Court Opinion

ID: 6643019
Source: CourtListenerOpinion
Date Created: 2022-07-20 20:47:10.835468+00
Date Added: 2024-06-11T15:59:18.897476
License: Public Domain

BALDWIN, Circuit Justice.
This case comes before the court on exceptions to the report of the master, to whom this cause was referred on the 10th of June last, for an account by the defendant The account exhibited a balance of partnership effects in the hands of the defendant of 25,498 dollars 91 cents, to which both parties agreed. They likewise agreed on the sum on which a commission should be charged by defendant for his services, being 69,726 dollars 55 cents, but they differed on the amount of commission, the defendant claiming five per cent, the plaintiff willing to allow two and a half, the master allowed four, to which both parties-except.
In the case of Burr v. M’Ewen, [Case No. 2,193,] Hale and Davidson, at April term 1830, this court gave their views on the subject of commissions to trustees, and are satisfied that they are in accordance with the settled judicial opinion and usage of the state. In Pusey v. Clemson, 9 Serg. & K. 209, and in the case of Walker’s Estate, Id. 225, the supreme court declare, that common opinion and understanding have fixed on five per cent as a reasonable allowance, and that cases in which the court may fix on a higher or lower rate, are to be considered as exceptions arising under the particular circumstances of the case. We think this a reasonable and safe rule, which will prevent much liti gation if so understood and adhered to, and in this case we perceive no such circumstances as to induce us to depart from it
The complainant comes into a court of equity demanding a retransfer of his part of partnership effects, included in the assignment, alleging that the defendant has in his hands a balance of money justly due to the plaintiff, or his stock in the firm, which he cannot retain in good conscience, and withholds in bad faith. In such a case the court is not governed by the technical and strict legal construction of the words of the assignment, but the real meaning and intention of the parties in relation to the subject matter and object for which it was made. Though they were satisfied that the words' were not broad enough to include all the errors and misconduct of the plaintiff which had been injurious to the defendant, we would not decree of course for the complainant as to those items, but adopt the principles of equity which the supreme court lay down as incontrovertible. Hunt v. Rousmanier, 1 Pet. [26 D. S.] 13: “Where an instrument is drawn and executed, which .professes or is intended to carry into execution-an agreement, whether in writing or by parol, previously entered into, but which by mistake of the draftsman, either as to fact or law, does not fulfil or violates the manifest intention of the parties to the agreement, equity will correct the mistake so as to produce a conformity of the instrument to the agreement.” They will compel “the delinquent party fully to perform his agreement, according to the terms of it and the manifest intention of the parties; so if the mistake exists, not in the instrument which is intended to give effect to the agreement, but in the agreement itself, and is clearly proved to have been the result of ignorance-of some material fact, a court of equity wni in general grant relief according to the nature of the particular case in which it is-sought.”
Deciding this question by these principles, we feel bound to consider the agreement and assignment as embracing all errors and mis-entries, whether of cash on the cash books, errors in not charging the plaintiff with goods taken by himself, or receiving money from customers and not accounting for it, and any other errors or misentries in keeping the books which would be injurious to the interest of the defendant. We do not think it important to examine minutely whether Mr. Odenheimer knew of the omission to charge the goods taken by plaintiff, or of any other misentries than such as relate to those in the cash book; if he was ignorant of the existence of any others, it would be a good reason for our reforming the assignment, especially when their existence was known to plaintiff. His concealment of them from his partner, when about executing a paper intended to be a complete indemnity against all errors and misentries in keeping the books of the firm, would be a complete bar to any equitable relief, when we had before us abundant proof of errors and misconduct on his part highly injurious *35to defendant. We would not take from him the security of a fund given to him for an indemnity, until it had been made effectual for all the objects intended, and for which the plaintiff was in equity bound to make a provision. If the defendant had a knowledge of all the errors committed by plaintiff, it would not alter the case, the words of the assignment are broad enough to cover them; the plaintiff knew of them, and agreed that defendant should retain the stock assigned till all losses, deficiencies and injuries resulting from them should be made up to his reasonable satisfaction.
We do not mean to decide, that the defendant is to be the judge of the amount which he shall retain out of the fund assigned; he holds it in trust, subject to the supervision of this court; for his own use, so far as he can reasonably satisfy us, that any alleged errors exist which operate to his injury, and for the plaintiffs for the residue. The cases cited by the plaintiffs’ counsel, fully support their position in this respect, and we think it the fair and equitable construction of the assignment Thus far the case is attended with no difficulty, but a very serious one has occurred in ascertaining the sum which we shall decide, on all the circumstances of this case, to be a reasonable satisfaction to the defendant for the errors and misconduct of the plaintiff. The reference to the master was a general one for an account, and his report does not find facts, on the legal result of which we are to pronounce an opinion as on a special verdict or case' stated. 2 Madd. Ch. [Pr.] 506. In stating the account between the parties, he makes specific allowances to the defendant, on account of errors and misentries, and returns the whole evidence for our consideration on the propriety of these allowances, which are the subject of exception by both parties. That errors and misentries, to a considerable amount, have been made by the complainant, is admitted in the bill and the assignment, it is also abundantly proved by all the witnesses. The burning of the books has not been conclusively brought home to the plaintiff, but the evidence is of that strong and convincing nature, as leaves no doubt on our mind that the act was committed by the complainant, and so we consider the fact to be.
