Court Opinion

ID: 6578607
Source: CourtListenerOpinion
Date Created: 2022-07-20 19:36:28.446588+00
Date Added: 2024-06-11T15:57:11.708603
License: Public Domain

Park, J.
One of the grounds of remonstrance urged by the petitioners against the acceptance of the report, grows out of the following action of the committee, as stated by them in their report: “ The committee allowed the sum of $3,023.58 for payments made by Romania Tillotson for the support of a minister at New River, Louisiana. There were over one hundred slaves on the plantation, and the committee allowed these payments as a charge on the common *358fund, as well on the ground of its being for the pecuniary interest of the concern in promoting in this way the good moráis and behavior of their servants, as from the fact that the duty of caring for their slaves in this way in the relation in which they stood to them, had been recognized and acted on in the same ample manner by the firm in the lifetime of Shubael Tillotson and at his especial instance and entreaty. A building intended as a meeting house, and also for use as a school, had been built by the firm under the direction of said Shubael before his death, on land belonging' to the firm, being a part of this plantation, and a deed of the premises given to trustees to secure the object. In this expenditure Roman-ta was but acting in the course of business pursued in the lifetime of his brother, and ardently sustained by him. It is true that others besides these families and their servants had the benefit of this ministry, while much the larger part of the expense was defrayed out of the funds of this concern. But the committee do not find that Romanta acted unreasonably in this, as the executrix of Shubael was aware of these expenses in a general way, although she supposed a larger portion of the expense was contributed by others than was actually done. On the same general ground the committee allowed the charge of Romanta for repairs to the building above mentioned, used as a meeting house, to the amount of $173.00.”
We fully agree with the counsel for the petitioners respect» ing the duties, liabilities, and authority of a surviving partner, that accrue to him by virtue of his survivorship. He holds the assets of the firm in trust primarily for the purpose of paying the partnership obligations, and, when they are extinguished, to account to the representatives of the deceased partner or partners for their share of the residue. He cannot prolong the business of the partnership further than is reasonably necessary in closing its affairs, and can do no act binding upon those interested in the assets of the firm not connected with the accomplishment of these objects. Story on Partnership, §§ 322, 324, 326, 327, 328, 344, 346, 347; Collyer on Partnership, §§ 129, 130, 131, 546 ; Rudy v. Harding, 6 Robinson, 70 ; Carr v. Woods, 11 id., 95.
*359But In the case under consideration the relation of Romania to the assets of this firm is not to be considered as entirely that of a surviving partner. The petitioners represent the interest that Shubael had in the firm. They derive title under his will. In his will he declares, “ It is my special wish and desire that all the property owned by myself and my brother Romania Tillotson in partnership be kept together, and the business continued in partnership as it is and has been, until all the debts are paid, or until such time as both parties wish to dissolve the copartnership.” It is true the partnership terminated at the death of Shubael, but the will authorized Romania to continue the business of the firm until the time mentioned in the will should arrive. The testator had no authority over Romania, to require him to continue the business ; hence this provision of the will is put under the form of a special desire that it might continue, but that he intended to bind his representatives should Romanta comply with his wishes is quite evident. It is common for testators to require that their property shall be invested in a certain way for a certain period, or that the business in which they are engaged shall be prosecuted for a certain time before distribution of their effects shall be made. Pitkin v. Pitkin, 7 Conn., 307 ; 1 Williams on Exrs., 88, and note. Shubael did not contemplate an early settlement of the affairs of the partnership. The business, no doubt, was prosperous at the time, and he entertained the expectation that all the debts of the concern would be paid out of the profits of the business ; which probably would have been the case, had it not been for the disastrous civil war that desolated the plantation. The case finds that Romanta acted in accordance with this provision of the will, that he conducted the affairs of the partnership in the same manner in which they had been carried on in the lifetime of Shubael, and that in the expenditures in question he acted in good faith for the best interest of all concerned. It was clearly the expectation and desire of Shubael that such expenditures should be made, and we think that, taking into consideration the will, the good faith of Romanta in making the expenditures, the relation that he and the pe*360titioners. bore to tbeir slaves upon the plantation, the benefit resulting to the petitioners in consequence of the expenditures, the previous practice of the firm, and all the facts of the case, there is no cause for complaint on this ground.
