5 Del. Ch. 33 | New York Court of Chancery | 1875
About the 22d day of January, 1842, James Rice succeeded by purchase to the interest of Jacob Pearson in the firm of Pearson, Hollingsworth, & Harvey. From that day until some time in the year 1854 there existed a firm by the name of Hollingsworth, Harvey, & Co. Achilles Hollingsworth, Amor H. Harvey, and James Rice composed this firm as partners in trade as machinists and blacksmiths. The precise day of the dissolution of the firm has not been proved, although it is safe to assume, in view of all the facts proved, that the dissolution occurred early in the month of January, 1854, by the withdrawal of James Rice. The business was continued by Achilles Hollingsworth and Amor H. Harvey until some time in the year 1865, under the same name and style of Hollingsworth, Harvey, & Co., when the copartnership was dissolved by the death of Achilles Hollingsworth. On the 18th day of August, 1849, all the real estate
There also existed prior liens against the real estate of the said James Hollingsworth and Joseph Teas, and Hollingsworth & Teas, amounting to upwards of $10,000. The sale made by the sheriff, of this real estate, was under a certain writ of levari facias on a mortgage made by James Hollingsworth and wife in favor of, and held by, the Wilmington Savings Fund Society, to secure a debt of $2,600, and also under a writ of venditioni exponas following a writ of fieri facias issued upon the judgment of James Bice v. Hollingsworth & Teas, for $1,200. Achilles Hollingsworth, at the sale of said real estate, became the purchaser of the same, and received the sheriff’s deed therefor.
The bill of complaint charges that the firm of Hollingsworth, Harvey, & Co., of which James Bice was a member, by and through Achilles Hollingsworth, and by and through him only as the agent of that firm, bought all of the real estate at the said sheriff’s sale, for the use and benefit of the firm of Hollingsworth, Harvey, & Co., and for no other purpose or purposes.
The bill also charges that all of the purchase money paid for the said real estate came wholly, directly, and absolutely from the partnership funds of the firm of Hollingsworth, Harvey, & Co., and that it was purchased in pursuance of ail agreement between the partners for their common benefit, in order to cover the claims of the firm of Hollingsworth,
The answer of Amor H. Harvey, one of the defendants, ■although drawn out at length and with great particularity, is, in substance and effect, a confession of the complainant’s bill.
The joint and several answer of William Gr. Pennypacker -and Susan Z. Hollingsworth, the other two defendants, after the admission of the existence of the alleged copartnership, in substance and effect denies every material charge of the hill upon which the complainant seeks relief.
These defendants positively and expressly deny that the purchase money paid for the said real estate came wholly, directly, and absolutely from the partnership funds of the firm of Hollingsworth, Harvey, & Co., and they allege that the same did come from the individual funds of Achilles Hollingsworth and on his own individual account; the manner of which is distinctly set forth in their answer, or appears by the evidence.
If the complainant is entitled to the relief he seeks, it must be for the reason that he has proved clearly, fully, and satisfactorily in the cause, that the firm of Hollingsworth, Harvey, & Co., of which James Rice was a member, actually paid the purchase money of the real estate conveyed by the sheriff to Achilles Hollingsworth, or incurred a liability for, its payment; and that such payment or liability for payment was a part of the original transaction of purchase, and not pursuant to any subsequent agreement or arrangement between the parties,— it being well established that a resulting trust must be coeval with the purchase, and must attach to the legal estate when it is taken under the deed; or, secondly, he
I therefore shall proceed to the consideration of the testimony with a view of ascertaining whether the complainant has furnished the requisite proof to entitle him to the relief he seeks. So far as the title to the real estate is involved in this controversy, the defendants, of course, rely upon the-sheriff’s deed to Achilles Hollingsworth. That title must, remain absolutely valid, and be conclusive against the claim of the complainant, so long as proof less than clear, full, and satisfactory is wanting to establish an equitable interest in it by those claiming an interest therein as heirs or representatives of James Rice. The burden of proof to establish an equitable interest in someone else, contrary to the legal title which Susan Z. Hollingsworth has in it as the devisee of Achilles Hollingsworth, is upon the complainant. In addition to other evidence which the complainant furnishes and which will be hereafter considered, he has examined Amor II. Harvey, one of the defendants, as a witness, whose testimony, if it is admissible and is regarded as true, tends strongly to establish the complainant’s case. Is that testimony admissible according to the rules of law and the practice of this, court ? Amor H. Harvey is a party to the record in this cause. His examination was taken before the examiner without the party applying for the same having first filed an affidavit that
I have no doubt that the complainant conscientiously made . that affidavit, and I do not wish to be understood as reflecting at all upon the integrity of Mr. Harvey as a witness in deciding, as I do, that he is not a competent witness in this cause for any purpose, either under the Act of 1859 or the 46th Buie ' ■of this court. He has an interest in this cause in the matter to which he was examined,—an interest of like character with that of the complainant, who has caused him to be examined, and not an interest adverse to that of the complainant. As ■stated by the solicitors of the complainant, no decree is sought against Mr. Harvey. It 'is apparent, from the whole case, that the substantial matter in controversy in this cause is the title to the real estate purchased by Achilles Hollingsworth at the sheriff’s sale hereinbefore referred to, and the fact that the complainant seeks to establish the indebtedness of the firm of Hollingsworth, Harvey, & Co. to James Bice, to the amount •of the memorandum checks and the account of James Bice against the firm, does not affect the question of the competency of Mr. Harvey as a witness; because, if these claims .should be established, it would be to the interest of Mr. Harvey to increase the assets of the firm by the addition thereto of the real estate in controversy, for the purpose of providing a fund for the discharge of the firm’s indebtedness.
