Wiggin v. Fine , 17 Mont. 575 ( 1896 )

Hunt, J.

The ruling of the district court in admitting certain evidence upon the trial before that court, and to which exception was duly taken, brings up the main point for determination. The plaintiff offered evidence to prove the partnership alleged between himself and the defendant in the Mary Ann and the Shonbar mining ventures. On cross-examination, plaintiff was asked concerning an interest that Hamilton and Lowrey, who were alleged by defendant to be partners in the Shonbar, had in the Shonbar lease, and in the stock of a mining corporation to be formed with the Shonbar claim, as the property of the corporation, and if he (plaintiff) did not know that, for a loan of $2,000 made by Hamilton and Lowrey to Fine, the said Hamilton and Lowrey were to be given stock in the Shonbar corporation, out of the interests of both plaintiff and defendant. Thereafter, on redirect examination, the plaintiff said he had conversed with Hamilton with reference to his being interested in the matter of the Shonbar claim and corporation. Counsel for plaintiff then asked what Hamilton said about it. Defendant’s counsel objected to the question as immaterial and irrelevant; also, as calling for hearsay. The plaintiff was allowed to answer, and an exception was saved. The answer of the witness stated, substantially, that Hamilton had told him that he (Hamilton) and Lowrey had loaned Mr. Fine $2,000, and he had deeded them an interest in the lease and bond, and had promised them some stock in the company, if it went through; that he expected no money, but understood it was between Fine and plaintiff; that plaintiff and defendant were to have any money to come, but that Fine agreed to give him (Hamilton) some stock for loaning the money, and was to pay him back the $2,000.

The defendant’s evidence tended to prove, in part, that at one time the plaintiff had assigned his entire interest in the Shonbar bond to the defendant, and that $1,000 had been paid by the purchasers to the plaintiff on account of the sale, which was for $2,500; that thereafter the purchasers failed to make the further payments, and an incorporation was talked of between plaintiff and defendant: that in November it was necessary to meet the unexpected expenses of the mine, whereupon the defendant went to Hamilton and Lowrey, who, he alleges, were partners, and they loaned to the defendant §2,000, and that, by way of appreciation of the assistance of Hamilton and Lowrey, defendant gave them one-sixteenth interest out of his interest in the Shonbar and Mary Ann; that at that time the entire title of the Shonbar was in the defendant, the plaintiff having assigned his interest in the Shonbar to the defendant at the time of the supposed purchase, some time before; that thereafter incorporation of the Shonbar was talked of, and it was understood and agreed between Hamilton and Lowrey and defendant — and this agreement was known to plaintiff, and assented to by him — that the interest of Hamilton and Lowrey would remain just the same in the organized company as it appeared in the bond and lease, and that said Hamilton and Lowrey should have a one-sixteenth of the entire stock in the incorporated company.

By the pleadings and the evidence, the question, therefore, of the existence of ahy partnership relation between plaintiff and defendant and Hamilton and Lowrey in the Shonbar, became a material issue. Upon its correct determination necessarily depended the amount of any share of money due by any one partner to his fellow partners, but especially any amount that might be due from this defendant to plaintiff in the accounting ordered before the referee. But, to establish defendant’s liability, it was error to permit Hamilton’s declarations made to plaintiff without the hearing of the defendant, to the effect that he did not claim to be a partner. Such declarations, when made by one not a party to the suit, and offered to disprove the alleged fact of a partnership, are inadmissible to bind the defendant or disprove the existence of the partnership alleged. (Teller v. Patten, 20 How. 125; Lindley on Partnership 86; Flournoy v. Williams, 68 Ga. 707; Converse v. Shambaugh, 4 Neb. 376; Sankey v. Iron Works, 44 Ga. 229; Brown v. Rains, 53 Iowa 81, 4 N. W. 867; 2 Greenl. Ev. § 484.) For this error the case must be remanded. Pankey, who, it is alleged, was one of the partners, testified. The court found he was not a partner. Upon Pankey’s rights in the accounting, no further order need be made, as we accept the finding excluding him from the partnership.

As the testimony of the declarations of Hamilton clearly went to the matter of the Shonbar incorporation only, and not to the Mary Ann accounts, no new trial need be had concerning the latter branch of the case.

It is likewise unnecessary to order a re-examination of the various items which enter into the Shonbar account between Wiggin and Fine. Fine had full opportunity to dispute their correctness, but negligently omitted to be present at the referee’s hearing. He makes no sufficient showing to reopen the accounts themselves. The only question left to be retried is, were Hamilton and Lowrey partners with Wiggin and Fine in the Shonbar venture, and, if so, what interest had they % If not, the- judgment of the court will remain. If they were partners, then let such deductions be made in the amounts found due by Fine to Wiggin .as will reduce the amount of Wiggin’s judgment to his actual interest in the firm, with relation to all partners. It appears that the referee reported Fine as indebted to Wiggin in the sum of §1,489.59 on the Mary Ann account. This amount was afterwards corrected by the court’s finding that Wiggin omitted to include in the Mary Ann account §3,980.40 received by him from two sources. The plaintiff accepted this correction. Fine is therefore entitled to an application of this Mary Ann credit on the Shonbar matter, without regard to the rights of others, as it is found, without error, that there were no partners besides Wiggin and Fine in the Mary Ann.

The judgment is reversed, and the case is remanded, with directions to grant a new trial upon the issue of partnership in the Shonbar matter, and thereafter to proceed in accordance with the views herein expressed. Costs of this appeal to be taxed to respondent.

Reversed.

Pemberton, C. J., and De Witt, J., concur.