Case Name: Beeson's Adm'r v. Stephenson
Court: Supreme Court of Appeals of Virginia
Jurisdiction: Virginia
Decision Date: 1836-01
Citations: 7 Leigh 107
Docket Number: 
Parties: *Beeson’s Adm’r v. Stephenson.
Judges: (Absent Cabell, J. )
Reporter: Virginia Reports
Volume: 34
Pages: 580–583

Head Matter:
*Beeson’s Adm’r v. Stephenson.
January, 1836,
Richmond.
(Absent Cabell, J. )
Indemnity — Competency and Effect of Evidence as against Party Bound to Indemnify — Case at Bar.— Debt on bond, with condition, that defendant should pay plaintiff $195, in case plaintiff should be made liable as partner of D. S. and two others, for that or any less sum more than his iust proportion, and in case D. S. should be found indebted to the partnership to that or any less amount, after full settlement of the partnership accounts, and application of all effects of the partnership to payment of demands against itr breach assigned, that plaintiff had been made liable,for a greater sum more than his Just proportion, and D. S. had been found indebted to the partnership in a greater sum, as would appear by the decree in a suit in chancery for the settlement of the partnership transactions; issue on the plea of covenants performed: Held, 1. the record of the suit in chancery, to which all the partners or their representatives were parties, declaring that the plaintiff had paid 499 dollars more than his proportion, was competent evidence for plaintiff, though defendant was not a party to the suit; 2. it was not competent to defendant to prove by parol evidence, that the decree in the suit, which ap peared by the record to be a decree of the court. was entered without any order of the court, by agreement of the counsel of the parties; or 3, to prove by the commissioner, to whom the partnership accounts were referred in that suit, and who stated and reported the accounts, that the accounts were stated under the direction of the parties there, not upon evidence laid before him; or 4. to shew mistakes in the report, either by the report itself, or other evidence.
Debt on a bond with collateral condition, brought by Stephenson against Beeson’s administrator, in the circuit court of Wood. The declaration, after alleging the execution of the bond by Jacob Beeson, the defendant’s intestate, to John Stephenson, the plaintiff, set out the condition thereof, which was, in substance, that whereas the said Stephenson heir at law of David Stephenson deceased, had released and conveyed all his right and title *in two lots in Parkersburg, which descended to him from his said ancestor, to Jane Stephenson the ancestor’s widow,— Beeson in consideration thereof, agreed and bound himself to pay the said Stephenson 19S dollars, or any less sum, in case the plaintiff should be made liable to pay that or any less sum, as partner of David Stephenson deceased, Moses, Pilcher and John Stephenson junior, after a full settlement of the partnership accounts should be made, and after all the partnership effects should be applied to the extinguishment of all demands against the house, and in case that or a less sum should be found due by David Stephenson deceased to the partnership ; but Beeson should only be bound to make good the deficiency which should appear against David Stephenson the deceased partner; and if no such deficiency should appear against him, the obligation should be void. And then the declaration assigned the breach, that, in fact, after a settlement of the partnership accounts, and after all the partnership effects had been applied to the extinguishment of the demands against the house, the plaintiff had been made liable for a much larger sum than 195 dollars, more than his just proportion of the partnership debts, and also a much larger sum than 195 dollars was found due from the deceased partner David Stephenson to the partnership, as would appear by a decree of the county court of Wood in a suit there depending for the settlement of the partnership transactions, wherein John Stephenson junior was plaintiff, and John Stephenson (the plaintiff here) and others were defendants; and Beeson in his lifetime well knowing the premises, and the defendant his administrator since his death, did not keep his said covenant, though often thereto requested, but broke and altogether refused to perform the same &c.
The defendant pleaded covenants performed, on which an issue was made up; at the trial of which, the defendant filed three bills of exceptions to opinions of the court.
