Ransom v. Harroun

113 So. 206 | Miss. | 1927

* Corpus Juris-Cyc. References: Appeal and Error, 3CJ, p. 709, n. 61; Partnership, 30Cyc, p. 441, n. 3; p. 739, n. 94 New; On the general rule that defense of the statute of limitations will not be considered when raised for the first time on appeal, see 17 R.C.L. 986. Harroun, appellee here, complainant in the court below, exhibited his bill in the chancery court of Leflore county against F.T. Ransom, appellant here, defendant in the court below, in which bill Harroun alleged that beginning in December, 1917, a partnership had existed between complainant and defendant, operating under the firm name of Mo-Kan-O Motor Sales Company, with its main office at Wichita, Kan., and a branch office at Kansas City, Mo.; and that immediately after the formation of this partnership they began dealing in Harroun automobiles and acting as distributors for the manufacturers, *587 Harroun Motor Corporation. The bill alleged that Harroun and Ransom were engaged in such business as equal partners, were to share equally all profits and losses, and each was to be liable equally for all liabilities incurred by the partnership; that the business was managed and controlled by Ransom, who had exclusive charge of the books of the firm and of the business; that the business was not successful, and on May 1, 1919, said partnership executed to the Mo-Kan-O Motor Sales Company, a corporation organized under the laws of the state of Kansas, a bill of sale of the assets of the partnership, with the exception of the defendant's indebtedness as to the partnership. This corporation was practically the creature of Harroun Ransom, organized May 1, 1919, and an equal amount of practically all the capital stock was issued to these partners; thereupon the partnership ceased business and has not since engaged in business.

The bill further alleged that there had been no dissolution of the partnership, nor settlement or accounting of any kind between the partners; that Harroun undertook to discover the condition of the partnership and to learn the details of the partnership transactions which had been made, but because of the failure of defendant to keep books and records with regard to its business, he was unable to obtain any accurate data as to the condition of the business and to say accurately what amount Ransom owed the partnership.

Harroun then charged that Ransom should account for seventeen cars of the alleged value of eight hundred eighty-five dollars, and demanded that Ransom account for same.

Harroun then alleged that when the partnership ceased to do business it was indebted to various creditors, which indebtedness he (Harroun) had been compelled to pay, as follows:

First. Two notes to the Union National Bank of Wichita, Kan., in the respective sums of eleven thousand eight hundred twenty dollars and fourteen cents and ten thousand *588 five hundred twenty-six dollars and twenty-two cents, with interest thereon, paid by Harroun on October 18, 1919. These notes were executed by Harroun and Ransom on May 24, 1919, in payment of a pre-existing partnership debt.

Second. Said partnership owed the Commonwealth National Bank of Kansas City, Mo., and executed its note to it for twenty thousand dollars, signed by Mo-Kan-O Motor Sales Company, by A.L. Harroun, which note was renewed and finally paid by him on October 21, 1919, with accrued interest.

Third. On May 1, 1919, said partnership was indebted to the State Bank of Kingman, Kan., in the sum of three thousand five hundred dollars, and on that date the Mo-Kan-O Motor Sales Company (incorporated) executed its note by F.T. Ransom, indorsed on the back by F.T. Ransom and A.L. Harroun, which note Harroun paid on October 28, 1919, with accrued interest.

Fourth. On July 2, 1919, Harroun borrowed twenty-eight thousand five hundred dollars from the Commerce Trust Company, of Kansas City, Mo., on his individual note, the proceeds of which, he alleged, were paid on partnership debts, and paid same on January 12, 1920, with interest.

Harroun further charged that the defendant, Ransom, had paid no debts of the partnership, and, furthermore, that he was largely indebted to the partnership.

The bill charged that Harroun had paid the above-described notes, debts of the partnership, with his individual funds, and had had same assigned to himself; that he is subrogated to the rights of these creditors of the firm, and thereby entitled to a decree for one-half of said sums as paid against Ransom, and for all other sums as shall be discovered to be due Ransom to the partnership, the notes paid being attached as exhibits to the bill.

The bill prayed for an accounting and discovery as follows: As to the specific sums paid by complainant, as to further debts of Ransom, and for a personal decree *589 in favor of complainant against Ransom for one-half of the amount so found to be due by Ransom to the partnership; and also prayed for an accounting, a discovery, and dissolution of the partnership.

To this bill the defendant filed a demurrer, which was overruled by the court. Thereupon Ransom filed his answer, in which he denied that there ever existed any partnership between complainant and himself; averred that he was employed by Harroun in the capacity of general manager, and that the business was so managed as to keep Harroun constantly in touch with its affairs. He denied Harroun's right to an accounting; averred that he kept the bank account correctly; that he kept such books as Harroun would permit, especially a bound book showing all necessary details of the purchases and sales.

In his answer Ransom set up that the business was only operated temporarily with the view of organizing a corporation; that Moses and Hoffman were to come into the business, and did come into it for a short time; and that he was to receive five thousand dollars per annum for his services as general manager. He denied that he was ever a partner in the business, or that he received any benefit from the proceeds of the notes, but averred that he signed such notes in aid of Harroun and as an accommodation to him upon his agreement to pay the same individually. Ransom denied any and all liability to account, denied that he retained any of the assets, or was indebted in any manner to the complainant, Harroun, but stated that he had fully accounted to complainant for more than six years before the date of filing of this answer.

After hearing much evidence, the chancellor entered a personal decree in favor of Harroun against Ransom for thirty-one thousand five hundred eighty-three dollars and sixteen cents, directing that execution issue for same; and from this decree, defendant prosecutes this appeal.