The incompetency of Mr. Harvey ás a witness would be ■still further apparent if these claims should prove to be claims against the firm of Hollingsworth, Harvey, & Go. composed of Achilles Hollingsworth and Amor H. Harvey, and not ■against the firm of Hollingsworth, Harvey, & Co. composed ■of Achilles Hollingsworth, Amor H. Harvey, and James Bice.
I shall further consider these claims at a subsequent stage of this investigation. While injustice may possibly be done by the exclusion of Mr. Harvey’s testimony, yet its admission,
“ The purchase money was $10,040. Of this sum 10 per ■cent, or $1,004, was received by the sheriff from Hollingsworth. Some expenses connected with the purchase, added to the 10 per cent, made $1,083.38, which was the sum actu■ally paid upon the property at the time of purchase. The whole real estate purchased was, before the purchase, subject to sundry liens to which the purchase money was applicable, but no money over and above the 10 per cent was in fact paid to the sheriff and applied to the liens. Instead thereof, Hollingsworth on the 28th of December, 1849, substituted his own bonds with mortgages of the several premises pur■chased, in lieu of the liens as they stood in priority, up to the
1. To The Wilmington Savings Fund Society for_____________$3,400 00’
3. " Ann Billany for______________________________________ 700 00
3. “ The Delaware Fire Insurance Company._______________ 450 00'
4. “ The Farmers’ Bank, afterwards assigned to the Savings Fund Society for________________________ ________ 3,100 00’
5. “ McDaniel & Harvey, afterward assigned to Jesse Lane for 1,800 00
6. “ John Rice, a judgment bond for....................... 1,595 64
, Total__________________________________________$9,045 64
“ There was also a mortgage of $600 of Teas and wife to-the Wilmington Fire Insurance Company, hovering part of the real estate; but the premises covered by it were sold subject to it, and hence it followed the property, and no account was taken of it in settling for the purchase money.
“ Of the securities thus given, there were paid off in Hollingsworth’s lifetime,—by whom is a point in issue,—the-following:
Ann Billany’s mortgage for__________________________________$ 700 00*
On account of the McDaniel & Harvey mortgage for $1,800, held by Lane___________________________________________ 800 00-
The Rice judgment for_____________________________________ 1,595 64-
Total ..........................................$3,095 64
“ After the death of Hollingsworth there were paid on these securities, out of his estate,—as to which payments there is no dispute,—the following sums, viz.:
The Delaware Fire Insurance Company mortgage for_________$ 450 00-
On account of the Farmers’ Bank mortgage for $3,100, held by Savings Fund __________________________________________ 500 00-
And the balance due on the McDaniel & Harvey mortgage of $1,800______________________________________________ 1,000 00-
Total ___________________________ ..$1,950 00-
“ There remains yet unpaid:
The Wilmington Savings Fund mortgage for_________________$3,400 00* Balance due on the Farmers Bank mortgage, also held by the
Savings Fund______________ 1,600 00-
Total unpaid ........ ..$4,000 06
“It is true that a considerable portion, though (as I am obliged to conclude) not all, of the payments made during Hollingsworth’s lifetime, were drawn from the assets of the firm. The 10 per cent paid to the sheriff, together with other small expenses incurred in the purchase, making in all $1,083.38, though settled by Hollingsworth as the purchaser, was drawn from the firm. The payments of interest from time to time on the securities given by Hollingsworth for the unpaid purchase money were also, for the most part, made by checks of the firm drawn and used by Hollingsworth. So also some portions of the principal of these securities were paid in Hollingsworth’s lifetime from the partnership funds. Mrs. Billany’s mortgage for $700 was thus paid in full, and $800 was applied out of the partnership’s funds to the McDaniel & Harvey mortgage, assigned to Lane.”
