Briere v. Taylor , 126 Wis. 347 ( 1905 )

Maeshall, I.

The main contention of appellants’ counsel is'that the finding as to the members of the union having made a partnership and no other agreement and that all business transacted as regards handling berries produced by members, as well as in regard to handling outside berries, was within the scope of such agreement, is contrary to the clear preponderance of the evidence. We shall not incumber this opinion by referring in detail to the evidence on that question. It is believed that careful study requisite to a thorough understanding of and such appreciation of the weight that should be given to the evidence, direct and circumstantial, as- one can reasonably acquire circumstanced as the members of an appellate tribunal necessarily -are, has been devoted thereto.

We are unable to reach the conclusion that the decision of the trial court is barren of any finding of fact on the issue as to whether there was or was not a partnership agreement, precluding a decision on the matter here as an original question. While findings of fact should respond in detail to all pleaded facts in issue essential to the cause of action or defense, they need not necessarily be any broader or more specific than a special verdict or a good pleading is required to be. An allegation in general terms as to a partnership agreement is sufficient to tender the matter as an issue to the adverse party, a denial of it by answer, supported by affidavit, as prescribed by sec. 4197, Stats. 1898, is a sufficient acceptance of the tender, and the decision of the matter under see. 2863, requiring the trial court to state separately in the decision the facts found by him, need not go into particulars to any greater extent than would satisfy, as before indicated, the test of a good pleading. Mere evidentiary facts need not be stated separate from the conclusion of facts based thereon, and so far as they might be pleaded according to their legal effect, as regards a challenge for insufficiency, they may be so stated in the finding, though the better practice by far is to avoid the latter, since it is liable to lead to confusion between conclusions of fact and conclusions of law, which should be avoided.

We are unable to agree with appellants’ counsel that the finding as to a partnership agreement having been made is in every respect contrary to the clear preponderance of the evidence. There seems to be considerable proof, all or nearly all of a circumstantial nature, though quite persuasive, that as regards everything reasonably germane to finding a market for the berries produced by the members of the union to the best advantage to them respectively, the agreement was characterized by all the essential features of a copartnership contract.

It was not contemplated that the expenses of the union as regards the per diem compensation for solicitors or the outlay for stationery, postage, labels to be placed on barrels, charges in sending out samples of berries, and expense of obtaining information as regards the financial responsibility of proposed purchasers for berries, and similar expenses were to be charged up to the members of the union otherwise than'in a ratio corresponding to'their respective interests in the union, regardless of the extent to which they might actually use the union agency in the selling of their berries. Each member agreed to pay his stipulated proportion of these expenses regardless of whether it handled the whole or only a small portion of his crop. The profits which it was contemplated the union would make, it was supposed, as it seems, would necessarily go to the members in the agreed ratio of their respective interests, because the only anticipatory profits were such as would accrue to them through that promotion of such interests which concei't of action in marketing the berries and maintenance of prices would probably afford. So far as the value of those benefits in the aggregate was in excess of expenses there would necessarily be a gain, and so far as the balance was the other way there would be a loss. In that there was all the community of interest in profits and losses essential to a partnership agreement. Bird v. Morrison, 12 Wis. 138; Miller v. Price, 20 Wis. 117; Spaulding v. Stubbings, 86 Wis. 255, 56 N. W. 469. It is not essential to a partnership agreement that it shall contemplate that the profits accruing to' the business shall be liquidated in the form of money or property in possession for division in the ratio of the interests of the members respectively. If the ultimate result contemplated of the business operations of the association according to the agreement was a community of profits in case of there being any, and of losses if any should accrue, the agreement was of a partnership character.

