Court Opinion

ID: 7198071
Source: CourtListenerOpinion
Date Created: 2022-07-24 17:04:46.279605+00
Date Added: 2024-06-11T16:16:25.588604
License: Public Domain

On Eeheaeins.
Blanchard, J.
A careful re-examination of this case, made at leisure during the summer vacation of the court, has served to convince us that the Judgment of the court below is in the main correct. Its view of the controversy, we now see, is more accurate, more nearly in accord with the disclosures of the record, than that expressed in our former opinion, although;/ as' to certain of its features, we find it uece'ssary to remand the case. ' . .
Jno. H. Scheen, H. M. Bosley and M. A'. Coekerham, agent (repre^ senting his wife who is separate in property) constituted the commercial partnership of Scheen •& Bosley. Coekerham, agent, was the silent partner. .lie put $2000 of capital into' the concern, and the other partners put, or were to put, in $Í00Ó each. Notwithstanding this disproportion, they were to share e'qually in the profits of the enterprise. The reason for this Was' that Scheen and Bosjey were to contribute their services to the business and attend to its. management. '
The partnership had continued- Tor about two years when, . on December 5th, 1895, Jno. TL'Scheen died. This.was in the midst of the business season, the time-when the sale of goods was most active, when cotton was being marketed, and when collections, of outstanding accounts were being made.'
The partnership was dissolved by the death of Scheen, but.to close the doors of .the business house'at that season meant great Toss to owners and creditors alike. And so, by'the consent pf the. surviving partners and the representative of the dead one, and with(the.acquiescence of the.creditors, the business kept right on under the, management and control of M. II. Bosley, who was advissed .with and consulted constantly by Coekerham, agent — he being present .in the town and in the store off and on every day.
*75This continued until January 16th, forty-two days after'the death of Jno. ÍL Scheen, when, by the written consent of' Oockerham, agent, and that of the widow of the deceased partner, M. H. Bosley was appointed liquidator. He qualified as such and continued to conduct the business in that capacity, collecting its assets, disposing of ‘its goods, paying its debts and seeking to wind Up and terminate its affairs.
The'concern was insolvent, but not greatly so. Its largest creditor was Wni. T.' Iiardie & Oo., commission merchants of New Orleans, but this claim was secured by the pledge of sufficient cotton to about cover it.
Unsecured creditors for six or seven thousand dollars were induced to accept 50 per cent, of their claims cash, and 16 2-3 per cent, in twelve months time. Some of. the smaller creditors were paid a larger percentage, and a few were settled with in full.
The net result of the effort at compromising the indebtedness was a saving to the firm of Scheen & Bosley, in liquidation^ of about $1900.
The creditors' who had agreed to the offer of compromise stipulated that the cash payments of 50 per cent, must be made in thirty days. To obtain the funds to meet these payments, it was necessary to make quick collection of assets and sales of goods. The creditors authorized the disposition at private sale of the goods and assets.
The liquidator kept the store open and sold off the goods as rapidly as possible. This continued until about the middle of Eebruary, when he sold the remnant stock remaining- in globo to L. E. Scheen for $1500.
The cotton in the hands of Iiardie & Co. was gradually sold by them and a settlement of accounts with that firm shows a balance of $127.00 in their favor.
The closing out pf the stock of goods and cotton left in the hands of the liquidator, at the time he filed the account under consideration, notes and accounts due the partnership of the face value of $4,120.00, and real estate valued at $1000. He stated in the petition accompanying the account that a large per cent, of the notes and other assets, he had reason to believe, could be collected the ensuing year. The account was not a final one, and the liquidation is not ended.
The present suit is one to settle the affairs of this partnership as between the partners themselves. No creditor is concerned herewith. *76The plaintiff sued for an accounting by the liquidator, and she now opposes in numerous particulars the account he filed.
One of her principal contentions is that the liquidator had no warrant or right to dispose of the remaining stock of goods to L. E. Scheen at private sale for $1300, and that he should be charged in his settlement with their full value, which is averred to have been $2500.
With reference to this transaction, the district judge'says: “The sale was' made after much discussion and deliberation; with the full knowledge of plaintiff’s husband and agent, who had acted for her in everything, and without a word or murmur of opposition from either. It was made to raise the money necessary to effect a compromise of the debts at 66 2-3 cents, with the written consent of the creditors whose assent to the compromise depended upon the cash payment in thirty days of 50 cents in cash on the dollar. And this cash could only be realized by making this sale. By making- it and thus effecting the compromise, about $1900 were saved, or about one-third of the indebtedness of the firm, exclusive of the Hardie account which was secured by cotton pledged.”
This is a fair statement of the case, and to it we will only add that the plaintiff, through her husband and agent, not only was consulted and advised with about the sale, without opposing it, but she requested to be allowed to take the goods herself at private purchase for fifteen hundred dollars and was given the refusal of them at that price.
The evidence satisfies us that a reasonable time was given her, or her agent, to raise the money and take them, and it was only after it became apparent she would'not, or could not effect the purchase that 'the sale was made to E. L. Scheen. There was no opposition to the sale of the goods in this way, no protest; and plaintiff, as a member of the firm of Scheen '& Bosley, having benefitted by the compromise made with the creditors, of which the rapid disposition of the assets of the partnership in order to raise funds was a constituent part, can not now be heard to contest the sale of the goods and to hold the liquidator responsible for an alleged value thereof over and above the fifteen hundred dollars realized.
