Taylor v. Peterson

1 Idaho 513 | Idaho | 1873

Lead Opinion

Hollister, J.,

delivered tbe opinion,

"Whitson, J"., concurring specially. No ogle, C. J., dissented.

This was a complaint filed in equity by tbe respondent against tbe appellant in tbe district court of Boise county, in wbicb it was alleged that be and tbe appellant formed a copartnership on tbe twenty-fiftb day of June, 1867, for tbe purpose of manufacturing and selling lumber at Idaho city, under tbe firm name of Taylor & Peterson, and that from thence until tbe twenty-second day of March, 1869, they conducted their business, when tbe active operations of tbe partnership ceased. By tbe terms of tbe partnership agreement each partner was to contribute equally to tbe partnership stock and property, and tbe two were to share in equal moieties tbe profits, and to bear equally any losses in their partnership business. Tbe stock and property contributed by both partners consisted of certain real estate and a steam sawmill with its fixtures, etc., together with some logs and lumber then on band.

Tbe complaint alleges that after a certain period (before wbicb tbe firm bad in its employ a clerk who kept the books of account) the appellant undertook and agreed to keep tbe books of tbe firm, and to keep and render full, fair, and true accounts of its transactions and of all moneys received and paid out on tbe firm account, and that be did thereafter keep tbe books of tbe firm, and during tbe existence of tbe partnership, and since, received in charge and custody tbe moneys belonging to said firm. Tbe complaint further alleges that tbe appellant did not keep correct, full, or true accounts of tbe moneys and business transactions of tbe partnership, but, on the contrary, and with intent to defraud the respondent, had kept imperfect, false, and fraudulent accounts thereof, and had converted the partnership moneys and assets to his own private use, by means whereof the respondent had been defrauded of his just rights. The complaint calls for an accounting, and prays for such other and further relief as may be necessary and just. An answer was put in denying the material allegations of the complaint, to which there was a replication, on which the issues were formed, for trial. On the third day of July, 1872, it being the third judicial day of the term, the court ordered that the case be referred to Jonas W. Brown, Esq., to take the proofs, and that the hearing of the cause should be had upon such day of the term as the court should appoint, On the twenty-second day of July the report of Mr. Brown was received, containing the proofs, and also his findings of fact and of the law arising therefrom. The appellant objected to the receiving and considering the report on various grounds, and particularly on the ground that under the order referring the case to the referee he had no authority to find the facts nor his conclusions of law.

On the twenty-seventh of July the cause came on to be heard upon the objections, and the court, after considering the same, found that the entry of the order of reference made on the third day of July was defective in not stating that the referee was appointed to report the conclusions of law as well as the facts in the cause, and ordered that said entry be amended nunc fro tunc, so as to show that he was appointed to report the conclusions of law as well as of facts found in said cause, and that the objections taken thereto be overruled. To this order the appellant took his exceptions in due form.

On the same day the cause came on to be heard upon the exceptions taken by the appellant to the report, and after argument, the court took the same under advisement until the third day of August, the same being the eleventh day of the term, on which day the court overruled the exceptions and ordered that a decree should be entered for the recovery by the respondent of the appellant of the sum of five thousand nine hundred and nineteen dollars and ninety-five cents, and costs of suit taxed at four hundred and three dollars and ninety-five cents.

Thereupon the appellant entered his motion for a new trial upon the following grounds, viz.:

1. Error in law occurring at the trial and excepted to by him, as follows: Error in law in overruling the objections to the report of the referee. Error in law in overruling the exceptions to said report.

2.. For errors in law apparent upon the face of the papers, record, and proceedings in the suit.

3. Insufficiency of the evidence to justify the findings of the referee or the judgment.

It is undoubtedly the law that the only order under which a referee can act is the one duly made and entered of record before he enters upon his duties. To this he must look for his authority, and he can not go beyond it and take upon himself any duty with which it has not charged him. Should he do so, his acts are of no more binding force in law than are those of a private individual, and all parties who are sought to be bound by them may regard them as of no validity. Nor can such acts be made valid by any subsequent order of a court made against the objections of a party after the referee has completed his work. In this case, the report was in and the facts and conclusions of law were found by the referee before the original order under which he acted was amended. In amending the order, therefore, under such circumstances, we think the court erred, but we do not deem it such an error as to require us to send the case back for correction in the court below.

On an inspection of the decree it will be seen that the judgment of the court was founded upon the proof reported; and though it is apparent the court took into consideration the findings of the referee, yet it does not seem clear that they were considered in any other light than merely as advisory. '

We are not disposed to consider the objections to the report as well founded. It is not pretended that it was erroneous in every respect. Certainly the erroneous findings did not render it so, nor did any error in receiving and reporting improper testimony render tbe unobjectionable portions bad. Tbe objections went to tbe entire report, and some portions being good, tbe court could not, without doing injustice, throw them out simply because other portions were objectionable.

