Case ID: ohio-st_25/html/0180-01.html
Source: Caselaw Access Project
Author: {"author": "Gilmore, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Julius Reis v. Max Hellman.
    1. Where a partnership intrusts money to a member of the firm to be used in the partnership business, and such member, without the knowledge or consent of his co-partners, forms a new partnership relation with another person, to engage in like business, and pays over the money to the new firm, whereby it is lost, he thereby becomes liable to account to the members of the old firm, as for money converted to his-own use.
    2. Where a written instrument, not the foundation of the action, is offered. in evidence by a person not a party to the instrument, as an admission of the adverse party, touching a matter in issue, the fact that it is not stamped, as required by the act of Congress, is no ground of objection-to its admission.
    Error to the Superior Court of Cincinnati.
    In 1868, Max Hellman and Julius Reis & Bro., of Cincinnati, entered into a partnership to speculate in cotton at Memphis, Tennessee. The brother, Samuel Reis, was passive in the transactions, and is not a party here, and will not' be particularly noticed in the case.
    Hellman was to furnish the bulk of the capital, and Reis was to go to Memphis, and purchase cotton and ship it to Cincinnati, to be sold by Hellman. The profits and losses-were to be equally divided.
    Hellman put in $6,000 and Reis $4,000, cash. Reis went to Memphis, but finding that he could not purchase cotton there on favorable terms, and that it might probably be so-obtained in the interior of Arkansas, he entered into a written agreement of partnership with Aaron Hirsch, wha> ■claimed-to be an Arkansas cotton-dealer, by which Heilman and Reis Bros, were to put in $10,000, and Aaron Hirsch $5,000, and the profits and losses to be equally divided between the four persons.
    This new partnership relation was made without the •knowledge or consent of Heilman.
    In pursuance of his agreement, Julius Reis gave Hirsch the $10,000 that he had taken to Memphis, and the latter started over into Arkansas, but sent back word the same day that he had been robbed by the rebels, and that the money was lost. He. never returned. Reis came back to Cincinnati in three or four weeks after Hirsch left, and paid •back to Heilman $1,000.
    Heilman brought his action below against Julius Reis to ■recover the remaining $5,000, which had been lost through Hirsch.
    The case was tried to a jury, and a verdict found for Hellman. A motion for a new trial was made by Reis, which was overruled, and judgment entered on the verdict.
    A bill of exceptions was allowed, setting out all the testimony, and the rulings of the court on the points excepted to.
    J ulius Reis, the plaintiff in error, asks a reversal of the judgment on the following grounds, which are assigned for error:
    1. That the court admitted improper evidence on the trial of the cause.
    2. That the verdict is against the evidence.
    8. That the verdict ought to have been for the defendant below.
    4. That the court erred in rendering judgment on the verdict.
    5. That the court erred in overruling the motion for a new trial.
    J. § V. Abraham, and JELoadly $■ Johnson, for plaintiff in error :
    The admission of the alleged contract of copartnership, it not having been stamped, as evidence, was erroneous. Harper v. Clark, 17 Ohio St. 190 ; Davy v. Morgan, 56 Barb. 218 ; Plessinger v. Depuy, 25 Ind., 419; Howe v. Carpenter, 53 Barb. 382.
    As to whether the United States statute of 1866, ch. 184, sec. 9, is inoperative as to state courts, see The Chartiers and Bobinson Township Turnpike Co. v. McNamara, 22 Penn. St. 278; Davy v. Morgan, 56 Barb. 218; 2 Am. L. R. 139) 5 Wall. 462; 30 Iowa, 526.
    
      Jacob Wolf, and Caldwell, Coppock ^ Caldwell, for defendant in error:
    Hellman is not responsible for the violation of the revenue laws by Reis. The law imposed no duty on Heilman to stamp the paper made and signed by Reis. Harper v. Clark, 17 Ohio St. 190. It was invalid from the beginnings It is not the basis of our action; we claim nothing under it. Unstamped instruments, introduced only as collateral to the main fact at issue, are admissible. 2 Phillips Ev., 3d ed. 397, top paging; 3 Parsons on Con. 295; Matherson v. Ross, 2 House of L. 286; Moore v. Moore, 47 N. Y. 468 ; 43 N. Y. 40. And not invalid or incompetent as evidence, there being no intent to defraud the government by the omission of a stamp. Schemmerhorn v. Burgess, 55 Barb. 422; 38 How. Pr. 123; Crocker v. Foley, 13 Allen, 380.
    The provisions of the United States statute of 1866, ch. 184, sec. 9, that no instrument not duly stamped, as required by law, shall be admitted or used in evidence in any court until a legal stamp shall have been affixed thereto, applies only to the courts of the United States. Green v. Holway, 141 Mass. 243; Griffin v. Ranney, 35 Conn. 239 ; Craig v. Dimmock, 47 Ill. 308; Bunker v. Green, 48 Ill. 243; United States Express Co. v. Haines, Ib., 248; Carpenter v. Snelling, 97 Mass. 452; Moore v. Quick, 105 Mass. 49.
    The principle of construction upon which the amendments of the constitution of the United States, securing fundamental rights in the mode of judicial proceedings, have been held to apply in such proceedings in the courts of the United States only, and not to those in the courts of the several states. Twitchell v. Commonwealth, 7 Wallace, 321, and cases cited: Livingstone v. Moore, 7 Pet. 482, 551; Commonwealth v. Hetchings, 5 Gray, 482, Latham v. Smith, 45 Ill. 29 ; Hunter v. Cobb, 1 Bush, 239 ; Barron v. City of Baltimore, 7 Pet. 243.
    Can Congress declare what instrument shall be or shall not be evidence in the state courts in a cause therein pending, growing entirely out of a domestic transaction, and which the laws of the state declare shall be evidence ?
    We do not think it requires any argument to pi’ove that Congress, under the constitution, has no such power, and under the pretense of levying taxes, can not so direct that power as to enter our state courts and take from them the powers with which the state laws have vested them.
    In the conduct of partners toward each other, the most scrupulous fidelity must be observed. Reis must be considered, by reason of the partnership, as the accredited agent of his copartners, and as such had no right to invest the partnership money in a new (and different) partnership. Smith’s Mercantile Law, 148 (n. b.); Warner v. Martin, 11 How., S. C. 224; 12 Mass. 241; 4 Ib. 597; 4 Camp. 183; 2 M. & Selw. 298, 301; 6 Taunt. 146; 12 Pick. 328; 1 Pars. Contracts, 69-72; 1 B. & Ad. 415; 10 Ad. & Ell. 27; 5 M. & W. 645; 4 Wash. C. C. 315; 1 Cow. 645; 6 Cranch, 415 ; 1 Wash. C. C. 454; 3 Johns. Cases, 36; 3 Wash. C. C. 151.
   Gilmore, J.

