5 Fla. 478 | Fla. | 1854
delivered the opinion of the Court.
The bill filed on the 23d October, 1843, in the Superior Court of Jackson County, by the appellee, charges that on theNth September, 1838, the parties entered into a copartnership, under the style of White & Walker, for the purpose of merchandizing, at Marianna, Fla.; that by the articles, 'which were in writing, it was agreed that the busi*
On the 6th March, 1844, a general demurrer to the bill was'filed, which being overruled, on 30th March, 1844, by consent of parties, an order was made, giving respondent thirty days to file his answer, and appointing commissioners to take and state an account.
On 20th August, 1844, respondent filed his answer, admitting the copartnership, and the articles as set forth in the bill; that the capital stock of $2,757.25 each was paid in by the parties ; that large stocks of goods were purchased between the Fall oí 1838 and April, 1843, when the stock on hand was sold to F. R. Ely ; .that the business was conducted exclusively by respondent; that he did use the funds of the firm, to a limited amount, in the purchase of property, but accounted for the same, and charged himself with everything he procured from the concern. The answer denies all fraud, and states that in May, 1843, respondent was informed by complainant that he wished to sell his interest in the concern, with the view of leaving the country, and requested respondent to make him an offer; that respondent replied he could not say what would be an equitable price for his interest, but he would “ make out a full and complete statement of the assets and liabilities of the house, exhibit them to him, and if then complainant desired it, he (respondent) would make him an offer to take or give a stated sum ;” that complainant said that he was willing to tahe less than half, as he desired to quit the country ; that on 7th June, 1843, respondent submitted to complainant statements A. and B., (which ai*e appended to the answer,) requesting him to examine them, and offering him access to the books to aid him in his examination; respondent told complainant that he would rather sell than buy, and would fake í8,500 for .his interest; that respom
Abstracts of Exhibits A. and B.
Assets deemed good,..................,____ $19,652 53
Amount of complainant’s account,........... 1,769 11
Amount of respondent’s account,............ 1,329 35
$22,750 99
Deduct amount of debts owing,............. 2,765 66
To be divided between the parties,..........2)19,985 33
Each entitled to........................... $9,992 66J
Amount received by complainant,........... 9,009 00
$983 66|-
IJpon the coming in of the answer, the commissioners appointed having failed to report, the order appointing
On the 4th day of May, 1846, Master Nickels filed his report, with accompanying schedule, stating the profits of the concern, after paying all debts and losses, at $30,872$ 69. From this sum, however, the capital stock, $5,514.50. and the had debts, amounting to $4,080, (in order to show the nett profits, according to his calculation,) to be deducted. Deduct these two items, which together amount to $9,594 50, and there remains $21,278.19.
On the 25th day of May, 1846, the appellant filed his exceptions to the report, and the same having been argued, tbe case was again referred to George F. Baltzell, as Master in Chancery, upon six points* viz :
1st. To ascertain tbe value of tbe bills of the Union Bank* during the existence of the firm j
2d. To take further testimony as to the sale of Union Bank money to Benjamin Wynns ;
3d. To take farther testimony as to the amount of goods sold for notes of third persons ;
4th. To review the exchange and interest account;
5th. To take further testimony as to the sale of Unioii Bank money to Thomas M. Bush;
6th. To ascertain the solvency or insolvency of the per-; sons named in exhibit A. as being insolvent.
And on the 26th of January, 1848, Master Baltzell filed his report, which, however, was attended with no definite result, except ascertaining the value of Union Bank money* increasing the interest and exchange account in favor of the concern, and proving all the persons named in exhibit A. to be insolvent at the date of the settlement.
On the 10th of May, 1848, exceptions were filed to ther
On the 22d day of November, 1852, a final decree was rendered, in favor of the appellee, for the sum of $6,534.22, and costs, and thereupon the appellant apj)ealed, has brought his case up to this Court, and the question now to be determined is whether that decree is right or not. Tho cause has been argued with great zeal and ability upon both sides.