As tbe appellant took no exceptions to tbe action of the court in overruling bis exceptions to tbe report of tbe referee, be is not in a condition to urge bis objections thereto in this court. His failure to do so must be considered as a waiver of bis objections and an acquiescence in tbe ruling of tbe court. Tbe appellant is in tbe same condition as to tbe order of tbe court in overruling bis motion for a new trial. Exceptions must be taken to an order overruling a motion for a new trial and preserved in tbe record, if a party wish to avail himself of tbe error in tbe appellate court. (Scott v. Cook, 1 Or. 24; Boyle v. Levings, 28 Ill. 314.)

In this case, tbe appellant failed to do so, and bis failure precludes him from urging bis objections here. Nor can be for tbe same reason object to tbe decree of tbe court on tbe ground of tbe insufficiency of tbe findings of tbe referee, or of tbe evidence, to justify tbe judgment. This court will not look into a statement with a view to determine therefrom whether such evidence will support tbe findings or tbe judgment unless a party has placed himself in a position to object to tbe order of tbe court, overruling a motion for a new trial, by proper exceptions, any further than it will where no appeal has been taken from such order. In tbe absence of any exceptions thereto, we must treat tbe question as though no appeal bad been taken from such order, •and in such a case, tbe statement serves no purpose but to point out such errors as may have intervened during tbe progress of tbe trial.

As no specific objection was made to tbe decree on tbe ground that it could not be supported by tbe pleadings, we are left to determine tbe question, unaided by tbe views of counsel. As nothing but tbe general statement, that a new trial should be awarded because of tbe errors of law apparent upon tbe face of tbe papers, record, and proceedings in tbe suit, bas been made on tbis point, and ibis only in connection witb tbe ruling of tbe court on tbe motion for a new trial, we might dispose of it in tbe same manner as we bave tbe latter. Tbe proper practice is for tbe party urging sucb objection to íqove in arrest of judgment after tbe motion for a new trial bas been disposed of. Sucb a motion is tbe only legitimate one that can be made, where a party bas not made a case in bis pleadings that will support a judgment in bis favor. In tbis way tbe attention of tbe court is called to tbe defective pleadings, and opportunity given to determine their sufficiency.

We think tbe appellant should bave entered sucb motion, and bad tbe ruling of tbe court upon it, so that such ruling could be brought here for review. However tbis may be, we bold that in tbis case, the respondent laid a sufficient foundation in bis complaint for tbe judgment that was rendered in bis favor, for be asked for an accounting and for general relief.

It was shown by tbe proofs that tbe appellant bad drawn out a large amount of the profits of tbe partnership business in excess of bis share — for bis private use, that tbe firm owed little less than one hundred dollars — that tbe active operations of tbe firm bad ceased, and that for all practical purposes witb tbe exception of tbe above outstanding debts and some uncollectible accounts due the firm, tbe partnership was dissolved, and that there should be a final winding up of its affairs, and an adjustment of tbe unsettled matters between tbe parties. In such a condition of things it does not seem equitable that one of tbe partners should be permitted to bave tbe control of tbe assets for tbe purpose of winding up tbe business, when its effect would be injurious to tbe interests of the other, and without benefit to tbe partnership interests. Tbis showing of facts came properly in to tbe support of tbe prayer for an accounting and for general relief, and justified tbe court in its final action. We think tbe form of tbe complaint, and its sufficiency, well enough for tbe purpose.

In tbe case of Miller v. Lord, 11 Pick. 10, it was held by tbe supreme court of Massachusetts, on a bill filed by one partner against another, to compel him to account, that it is sufficient to pray in substance that he may be held to account — that such a prayer includes something more than barely to state an account; and that a party bound to account is bound thereby to pay any balance that may be found due. This we ^consider sound doctrine and applicable to the case at bar.

In making up the decree, the court allowed the respondent interest on the sum found due from October 21, 1870, to the date of the report, amounting to eight hundred and eighty-one dollars and seventy-nine cents. This we think was erroneous. There was no agreement between the partners that interest should be charged upon such share of the profits as each should draw out for his private use. In the absence of such an agreement, and of any accounting between the partners, interest does not run as a general rule. This error can be corrected here, however, by such a modification of the judgment as will exclude such interest, and this being so, the cause will not be remanded.

It is therefore adjudged that the judgment of the court below be reversed, and that respondent have judgment here for the sum of five thousand and thirty-eight dollars and sixteen cents, together with interest thereon at ten per cent, from the date of the entry of the judgment below. It is further adjudged that the order of the court below overruling the motion for a new trial, be affirmed, and that the respondent pay the costs of the proceedings in this court.

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Concurrence Opinion

Whitson, J.

