Court Opinion

ID: 3400516
Source: CourtListenerOpinion
Date Created: 2016-07-05 19:11:47.782622+00
Date Added: 2024-06-11T13:36:16.108818
License: Public Domain

1. Whether or not the relationship between the petitioner and the principal defendant in the operation of a second hand furniture business was a partnership, as contended by the petitioner, or an agency, as found by the auditor, is immaterial, since an accounting was had and the amount found in favor of the petitioner was no less than would have been due him if a partnership had been found to exist.
2. The auditor did not err in finding that the petitioner failed to establish by a preponderance of the evidence any amount due him as his share of profits from the business alleged by the petitioner to have been operated under a partnership agreement.
(a) The facts of the case did not call for the application of the legal principle that transactions between husband and wife are to be scanned with care.
3. The auditor — having found that the principal defendant was indebted in a stated amount to the petitioner on his contract to operate the furniture business, and that he was further indebted on another contract to collect rents, for both of which amounts the petitioner was entitled to a judgment — did not err, as contended, in failing to find that the petitioner was entitled to a lien upon real estate purchased by the defendant wife with her own funds during the time of her employment with the agency here involved.
4. The evidence showing that the defendant wife was separated from her husband, the principal defendant, during the pendency of a suit for divorce, and was not present when the principal defendant admitted to the petitioner that he had used the petitioner's money in the purchase of property, the title to which was taken in the name of the defendant *Page 298 
wife, the auditor did not err in finding that such admission was merely hearsay and not binding upon her.
5. The auditor did not err, in the absence of any evidence on the question, in failing to find that the petitioner was entitled to a lien on the real property, purchased by the defendant wife, to the extent of the value of certain guano alleged to have been the property of the petitioner and used by her in the operation of a farm.
6. The evidence, though conflicting, supported the findings of fact of the auditor, and the trial court did not err in sustaining such findings and in entering a decree in conformity therewith.
                        No. 15821. MAY 16, 1947.
Connie Lee filed in Tift Superior Court, against L. D. Calhoun and his wife, Mrs. Reba Calhoun, a petition which alleged substantially the following: During 1938 the petitioner entered into an agreement with L. D. Calhoun, by the terms of which they entered into a partnership and thereafter engaged in the purchase and sale of second-hand furniture. Under the agreement the petitioner financed the purchase of the original stock of merchandise and furnished the building in which it was operated. In entering into the partnership L. D. Calhoun was to take charge of and handle the business. The petitioner was to receive no rent from his building in which the business was conducted, and L. D. Calhoun was to draw no salary, but all profits were to be equally divided between the parties. The petitioner owned various houses which were rented for residences, and had an agreement with L. D. Calhoun by which he was to collect the rents from such houses, make and supervise repairs and additions thereto, for which he was to receive from the petitioner the free use and rental of the house in which he resided and which was owned by the petitioner. The average monthly rental which the petitioner should have received would amount to approximately $200 for the years 1939, 1940, and 1941; and thereafter, because of the increase in rents charged and additional units erected, such income should have been $275 per month. Although L. D. Calhoun had exclusive control of the collection of rents and should have made to the petitioner detailed statements of the amounts of rents collected, he has never given a full and complete statement of such matter, although such a statement has often been demanded by the petitioner. Since the formation of the partnership L. D. Calhoun has *Page 299 
never paid to the petitioner any amount of money, made any statement of the partnership affairs, or furnished an inventory showing the furniture on hand and the accounts receivable, except approximately four years ago, at which time the accounts receivable were about $1800. On some occasions he stated that the partnership was not making any money and at other times that the profits were being reinvested in additional furniture. At the time the partnership agreement was entered into L. D. Calhoun and his wife, Mrs. Reba Calhoun, owned no property, money or effects, except household furniture of the doubtful value of $100. Since such time neither L. D. Calhoun nor his wife has acquired any property by inheritance or gift. Although the defendants had no income except from the operation of the furniture business, they have been able to acquire valuable property, the income from which amounts to not less than $150 per month, and which had an original cost of $10,000. During the above period Mrs. Reba Calhoun purchased from third parties described real property worth $1500, the petitioner sold her real estate worth $1100, and a third party sold L. D. Calhoun real property worth $6000. From time to time the defendants explained to the petitioner that Mrs. Reba Calhoun owned valuable real property in North Carolina, and that she had sold various tracts of the same and was investing the proceeds. Recently the petitioner learned that such representations were untrue. L. D. Calhoun has taken the income from the operation of the partnership business, in which the petitioner has an equal interest, and has invested the same in the purchase of valuable real property, and Mrs. Reba Calhoun contributed nothing to the purchase price thereof. The title to such property, in equity and good conscience, is in the petitioner and should be so decreed by the court. The defendants also purchased an automobile and a considerable amount of war bonds, which rightfully belong to the petitioner, as having been paid for from his money.