On the one hand, it is contended that the decree of the Circuit Court is wrong; that it ought to be reversed, the settlement sustained, the bill dismissed, and the costs taxed upon the fund : on the other, that the said decree is right and proper in all things, except that it ought to be increased by the amount of $2,757.25, the portion of the capital stock furnished to the concern by the complainant.
The first and most important question presented for our consideration, is whether the sale made by the complainant of his interest in the concern, to the respondent, on the 8th day of June, 1843, should or should not he sustained, and we are met at the very threshhold of this enquiry by the position that “ the order of tho 30th of May, 1844, for an account, established the fact that the appellant was an accounting party, and in establishing that fact, nullified the settlement.”
It may he well here to remark that the transaction be
Now in regard to the order of the 30th of May, 1844, it is very evident that the Court did not understand that it nullified this sale and purchase, or it would not (as it did,) in the same order have given to the respondent thirty days within which to file his answer. If this order established the fact that the respondent was an accounting party, all that remained to be done, was to ascertain the amount of Ms liability, and that was not the object of the appointment of Master Nickels. He was appointed for the express purpose of examining the books and papers of the concern, in order to ascertain whether the t respondent vías an accounting party or not. The respondent did not so understand the effect of the order, or he would not have.set np Ms purchase of the interest of the complainant in his answer, as a bar to the suit; and it surely could not have been so understood by the complainant, or his learned and able counsel would undoubtedly, on the coming in of tho answer, have excepted to it for that reason, and had that matter stricken out, as irrelevant and improper. It is, however, deemed a sufficient answer to the objection to say that this order, made, by consent, was, after the answer was
Having disposed of the foregoing propositions, we come now to the important question whether the sale by the corn-pi ainant of his interest in the concern to the respondent ought to be set aside or sustained. It is a general and most •material rule in all cases of accounts that where there has been a settlement, and the account has either been signed or ,a security executed at the foot of it, a Court of Equity will not open that transaction, unless the evidence produced (founded on the charges in the bill,) shows the transaction to be so iniquitous that it ought not to be brought forward at all to affect the party sought to be bound. 1 Hovenden on Frauds, 160; Chambers vs. Goldwin, 9 Ves., 266; Drew vs. Power, 1 Sch. & Lefr., 192; Farnham vs. Brooks, 9 Pick. Rep., 231. Some principles, however, (say the Court in the last case cited,) may be^extracted from the decisions which stand not contradicted by others, and therefore may be adopted as rules. One is that mere inadequacy in price, if the bargain is fair, is no ground for relief. Another that if the value of the thing sold depends upon a contingency, although great advantage may be gained, yet the contract shall be sustained. Another that old age or infirmity alone, without practice upon it, shall not avoid a .contract. Pex’haps (say the Court,) the whole doctrine may be summed up in this brief sentence taken from a case in Sch. & Lefr., 209: Concealment of a material fact, by the party whose duty it is to disclose it, is sufficient to set aside a contract. And in another book, (1 Simons’ Ch. Rep., 89,) it is said that a partner purchasing must give a full account of the state of the property ; axxdin3Swanst., 73, itis said fullinformation is required ; and in 14 Ves., 300, that although the purchaser may not be atoare of the duties of giving information^ céc., which the Gourt would require in the situ
The exhibit of a balance considerably larger than the sum offered for it, is of itself one pretty strong ground of enquiry, and an intimation of contingencies which may affect the bargain, and if the books and memoranda containing tbe elements from which the balance is composed, be offered for scrutiny, there seems to be no ground to impute fraud. If tbe party entering into tbe contract has tbe full means of knowledge committed to him by tbe other party, and does not choose or neglects to avail himself of them, it is his own fault if the bargain turns out to be unfavorable. He may bave too nrucb confidence in the party with whom ho deals to think it necessary to go into a particular
An agreement will not be avoided by reason that representations made by one party to the other, upon the subject of the agreement, are not correct, if it be manifest that the party making the representations is speaking not from personal knowledge, but with reference to accounts which were equally open to both parties, and if the representations be justified by those accounts. Harris vs. Kemble, 2 Eng. Cond. Ch. Rep., 57.