The parties to this action resided at Cincinnati, and had been partners in a cotton speculation in 1863. In the court below it was claimed by Heilman that Reis had violated the partnership agreement, by entering into a new partnership relation, without his knowledge or consent, with Aaron Hirsch, at Memphis, Tennessee, to trade in cotton, to whom he intrusted the partnership funds, and who absconded, and thereby the funds were lost. To recover back his share of the funds thus lost, Heilman brought this action against Reis.

The defenses were: 1. A general denial; 2. That Heilman, with a full knowledge of all the facts relating to the transaction with Hirsch, had ratified the same, and received from Reis one thousand dollars in full satisfaction and settlement of all matters relating to the affairs of the partnership.

On the trial of the case to a jury, Heilman was sworn •and examined as a witness, and while on the stand was •shown the paper quoted below, and asked if he knew the signatures to it. He answered that, “ The signatures, as well as the body of the instrument, were in the handwriting of Julius Reis, with the exception of the signature of A. Hirsch, and that Julius Reis gave him the paper, stating :at the same time, that it was the paper he received from Hirsch, at the time he paid over the ten thousand dollars.” The paper reads as follows :

“ Memphis, Tenn., November 7, 1868.
This is to certify, that we, the undersigned, have this day made the following agreement: Aaron Hirsch on the first part, and Heilman, Reis & 33ro. on the second part; both parties have this day entered into a copartnership to purchase cotton, for which purpose Heilman and Reis Bros, have to invest ten thousand dollars, and Aaron Hirsch five thousand dollars, the profits of the above to be divided in four equal parts, to wit: Aaron Hirsch, M. Heilman, Julius Reis, and Samuel Reis.
“ Hellman & Reis Bros, [seal.]
“ A. Hirsch.” [seal.]

The plaintiff then offered the paper in evidence. The •defendant objected to its admission, on the ground that it was not stamped as required by the laws of Congress in force at its date. The objection was overruled and the paper admitted, to which Reis excepted. The ruling of the court, in admitting the paper in evidence, is assigned for error, and is the point to which the argument of counsel on both sides is principally directed.

This paper is not the foundation of the action on the trial of which it was offered in evidence. The testimony shows that it had been voluntarily handed to Heilman by Reis, as an explanation, to the extent that it went, of the circumstances under which he had transferred the partnership funds to Hirsch.

Heilman was, in no respect whatever, bound or affected by the instrument in any legal or equitable aspect. In his hands, it was simply a written admission by Reis, of the facts that it contained. These facts were pertinent to the issue, and therefore properly allowed to go to the jury as the admissions of Reis. If he had made a verbal statement of the same facts contained in the writing, to the plaintiff below, or a third person, such statements could have been proved by the person to whom they were made as his admissions. Eor the same, if not more satisfactory reasons, they wmre his admissions when he had reduced the facts stated to writing, and delivered the statement to Heilman. In this view of the ease, none of the authorities cited are in point.

Exceptions were also saved to the introduction of a letter from Reis to Heilman, dated July 8, 1867. It seems to have been irrelevant. But we can not see how it could possibly have prejudiced Reis. Heilman’s reply, of July 5, 1867, was also admitted. The plaintiff in error argues as though exceptions had been saved to its admission, which the record does not show to be the fact.

The other errors assigned are all embraced in the fifth assignment, viz : “ That the court erred in overruling the motion for a new trial.”

We have carefully read the evidence and charge of the court, as set out in the record. The testimony material to the issues was conflicting. The corroborating evidence for the parties respectively, is hot material, and threw but little, if any light on the real issues in the case. The charge of the court was fair, stating the issues in such a way that they must have been understood, and leaving the jury to apply the testimony and find in accordance with it. The jury seems to have found that Reis formed the new relation with Hirsch, at Memphis, without the knowledge of Hellman, and intrusted the partnership funds to Hirsch, who ran .away with them. If so, it amounted in law to a conversion to his own use, of the funds thus intrusted to Hirsch. They must also have found that Heilman never ratified the acts of Reis in this respect. We can not say that the verdict on these issues is manifestly against the weight of evidence, or that the verdict for Heilman should have been set aside.

We find no error either in admitting the evidence objected to, or in overruling the mo.tion for a new trial.

Judgment affirmed.

MoIlvaine, C.J., Welch, White, and Res., JJ., concurred.