Town of Chatham v. Niles

36 Conn. 403 | Conn. | 1870

Carpenter, J.

The respondents claim that the only issue formed by the pleadings in this case is the existence or nonexistence of an account stated, and that the committee had no power to take an account until that issue should be determined against the respondents, or, if determined in their favor, until the account stated should be opened or set aside, upon a petition for that purpose alleging reasons.

The bill alleges that the respondents, as selectmen of the town, or as a committee, or in some other capacity, received a large amount of money belonging to the petitioners, for which they had not accounted, and prays for a disclosure, and that an account may be taken. The respondents in their answer respond to the interrogatories in the bill, allege that they rendered an account, which was accepted by the town, and close their answer by saying, “ that as to each and every allegation in said bill of complaint, not herein admitted to be true, they deny the same, and say they are untrue.” The replication traverses the answer, re-aiErms the allegations in •the bill, and sets out with some particularity the facts and reasons upon which they rely to show that the account rendered should not have a conclusive effect as against them.

The replication may perhaps be regarded as a traverse simply ; in which case the allegations relating to an account rendered must be considered as, in effect, only giving notice to the respondents of the grounds on which they claim that the account rendered is not, in contemplation of a court of equity, an account stated, or an account settled; or, it may be regarded, as the respondents' claim in another part of their brief, as a traverse joined with a confession and avoidance. Viewed in the latter light it is somewhat informal, and might not have stood the test of a special demurrer. But that is a question we have no occasion to discuss, as the respondents manifestly either waived the defect, if any, in. form, or considered the replication as a traverse merely. In either case we think the committee did right in proceeding to hear the whole cause. In one case the evidence offered by the petitioners tended to prove that the transactions between the parties did not, in legal contemplation, constitute an account stated; and in the other, assuming that there was an account stated, that the facts and circumstances surrounding it were of such a character that a court of equity ought to set it aside and take a new account.

It must be borne in mind that the respondents do not plead in bar an account stated, but set- it up, among other matters, by way of answer. Had they desired to present that single issue, and have it determined before taking an account, they could have framed the pleadings so as to have accomplished that result. But this they have not done. They have undertaken to answer, and have answered fully. All the matters in dispute between the parties were open to a hearing before the committee, as it is not according to our practice, in cases of this character, and upon this state of the pleadings, to select a single issue, even though it be a vital one, and determine the facts and the law in respect to that, before proceeding to hear other issues involved in the pleadings. Such a course would be attended with unnecessary delay and expense. If the pleadings put in issue the whole cause, we see no good reason why the parties should not be prepared to try the whole cause. If upon the trial it should clearly and unmistalceably appear that the parties had stated an account in such a manner as to be conclusive, the committee would be justified in declining to take the account. But if it should be clear that the statement of the account ought not to be binding, or if the trier is in doubt, we think he should, ordinarily, state the account and ascertain the balance. And then if the court can say, as matter of law, upon the facts reported, that the parties have stated an account which ought to stand, that part of the committee’s report which states an account should be rejected and^the bill dismissed. If, however, the account rendered does not amount to an account stated, then the account taken by the committee should stand, unless for other reasons it ought to be set aside or modified.

That brings us to consider what we regard as the main question in this case, namely, whether the transactions between these parties constituted a stated account. We are satisfied that this question should be answered in the negative. It is -not therefore a case in which the parties are before a court of equity for the purpose of opening an account stated, and we are not called upon to discuss the law pertaining to proceedings of that character.

The committee says in his report that “ he has not received the Goff and Buell writing, and the report made as above to the town meeting in 1865, and the action of the town following, as a conclusive settlement between the parties.” He then adds, “ The town acted without scrutiny, and without knowledge or information of particulars, on a general confidence in the respondents.” So far as the question was one of fact the committee has found it against the respondents. As a question of law, or as a mixed question of law and fact, we think the committee was justified in the result to which he came. *

The reasons which lead us to concur in that result will be briefly stated.

1. The reason stated by the committee, that the town acted on a general confidence in the respondents, and without knowledge or information of particulars, is a cogent one. A party possessing the confidence of another should be particular not to abuse that confidence. Hence the utmost candor and good faith should characterize all his dealings with him. Especially is this so in respect to towns and other corporations that are obliged to transact all their business through agents. The respondents knowing the confidence thus reposed in them, framed their report so as to withhold from the town a knowledge or information of particulars. That indicates a disposition to abuse that confidence. It .tends strongly to prove undue advantage. Perhaps a jury might be justified in finding fraud from that circumstance alone. Still, we would not wish to be understood as saying that we regard it as sufiScient evidence of fraud to require the opening of an account stated^ which, is otherwise unobjectionable; but, taken in connection with the other circumstances in this case, it is entitled to great weight in determining the question whether the parties have intentionally and understanding^ settled their accounts.

2. The alleged settlement was not with any authorized agent of the town. The account was not presented to the successors of the respondents, nor to auditors, nor to a committee ; but to a town meeting, which was not warned for that purpose, and with no notice, so far as appears, that such an account was to be acted upon. It is true it was at the annual-town meeting at which the selectmen’s ordinary report for the year preceding was usually presented and acted upon; but this report was special, covering transactions most of which occurred in previous years, and related to extraordinary matters. The events of years were brought together in a general and indefinite account, and acted upon at the meeting without scrutiny, without books or other original entries, and without vouchers.

