13 Iowa 344 | Iowa | 1862
It is seldom that a case is brought before us, involving more difficult or intricate questions than the one now presented for our determination. These difficulties arise, not so much from the questions of law discussed by the counsel, as from the novelty of the controversy, the character of the agreement between the parties, the manner in which the accounts were kept, the mass of testimony, at times conflicting, and difficult to reconcile, and the course pursued by the parties in making their expenditures, and working their lots.
After listening to and reading the very full and able arguments of counsel, after patiently examining a most voluminous record, and the several statements of the account, as claimed by either party, we have arrived at certain conclusions, which must form the basis of a final settlement of their respective rights. 1. The second, third and fourth exceptions to the master’s report, raise the question, whether he determined correctly in finding that there was no settlement between the parties, as charged by the respondents, on the 1st of November, 1855.
On the 24th of November, 1855, plaintiff executed this receipt:
“ $892.67. Dubuque, Nov. 24,1855.
“Received of Greo. Ord Karrick, superintendent of the diggings owned by Karrick, Levi & Jones, three hundred and ninety-two dollars and sixty-seven cents, in full settlement for my interest in said diggings to the 1st day of November, instant', as shown by account current rendered by said Karrick. “ A. Levi.”
It was agreed on the 29th of October, 1860, that a copy of this receipt should be used in evidence, with like effect as the original.
For several reasons we feel bound to conclude that the
• The receipt is unambiguous' in its terms. It expressly acknowledges the receipt of so much money in full settlement of all that was due for his “interest in the diggings” to the date named. Its execution is not denied, but admitted. The familiar rule is not • controverted, that prima facie, this paper, like all others importing a settlement is evidence that the parties then adjusted all matters touching the business or adventure to which it relates. This is affirmative, and, until rebutted, conclusive evidence of what it contains. The burden is thus thrown upon the complainant, to impeach it, by showing that it was obtained by fraud, executed without proper knowledge of the facts, mistake, or the like. With him was the laboring oar, as to this issue, therefore. And so far from impeaching it, we think the evidence and circumstances clearly tend to maintain it.
In May, 1858, the referees made their report, which was before us when this case was heard on the prior appeal. It is found in this record, and they expressly state that there was a full settlement on this date, and that each of the copartners was paid his full share of the proceeds arising from • the copartnership business up to that time. And while complainant excepted to this report upon eight distinct grounds, he makes no objection to this finding, nor a suggestion, even, that it was erroneous. Then again, Karriek, who was the active partner in the firm, sets up this settlement in his answer, filed in February, 1858, and yet complainant made no effort by pleading, testimony or otherwise, to invalidate this receipt until the 80th of October, 1860, the day on which the master closed the testimony, and this he does by his own deposition. Giving to his testimony, however, all the weight that can be consistently claimed, it is fully met by that of Karriek on the
2. The fifth exception is that the master erred in refusing to allow the respondent, Karrick, for his services as superintendent of said mining operations. Upon this subject the finding is, that he acted as superintendent during the greater portion of the time, that he devoted a considerable part of his time to their affairs during the early part of his superintendence, and all of it after that, that he did so without any agreement or understanding that he was to receive compensation therefor, and that he was not, therefore, entitled to pay for such services.
The general rule upon this subject, as stated by Judge Story, is: “ That as there is an implied obligation on every partner to exercise due diligence and skill, and to devote his services and labors for the promotion of the common benefit of the concern; it follows that he must do it without reward or compensation, unless it be expressly stipulated for between the partners, as it well may be under peculiar circumstances.” This is a correct statement of the general rule where the partner is acting simply in the discharge of his duty as such partner, for while he is taking care of the joint
This is the general rule, and the substance of the reasoning used to show its propriety. But like many general rules, experience has shown, by the application of the same reasoning, that it is not inflexible. That is to say, if an agreement that the partner shall be paid for his services can be fairly and justly implied from the course of business between the copartners, he is entitled to recover. The question is one of evidence, or contract, and whether the right to recover is established by necessary implication or from express stipulation, the rule is the same.
This rule is maintained by Caldwell v. Lieber, 7 Paige, 483, cited in the note to § 182, Story on Part. So in Lewis v. Moffatt, 11 Ill., 392, it is held that the firm may be liable when such an agreement may be implied from the course of the business between the partners, or from the nature of the services rendered, in connection with the duties and obligations imposed by the copartnership articles upon the several members of the firm, that there is no inflexible rule that one partner shall not recover for extraordinary and unusual services, without an express agreement to that effect.