The entries upon the books of the firm in respect to this real estate, extending from about the date of its purchase to nearly the period of Achilles Hollingsworth’s death, are very numerous; and experts have been examined on both sides to ascertain the correct meaning of those entiles. Bookkeeping has been treated by the respective solicitors as a science, and persons presuming to be familiar with it have, in about equal numbers, testified differently in respect to the true construe
Daybook, 1849.
Dec. 81. Achilles Hollingsworth (for real estate)...........Dr.
To Cash for ten hundred and four dollars, which he paid to Isaac Grubb, sheriff, in Oct. last, being ten per cent of the purchase money on the property late of James Hollingsworth and Joseph Teas, of which he purchased at sheriff’s sale in August last......................................$1,004 00"
For ten dollars paid interest on the above account for 60 days.. 10 00-
For eleven dollars paid Thomas L. Mehaffy, tax against Hollingsworth & Teas property........................... 11 50
For sundry expenses to Hew Castle.......................... 3 00-
Three dollars paid Isaac Hollingsworth for fastening up shop.. 3 00
Nine paid Insurance Company, Oct. 14................... 9 36
Two -jtfg dollars paid prothonotary___________________________ 3 13
Twenty dollars paid to Mrs. Ann Billany for interest on bond.. 30 00
$1,083 38-
Cash Dr, to Achilles Hollingsworth (for real estate) for (dollars received) from him for money returned to him by Isaac Grubb, at settlement, for twelve dollars received of, for rent of house in Third Street____________________________ 13 50 -
Page 1041, Daybook D.
Jan. 17,1850. A. Hollingsworth (for real estate) Dr. To cash____
For thirty dollars paid interest to Mrs. Billany, on account____ 30 00 -
Jan. 81, 1850. A. Hollingsworth for real estate Dr. To cash for four hundred and twenty-one dollars and twenty hun dollars paid this day to Jonas Pusey for interest on James Hollingsworth’s bond of $3,400, or up Dec. 38, 1849, and
Joseph Teas’ bond of $600 up to Feb. 5, 1850 ............ 431 30 •
Feb. 1. A. Hollingsworth for (real estate) Dr. for forty-five 39 hun. paid for labor taking down old machinery at shop... 45 39 ■
Feb. 9. Achilles Hollingsworth (for real estate) Dr. to cash for twenty-eight -j^ dollars paid this day wages to hands for work at shops.......................................... 38 14
1850. Daybook.
May 14. Achilles Hollingsworth (for real estate) Dr. to cash for fifty-three hundred dollars, paid to the Wilmington Fire Insurance Company, interest on James Hollingsworth’s bond and for entering up mortgage...................... 53 80-
For seven -fjfa hun. dollars for recording deeds _____________ 7 35-
Achilles Hollingsworth for real estate, Dr. to cash. For cash paid at sundry times for carpenters, labor, etc., at shops while repairing and altering shops....................... 534 36-
July 12. Achilles Hollingsworth for real estate, Dr. to cash for ninety dollars to pay interest on his own bond and J. Teas’ bond at Savings Society--------------------------------- 90 00'
July 25. A. Hollingsworth for real estate, Dr. to cash. For cash paid interest on James Hollingsworth’s bond, and also oh his own bond up to June the 28th ult_____________________ 233 89-
Aug. 2. A. Hollingsworth for real estate, Dr. to cash for twenty-one dollars paid Mrs. Billany............................ 21 00’
Aug. 16. Sundries, Dr. to McDaniel & Harvey. A. Hollingsworth for real estate, fifty five x5A hun. dollars’ interest allowed them on their bond_____________________________ 55 52'
Oct. 28. A. Hollingsworth for real estate, Dr. to cash, thirteen ¿A hun. dollars paid interest to Delaware Fire Insurance Company,............................................. 13 50-
Nov. 26. A. Hollingsworth for real estate, Dr. to cash, for two hundred ten AV hun. dollars paid to George O. Gordon, attorney on Jeremiah W. Duncan’s mortgage against James Hollingsworth and Joseph Teas, being in full of principal and interest up to this date with said bond, except four hundred dollars, which is assigned to Robert E. Pool_____ 210 71
Daybook, 1851.