3. The account rendered is suspicious on its face. There is a want of frankness—a manifest indisposition to render a full, complete'and intelligible account. It pertained to a large amount of money, raised and expended by the town -in an extraordinary emergency. Instead of giving the items in detail, with names, dates and other indicia by which the fairness and accuracy of the account could be tested, it gives the aggregate sums expended, the number of men furnished, and the average cost of each man. In this respect the account, so far as it relates to the call of December, 1864, is worthy of particular notice. The town voted to authorize the payment of such a sum as might be necessary, not exceeding $300 per man, and ten dollars each for recruiting. The respondents charged the full sum, $310 per man, without showing how much was actually expended, nor how much it was necessary to pay in order to secure the men. In this way the account could easily embrace and conceal a large profit to the respondents. Whether such was the design or not is immaterial; it is enough that the town did not obtain what it was entitled to, a complete statement of the expenditures in detail.

4. The account, such as it was, was withdrawn by the respondents, and ever after kept in their possession. It. was not kept on file, as is usual with such documents, nor was it entered upon the records or treasurer’s books, so that nothing in the archives of the town furnished any intormation as'to the expenditure of this large amount of money; but the whole matter rested in the recollection of those—and it may have been a very small part of the town—who happened to be present and heard the report read.

The impropriety of this proceeding is more apparent, when we remember that this money was not expended in the ordinary way, by orders drawn by the selectmen on the treasurer, and entered on the books of the selectmen and treasurer, but was taken by the respondents and expended in a manner known only to themselves. Had they designed to foreclose the town by something in the nature of a snap judgment, and conceal their doings and keep the town in ignorance of their proceedings, they could hardly have devised a more ingenious plan.

5. It does not appear that the town acquiesced in the alleged settlement. The terms of it were not known to the inhabitants of the town who were not present at the meeting, except by hearsay and rumor; and those present had no knowledge, except such as they could retain in their memories. Less than three years had elapsed when this suit was commenced. How early in that period a claim was made upon the respondents by the authorities of the town, does not appear; but judging from what ordinarily transpires in cases of this character, we may presume that the controversy, previous to the commencement of the suit, must have occupied some considerable time. It does not appear that the respondents have changed their relations to the town or others, or in any respect placed themselves in a worse condition in consequence of the action of the town.

In concluding this part of the case, by way of summary, we say:—that to a limited extent the relations between these parties was of a confidential nature; the report was presented to the town at an unexpected time, without previous notice, and with no opportunity for the town or its agents to examine it with that degree of care and scrutiny which its importance demanded ; it was not a full and complete account, but was merely an abstract showing results of the various transactions, deficient in many essential particulars, and wholly unaccompanied with vouchers; the report was withheld from the officers of the town, so that no opportunity was given for a thorough examination, and acquiescence in the pretended settlement for an unreasonable length of time, which is an important element in some of the cases, is wholly wanting in the present case. For these reasons this ought not to be deemed a stated account.

Other questions, of minor importance, are presented by the remonstrance, and the finding of the court thereon, but as they do not seem to have been specially insisted on in the argument, we deem it unnecessary to refer to them in detail.

The view we have taken of this case leads us to construe the report of the committee as finding the main issue, viz:—■ whether there was an account stated—in favor of the petitioners. That being so, we entertain no doubt that the course taken by the committee in proceeding to state the account between the parties was correct. The report therefore ought not to be set aside. The only remaining question is, whether it ought to be accepted as it stands, or an opportunity given the respondents for a further hearing.

It seems that the respondents offered no evidence touching the account itself except that contained in their answer; and that was so general and indefinite as to give the committee little information as to the items of the account. The petitioners, from the nature of the case, could throw little light on the subject. Under these circumstances it is not surprising that the committee should feel that the respondents ought to have given him more light on the subject of the disposal of the money received by them, and to regret the necessity of stating an account with such insufficient and unsatisfactory data. As it was, it is quite possible that injustice has been done. If so, it may, perhaps, be fairly attributed to the respondents’ own folly, and we might with propriety advise the acceptance of the report as it is. Nevertheless, the case is an unusual one, and somewhat novel in some of its features; and it is obvious enough, we think, that the course taken by the respondents in refusing to offer further evidence, was the result of a misconception of their legal rights. Indeed it was stated in the argument that they acted in this respect upon the advice of eminent counsel.

Considering all the circumstances, we do not deem it inequitable to advise the Superior Court to accept the report of the committee and establish it, except as to the amount of the account: and as to that, to give the respondents an opportunity to render a just and true account, and to show, if they can, that a smaller balance ought to have been found against them. In doing so, the question may again arise, whether the respondents, Niles and Strong, in recruiting men for the call of December, 1864, were to be regarded as acting in their private capacity, or as agents of the town. Upon the facts stated in the report of the committee, we are of the opinion that they ought to be considered as having acted solely in their capacity as selectmen or agents, and that they should be allowed such expenditures only as they might lawfully make in such capacity, without profits or commissions to themselves, directly or indirectly, except such, if any, as were contemplated by the votes of the town.

In this opinion the other judges concurred.