*1. The plaintiff offered in evidence, the record of the proceedings and decree in a suit in chancery in the county court, upon a bill of John Stephenson junior against John Stephenson (the plaintiff here) in his own right, and as administrator of David Stephenson deceased, and the representatives of Moses Pilcher, for a settlement of the partnership accounts of David Stephenson & company, of which John Stephenson junior (the plaintiff there) John Stephenson (the plaintiff here) David Stephenson and Moses Pilcher were the partners; in which suit the ijartnership accounts were referred to a special commissioner of the court, to be stated and settled; and upon the report of the commissioner, and in conformity with it, the court made a decree, adjudging to John Stephenson junior the sums of 201 dollars, and 499 dollars, against John Stephenson administrator of David Stephenson, and declaring, that John Stephenson (the plaintiff here) had paid 499 dollars over and above his just proportion, towards the debts due from the partnership at the time of David Stephenson’s death. The defendant objected to the reading of this record in evidence to the jury; but the court overruled the objection, and admitted the evidence; to which the defendant excepted.
2. The defendant then called the deputy clerk of the county court as a witness for him, who testified, that the decree in the suit mentioned in tne first exception, was entered without any directions or order of the court, on the agreement of the counsel of the parties; and then the defendant repeated his motion to the court to exclude the record; but the court again overruled the motion, and the defendant excepted.
3. The defendant then called the special commissioner who made the report, on which the decree of the county court was founded, for the purpose of proving, that, in stating the partnership accounts by him there reported, many charges were allowed without proof, and the accounts were made up under the direction of *the parties; John Stephenson junior, the plaintiff there, being the son of John Stephenson, the defendant there and plaintiff here: and the defendant also offered to shew and prove mistakes in the commissioner’s report, both by the report itself and by extrinsic evidence: but the plaintiff objected to all this evidence, and the court sustained the objection, to which the defendant excepted.
There was a verdict and judgment for the plaintiff for 195 dollars with interest &c. from which the defendant appealed to this court.
Johnson, for the appellant.
1. If the suit in chancery in the county court of Wood, had resulted in a decree subjecting John Stephenson to, the payment of money out of his own pocket, upon claims against D. Stephenson & company, beyond his own just proportion of the burden, the record of that suit might have been proper evidence in this. But there was, no decree against John Stephenson personally, and nothing in the decree touching the present controversy, but a declaration that he had overpaid his just proportion ; a declaration not material or pertinent to the cause pending in the county court, and intended for no purpose but to prepare evidence to sustain the claim now asserted upon Beeson’s bond; and as that declaration is not a decree, and as Beeson was not a party to those proceedings, the record was not proper evidence in this case. 2. The testimony of the clerk proved, that the decree was not a decree founded on the judgment of the court, but a decree entered by the counsel of the parties; that is, a decree by consent of the parties, by collusion between them. Such a decree could prove nothing against Bee-son ; and the record ought therefore to have been excluded. 3; The evidence stated in the third exception, which the court excluded, would have gone further, and proved, that the commissioner’s settlement of the partnership ' accounts *of D. S. & Co. was founded in collusion' between father and son; that the accounts were on the face of them unjust; that the proceedings, especially the report, and the decree were fraudulent, so far as they affected Beeson. To reject such evidence ■ was to take from Beeson’s administrator all opportunity of defence against the iniquity of the proceedings in the county court; for as he was not a party to them, he could not defend himself there.
Robinson, contra.
1. The meaning of Beeson’s covenant was to indemnify Stephenson to the extent of 195 dollars, in case he should be bound to pay so much, over and above his just proportion of the debts of D. S. & Co. and in case D. S. should be found indebted so much to the concern, after a full settlement of the accounts of the partnership, and after applying all the social effects to the payment of all demands against it. The covenant itself, then, called for a settlement of the partnership accounts, to which, in the nature of things, Beeson was not to be a party, nor ¿lid he stipulate that he should be made a party. The settlement could be nowise so properly made as by a suit in chancery. Of such a proceeding, Beeson had no right or reason to complain. But the conclusive answer to all the objections, is, that the proceedings and decree in the suit in the county court, were pleaded in the declaration, with a prout patet per recordum; and the only defence was the plea of covenants performed. Now, it seems impossible to doubt, that the plaintiff might shew in evidence the record of which he had made profert, and which the defendant in his pleadings did not impugn. If the declaration, with the record, was insufficient to sustain the plaintiff’s demand, the defendant should have taken oyer, and demurred. If he meant to deny that there was such a record as that pleaded in the declaration, he should have pleaded nul tiel record. If he meant to impeach the proceedings and decree as collusive and ^fraudulent, he should have pleaded that matter; but not having pleaded it, he could not give it in evidence. Besides, the evidence he offered did not go to shew fraud in the settlement of the partnership accounts before the commissioner; the admissions of the parties there, might have been, and most probably were, founded on their knowledge of the justice of the items admitted. They were the proper parties to settle the accounts of the partnership.