The prayers were: (1) that process issue; (2) that the petitioner have an accounting with L. D. Calhoun for all rents collected and for the income received from the operation of the furniture business; (3) that the books kept by the defendants be held subject to the order of the court; (4) that L. D. Calhoun be enjoined from collecting any rents due the petitioner or making any collection on the accounts of the partnership; (5) that the partnership *Page 300 
be dissolved; (6) that the title to all of the real estate alleged to have been purchased with the petitioner's money, whether now in Mrs. Reba Calhoun or L. D. Calhoun, be decreed in the petitioner; (7) that the defendants be enjoined from selling or encumbering such real estate or from collecting rents thereon; (8) that the petitioner recover judgment against each of the defendants for any amounts found to be due him after a full and fair accounting; (9) that the petitioner receive such other relief as may be necessary to fully protect his rights.
The defendants filed separate answers denying material allegations of the petition. An intervention was filed by Warren G. Calhoun, a son of the defendant, L. D. Calhoun, setting forth that he was the owner of certain personal property and that, since described real estate taken in the name of L. D. Calhoun was purchased with money belonging to the intervenor, he was the equitable owner of such realty.
By consent of the parties the case was referred to an auditor to pass upon all questions of law and fact. After hearing evidence the auditor made twelve rulings designated as findings of law, and five rulings designated as findings of fact. The first finding of law merely stated that "certain demurrers were filed to the original petition in the above matter, but at the hearing . . they were not presented, or insisted upon, and they will now be considered as having been abandoned." The findings of law numbered 2 to 12 inclusive had reference to rulings upon the admission of evidence. There were no exceptions to any of the above rulings.
The findings of fact were substantially as follows: During the fall of 1938 or the spring of 1939, two separate and distinct contracts were entered into between the petitioner and L. D. Calhoun. 1. The petitioner employed L. D. Calhoun to look after, repair, and rent out for him certain houses for which the petitioner agreed to allow L. D. Calhoun rent free a certain house in which to live. (a) L. D. Calhoun was not to be paid any commission for collecting rents. 2. The petitioner, about the same time, employed L. D. Calhoun to operate a retail second-hand furniture store, agreeing to furnish a certain stock of second-hand furniture which he had on hand, and also to furnish rent free the store in which the business was to be carried on, and as compensation therefor *Page 301 
agreed to pay L. D. Calhoun 50 percent of the profits. (a) The evidence does not sustain the allegation of the petition that a partnership was to be formed, there being no evidence that there was any agreement whereby losses, if any, were to be shared. However, such contract constituted the relationship of principal and agent on the basis that the petitioner was to furnish the original stock with which to do business, and L. D. Calhoun was to take charge of such stock, and from the proceeds of sale supplement the stock. (b) The original stock of second-hand furniture furnished by the petitioner to L. D. Calhoun amounted to $2000, and subsequently thereto the petitioner supplemented the stock by furnishing additional stock in the amount of $1000, the petitioner having testified that he had invested in the business the sum of $3800. However, he testified that $800 thereof was for truck hire, and this amount is deducted, leaving as a value of the stock of second-hand furniture furnished by the petitioner the sum of $3000. 3. The petitioner failed to establish by a preponderance of the evidence any certain amount which might be due him as his share of profits from the operation of the furniture store. While the evidence of the petitioner is sufficient to establish a strong suspicion that he has not received a proper accounting from L. D. Calhoun in the operation of the furniture business, his evidence is entirely speculative and is not sufficiently satisfactory to arrive at any proper accounting. (a) However, having furnished to L. D. Calhoun a stock of goods valued at $3000, and it appearing from the record that at the time a receiver was appointed there was on hand a stock amounting only to the sum of $373, L. D. Calhoun is indebted to the petitioner in the sum of $2627, representing the difference. 4. L. D. Calhoun is further indebted to the petitioner as a result of his contract to rent out and collect the rent for the houses, the sum of $1068. In arriving at this conclusion an examination was undertaken of the books submitted by L. D. Calhoun, as shown in the report of the evidence proposed to be a record of the rents collected and disbursements thereon from May 4, 1940, through September, 1945. These records are not supported by receipts or canceled checks but are accepted at face value. The rent collections and disbursements appear to be approximately correct in Books 17, 18, 19, and 20. However, in Book 16, which covers a period from March 4, 1940, through September 20, 1940, *Page 302 