These considerations apply with equal force and effect to the value of the articles given in charity by Romanta when a crevasse in the Mississippi river produced great distress in that region.
The next objection to the acceptance of the report is based upon the following finding of the committee: — “In the years 1859 and 1860 the said Romanta erected on the Avon farm a new barn, larger and more expensive than was actually necessary for farming purposes, and the expense was more than the barn would increase the value of the farm if it were to be sold. But a new barn was then needed on this farm, and the pecuniary condition of the concern at that time was such that, unless Romanta was under obligations to conduct its affairs solely with a view to a payment of its debts, and the closing up of the partnership as soon as might be, the expenditure was not unreasonable, and should be allowed, and was allowed by the committee.”
The view we have taken of the case disposes of this objection. We have seen that Romanta was not under obligations to conduct the affairs of the partnership with a view to the immediate closing of the business, and unless this was the case the committee have found that the expenditure was reasonable, and should be allowed. We have seen that the will contemplated a continuance of the business until all the debts of the firm should be paid. The expenditure may have been injudiciously made, and probably was under the circumstances, but Romanta acted in good faith in making it, and ought not to suffer for an error in judgment. Syles v. Styles, 2 Wash., C. C., 225; Collyer on Partnership, Sec. 178, note 3. We think there is no ground for complaint in this respect.
The next objection is based upon the following finding of the committee. “ There was a claim of title made by other parties covering all the land owned by these parties, situated *361in Louisiana, and a very large amount of other lands belonging to other persons. The firm before the death of Sliubael had expended considerable money in resisting this claim, but the claim was most persistently urged after that event, and congressional action was fraudulently obtained in derogation of the rights of this concern and of others in the same interest. In endeavoring to got this action reversed, which endeavor was to an important extent successful, Romanta spent a long time in Washington, and was at large expense, all of which the committee are of the opinion and find was done in good faith, and in strict accordance to his duty for the protection of the concern and the promotion of its interests. The others who shared in the advantages of this expenditure did not contribute to it, but the committee do not find that any blame is attributable to Romanta for this neglect, and they do find that it was his duty to make this expenditure for the interest of the concern, and have allowed his charges therefor. Eor part of the amount so allowed by the committee the petitioners made this special objection, that the entries of charge made by Romanta at or about the time of the transaction, were too general, and ought for that reason to be disallowed, and especially so inasmuch as he could not at the hearing before the committee give any detailed statement of the entries, and relied solely on the entries themselves. The' committee from the whole evidence were satisfied that the entire expenditure was incurred in good faith, and was for the interest of the concern, and therefore allowed it as above stated.”