Jan. 29. A. Hollingsworth for real estate, Dr. to cash for fifty-four dollars paid McDaniel & Harvey for interest on their bond of $1,800.................................l....... 54 00-
Sept. 25. Cash, Dr. to A. Hollingsworth for real estate, for twelve xA dollars due for rent__________________________ 12 51
Dec. 12. A. Hollingsworth for real estate, Dr. to cash for sixty-three dollars paid interest on bond at Farmers’ Bank______ 63 00’
Journal, 1852 and 1853.
Jan. 8, 1853. A. Hollingsworth Dr. to cash for ninety dollars paid Savings Fund Society for interest on two bonds______ 90 00’
Nov. 1, 1852. Achilles Hollingsworth for real estate, Dr. to cash for sixty-three dollars paid to the Wilmington Savings Fund Society for interest on his bond given to the Farmers' Bank of $2,100...........................------.......-..... 63 00
March 19, 1850. Shop, Dr. to Achilles Hollingsworth, for real estate, for four hundred and fifty pounds of old shafting at one and a half cents,___________________________________ ’ 6 75
March 27. Cash, Dr. Achilles Hollingsworth (for real estate) for six dollars received of Thomas Tucker, being one half the rent which he agreed to pay for frame house on the R. Road up to the 25th inst. _____________________________________ 6 00-
Cash Dr. to A. Hollingsworth for real estate for five dollars, received of Charles Campbell for money he agreed to pay toward getting up plot of Hollingsworth & Teas’ property, $ 5 00
¡Nov. 1, 1852. Cash Dr. to A. Hollingsworth for real estate thirty-seven - dollars received for rent_________________ $37 50
These items extracted from the books of the firm, of which the number of similar items must approximate nearly eighty or ninety, show the general character of entries, in respect to this real estate, contained in the books of the firm. Although it is proof that these entries are mostly in the handwriting of Achilles Hollingsworth; yet the books being subject to the inspection of all the partners, and the entries being made in the regular course of their business by parties having authority to make them, and the same not having been objected to by any of the partners during the existence of the copartnership, or during the life of James Bice or Achilles Hollingsworth, I feel myself bound to receive them as correctly made, consider, ing the lapse of time since they were made, and the entire absence of any proof that they should have been made other-' wise. Considering them as they stand, what do they mean ? This is the important question.
The experts examined in behalf of the complainant say, in effect, that they mean the real estate belonged to the firm of Hollingsworth, Harvey, & Co.
The experts examined on behalf of the defendants say they mean that the real estate belonged to Achilles Hollingsworth. The science of bookkeeping, which has been invoked, has thus failed to illumine the path of our investigation. The fault, perhaps, is not so much the fault of science as of the partners in allowing the books to be so carelessly kept, and their true meaning to be left undetermined throughout the whole existence of the copartnership, and during their joint lives. I interpret these book entries to mean — and they are admissions in effect, by the copartners — that the real estate for which Achilles Hollingsworth held the sheriff’s deed was his individual property, but that the 10 per cent paid to the
Here the case, so far as this court is concerned, substantially ends, because it has been manifest from the beginning that the important subject of controversy in the cause was the title to the real estate, and to the rents of the same, or compensation for its use and occupation. The bill, however, prays an account and a decree in behalf of the complainant, not only for his share of the rents and profits of the real estate, but for the amount of the memorandum checks, and also the amount of the private account due by the firm to James Rice.
The claim of the complainant, so far as it is based upon these memorandum checks and the private account of James. Bice against the firm, would be barred at law; and equity, acting in analogy to the rules of law, does not favor old or stale demands. I cannot, therefore, decree according to the prayer of the complainant, in favor of the existing validity and binding obligation of either of these claims.
I must therefore order the bill to he dismissed, with costs.
Note.—The note appended to the case of Harvey v. Pennypacker, 4 Del. Ch. 489, by the editor of Gliancellor Bates’s decisions, is founded upon a misapprehension of the character of the proof in that case and in the present one, so far as the proofs tend to the establishment of a resulting trust. There was no material proof tending to establish a resulting trust to distinguish the one case from the other. There were a greater number of witnesses in the latter case than in the former; but the materiality of testimony does not depend upon the number of witnesses examined in a cause, but upon the character and relevancy of the facts to which they depose.