the total collections on rent appear to be $6045.59. Against these collections there appears to be disbursements in the amount of $5435.46 which leaves a shortage in the amount collected in the sum of $610.13. However, the petitioner testified that no rents were paid over to him after April 1, 1945, in which case the total disbursement against this amount collected is $4976.79, leaving a shortage of $1068.80, which amount is adjudged to be due the petitioner as a result of such rental contract. From the standpoint of the petitioner, he has offered no evidence which would throw light upon such transaction. While his evidence established a strong presumption that he has not been fairly dealt with by L. D. Calhoun, the very laxness of his dealings with L. D. Calhoun, and the fact that throughout the period in controversy, he accepted the reports of L. D. Calhoun without raising any objections, and he having failed as a witness to show any valid objection to such reports, the auditor was forced to rely solely upon the books offered in evidence by L. D. Calhoun for the accounting in the matter. 5. Subsequently to the filing of this petition, L. D. Calhoun stated to the petitioner that the money of the petitioner had been used to buy certain real estate described in his petition, and that title thereto had been taken both in the name of L. D. Calhoun and his wife, Mrs. Reba Calhoun. (a) This is an admission from the defendant, L. D. Calhoun, and therefore title to all of the property standing in the name of L. D. Calhoun, except as to the portion now claimed by his son, Warren G. Calhoun, should in equity and good conscience be decreed to be in the petitioner. (b) However, such statement or admission is not binding either upon Mrs. Reba Calhoun or Warren G. Calhoun, such evidence being merely hearsay as to them. Therefore judgment is rendered against the petitioner and in favor of Warren G. Calhoun for the property described in the intervention, and in favor of Mrs. Reba Calhoun for all of the property described in the petition as having been purchased in the name of Mrs. Reba Calhoun.
On exceptions by the petitioner to the findings of fact contained in the auditor's report, the court sustained the findings of the auditor, and a decree was duly entered, to which judgment and decree the petitioner assigned error in a direct bill of exceptions. Other facts will be stated in the opinion. *Page 303 
1. The first exception complains that the auditor erred in finding that the evidence does not sustain the allegation of the petition that a partnership was to be formed, there being no evidence that there was any agreement whereby losses, if any, were to be shared.
Whether or not the relationship between the petitioner and L. D. Calhoun was a partnership, as contended by the petitioner, or that of principal and agent, as found by the auditor, is immaterial, since an accounting was had and the amount found in favor of the petitioner was no less than would have been due him if a partnership had been found to exist. Nothing in the way of profits was shown to be in the hands of L. D. Calhoun, and under the contentions of the petitioner he would be entitled only to what funds or property really belonged to him, and an accounting as of agency would benefit the petitioner no less than if predicated upon a partnership.
Accordingly, the petitioner could not be said to have been harmed by the finding of the auditor that the relationship between the petitioner and L. D. Calhoun was that of principal and agent instead of a partnership.
2. The second exception complains of the finding of the auditor that the petitioner failed to establish by a preponderance of the evidence any certain amount which might be due him as his share of profits from the operation of the furniture store. It is insisted that, under the allegations that the petitioner's money derived from the operation of the furniture business was used in the purchase of valuable real property, title to which was taken in the name of Mrs. Reba Calhoun, the doctrine that transactions between husband and wife are to be scanned with care was applicable, and that the burden was upon the husband and wife to show the bona fides of the transaction.
As pointed out in the finding of the auditor, while the evidence of the petitioner was sufficient to establish a strong suspicion that he had not received a proper accounting from L. D. Calhoun in the operation of the furniture business, his evidence was entirely speculative and was not sufficiently satisfactory to enable any *Page 304 
proper accounting to be made. The auditor then proceeded to determine the matter as best he could by reference to books that were kept in the furniture business, and awarded the petitioner a judgment against L. D. Calhoun in the sum of $2627.
There was evidence for the petitioner to the following effect: He and L. D. Calhoun were jointly interested in the operation of a second-hand furniture business. Mrs. Reba Calhoun, the wife of L. D. Calhoun, kept the books and otherwise assisted in the business. The petitioner saw the books from time to time, but kept no records and did not know the exact amount of profits that should have been made during the years 1938 to 1945, or that either of the defendants had taken any money belonging to him. However, when the defendants commenced buying valuable property, he suspected that they were using money that belonged to him. His suspicions were confirmed when an investigation of representations made to him by Mrs. Reba Calhoun, that she had sold real estate in North Carolina, showed that such representations were untrue. Mrs. Reba Calhoun testified positively that she did own the real estate in North Carolina which she sold to a named person. She also testified to the following effect: She operated a farm and sold hogs, flower cuttings, milk and butter. She received a Government allotment of $30 a month for taking care of her stepson's child, and $190 a month as rental on the property she bought, which was applied against the purchase-price thereof, and no part of the purchase-price was paid with money belonging to the petitioner. The uncontradicted evidence showed that she purchased four pieces of real property at various times, taking title thereto in her own name, one of which was purchased from the petitioner, and none of which was purchased from, or given to her by her husband.