Johnson, in reply.
The record of the suit in the county court, was not the foundation of this action; the action was founded on the bond; no such proceeding as that in the county court, was necessary to give or to sustain the action. Therefore, it was not necessary for the defendant to plead that the proceedings and decree were collusive and fraudulent, in order to be let into that defence at the trial.
He was prevented by sickness from sitting in this and several of the following cases.

Opinion:
CARR, J.
I think the objection to the admission of the record of the suit in the county court in evidence here, was very properly overruled. The record in that suit was counted upon in the declaration, and shewn to the court, and the defendant's only plea was covenants performed. The defendant covenanted to pay the plaintiff such sum, not exceeding 195 dollars, as he should be made liable to pay as partner of D. Stephenson & Co. or as X). Stephenson should be found indebted to that concern, on a full settlement of the partnership affairs. Surely, there could be no better way of ascertaining the facts, than by a settlement of the partnership affairs in a regular suit in chancery between the partners and their representatives. If the defendant could have- impeached the proceedings and decree upon the ground of collusion and fraud, and had pleaded that matter, the case would have been different; but as the only issue was upon the plea of covenants performed, I think the opinions of the -court were right upon all the points. I think the decree should be affirmed.
*BROCKENBROUGH and BROOKE, J., concurred.
TUCKER, P.
The true interpretation of this- contract is, that Beeson would pay to John Stephenson any sum, not exceeding 195 dollars, for which Stephenson should be made liable as the partner of the firm of David Stephenson & Co. or which should be found due and owing to the company by David Stephenson. In a suit upon this bond, it behoved Stephenson to prove his liability for the sum demanded, or that such sum was due and owing to the company from David. These facts might have been established by evidence of witnesses, and an investigation in this case, of the partnership concerns. But they may be not less established by other means. Thus, the copy of a judgment against Stephenson, as surviving partner of the house, would not only have been proper evidence against Beeson, of the fact of his liability for the sum so recovered, but it would have been conclusive against him, unless he could have impeached it for fraud and collusion. It would have been similar, in principle, to Buford v. Buford, 4 Munf. 241, where the plaintiff, being a co-surety in Kentucky with Henry Buford for James Buford, in a bond to Talbott, was permitted to introduce as evidence of his demand, the judgment upon the bond, rendered against himself in the courts of Kentucky. This court held the record of the judgment to be conclusive evidence of the amount recovered, and of the amount the plaintiff was compellable to pay; and most justly: for .the question as between the parties, was not whether the amount was justlj1 due to Talbott, but whether the surety had been compelled to pay it, without fraud and collusion on his part; because if he had been, he was entitled to recover from the principal, or in case of his insolvency, he was entitled to contribution from the co-surety. The like principle applies, I think, in reference to the construction of this . contract that Beeson should *pay such sum as should be found due and owing by David Stephenson. How found? If a suit instituted for the purpose of settling the partnership accounts, and eventuating in a decree against David Stephenson for the balance due from him to the firm, is not evidence and conclusive evidence (unless there was fraud and collusion) of what was really due, I am at a loss to conceive what would be satisfactory to the defendant. I am inclined to think, that a settlement in pais, if free from the suspicion of fraud and collusion, would have been evidence, since the condition of the bond obviously refers to a settlement of the partnership, on which settlement the balance due would be found. This settlement could only have been made between the partners, and when made would seem to have been all that was necessary or required by the bond of indemnity, for ascertaining Beeson's responsibility. But be this as it may, I cannot doubt that a decree of a court of equity ascertaining the balance due, is and ought to be conclusive evidence against Beeson, that the sum decreed was found due to the firm. It might indeed have been assailed for fraud or collusion, but not for any supposed errors, or because it was founded on the admissions of the parties, who cannot be presumed to have admitted more than was just.
With respect to the second bill of exceptions, the opinion of the court was clearly right. And as to the third, a sufficient answer was given at the bar — that the evidence did not go to establish fraud or collusion; and if it did, it was not admissible because there was no such allegation in the pleadings.
Judgment affirmed.