Then, again, this rule is well settled: that if a member of the firm is employed to render services which neither the law, nor the agreement of the parties, impose upon him,
Following the law as recognized by these cases, we think the master erred in refusing compensation to Karrick, for his services as superintendent. The testimony satisfies us that he acted as superintendent with the knowledge and consent of all the partners. The agency was one of hazard, and required a large amount of skill, and business capacity. The mines were, for a portion of the time, worked day and night, and he was frequently there at all hours of both. Upon him devolved the employment of a large number of hands. He superintended the books, (not, perhaps, in the most satisfactory manner,) the settlements with hands, and their payment, and had to supervise valuable machinery, and to look after the general interest of the partnership. In a word, we think it equitable and just, and entirely in accordance with the understanding of the parties, that he should be paid. The only matter to be determined, is the amount of that compensation. And, in fixing this, we are not to be governed alone by the opinion of witnesses. It is our duty to “ look at the nature and character of the services rendered, the time employed, the skill and talent
Counsel claim for him $5 per day, for twenty-one months, or $3,150. Under the circumstances this is too much. He is,' of course, entitled to nothing prior to November 1,1855, the time of the settlement. For a portion of the time after that, until his superintendency ceased, (Aug. 1, 1857,) the work was not heavy, not such as to engage him constantly, as it did subsequently. A fair average compensation will be $75 per month, for the twenty-one months, amounting in the aggregate to $1,575.
8. After the appointment of the Receiver, respondents, upon a showing ■ made, moved that he be directed to take charge of the property of the firm, composed of engines, gins, and other machinery used' about such mining operations, and that he be authorized to lease or rent the same, and also to remove said Receiver, and appoint some suitable person in his place. By consent this application was referred to the master who overruled it, and the exception to this action is the next matter brought to our attention.
Under the circumstances disclosed, we conclude that this ruling was correct. No good reason is shown for the removal of Wood (the Receiver first appointed). And while, as to the other part of the motion, there was nothing in the state of the pleadings to prevent such an order, yet the fact that the property had passed into other hands, (and this fact is found by the master,) was a sufficient answer to the application. It is competent for a court of chancery, by an interlocutory order, to take possession of property which is the subject of litigation, pending the proceedings. If, however, the rights of third persons, in no manner parties to the record, have intervened; as in this case, if they have purchased the property in good faith, the Master or
But growing out of this question is another, urged with great persistency, and which is, in fact, of great importance to the parties.
Under a judgment, in favor of “The Bank of Auburn,” against Karrick, Levi & Co., the property now under consideration was sold by the sheriff, and bought, as respondents claim, by the complainant, Levi, he paying for it, as they insist, in whole or in part, with the funds of the partnership. All this is denied in argument, by the complainant, he insisting that he bought it in good faith, from the purchaser at such sale, and paid for it with his own means. The impression the testimony has made upon our minds, inclines us to believe that there was an understanding between Levi and the purchaser, at the sale, that complainant was to have the property by paying the amount of the bid, and the balance due on the judgment, which he subsequently did. It is left in much doubt, however, whether he used any other than his own means in making such payment. But whatever the facts may be, a difficulty meets us at the threshold, which first demands our attention.
It is true that each partner is required to exercise towards the other the utmost good faith in all matters relating to the copartnership. And if one deals with or uses the firm property, he should be held to account for all profits arising from such use or transaction. Not only so, but if loss arises by his fraud, he is liable to remunerate his cor partners for all injuries arising from such misconduct. But it seems to us that to entitle the other partners to recover for such fraud, such failure to exercise good faith, such use of.the joint property, there should be some predicate-for it
4. It is claimed that the master erred in the amount allowed Karrick and Jones as ground rent for mineral naised on the “ Starr Lot,” for the months of February and
5. But the question of greatest magnitude, and that upon which counsel have bestowed the most labor, still remains to be considered.
As to certain matters, there is no controversy. We can easily ascertain the amount of mineral raised on each lot, the price for which it was sold, the respective interest of each partner therein, the amount of rent paid, and the aggregate amount of expenses. But as the respective shares of the parties in these lots differed, it is a matter of vital importance to settle upon some just rule by which to apportion these expenses. Thus, to illustrate, as respondents were to pay five-sixths of the expenses of working the “ Levi Lot” and but five-ninths of said expenses on the “ Starr Lot,” it is to their interest to charge as large a proportion of these expenses as possible to the “ Starr Lot.” And it is, in like manner, the interest of the complainant to make “ Levi Lot” liable, so far as he can, because he thereby decreases the amount he would have to pay.