Under these circumstances, he calls for the interposition of this court, to compel the plaintiff to account, to pay the balance in his hand, and retransfer what remains of his share of the fund assigned without producing any statement of the errors or misen-tries, giving no information which could tend to ascertain the amount, putting no estimate on the sum he thought himself entitled to for extra service, or what he had taken under such pretext, when he could have done it from his own knowledge. He does not swear to his bill, or even positively aver, that he had made no other errors or misentries to the injury of his partner than are referred to in his bill, or were proved before the master. Where papers are destroyed or suppressed by a party with a deliberate design to defraud or injure another, the presumptions of law are very strong against him, and there cannot well be a case more strong against a complainant in equity' than this. Courts of law are very severe in punishing fraud, but when it is aggravated by the destruction or suppression of papers or books which would, if produced, be the means of detecting it, courts of equity will go beyond, and even contrary to the rules of law, and presume most liberally, in odium spoliatoris. [Philips v. Philips,] 1 Ch. Cas. 293; [Cowper v. Cowper,] 2 P. Wms. 748; [Cookes v. Hellier,] 1 Ves. Sr. 235; [Garth v. Cotton,] 3 Atk. 755, 756; [Bowles v. Stewart,] 1 Schoales & L. 222; 5 Brown, Parl. Cas. 300, 324; [Childrens v. Saxby,] 1 Vern. 207.
A court of equity will entertain jurisdiction of a trespass, where it is done secretly, so that it cannot be proved easily, as where on his own ground a man digs under ground to another’s mineral. East India Co. v. Sandys, 1 Vern. 127, 130. So where an interloper trades to the East Indies, he shall admit his trading, and to some certain amount, because it is difficult of proof. Id. 130; [East India Co. v. Evans,] Id. 307. So where a bailiff took a sum of money under an execution issued in breach of an injunction in odium spoliatoris, “the oath of the party injured is a good charge on him who hath done the wrong.” Childrens v. Saxby, 1 Vern. 207; 1 Eq. Cas. Abr. p. 11, pl. 2; Id. p. 229, pl. 11. So where a man ran away with a casket of jewels, the oath of the party-injured was allowed as evidence, (East India Co. v. Evans, 1 Vern. 308;) but not to conclude the party committing the fraud, (Plampin v. Betts, Id. 272.) Where a plaintiff in equity has been guilty of fraud, and his bill is dismissed, the court will decree costs to the defendant, to be taxed on his oath. Dorrington v. Jackson, Id. 449, 450. So as to the plaintiff where a bill of exchange was obtained by fraud and the oath of defendant was falsified. Dyer v. Tymewell, 2 Vern. 122, 123.
These cases fully establish the principle, that in cases of fraud, suppression and-spoliation, the oath of the party injured is evidence, but not conclusive; the court must judge of the weight'it is entitled to, under all the circumstances of the case. The mere circumstance of a party haying destroyed or suppressed a deed, book or paper, will not induce a court of equity to decree a penalty against him to deprive him of what may be his just right, to dispense with such secondary proof of the existence and contents of the paper which has been so suppressed or destroyed as may be in the power of the party injured to produce, or to give a decree in his favour, without some proof. [Cowper v. Cowper,] 2 P. Wms. 738, 748; [Saltern v. Melhuish,] Amb. 247, 249; Saltern v. Mel-*36huigh, [Bowles v. Stewart,] 1 Schoales & L. 222.
