Court Opinion

ID: 3613342
Source: CourtListenerOpinion
Date Created: 2016-07-05 23:57:04.293529+00
Date Added: 2024-06-11T14:24:27.506205
License: Public Domain

This action was brought to open a settlement of a partnership transaction, and to recover of the defendant a sum of money claimed to be due to the plaintiff upon a rectification of the alleged errors. The partners were the defendant and Addison Gardner and Hiram F. Sickles; each being interested in one-third of the profits. The plaintiff is the assignee of the two last named partners, and seeks to recover what would have been due to them, or either of them.
The partnership enterprise consisted in the purchase of a particular quantity of wheat, manufacturing a part of it into flour, and selling the flour thus manufactured and the residue of the wheat. There was connected with it the purchase and sale of about two hundred barrels of manufactured flour, which came by boats, and is called in the case "canal flour." The business commenced in December, 1847, and was finished on or prior to February, 1848, and in the last mentioned month an adjustment took place, when it was found that profits had been made to the amount of $316.09, of which the share of each partner would be $105.36. It was also found that there remained in the defendant's hands, of the moneys of the concern, $91. An arrangement was had *Page 502 
between Sickles and Gardner, by which the latter became entitled to the rights and interests of the former in the business. In March following, a settlement took place between Gardner and the defendant, representing Sickles' interest as well as his own, of which a written statement was made and mutually assented to, which embraced the aforesaid balances of the partnership dealings and other accounts, and which, including a small sum of money paid by the defendant, balanced the respective claims of Gardner and the defendant. It was assumed, on the trial, that neither the adjustment in February, nor this settlement in March, embraced the accounts respecting the canal flour, on which there was eventually a loss to the concern of between one and two hundred dollars.
Soon after these transactions, Gardner became insolvent, and his property was assigned to N.S. Graves, under the insolvent act. He, as the assignee, sold the assets of Gardner by a transfer, embracing, in general language, all his property, to two sisters of Gardner, and they, by an instrument expressing a nominal consideration, transferred their interests in the subject to the plaintiff. He also took from Sickles a transfer of his interest in the partnership concern for a nominal consideration.
Gardner, who was the principal witness for the plaintiff, gave evidence tending to show that, in the adjustment in February, the results of which were carried into the settlement of March, an item of two hundred and fourteen bushels of the partnership wheat, which the defendant had sold to one Parmelee in December, 1847, and for which he had received payment to the amount of $270.31, had, by mistake, been omitted to be charged to the defendant. The omission of this item was the principal error claimed to exist in the accounting. Gardner testified that he did not discover the error until 1850, after the title to his property had become vested in his sisters.
The defendant proved, and gave in evidence, a due-bill and receipt, in the following words: *Page 503 
"Due A. Gardner, on settlement of flour and wheat business, thirty-eight 76-100 dollars, value received. May 8, 1848.
"JEREMIAH COOPER."
[Indorsed thereon] "Received, May 27, 1848, of J. Cooper, the within amount, in full.                        ADDISON GARDNER."
Before the production of these papers, Gardner had testified that he did not recollect the giving of any such note or receipt, or that he had ever settled with the defendant the account of the canal flour. After they had been produced, he was examined to show that the note was given for the defendant's share of the loss upon the purchase and sale of the canal flour, and that nothing else was settled or accounted for on that occasion. The defendant's counsel objected to this evidence, insisting that the contents of the note could not be contradicted by parol, and that the note and receipt, taken together, were evidence that all the partnership accounts had been fully adjusted. The referee overruled the objections, the defendant excepting, and Gardner thereupon swore positively that the adjustment then made, and for which the note was given, was confined to the loss on the canal flour. The defendant, who was examined on his own behalf, swore with equal positiveness that the account of the wheat sold Parmelee, which had been omitted in the February and March settlements, was then brought in and accounted for; that he then paid Gardner a considerable sum of money; and that the note was given as a final close of the whole matter. There was also produced a paper, in the handwriting of Gardner, showing that, as late as 1852, he claimed that the loss on the canal flour had never been adjusted, and that the defendant was still indebted to him for his part of that loss.