While I concur in most of the views expressed by Justice Hollister in the foregoing opinion, I feel it my duty to dissent from the opinion on some of the questions involved.

The order entered by the court below, nunc pro tunc, was, in my opinion, just such an order as was warranted by the facts in the case. It is a well-established principle, that a court has complete control of its records in a cause until a final determination thereof, and that the court has full and complete power to make the record conform to the facts during the progress of the trial or proceedings. The record is no part of tbe action of tbe court, but only tbe evidence of sucb action, and wben parties to a suit understand wbat tbe action of tbe court is, and are controlled by it, it is then too late to object that tbe record fails to show tbat a certain fact existed, wben they do not deny its existence, but, on tbe other band, acted in accordance with tbe direction of tbe court, before discovering tbat tbe evidence of sucb direction was wanting.

In this case it is not contended tbat tbe record of tbe order nunc pro tunc falsifies tbe facts, but tbat, as tbe record did not show the authority of tbe referee to find the facts and conclusions of law, but simply to take the proofs, he bad no right to go farther than tbe record warranted. Tbe record shows tbat tbe defendant recognized tbe right of tbe referee, to make findings of fact and conclusions of law from the proofs; for, by bis attorneys, be appeared before tbe referee and argued tbe case without ever raising any objection to tbe authority of tbe referee to find tbe facts and law from tbe proofs, and it was only wben tbe referee bad reported against him tbat be objected. If, however, tbe referee transcended his authority by going too far, did not tbe defendant, by appearing before tbe referee and arguing tbe case, thereby consent to tbe referee deducing tbe facts and law from tbe proofs ? It is not a jurisdictional question for tbe court, aside from doing wbat it in fact did do, bad an undoubted right to do.

Tbe defendant did not, and did not in the court below, claim tbat be was taken by surprise, or tbat tbe referee, in point of fact, was not, by order of tbe court, authorized to do just wbat be did. After the defendant had proceeded in tbe case, as though tbe record showed tbe authority of the referee to do all be did do, did not tbe defendant by tbat action cure tbe record, even without any order of court nunc pro tunc ? I think be did, and tbat sucb assent was as binding on him as if be bad agreed, in writing, to tbe reference under section 182 of tbe civil practice act. Did not the defendant, by bis objection to tbe report, attempt, not only to vitiate wbat be himself had consented to and helped to bring about, but also to annul an order of court. which in fact, and which he did not deny, had been made, but which by a mere inadvertence had not been entered by the clerk. It seems to me that the defendant was doubly bound by the report, so far as the authority of the referee went, to» do that which was objected to.

Another point upon which I feel impelled to differ from the opinion, is the question of interest. The defendant in this case was the book-keeper of the firm as well as a partner of the plaintiff, and as such was intrusted with the receiving and disbursing of all the moneys of the firm. The account between plaintiff and defendant was not an open, mutual, and current account, where each was presumed to keep his own account, and one in which it was necessary for the parties to come together- and have a full and complete settlement, in order to determine the balance between them. The amount due the plaintiff depended entirely upon the books kept by the defendant, and he knew, or must be presumed to have known, when the active operations of the firm ceased, what amount was due his partner; and it being his duty to pay over such an amount as was due, he ought, I think, to be made toypay interest thereon.

It appears that there was a large amount due the respondent, at the time when the active operations of the firm ceased, and this too, from the books kept by the appellant, which must be regarded as his own admission of that fact. What settlement then was necessary? The defendant admitted in writing that there was a large amount due the plaintiff, and although he denied in the suit that any amount was due, the court found that his own books admitted it, and gave a decree accordingly.

This case is not similar to one in which there are transactions between two persons not united in business, and each of whom is presumed to keep an account of the transactions, and in which it would be necessary to compare books and accounts with one another, but a case in which it is conceded that one individual member of the firm was intrusted with keeping all the accounts and money, and who could know at any time the state of the business and the amount due each partner.

The money received by the defendant was not a loan from the plaintiff, as in ordinary transactions between individuals, but simply money received by him in a fiduciary capacity, and a failure on his part to pay the plaintiff his share was a conversion of the plaintiff’s money to his, the defendant’s, own use. I have yet to find a single case in which the wrongful conversion of money or property has not subjected the wrong-doer to pay for his wrongful act. The case of Reid v. Rensselaer Glass Factory, 3 Cow. 436, bears upon this case.

There is still another point upon which I can not agree with my learned associate, and that is, as to the reversal of the judgment below. I do not think that because the court below gave too large an amount, the judgment should be reversed.

Section 293 of the civil practice act provides that “upon an appeal from a final judgment or order, the appellate court may reverse, affirm, or modify the judgment or order appealed from.” If the judgment of the court below was too large to the amount of the interest which the court allowed, then it is certainly a proper ease for modification, and the judgment should not be reversed, but modified.