Another contention of plaintiff is that the defendant, Bosley, without right or authority used a $1000 mortgage note belonging to her. With reference to this the district judge says: “It (the note) seems to have been entrusted by her to her husband and that he, without *77her consent, authorized J. EL 'Seheen to use it in making up his part of the capital stock. It was during the year 1895 pledged to Jos. Bowling Company, Limited, to secure a debt of $800, and about the time of the death of Seheen it was offered to- the maker for $800, which he accepted and the Bowling debt was thereby paid. This was done by Bosley during the illness of Seheen. While the note was made payable to the maker, and by him endorsed, and Mrs. Cooker-ham’s name did not appear on it, still I am inclined to think that Bosley should be charged with knowledge that it belonged to her. But whether he knew it or not, it did belong to her in fact, and the firm had no right to use it without her consent, and having done so it is responsible to her for its full amount of one thousand dollars, with 8 per cent, interest from December, 1893. Her demand for a personal judgment against Bosley for the amount can not be allowed. The note was not used to pay his separate debts, but to pay a debt of the firm for which she, with other members, was equally bound. The effect of this finding is to debit J. El. Seheen with the amount placed to his credit as the proceeds of the note, $800.”
The facts disclosed by the record with reference to this note and its use in the business of the firm fully warrant this ruling, and the law governing and guaranteeing the rights of this married woman, under the circumstances disclosed, has found its proper application therein. Nor do we think that this is a case where C. C. 2324, which provides that he who assists or encourages in the commission of an unlawful act is answerable in solido with the other party to the offending for the damages caused by the act, applies. . The act by which this note was used in the partnership was that of J. EL Seheen, and he left a written statement signed by himself to this effect. But the partnership benefitted by its use, and since it is not shown that Seheen had the right in fact, or in law, to so use it, it follows that the partnership, which, through Seheen, used the note, must return it or account for its full value to the owner. It quite suffices, therefore, that the partnership be charged with its reimbursement.
Bosley, while conducting the business after the death of Seheen, and before his appointment as liquidator, collected a considerable amount of money representing the cash sales of goods, and, in addition, drew $1000 in cash from Hardie & Co.
The account he has filed herein does not make a sufficiently full and satisfactory showing of what he did with this money. If he dis*78bursed it for account of the partnership- he should present an itemized statement of the expenditures showing how, when, to whom, and for what paid out, present the vouchers therefor, and if there are no "vouchers make due proof of the payments, as well as the neceessity for the samé. Each item of disbursement should be, if possible, specifically proven. And .the account should be so made out as to be susceptible of easy understanding by those who have to deal with the same, and who are not professional book-keepers, or experts, in the matter of commercial accounting. The members of the Bench are not supposed to be skilled book-keepers, or experts, in the understanding; of accounts.
If need be auditors and experts should be appointed to make these matters cloar to the court, and the Code of Practice provides for the appointment of such. The practice of appointing auditors and experts is favored in cases like the present one.
The liquidator attempts to eke out his account in the particulars we have mentioned by filing as exhibits certain pages of his cash book for December, 1895, and certain “pages of what he calls “the liquidator’s book.” But these are confused accounts, without dates, leaving-much to be supposed, understood and guessed at. Skilled accountants might perhaps understand the same and arrive at the results they are supposed to disclose, or be able to point out wherein they are lacking in results they should disclose. We decline to essay the difficult and doubtful task, and will reverse the judgment appealed from on this branch of the case, and remand it at the liquidator’s personal expense, with directions to present such an account of his disbursements of cash received as will permit a proper understanding of the same to be easily arrived at.
It will not do to say that Bosley is accounting in this litigation merely as liquidator and that, therefore, he is concerned herein only with the cash balance on hand at the time of his appointment as liquidator. By consent of those interested, he conducted the business for over forty days before he was appointed liquidator, and it is as much his duty to make a full and complete showing of receipts and disbursements while acting without the sanction of a formal appointment as liquidator as .it is of receipts and disbursements since such appointment. As we have seen, the-suit is one to settle the affairs of the partnership as between the partners.
For the reasons assigned, it is- ordered that the decree of this court *79.hereinbefore handed down, be set aside, and it is now adjudged and decreed that the judgment appealed from, in so far as it sustains the sale of the remnant of stock of goods to L. E. Scheen for fifteen hundred dollars, and in so far as it holds the partnership re.--sponsible to the plaintiff herein for the $1000 mortgage note, and directs that the amount of same with interest be paid to her before any dividend is declarad, and in so far as it adjusts among the partners their separate accounts, and in so far as it debits the liquidator with certain items aggregating $539.07, mentioned in the opinion of the court, and debits and credits him 'with certain other items mentioned in -the opinion, and in so far as it decrees the estate of I. Ii. Scheen to be indebted unto the partnership in the sum of $800, and the further sum of $171.16, and in so far as it holds that the plaintiff did not put into the business fifty-five bales of cotton as she contends, Ibut only forty bales, be and -the same is affirmed.
It is further ordered, etc., that in all other respects the said'judgment is annulled, avoided and reversed, and the case remanded with directions that M. H." Bosley and M. IL Bosley, liquidator, be ordered to file such an account in detail of his receipts and disbursements ®f cash as is described in the opinion of the court, any balance «claimed by him as against the partnership, or the partners, on account of his personal funds used in settlement of the debts of the partnership, to await the final determination and settlement of his accounts as liquidator.
It is further ordered, etc., that the costs of the lower court be paid iby the estate of Scheen & Bosley, in liquidation, those of this appeal b„y the liquidator .personally.
MoNeoe, J., takes no part.