Whether the partnership agreement contemplated the buying and marketing of berries, as the court found, so far as the finding relates to outside berries to the extent reasonably necessary to prevent them from being offered to the trade to the prejudice of the common interests of the members of the union, is by no means free from difficulty. It would seem that the handling of outside berries to that extent was probably included in the scope of the union agreement from the very nature of it, especially in the light of the way the business was done without definite protest by any one. The trial court was evidently left to determine such scope almost wholly from inference. The efforts made to have the witnesses give the language used by the interested parties when the agreement was made resulted in utter failure, at least except as to one feature to be hereafter discussed. There was evidence to the effect that nothing was said at the time the association agreement was made about buying outside berries, but whether the authority to do so in the event of it seeming to be necessary to protect the common interests might be inferred from what was said as regards marketing berries belonging to members, the record is substantially silent because what was said neither counsel on either side nor the court was able to elucidate from any witness. The most that appears is testimony to the effect that there was an understanding that tbe buying of outside berries for tbo protection of tbe common interest was to be a part of tbe union business, and testimony to tbe effect that there was no such understanding. As to tbe manner of conducting tbe business tbe president of tbe association testified that on one or more occasions be protested against buying outside berries,, yet be fairly admitted tbat be participated in some of tbe purchase transactions in a way inconsistent with bis having an understanding tbat such business was not within tbe association agreement. Further, it does not appear tbat tbe ground of tbe protest was tbat tbe marketing of berries produced by members of tbe union was tbe sole object of tbe association-contract. It may reasonably be inferred from tbe language of tbe protest, as testified to, tbat it was put upon tbe ground tbat as a member of tbe managing committee the objector regarded tbe buying of outside berries as unadvisable. Though, as indicated, there is evidence tbat tbe witness participated in some of tbe purchase transactions, be endeavored to explain it, aiid in one view of tbe matter denied it, but evidently neither bis denial nor explanation was satisfactory to tbe trial court. Another witness who testified in respect to tbe matter, appellant Andrew Searls, gave evidence fully as unsatisfactory as tbat of tbe president. He said be objected to tbe purchase of outside berries, but be failed to suggest in making-bis protest tbat such business was outside of tbe union agreement. Eor aught tbat appears, it was made merely upon the ground tbat be, as a member of tbe managing committee, was not in favor of such purchases. In bis case, tbe same as tbat of Briere, there is evidence fairly tending to show tbat be to some extent participated in outside purchases, as a member of tbe executive committee. Taylor, tbe other member of such committee, and tbe only other witness who gave any testimony in tbe matter worthy of consideration, testified that tbe outside purchases were made in tbe regular course of tbe union business, and tbat as be remembered It some one of tlm members of the union was consulted on each occasion. Taking the evidence as a whole, it was far from being satisfactory. There is very little that is definite either upon one side of the controversy or the other. There is some tending to show, as it seems, that there was either an understanding at the start or that one was arrived at in the course of the union business to handle some lots of outside berries merely to protect the common interest. 'That was a very natural and probable feature of the partnership agreement. In the ultimate, we are unable to reach the conclusion that the decision of the trial court on this branch of the case is against the clear preponderance of the evidence.

In support of the finding that the union agreement contemplated that the union should become the owner of the berries produced by its’members as fast, as taken from their stock for the purpose of supplying the trade, we are unable to find any satisfactory evidence whatever. As we view the record the evidence is all the other way. It seems to be established beyond all reasonable controversy, that in handling such berries it was definitely agreed that the union should act in the character of a factor; that it should take the title thereto not as owner but as trustee for sale;.that each order for berries was to be filled out of the particular stock represented by the sample by which the order was taken at the option of the owner of such stock; that the sale, though made in the name of the union, was to be for the person furnishing the berries, the net proceeds to be rendered to him, and he to bear all losses there might be in the transaction; the business to be conducted in every respect the same as between a commission merchant and his consignor. The witnesses on both sides, in substantial harmony, so testified in respect to the matter.

It seems that the learned trial court gave controlling significance to the fact that the union agreement seemed clearly to contemplate that in handling the berries the union should take the title thereto. In our view, that has no significance whatever in face of the positive evidence that each member was to retain control of bis crop of berries and sell all or a part of them himself, or permit the union to sell all or a part of them as he saw fit, and that to the extent to which the union handled the crop of any member it should do so by selling such berries by sample or otherwise at a price satisfactory to such member, who should receive the net price thereof. That feature of the agreement with the one that the union was to handle the berries of its members, so far as it handled them at all, in form as owner, as regards the parties, shows conclusively that the union was to act in the manner substantially as a factor who takes title to property for sale in his own name and collects the proceeds, but at the risk of the consignor, so far as the consignment agreement, express or implied, is not violated. Beardsley v. Schmidt, 120 Wis. 405, 98 N. W. 235.