The first objection urged by the petitioners to the allowance of this claim is, that the charge of Romanta did not contain a detailed statement of the various items of which it was composed, but was entirely general in its character, and they claimed that for this reason it should have been rejected. This claim of the petitioners would require us to hold, as a matter of law, that under all circumstances an account of a like nature should be disallowed, notwithstanding the evidence that might be offered to show that it was true. The claim has no reference to the truth or falsity of an account *362in fact, but demands that a particular charge should be disallowed when found tobe composed of two or more items; thus requiring that Romanía, in journeying to Washington, should make a distinct charge of every bill of fare upon every railroad that he might pass over on the way, and every omnibus, hotel or restaurant bill that he had to pay, in order to lay the foundation for recovery; when, to a person of ordinary understanding and experience, the accuracy of the charge could be judged of by ascertaining the distance. Suppose that A should employ B, residing in Connecticut, to go to New Orleans and transact certain business for him; and suppose that B on his return should be unable to give the items of his expenses while absent; would it do to say that he should receive nothing for them, when obviously he must have expended a considerable sum on the way there, and while there, and on his return ? But it is said that gross sums will not be allowed in the case of executors and administrators in settling their accounts with the courts of probate; and authorities are cited to that effect. But this arises from the peculiar character of those cases. In their accounts every item may be the subject of appeal. The appeal does not take up the whole case for review, like other cases in other courts where an appeal is allowed, but only the particular matter appealed from, and the remainder stands determined by the court of probate. In other cases before other courts the appeal vacates the judgment, and the whole case goes up to be determined, de novo, in the appellate court, but the decision of a court of probate stands till reversed, and when reversed it can be set aside only to the extent appealed from. Hence, in order to give parties interested the right of appeal, it is necessary that every independent item in these accounts should appear separately and distinctly. Should an item of charge be found to be composed of two or more distinct items, and an appeal is taken from the allowance or rejection of only one of them, it is easy to see that great irregularity and confusion would ensue. But in a case like the one under consideration no appeal is allowed. The committee determine questions of fact and the court settles ques*363tions of law, and no confusion can arise if the account is not specific to the extent required of executors and administrators when dealing with the court of probate. We are satisfied that there is no law or practice on this subject that goes to the extent that the petitioners claim. No doubt if an account is kept irregularly and is not specific to the extent that is ordinarily practiced by men of business in like cases, it would weigh against its allowance upon the trial. The triers would require the more evidence in proportion as the mode of making the charges differed from the ordinary practice, before they would be satisfied that it was true. On the other hand, if an account is regularly kept, and every item appears by itself, and purports to have been entered when the transaction took place, it affords strong intrinsic evidence that the account is true. Further than this we do not understand that the law requires us to go. It is a matter to be considered by the committee in connection with all the evidence in the case, in determining the truth or falsity of the account. Swift’s Ev., 82; 1 Story Eq. Jur., sec. 468; Leavenworth v. Phelps, Kirby, 71; Bevans v. Sullivan, 4 Gill, 383 ; Bradley v. Chamberlin, 16 Verm., 613; Wedderburn v. Wedderburn, 2 Keen, 783; Crawshay v. Collins, 2 Russ., 325; Swan v. Wheeler, 4 Day, 137; Field v. Hitchcock, 14 Pick., 405; Hughes v. Hampton, 2 So. Car. Const. R., 745; 1 Phill. Ev., 371, 383 ; 2 Dan. Ch. Pr., 1418, 1426, and note.
Another objection is urged to the allowance of this account, and that is, that the real estate in this case was not partnership property by the laws of the state of Louisiana, by which, it is said, no real estate can become partnership property except by a written contract between the partners to that effect, and that hence the expenditures of Romania in defending the title to the real estate cannot be brought into his account in settling the transactions of this partnership.
