’s funds, could defeat his right to the profits by advancing his son or making a donation of the profits to him.— The record before us, however, does not present such a case. It does not show that the arrangement made by the guardian with John N. Barnett.was unreasonable, or that it might not well have been entered into with any other individual. It secured to the guardian interest at the rate of eight per cent, upon the cash invested and one half the remaining profits. Whether this provision for the services of the son should turn out to be more or less than a just compensation was a question which from the nature of the case must then have been doubtful, depending as it did upon the success or failure of the enterprise. In view of the facts of the case as they appear in the record, the son having given his personal attention to the business from its commencement up to its close, without other compensation, and having, it may be, mainly by his skill and efficiency, been enabled to swell the profits to a considerable sum beyond what may have been contemplated by the parties at the time, we do not feel authorised in holding that he is not justly entitled to the compensation he contracted to receive, nor will we charge the guardian vrith more of the profits than has come into his hands,
3. In Bryant v. Craig, 12 Ala. Rep. 354, it was held that a guardian who fails to make annual returns of his accouuts is liable for interest on the funds in hand, but is not liable to be charged compound interest, unless he is guilty of such gros3 neglect as is evidence of fraud. The same case further decides that in settling the account of a guardian the court should charge him with interest on all money of the ward in his hands from the time of its receipt, and allow him interest on all disbursements from the time they were made, the interest due from the guardian to extinguish pro tanto, or in full as the case may be, the expenditure of the*ward. In the record before us, the guardian from time to time received the profits which accrued upon the ward’s money invested in the business of merchandize. The receipt from that source is the same, so far as his liability is concerned, as if he had received the same amounts from any other source, and in our opinion he should be chargeable with simple interest upon these dividends from the time of their receipt by him. So also should he be charged with interest upon the amount of the capital stock which belonged to the ward and remained in the concern at the time of the dissolution, calculating the interest from the time said guardian received or might, have received it by the use of due diligence. The failure of the chancellor to decree interest upon the dividends and the capital on hand at the dissolution was an error against the complainant below. On the other hand, the complainant is not entitled to recover interest on the funds which were invested in the concern of Kyle & Barnett pending the operation of the concern, but he is entitled to all the nett profits which accrued thereupon to the guardian, both under his partnership with Kyle and under the subsequent arrangement with his son, John D. Barnett.
The principles above laid down will be sufficient to a correct determination of the cause in the court below.
Let the decree be reversed and the cause remanded, and let each party be taxed with his own cost in this court.