The principal question of law arising upon the case relates to the admissibility of the parol evidence to qualify the effect of the note of May 8, 1848. In terms, it covers the transactions respecting the partnership in buying, manufacturing and selling wheat and flour, as well as the selling of the flour called the canal flour, and it professes to be a settlement of both transactions. It is not alleged that there was any fraud *Page 504 
made use of in inserting that language, but simply that the settlement referred to was limited to the canal flour. The evidence admitted was clearly hostile to the terms and legal effect of the papers; and, if the question arose upon any other instrument than a receipt, it would be a violation of a very familiar rule of evidence to allow it to be thus contradicted. The note, and receipt of its payment, taken together, do in fact amount to a receipt in full for the subject mentioned in the note. It is very much like the case of a person giving his check on a bank payable to the order of his creditor, and expressing on its face that it was given on a particular account or for a particular indebtedness. When such a check is paid at the bank, the drawer holds it as his voucher for the payment of the indebtedness mentioned in it. The question is, whether it possesses the immunity against parol evidence and the slippery memory of witnesses which the law attributes to other written evidence. It imports, in the present case, something more than that Gardner had received of the defendant the sum of money mentioned. It affirms that there had been a settlement between the parties; that such settlement embraced their wheat business as well as their dealings in flour, and that the sum agreed to be paid, and which was afterwards paid, was the balance found due on that settlement. It contains the results of an account stated, and the subjects which that account embraced. I think it cannot be contradicted by parol evidence in respect to the subjects included. The case of Coon v. Knapp (4 Seld., 402), is not, I think, distinguishable from the present. The plaintiff had been injured by the overturning of the defendants' stagecoach, and she brought an action on the case for negligence. The defendants soon after settled with her, taking her receipt for $40, expressed to be in full for the damages done to her by the stage accident. At the Circuit the plaintiff was permitted to prove, in effect, that the agreement was, she was to have the $40 if her injuries were not of a more permanent character than they then appeared to be, and that she gave the receipt under that agreement, but that in fact her injuries were of a more permanent character, and she recovered *Page 505 
a considerable verdict. This court reversed the judgment, holding that the paper was something more than a receipt; that it was written evidence of the satisfaction of the entire claim which she had against the stage proprietors for their misfeasance. InKellogg v. Richards (14 Wend., 116), the receipt was written on the back of a note for $1,627.44, which the plaintiffs held against the defendants, and it acknowledged that the plaintiffs had received the note of a third person "as a compromise for the full payment" of the principal note. The plaintiffs offered to prove that the real agreement was that they were to have a further sum which, with the collateral note, would make one dollar on a pound of the original debt. It was excluded; and the ruling was held to be correct. The court considered that the indorsement contained more than a receipt; that it was an agreement for a compromise, and was not subject to be modified by parol evidence. In the case before us, the receipt is the evidence of an agreement by which the multifarious accounts of the parties were adjusted at a given sum, and it was not competent to show by parol that one of the subjects which, by the terms of the paper, were embraced in that settlement, were not in fact embraced in the real agreement.
It may be said that the defendant had, in his evidence, gone into the parol arrangement, and had given his version of it, and that Gardner, the other party, should have the like liberty. But the defendant's evidence was not objected to; and, besides, it was in harmony with the paper, while that of Gardner was in hostility to it.
I do not perceive upon what theory the referee could have reported the whole amount of $316.50 against the defendant. It consisted of the $270.31 for the money which the defendant had received of Parmelee; $38 which had been credited to the defendant for money paid by him to a bank over and above the money actually paid; and $8.36 for some miscalculation in ascertaining the profits. If the two first mentioned of these items had been brought in and accounted for, the profits of the concern would have been something more than $300 more than they were found to be, and the defendant *Page 506 
would have been entitled to retain one-third of that sum; and he should, in this action, have been compelled to pay only two-thirds of these increased profits; instead of which, the report and judgment are for the whole amount, with interest.
I am in favor of reversing the judgment appealed from, and ordering a new trial.
Judgment affirmed, deducting one-third of the amount without costs to either party. *Page 507