The committee have found that the real estate was purchased out of partnership funds, for partnership purposes— that during the life of Shubael it was treated by the partners as partnership property — that in the last will and testament of Shubael ho declared, “ I further desire and wish the pro*364perty which is in my name and that which is in my brother Romania’s name to be considered company property and to be equally divided between my family and my brother Romania’s” — that in the same will is the further declaration that'Romanta should have the management or principal direction of the business of the firm, and that it should be continued till all the debts were paid or until such time as both parties might desire to dissolve it — and that Romania continued the business in good faith and in strict accordance with his duty expended the sums under consideration in defending the title from those who were fraudulently seeking to take it away. These are the principal facts that apply to this claim of the petitioners. The question is made between parties interested in the business of the late firm, and as between them we are satisfied that equity requires that the real estate should be considered as a part of the partnership property. Suppose the partnership had been dissolved in the lifetime of Shubael, and similar proceedings had been instituted to settle the affairs of the partnership, and Romania had presented a claim for the sums of money that had then been expended in this controversy respecting the title. Could Shubael have made the claim that is made here, when the real estate had been purchased by partnership funds for partnership purposes and had been treated as such by both parties for a series of years ? Manifestly not. The conduct of the parties would have shown an agreement that the real estate should be considered partnership property, and as between themselves equity would have held that what was agreed to be the property of the firm was such property. Do the petitioners stand in any better relation ? We have seen that by the will of Shubael the business of the firm was to continue after his death in the hands of Romanta, and that he was to manage it in the same manner as it had been previously conducted. During the life of Shubael large sums of money had been expended in defending the title of the real estate in the same controversy in which the expenditures in question were made. Under these circumstances would not the petitioners have held Romanta responsible if the title had been lost through his neg*365lect ? Could lie have shielded himself on the ground that the property did not belong to the late firm and that the petitioners had given him no directions as tenants in common concerning it? It is clear he would have been liable, and his liability would have arisen from the fact that originally the real estate was partnership property in equity, and continued connected with the business of the firm in the hands of Romania, like other partnership property. . His liability could not have arisen from any implied authority given him by the petitioners growing out of the management of the business, for an authority to manage the business of the plantation would not be sufficient to authorize Romanta to defend the title of the land in a controversy before Congress. The labor and expenses of such a controversy would not come within the scope of his employment as manager in raising and selling the products of the plantations; and furthermore, most of the petitioners were minors at the time and consequently were unable to bind themselves by contract. We think therefore this claim is unfounded.
Again the petitioners claim upon this subject, that other lands were benefited by this expenditure — that Romanta in making his defense before Congress acted as a delegate for the persons interested in those lands as well as for himself and the parties interested in this plantation — that he never attempted to collect of them their proportion of this expenditure, but charged the whole in his account with tire petitioners, and that consequently such proportion of the account ought to have been disallowed. It appears from the report of the committee that the Houmas claim embraced a large extent of territory, including the lands in question. Romanta could not therefore make a successful defense of the title of this plantation, without its enuring to the benefit of the entire territory. The questions applicable to a portion of the land were applicable to the whole tract, and consequently the owners of the territory made common cause in their defense of the title, and Romanta acted as a delegate of the whole. The committee say that no blame is attributable to him for the failure to obtain from the other persons interested in the *366defense their proportion of the expenses incurred, and we think they have decided the whole question.
It is further claimed by the petitioners, that the committee erred in allowing Romanta the sum of f5,000 for services rendered in carrying on the business of the partnership from January 1861 to November 1866, and in this claim we think the petitioners are correct. It appears that there was no express contract between the partners in the lifetime of Shubael for either of them to receive compensation for his services, and that there was none after the death of Shubael between Romanta and the petitioners or either of them ; but on the contrary, that Romanta did not expect remuneration for his services and did not charge for the same during the time that they were rendered. As surviving partner he was not entitled to compensation for services rendered after the dissolution of the partnership, in the absence of an express contract to that effect. Collyer on Part., secs. 199, 328, note; Story on Part., sec. 331, & note; 3 Kent Com., (5th ed.) 64; Beatty v. Wray, 19 Penn. S. R., 516 ; Washburn v. Goodman, 17 Pick., 519 ; Burden v. Burden, 1 Ves. & Beame, 171. And although Romania, in carrying on the business of the firm as a business under the will of Shubael for the bene fit of the petitioners as well as for himself, and not with the view of closing the affairs of the partnership, seems to have been acting in some other capacity than that of surviving partner, still, taking into consideration all the facts of the case — that no compensation was expressly agreed to be paid in the lifetime of Shubael for services then rendered — that no such agreement existed between Romanta and the petitioners to pay for those services — that Romanta did not expect compensation, and did not intend to charge for his labor “ if all had been satisfactory ” to him, — and the further fact that Romanta regarded himself as acting in the capacity of surviving partner while rendering the services, we think the committee erred in allowing compensation.
It is further claimed by the petitioners, that the note given by the firm to Woodford was taken up and canceled by Romanta after the partnership was dissolved and a new note *367given in lien thereof, and that, although the new note purported to be a partnership note, still Romania had no authority to give a note in that form, and that consequently it became his own individual note, and could not therefore be considered by the committee in adjusting the partnership accounts.