_ t "Wfe have been referred by complainant’s counsel to the base of Maddeford vs. Austwick and Austwick vs. Maddeford, 1 Simons’ Rep., 89, 2 Eng. Cond. Ch. Rep., 45, to show that where a partner who superintended exclusively the accounts of the concern, agreed-to purchase his co-partner’s share of the business, for a sum which he knew, from. accounts in his possession, but -which he oonoealed from his copartner, was an inadequate consideration, the agreement was set aside. But there are several circumstances which materially distinguished that case from the case at bar. One is that at'the time the agreement was made between the plaintiff and defendant, the defendant had in his possession a private loolc, which contained a statement of the accounts between the plaintiff and defendant, made out by the defendant, whereby it appeared that the one thousand pounds which the defendant agreed to pay to the plaintiff, in addition to the money which he had drawn from the concern, would have been nearly but not quite a fair consideration, if no profits'had been made from the concern of the mint; but taking the mint profits into the account, which the defendant was unquestionably bound to divide with the plaintiff, it would have been many hundred pounds fess than the plaintiff would be entitled to
Now if he committed so gross an error in an account covering less than half a sheet of foolscap paper, what errors may he not have committed in recasting the whole set of books of the firm of White & Walker, which did a large business, running through a period of four and a half years ? And ought such a report to be taken as conclusive, and as sufficient evidence to establish the grave charges made against the respondent in the complainant’s
It may be proper to remark that we have looked into this report merely as a matter of evidence, to ascertain the fact whether respondent was an accounting party or not — the sole object of this reference to this Master.,
In regard to the item in account T., charged as goods sold for promissory notes of individuals, &c., $2,500, the proof •is exceedingly vague and unsatisfactory. Indeed, there is no legal proof of any specific amount. The respondent, in his ‘examination before the master Nickels, in answer to •a question put to him on this subject, said — We were in the
The charge for profits on Union Bank money, seems to •have nothing to sustain it. The testimony shows that some of it was received at its face for goods sold, and bought at a. discount of fifty per cent.; that it was lent, to be paid in good money, and that it was paid, and that tbe amount received went to pay the debts of the concern, and Russ, their principal Clerk, who was intimately acquainted with all the business transactions of the House, says expressly in his testimony, taken before tbe Master, that all these speculations were for the benefit of the concern. There is consequently no reason or pretence for this charge.
The Master’s report affords no satisfactory explanation in regard to the item of $2731.75, found on the credit side of exhibit T. He states it thus : — u Sales made to cash which has been paid out to individuals, which I have found charged to them at sundry times in day book, but has not been entered in cash book; therefore merchandise ought to he credited.” By turning to exhibit R., we find that this item ■is made up of 53 monthly items, embracing doubtless di*
The objection to the explanation offered in the argument of counsel, viz: That it afforded an index of the amount of merchandise sold for cash, is equally unsatisfactory; for, non constat, that the- money so loaned to customers was collected from other sources than the daily sales, as for settlement of accounts previously contracted by other customers, or taken out of moneys already entered in the cash book, and which had passed into the general fund of the concern, and other monies, collected from various sources, and placed in the same fund, which is much more likely. Fraud, as before stated, is never to be presumed, but must be proved; but if facts may be assumed, and made to rise to the dignity of testimony, this sound, salutary and equitable rule of law may very easily be evaded. The question propounded to the respondent, to which his answer above referred to was given, is as follows, viz: íc I find many charges of cash entered on the day book which have never been entered on the cash book; how are they to be accounted for, and to what account are they to be placed ?” To which the answer was : “ I presume merchandise ought to be credited with the amounts.” Here, in the question put, is to be found again the same assumption. It is a mere general question ; the attention of the witness is not called to any particular item; but without any'particular item being brought to his notice, he is called upon to answer to
As to the sum of §4,080 for bad debts, it is deemed sufficient to say that this item is set up in the answer responsive tp the bill, that it was allowed by the Court below, and has not been objected to here, even by way of argument.