It will be remembered that the contract was, “ that each partner was to pay his equal proportion,- according to his mining interest in said lots, of all expenses necessary to carry on said business of mining thereon.” When this cause was formerly before us, in giving a construction to this contract, we used this language: “ The referees were bound by the agreement of partnership, in stating an • account, to charge to each partner his proportion of the expenses in raising mineral on. each lot, according to his interest in said loti They have departed from this rule, in those instances in which, instead of ascertaining the actual expenses incurred upon each lot for a given period, they have apportioned the expenses between them in proportion
■Then the testimony was not before us, and the difficulties which now present themselves, in giving a practical application of the rules stated,*, did not arise. That the views then expressed are correct, we entertain no doubt. Whenever the expenses on one lot can be ascertained, separate from the other, then it is perfectly clear that the parties should pay them in proportion to their respective interests. In such a case the matter should be treated just as if the other lot did not belong to them. And it was upon the supposition that these expenses could be thus ascertained, and charged to each lot, that this rule was given for their apportionment. It has been made perfectly apparent, however, since the parties have exhausted all the channels of evidence within their reach, that these expenses cannot be thus divided. The very nature and character of the business transacted, now that it is all before .us, suggests the difficulty. These lots were contiguous. The lode was worked from east to west, passing first through . the “ Levi,” and then into the “ Starr Lot.” For some months, a large amount of mineral, found on the “-Starr Lot,” was carried back along the drift on the “ Levi Lot,” - and thence lifted through a shaft which had been previously .sunk on ,the last -lot, for the purpose of working out the
It was the custom of the superintendent to close his accounts each month. And whenever the expenses were incurred exclusively upon one lot, he so stated. And in these instances we have no difficulty. The master apportioned the expenses for these months, according to the interest of each partner in such lot. And thus far, the parties agree. When this could not be done, he divided the expenses equally between the two lots, and made each partner pay the same, according to his respective interest, which he regarded, to use his' own language, “ as the nearest approximation that can be made to the directions of the Supreme Court, in the dim light of the evidence as to the expenses on each lot, in some instances, and its total absence in others.”
Respondents object to this rule, and suggest two others. The first is : To apportion the entire expenses of the work upon each lot in proportion to the amount of mineral raised, and then charge the parties in the ratio of their interest in the respective lots. The second is: To charge
If respondents’ assumption, that these expenses were incurred for tbe purpose of raising mineral from tbe “ Starr Lot,” and with tbe understanding between tbe parties that they should be paid for in tbe ratio of tbeir working interest therein, was sustained by tbe evidence, tbe rule would be unquestionably correct. For this would be in perfect harmony with tbe spirit of tbeir contract, and tbe rule followed in those cases where tbe expenses were kept separate. And yet tbe object for which the machinery was purchased, is not alone a safe criterion, for though designed to assist in raising mineral from one lot, if it was used upon tbe other, that other, in tbe absence of agreement, should bear its due proportion of tbe expense. Not only so, but under tbe evidence submitted, tbe rule is not, in our view, practicable. Tbe work upon tbe two lots was so intimately connected, that it is impossible to tell, with any fair approximation to certainty, wbat was tbe principal, and wbat tbe incidental, use of tbe machinery. Abstractly, tbe rule is correct, but it cannot be applied to tbe actual facts, as developed by tbe testimony.
Nor do we think tbe rule adopted by tbe referee correct. True, it is susceptible of a practical application, but it seems to us inequitable and unjust. According to this, it makes no difference bow great tbe disproportion between tbe mineral raised upon tbe one lot as compared with tbe ■ other, or bow little the benefit or advantage in one case, or bow great in tbe other, tbe entire amount is divided, and tbe parties required to pay each half according to bis working or mining interest. Thus, assuming that tbe aggregate expenses were $65,000, tbe rule makes tbe “Levi Lot” pay one half of it, or $32,500. But tbe mineral raised
We then come to the rule which, in those cases where the expenses were not kept separate, apportions the entire amount upon each lot in proportion to the value of mineral raised, and charges the parties in the ratio of their interest in each lot. This rule may not be in all cases just, but it recommends itself as more nearly so than either of the others, under the circumstances. It is simple, and of easy application. And we do not see why it will not be substantially just and equitable. It certainly has the merit of requiring the parties to pay for the benefits derived, in proportion to their interest therein. It treats the operations upon each lot as a distinct adventure,, and by approximating the expenses as near as possible under the confused manner in which the accounts were kept, makes the parties share the expenditure in the ratio of their receipts.
The case will be referred to a master, to state the account in accordance with this Opinion, that a final decree may be entered in this court. The question of costs, and all others not herein disposed of, will be reserved until that time.