The committee find that it was not the intention of either party to the new note to discharge the firm. It had been the practice of the firm to settle with Woodford annually, and Romania was only following the custom in the several renewals that were made of the note. It is further found by the committee that all the parties in interest have always treated the new obligations as debts of the firm. Under these circumstances we think, as between these parties, the new obligations given by Romania to Woodford in lieu of the firm note should be treated as a firm indebtedness.
It is further claimed by the petitioners that the renewal notes given by Romania to Woodford included eight per cent, interest, and were therefore usurious, and the interest forfeited by the laws of this state, where all the transactions took place, although the notes purported to have been given at New River, Louisiana, and that consequently the interest ought not to have been allowed.
The original note, together with the several renewal notes given by Romania, are dated “ New River, Louisiana.” This shows that the parties to the notes intended to make them payable at that place, for no other reason can be given why they should have been so dated. Most of the indebtedness had accrued there. Most of the partnership business was then being transacted there. The parties then contracted with reference to the laws of Louisiana. The legal interest in that state was five per cent., but eight per cent, was allowable where parties stipulated in writing to that effect. The original note did not specify any rate of interest, but the partners verbally agreed to pay interest at the rate of eight per cent. When the first renewal note was given Romania paid the difference between five and eight per cent, and gave a note for the balance that was due. The new note did not *368specify any rate of interest, but the subsequent renewal notes did. The law of Louisiana was made for the benefit of debtors. They could not be compelled to pay more than five per cent, unless they had agreed in writing to pay more, but should a debtor waive his privilege and pay more than the legal interest, or give his note for the same when he liad agreed at the inception of the note to pay more, the payment or note would be good by the law of that state, for in the one case the transaction would be closed, and in the other the party would have committed to writing the original agreement to pay more than the legal rate. Rose v. Phillips, 33 Conn., 570. When the renewal note of May 9th, 1856, was given, Romanta paid the excess of interest over five per cent, on the original note of September 9th, 1854, and the transaction was settled and closed to that time. The renewal note of June 19th, 1857, included the principal and interest on the note of May 9th, 1856, at eight per cent., and he agreed in writing to pay the amount. That note specified the interest as eight per cent, and the subsequent renewal notes as seven per cent. In these several settlements with Woodford, Romanta simply allowed the interest that was agreed to be paid when the original note was given. If Shubael was alive he would be bound by the act of Romanta, and surely these petitioners can stand on no better ground.
The petitioners further claim that the indebtedness to Moulton and to M. A. Tillotson, and a part of the Woodford debt, accrued after the death of Shubael, and therefore were improperly allowed in Romania’s account.
If Romanta was authorized by the will of Shubael to continue the business of the firm for a specified time, it would seem to follow that what was necessary to be done in order to continue the business was included. These sums were necessary for the purpose and were properly allowed.
It is further claimed by the petitioners that Romanta sold goods from the plantation while engaged in conducting the business of the firm, and took in payment therefor worthless obligations called “Parish Ascension Scrip,” and therefore *369that the committee erred in allowing this to he good accounting.
The court finds that the scrip was current money at the time and place where Romanta took it, and we see no cause for complaint on this ground. The question was one of fact for the committee to determine, whether under all the circumstances Romanta conducted fairly in this respect, and with a reasonable degree of diligence to protect the interests of the petitioners.
We think, therefore, that the superior court must be advised to disallow the charge, of salary allowed by the committee to Romanta, and to correct and amend the report so far as the rejection of this item may make it necessary, and when thus amended to accept the report, and pass a decree ordering the property of the concern, both real and personal, to be sold, the debts to be paid, and the balance to be distributed to the parties in interest in proportion to their several shares therein.
In this opinion Hinman, O. J., and McCurdy, J., concurred. Butler and Carpenter, Js. were absent.