Boyle v. Hardy ( 1859 )

RichaRdson, Judge,

delivered the opinion of the court.

The general history of this controversy to the time that the defendant filed his answer to the complainant’s amended bill may be seen in the report of the case in 21 Mo. 60, 62.

The answer to the original bill set up as a defence that an account of the affairs of the first partnership had been stated and settled; and, on a hearing of the cause, the court found the issue for the defendant. The effect of that interlocutory decree, which we are not called on to review, was to drive the complainant to file an amended bill, in which it was necessary to point out specifie errors in the account. When the case was last here, it was remanded “ with directions to refer back the account stated to a commissioner, with instructions to examine the same as to errors and omissions, and with leave to the complainant to surcharge and falsify the same on the basis of the settlement as found by the court.” And the first question to be decided is whether the decretal order referring the cause to the commissioner was properly made and in conformity to the opinion of this court.

It is stated in Daniel’s Treatise on Chancery Practice that when a settlement of account is shown to have’been procured by fraud, it is a sufficient ground to open the whole account, and the parties will not be in any manner bound by it; but when errors or omissions only are shown to exist, the account will not be opened, and the party will be permitted merely to surcharge and falsify it. The court takes it as a ' stated account, and the party seeking to open it must specify the errors he relies upon. It is not however necessary for him to prove all the errors named in the bill, for he will be entitled to a decree giving him liberty to surcharge and falsify if he proves some of them; and if he can show an omission for which there ought to be a credit, it will be added, (which is a surcharge,) and if any improper charge is inserted, it will be deducted (which is a falsification). (2 Daniel Ch. Pr. 189,190.) Judge Story says that, when it is shown the parties have already adjusted an account, the court will adopt, according to circumstances, one of three courses. 1. In case of gross fraud or gross mistake, or undue advantage or imposition, the whole account will be opened and ordered to be taken de novo. 2. When the mistake or omission or inaccuracy or fraud or imposition is not shown to stain or affect all the items of the transaction, the court will allow the account to stand, with liberty to the complainant to surcharge and falsify it; the effect of which is to leave the account in full force as a stated account, except so far as it can be impugned by the opposing party, who assumes the burden of proof to establish errors or mistakes. 3. Sometimes, a still more moderate course is adopted, and the account is simply opened to contestation as to one or more items which are specially set forth in the bill of the plaintiff as being erroneous or unjustifiable, and in all other respects it is treated as conclusive. (1 Story Eq. § 523.)

The interlocutory decree, to which the complainant excepted, ordered that the account settled and stated on the 25th of January, 1844, of the first partnership should stand, with liberty to either party to surcharge and falsify it, and that the account should be referred to the commissioner with instructions to examine the same as to errors and omissions on the footing of said account stated, and to state the balance of account and interest due to either party from the pleadings and evidence then in the cause, and such further competent evidence as either party might produce before him. This decree, we think, was in conformity to the remanding order of this court, was adapted to the nature of the bill, and is of the character suggested by Judge Story in his third classification.

It appears that the commissioner examined every specification of error stated in the bill and found that there was nothing to invalidate the integrity or correctness of the account; and, in our opinion, he properly construed the decree in ruling that the examination should be confined to such errors and omissions as were specifically charged, and that the account should stand unless one or more of the specific errors or omissions charged in the bill were established by proof.

The balance sheets made out by Pagaud were properly rejected as evidence. They were not made from the original books of the parties, but from those transcribed by Liggett, which were shown to be inaccurate in many respects. Pagaud was never sworn in the cause, and they amounted to nothing more than the private papers or written statements of a third person. In Turner v. Hughes, Busby’s Eq. Rep. 116, the person who furnished the abstracts of the books was the agent of both parties appointed for that purpose, and the examination of the books was made by him in the presence of the parties; but in this case the abstracts were taken from data which the defendant repudiated, and they were not drawn off in the presence of the parties, nor even under the eye of Mr. Carroll, the former commissioner.

The exception to the final decree that the bill was dismissed without taking an account of the business of the last partnership was properly overruled. The allegations.in respect of the second partnership was that the errors and admissions in the account of the first partnership were carried into the new concern; but as the decree established that there was no error in the account of the first partnership, it would seem that there was no reason for examining into the accounts of the second partnership. Furthermore, it does not appear that the complainant, either before the court or the commissioner, offered any proof touching the accounts or business of the second partnership; and it may be fairly inferred from his silence on the final hearing, as he did in express terms on a former hearing, that he abandoned any claim to inquire into the affairs or accounts of the second partnership. The other judges concurring, the judgment will be affirmed.