The cause was referred to Thomas E. Withrow, as master, and upon the filing of his report a decree was entered in this court. The complainant and appellee, Levi, and the respondent and appellant, Waters, filed petitions for a re-hearing. In overruling the applications the following opinion was delivered by:
Since the filing of the foregoing opinion, Levi and Waters have, by their counsel, presented for our consideration elaborate arguments for a re-hearing, and have urged, with much zeal and apparent plausibility, that injustice has been done them in the rulings made, the report of the master, and the decree founded thereon.
And first, as to the settlement of November 24, 1855. 'As.to this, we deem it unnecessary to restate the considerations which induced us to hold that there was not sufficient testimony to impeach the prima facie effect of the receipt of that date. But we may notice a point now presented by counsel, which was not urged, or if so, not much relied upon in the first argument. It is asked .: “ Of what is this receipt a settlement ? To whom is it a settlement ? •Not with Jones, for he is no party to it. It is between his two partners — not signed by him, or under his control, or agreement. Jones is clearly not estopped by it. But if Jones is not, then Levi is not. Estoppels are odious in law, and, to be binding, must be mutual.” These inquiries, and this reasoning, misapprehend the language of the ■receipt,' as well as the effect given to it. Thus it must be •borne in mind, that Karrick, who paid the money to Levi, and took the receipt, was the superintendent of the diggings worked by the parties. He was the agent of the partnership — received all money arising from the sale of mineral, ánd paid it out to the partners or other persons entitled to the same. The receipt is to him: “in full settlement for my (Levi’s) interest in the diggings.” This language is fairly susceptible of but one construction, and that is, that Levi admitted that he had received all that was coming to him to that date, from the proceeds arising from the working of the mines. It was not conclusive upon him, and we never have so held. Nor was it more binding upon Jones. But it does show prima fade that this much was owing to Levi, and no more. And to this extent would Jones be
Next, as to the amount allowed Karrick for his services as superintendent. If, under the testimony, and the rules of law governing, he is to be allowed anything, we are satisfied that his compensation has not been fixed too high. "We do not understand the principles of law, declared by us upon this part of the case, to be controverted; but the claim is, that $75 per month, under the circumstances, is extravagant. If governed alone by the opinion of witnesses as to the value of these services, we should certainly have allowed more than this amount. We determined, however, that we were not to be governed alone by these opinions. We exercised our own judgments, in connection with these opinions, to arrive at a conclusion as nearly satisfactory as practicable. We could not interfere with this finding without coming in conflict with the great body of the testimony on this subject, and losing sight of the hazard incurred, and skill requisite in superintending the large business carried on by these partners.
But it is, in the third place, claimed that an incorrect rule was adopted, in apportioning the expenses incurred in raising mineral from these lots. And it is now insisted that, by the terms of the partnership, these expenses should be apportioned to the several partners according to their interest in both lots, and not their interest in each lot. In other words the position is, that Jones should pay fourteen thirty-sixths, and Karrick and Levi eleven thirty-sixths each, of the entire expenses, instead of apportioning them on each lot in proportion to their interest in each, or the amount of mineral raised from them severally. This rule is condemned by the construction given to the contract by
Fourth. It is claimed by Waters that he was not owing Levi, Karrick & Jones anything, and that the sum of $985.99, found against him by the master, is grossly unjust and inequitable. In support of this position, he now produces the affidavit of Karrick, the superintendent, and one of the partners. It may be unfortunate for him that this testimony (for it is nothing else), was not introduced in the District Court. We are not prepared, however, to recognize the right of a party to make out his case, after it has been appealed to and determined in this court. This cause has been pending since 1857. Waters knew before, as well as since, the determination of the cause, that Karrick proba
A great many alleged errors are pointed out in the report of the master, in stating the account, under the rules established by the former opinion. And in this connection it is urged, as a cause for rehearing, that petitioners were not present when this report was presented and had no opportunity to take exceptions to it. To this the reply is, that it was expressly requested by all parties, when the cause was submitted, that a final decree should be rendered in this court. The opinion was announced near three weeks before the entry of the final decree. All parties were notified of the result, advised that a master had been appointed, who would report at the same term, and had ample opportunity to be heard, if they so desired. We need only say, that if a party has had an opportunity to be heard, and fails to avail himself of it without good excuse, he cannot be permitted to urge his own laches, as a reason for a further hearing.
As to the alleged errors, we remark, that we have with the assistance of a most able and 'experienced accountant, re-examined the report, and find that it is not subject to the objections urged. .The case is peculiarly complicated. It is only after the most patient examination of the immense mass of' testimony, that anything like satisfactory results can be arrived at.. If critical or mathematical accuracy has not been reached, it must be attributed to the character of the- adventure entered into by these parties,