It is difficult to define precisely what will be deemed some proof, as much must necessarily depend on the particular case; but there can be little danger in laying it down as a general rule, that where there is the least positive proof of the existence of a paper, or where it may be supposed or inferred from appearances out of which such supposition or inference necessarily or naturally arises, proof of spoliation would entitle the opposite party to a decree. Cowper v. Cowper, 1 P. Wms. 750. If there has been actual spoliation by a party, every thing would be presumed against him in favour of those setting up a prima facie title; and though there is no actual spoliation proved, yet a complete suppression- would, for the purposes of the suit, be equal to a spoliation. Bowles v. Stewart, 1 Schoales & L. 222. Where a widow made a deed of the greatest part of her estate, to the. value of 800 pounds, .to trustees for her children by the first husband, which the second husband destroyed, he was decreed to pay the amount without any account of the Yern. 408. So where aestate. Hunt v. Matthews, 1 defendant swore that he had burnt a deed, and after-wards produced it, he was compelled to admit the deed as laid in the bill. Sanson v. Rumsey, 2 Vern. 561. Where a defendant in a bill in equity swore that she had delivered a will to the plaintiff, which he did not produce, she was held not to be bound to answer till the will was produced by plaintiff; on a final hearing, it was decreed, that having suppressed the will, it ought to be presumed most strongly against him, and to be taken as set forth by the party claiming under it. Hampden v. Hampden, 3 Brown, Parl. Cas. 250, 252. Where a deed limiting a term was burnt by the defendant, who contended that the limitation was void, the court decided, that since a term might be limited in such a manner as to take effect, they would intend it to have been so limited in that case, and decreed a conveyance accordingly. Dalston v. Coatsworth, 1 P. Wms. 731, 732, &c. So where title deeds are suppressed, the court will decree possession to the party claiming under them till produced. King v. Hounsdon, [Arundel,] Hob. 109; [Tucker v. Phipps,] 3 Atk. 360. Where on an account being decreed, the master reported that defendant had suppressed and embezzled some pages of accounts in a bundle, or that it had been, done with his privity, the court disallowed his whole accounts for diet, &c., on account of embezzlement. Wardour v. Berisford, 1 Vern. 452; [Cowper v. Cowper,] 2 P. Wms. 749. Where a will is suppressed by the executor or heir, he shall £>e compelled to pay a legacy bequeathed by it before probate, and without a citation in the spiritual court; equity interferes on the head of spoliation and suppression. [Tucker v. Phipps,] 3 Atk. 360.
Prom these cases we may take the rules of equity to be well established, that where a deed, a will or other paper is proved to be destroyed or suppressed, or there is vehement suspicion of its having been done, the presumption in odium spoliatoris applies in favour of the party who claims under such paper, though the contents are not proved. The fact of spoliation, suppression or embezzlement may be proved by the answer or oath of the opposite party, so may the contents of the paper; the same rule applies to matters of account; the mere embezzlement of books or accounts is sufficient to authorize a rejection of claims by the spoiler though supported by evidence, or the party spoiled may rebut the claim by his oath. But where he comes to charge the spoiler in account, in order to raise a debt against him, he must give some evidence beyond the fact of spoliation, his oath would be admissible evidence, its effect depending on the circumstances of the case. If he relies on other evidence he must make out a prima facie case, by proof competent for a court of equity to presume, a court of law to give a judgment on a demurrer to the evidence, or a jury to find a verdict in favor of the charge set up. This is what is understood by some evidence, it may be slight, yet if it conduces to prove .the charge it is legally sufficient, its weight or credibility is a matter of discretion and circumstance. No specific sum can be charged against the spoiler on proof of the mere fact 'of spoliation, herein the rule differs from that which applies to a claim of property under a deed or will on which the right depends, and the thing claimed is ascertained.
The circumstances of this case would justify the utmost latitude of presumption in a court, jury, master or auditors; the fraud was premeditated, the spoliation wilfully made to conceal it, and we would not disturb a verdict or report which did not at the first blush appear to have debited the complainant with items, in support of which there was no evidence, conducing to make out the charge.
So far as the master has debited the complainant, his report is confirmed; but from the evidence returned with his report he seems to have held the defendant to proof not required by any rule, and to have withheld all credits not definitely proved, or at least to have allowed none which were not supported by such evidence as would have supported charges in an ordinary case between partners or merchant and customer. Were we to confirm this report, on á consideration of the evidence which accompanies it, it would confound all distinction between the spoiler and the despoiled, and tend to encourage rather than to suppress spoliation by throwing on the innocent party the burthen of supplying the evidence which the other had destroyed.
The master has overlooked entirely one *37powerful item of evidence, the admissions in the bill of the complainant, which are conclusive on him, as well as on a master, a jury or a court, who can approve of nothing in contradiction or opposition to such admissions. East India Co. v. Keighley, in the house of lords, 4 Madd. 15, 21. These admissions must be carried into every act of fraud, in taking money or goods furtively, the amount of which may be presumed to be equal to the object for which they were taken; that is, to the saving of clerk hire for the services performed. We should forget the first principles of justice in confining the respondent to the rules by which the master has acted. One of the clerks testified to repeated acts of the complainant in taking goods not charged, of which he kept a memorandum, amounting to .570 dollars, exclusive of what was allowed by the master; though the proof was not specific, we think it reasonably sufficient to justify giving the defendant credit to this amount, and direct it accordingly. i
We have not thought it proper to direct any credits on the general averment in the answer that the injuries sustained amounted to 5000 dollars; it is too vague to act upon satisfactorily. Had it been definite as to any particular fact, or the amount of injury sustained under any defined item, we might have directed a further allowance to the defendant, but it would be acting too much on vague conjecture for us to specify any particular amount. Though we should not have disturbed the report if the master had done it, we cannot feel justified in decreeing any particular charge under this general allegation.
We have allowed no damages for breaking up the business of the firm, no sum was specified in the answer as applicable to this item, and no evidence is before us which enables us to ascertain what may be just; there is therefore no prima facie case, either by the oath of the respondent or the evidence, for the allowance of any specific sum on this ground.