It is obvious that the chancellor found that a partnership existed between the parties, and that they were to *590 share in the profits and losses equally, and be equally liable for the firm's debt; that they were not promoters of a corporation, and that Ransom did not sign certain notes as accommodation indorser and was not an employee on salary. It is also patent that the chancellor did not charge Ransom with the one hundred ten cars, nor with the twenty-eight thousand dollar-note above described, but did charge him with the first three notes above described, and interest thereon to the extent of one-half thereof.

We have read with care the brief and the evidence given by Harroun and Ransom, together with all references to the record, and from a careful study of the record we are of the opinion that the chancellor was fully warranted in finding the above conclusions of facts against the defendant.

There are assigned by appellant twenty-four errors as grounds for reversal, which we shall not consider except as argued in the briefs.

First. As above stated, the case cannot be reversed on the facts.

Second. Tersely stated, appellant contends that if a partnership existed, it was one in which Harroun furnished the money and Ransom only his time and skill, and that the former could not recover from the latter for advances made, and cites 20 R.C.L., p. 930.

Conceding the rule thus stated to be the law, the facts are not applicable. It appears that the money secured for the operation of the partnership was secured on the notes of the concern with the personal indorsement of Ransom and Harroun, and neither of them seems to have put in any appreciable sum in cash; and the chancellor evidently found that the agreement was that each should be equally liable.

The record teems with letters and documents written by Ransom admitting the partnership; and on May 1, 1919, Ransom wrote and signed a letter addressed to Harroun, and delivered to him that day, in which he says: *591

"May 1, 1919.

"Mr. A.L. Harroun, Kansas City, Mo. Dear Al: Confirming our conversation and agreement in regard to the winding up of our partnership affairs which have been transacted under the name of the Mokano Motor Sales Company, and as I am not at the present time in a position to pay my half of the liabilities of said partnership, and as it will probably be necessary for you to personally assume the liabilities in such case I agree to deliver to you my personal notes due serially in one, two, three, four, and five years for one-half of the total loss after same has been determined by an audit of the accounts and the loss has been determined by the sale of its assets and the collection of the accounts and liabilities due to Mokano Motor Sales Company.

"I further agree to put up as collateral on these notes, all stock of the Occident Oil and Refining Company now owned by me as soon as same can be cleared of indebtedness now against it. The present amount of this holding is ten thousand dollars at par value of which five thousand dollars is used as collateral on a note of eleven thousand nine hundred dollars at the Fourth National Bank, which is further secured by ten thousand dollars of Union National Bank stock and two thousand dollars of Wichita Cattle Loan Company stock, which will first be disposed of and applied on this note.

"The five thousand dollars at the Union National Bank is on a guarantee of payment of a note of C.D. Forney et al., which should be paid out of the proceeds of the Fortuna Oil Gas Company, approximately one thousand four hundred dollars, in which case this five thousand dollars would be released.

"F.T. RANSOM."

Ransom also signed one of the notes on that same day and another on May 24th, just a few days later; and the chancellor evidently gave Ransom the benefit of all doubt by his finding, as exemplified in his decree. *592

Third. Appellant insists that the corporation formed on May 1, 1919, assumed payment of all liabilities, a release or novation being thereby created. Neither party acted on this hypothesis, as shown by the facts quoted, supra.

Fourth. Appellant invokes the statute of limitations of three years as a bar to a recovery.

We have examined critically the answer and demurrer of defendant, and there is no such plea on file in this cause. This plea not having been submitted to the lower court, appellant cannot for the first time interpose a plea of the statute of limitation in this court. Central Trust Co. v. Meridian Light Ry. Co., 106 Miss. 431, 63 So. 575, 51 L.R.A. (N.S.) 151,Id. (Miss.) 64 So. 216; Hines v. Potts, 56 Miss. 346; Y. M.V.R.R. Co. v. McGee-Dean Co., 115 Miss. 282, 76 So. 264; Y. M.V.R.R. Co. v. Kirk, 102 Miss. 41, 58 So. 710, 834, 42 L.R.A. (N.S.) 1172, Ann. Cas. 1914C, 968; Raleigh Co. v.Fortenberry, 133 Miss. 467, 97 So. 722; Standard Oil Co. v.National Surety Co. (Miss.), 107 So. 559.

Fifth. It is also contended that the chancellor erred in rendering a decree for an arbitrary sum without ordering reference to a master for a partnership accounting. While it is proper in complicated cases to refer an accounting to master this jurisdiction is vested in the chancery court; and our view of this record is that the chancellor did state an account, and the result is set forth in the decree.

The chancellor did not have to make a report to himself, nor was it necessary to set forth the details of the account in the decree. Ransom admitted he owed one-half of these notes, but denied the partnership, and claimed that he signed these notes as an accommodation indorser, and therefore, did not owe Harroun. But the chancellor found the facts against Ransom.

Looking to the whole record, we do not think the chancellor erred in rendering the final decree complained of by appellant, or that there was any showing that all obtainable *593 facts were not then before the court. Where all the facts are before the court, the accounting may be had and rendered by the court without appointing a master. The appointment of a master in such cases is within the discretion of the trial court, and the chancellor may make his own calculations, or have counsel do it, or refer same to a master.

In this case it would have been better if the chancellor had announced the basis upon which he ascertained the sum due. SeeHebron v. Kelly, 77 Miss. 48, 23 So. 641, 25 So. 877.

Under our present practice in the chancery court, where important and vital testimony is usually heard orally by the court, and where a stenographer is employed, we doubt if the chancellors find it expedient to refer to a master except in unusual and rare cases. To us it is apparent that the chancellor adopted the basis indicated herein for his conclusion.

Affirmed.