We insert here a statement showing the difference between the exhibit made by White to Walker at the time of the purchase of his interest in the partnership business, and the actual condition of the business, as shown by the Master’s report, after being corrected by this Court.
White’s exhibit, made to Walker at the time of sale, viz;
Good assets over aud above the debts due by the concern, and including the private accounts of the copartners,................. $19,985 83
Total assets due concern, over and above its liabilities,........ 24,065 33
Balance reported by Master, in account of profit and loss,......................... 80,872 67
By item in account designated as “ sales to cash paid out to individuals,”.............. 2,731 75
By item in account, “ Goods sold for promissory notes,”.............................. 2,500 00
By item in account, profit on Union Bant notes loaned to T. M. Bush,.................... 935 00
By item in account, profit on Union Bant notes loaned to Wynns,............ 660 00
$6,826 75
Total balance, as corrected by this Court,".... 24,045 92
Balance in favor of White’s exhibit,......... 19 41
To gross balance due partnership, as per above statement,.............................. $24,045 92
By amount allowed for bad debts by the Circuit Court,............................ 4,080 00
Nett balance, to be divided in equal moities,... 19,965 92
Nett balance due to each partner,........... 9,982 96
Amount of cash and selected notes received by Walter,................................ 9,009 00
Excess in favor of White, consisting of assets remaining after the selection by Walter of his portion,............................. $873 96
It is insisted by the complainant that the decree of the Circuit Court is erroneous in this: That it does not allow him for the cash which he contributed as capital stoct, with which the firm commenced business, and that this ought to be added to the amount decreed in his favor. This claim of the complainant we have maturely consid
Balance reported in account T.,............. $30,872 67
One moiety, or Walker’s half,... $15,436 33
Add for cash contributed to capital stock,................... 2,757 25 — $18,193 58
Balance to be received by White,........... 12,679 09
Thus it will be perceived, upon the hypothesis on which the complainant’s claim is based, of two copartners contributing equal portions of the cash capital, and to participate equally in the profits, one receives from the nett assets of the concern $18,193.58, while the other gets only $12,-679.09. To meet a result so obviously inequitable, it was insisted by the counsel for complainant that $2,757.25 was tó be viewed as coming not out of the nett assets of the concern, but as due by White, the acting partner, who had received it from Walker at the time of entering into the co-partnership, and that he' ought to be required to refund it out of his private funds. It is true, White did receive the amount, as Walker’s portion of the cash capital, but it is equally true that he disbursed it for the purchase of merchandise, which very merchandise is debited in account T.s
Amount of merchandise bought during four and a half years, the period of doing business, (in round numbers,)................ $44,000 00
Fifty per cent, advance on cost is........... 22,000 00
Deduct for bad debts...................... 4,000 00
Leaving good assets to be divided,........... $18,000 00
One moiety of good assets,................. 9,000 00
Which is in round numbers the amount the complainant received for his interest in the concern when he sold out to White — a result with which we think complainant has no cause to he dissatisfied, when we reflect that he embarked in the enterprise only the sum of $2,757.25, and in the brief period of four and a half years had returned to him, in cash and the selected assets of the concern, the amount of$9,009.00. A result so satisfactory, and achieved through the perilous periods of 1840, 1841 and 1842, is in our estimation the highest compliment which could be paid, not only to the business capacity, but to the honesty and integrity of the respondent. Let the decree of the Court below be reversed, and the cause be remanded to the Court below, with directions to dismiss the bill; and as to the costs, we deem it right and proper that under the circumstances •each party should pay one half the costs, and accordingly so "decree.
As a general m\c,prima facie, the prevailing party is entitled to costs, as well in equity as in law. 3 Daniels’ Ch. Pr., (by Perkins,) 1520, and notes. Yet costs do not always follo w tbe decree in favor of a party ; they are in the sound discretion of the Court, and are to be awarded or refused according to tlie justice of eacb particular case. Ibid, 1515, 1516, and note and case cited. In dones vs,
Therefore let one half the costs be taxed against each party, both in this Court and the¡ Court below. Per toiam Curiczm.