It is true that whenever a transaction is between husband and wife and the creditors of the husband attack it for fraud, if the wife claims the property purchased or received from the husband, the onus is upon her to make a fair showing about the whole transaction. Jones v. J. S. H. Company, 199 Ga. 755 (1) 769 (35 S.E.2d 288). Yet the Code section upon which the above principle is predicated also provides that, where the wife has a separate estate, and purchases from others than her husband, and the property is levied on as the property of the husband, the onus is *Page 305 
upon the creditor to show fraud or collusion, or that the wife did not have any separate estate or means wherewith to purchase the property. Code, § 53-505; Richardson  Co. v. Subers,82 Ga. 427 (9 S.E. 172).
Applying the above principles of law to the pleadings and evidence in the present case, a finding by the auditor, that the onus was upon the wife to make a fair showing about the whole transaction, was not demanded as a matter of law. Accordingly, the auditor did not err in finding that the petitioner failed to establish by a preponderance of the evidence any certain amount which might be due him as his share of profits from the operation of the furniture store.
The instant case is distinguished on its facts from Mattox
v. West, 194 Ga. 310 (21 S.E.2d 428), where, among the means employed to convey the property into the wife, there was a deed from certain persons who had granted to the husband an option to purchase lands, which he transferred to his wife and procured extensions thereon in her name.
3. The third and fourth exceptions are also based upon the contention that the burden was on the defendants to show the source from which the funds were derived for the purchase of the real property; and for the further reason that the auditor found that — the petitioner, having furnished to L. D. Calhoun a stock of goods valued at $3000, and it appearing that at the time a receiver was appointed the stock amounted only to $373 — L. D. Calhoun was indebted to the petitioner in the sum of $2627, and further indebted to the petitioner in the sum of $1068 on his contract to collect rent, for both of which amounts the petitioner was entitled to a judgment, and yet the auditor found that the petitioner was not entitled to a lien upon any of the property which had been bought and the title taken in the name of Reba Calhoun during the operation of the business.
Under the conflicting evidence above set forth there is no merit in these exceptions.
4. The fifth exception complains that, the auditor having found that L. D. Calhoun admitted to the petitioner that he had used the petitioner's money in the purchase of the property, the title to which was taken in the name of Mrs. Reba Calhoun, the burden was upon the defendants in equity and good conscience to show *Page 306 
that the property had been purchased with funds belonging to Mrs. Calhoun.
There is no merit in this exception. The uncontroverted evidence shows that Mrs. Reba Calhoun was separated from her husband, L. D. Calhoun, during the pendency of a suit for divorce that was withdrawn after the filing of the present petition, and was not present but on the contrary was living in North Carolina at the time of the alleged admission in Georgia by L. D. Calhoun to the petitioner. In Virgin v. Dunwoody, 93 Ga. 104
(19 S.E. 84), this court held: "The court erred in admitting evidence of the declarations of the defendant's husband, made to the plaintiff when the defendant was not present, to the effect that the defendant was, or had agreed to become, a copartner of the plaintiff in the business in lieu of her husband." Similar rulings were made in Hamilton v. Duvall, 142 Ga. 432 (4) (83 S.E. 103), and Graham v. Walsh, 14 Ga. App. 287
(80 S.E. 693).
It might be added that, while the auditor did find that the defendant had made the admission as contended by the petitioner, he also found that the admission was not binding upon Mrs. Reba Calhoun, such evidence being merely hearsay as to her.
5. The sixth exception complains that the auditor erred in not finding that the petitioner was entitled to a lien upon the real property, which had been purchased by Mrs. Reba Calhoun and the title thereto taken in her name, to the extent of the value of certain guano used on a farm operated by her.
While the petition alleges that guano belonging to the petitioner was used on a farm operated by Mrs. Reba Calhoun, these allegations were denied in the answers filed by the defendants, and a careful reading of the evidence introduced at the hearing before the auditor fails to disclose any reference to such guano.
The auditor did not err, in the absence of any evidence on the question, in failing to find that the petitioner was entitled to the above-mentioned lien.
6. In an equity case, exceptions of fact to an auditor's report are to be submitted to a jury only when approved by the trial judge; and an order overruling such exceptions will not be reversed by this court if the findings of the auditor are supported by any evidence, even though the evidence may be conflicting. Mitchell *Page 307 
v. Turner, 190 Ga. 485 (9 S.E.2d 621); Grant v. Grant,202 Ga. 40 (41 S.E.2d 534 (3)).
Applying the above principle of law to the facts disclosed by the record in the present case, it appears that the evidence, though conflicting, supported the findings of fact by the auditor. Accordingly, the trial court did not err in sustaining the findings of fact by the auditor and in entering a decree in conformity therewith.
Judgment affirmed. All the Justices concur.