Complaint is made because in the accounting freight, cartage, brokerage, shrinkage, and the difference between the net price to the union from customers for berries sold for members and the price of the berries as credited to members were treated as losses to be borne by all members according to their respective interests. Sufficient has been said to indicate that such method of accounting was wrong. The difference between the net amount to the union, after taking account of all cartage, freight charges, brokerage, shrinkage, and other deductions, which any particular shipment of berries out of the stock of a member yielded and the amount credited to such member at the time of the shipment should have been charged back to him. >

Further complaint is made because the court dismissed the action as to defendants Oaynor and Taylor. No serious complaint seems to be made as to the former. The record does not disclose that either of the parties took any of the money which came into the possession of the union for their own benefit. The most that is shown is that Taylor by mere mistake as to tbe nature of tbe union agreement paid money received by bim as secretary for tbe benefit of one or two members, wbicb upon a proper accounting would bave been differently directed. No question seems to bave been raised that tbe members receiving excess payments are not abundantly able to make tbe proper refund. Taylor was not tbe agent of any member in any transaction,- — be was, a mere employee of tbe union serving gratuitously. Tbe union was tbe agent for its members. Under those circumstances we are unable to see any reason in law or equity for bolding Taylor liable for bis mere mistakes, wbicb members of tbe union wbo received tbe benefit are abundantly able to remedy. Obviously, Tcmj-lor could not properly be brought into and charged in this litigation with improperly distributing money, except on tbe ground that be was liable to tbe union as having violated tbe trust relation between bim and it to. tbe latter’s injury. An agent is never liable to bis principal for a mere mistake in tbe performance of a duty within tbe general scope of bis authority. That is all that occurred in this case. Tbe whole matter by common consent was left to Taylor to distribute tbe money received for berries according to tbe rights of parties as be understood them, and without compensation for bis services. He determined tbe relative rights of members honestly, but wrongly, yet without negligence, so far as appears. Tbe court found that be acted in tbe most perfect good faith, and we are unable to discover anything in tbe record casting doubt on tbe correctness of that finding. An agent wbo performs gratuitous services and is not permitted to do so because of bis bolding himself out to be particularly skilled in tbe mat-, ter, is only liable for tbe fair exercise of such capacity as be possesses. Mecbem, Agency, § 499. Many authorities state the rule still stronger and to tbe effect that in a case of gratuitous agency not implying any peculiar knowledge or skill, tbe agent is only liable for loss happening through bis gross neglect or wilful and malicious fraud. 1 Am. & Eng. Ency. of Law (2d ed.) 1070. An examination of the authorities, however, upon which the text referred to is grounded, indicates that the term gross negligence is not used in the sense in which it is understood here, but rather in the sense of inexcusable failure, — mere inadvertence, — to exercise the care which the particular person is accustomed to exercise in the same and similar cases of his own. Tracy v. Wood, 3 Mason (U. S.) 132, 24 Fed. Cas. 117; Persch v. Quiggle, 57 Pa. St. 247; Eddy v. Livingston, 35 Mo. 487.

Error is assigned because costs were not awarded to the plaintiffs. That was a matter within the sound discretion of the trial court. If the result reached below had been the same as that now arrived at, most likely a different determination would have been made of the question of costs. As the case now stands, plaintiffs were not only compelled to invoke judicial assistance to obtain a settlement of the union business, but to establish, contrary to the vigorous opposition of respondents, tire nature of the union agreement. It seems that they are fairly entitled to some consideration in the matter of costs. They should be allowed in the final disposition of the cause in the trial court their disbursements and taxable costs, and attorneys’ fees not exceeding $25.

The general result of the foregoing is this: The union agreement included a partnership feature and an agency feature of the sort between a factor and his consignee as well. The former included the business of finding customers for berries produced by members, so far as they desired that to be done, and the handling of outside berries, so far as that seemed necessary for the protection of the common interest, which it is held covers the instances where business of that nature was transacted. The agency feature covers the transactions of shipping berries out of stocks belonging to members, in form as owner, and collecting and accounting for the proceeds to each member for the net amount received for berries sold for him. The relations between the union and a member, as regards the selling by the former of berries belonging to the latter, was similar to that between a factor and bis consignor. In tbe accounting tbe expenses such as the per diem compensation of solicitors for customers for berries, tbe expenses of postage, stationery and labels, and charges for sending samples and tbe outlay for obtaining information as to tbe responsibility of proposed purchasers, and any other similar ■expenses, should be regarded as partnership outlays, to be charged to the members in accordance with the ratio agreed upon, as stated in the findings. The contributions made by members to the expense fund should be properly credited. All ■expenses of handling outside berries and all losses incurred in such business should be charged in the proper proportions to the members respectively. The berries furnished by any member should be credited to him at the price he turned tlie same over to the union as sales agent for, and he should be •charged with the difference between that amount and the net sum which the union actually collected for the property, in ■case of there being a difference, and in case of there being an excess the same should be treated as partnership assets. Each member should also, of course, be charged with the payments made to him.

By the Gourt. — The cause is reversed on both appeals, and remanded with directions to state the account between the parties to the litigation in accordance with this opinion, and to render judgment accordingly, with costs in favor of plaintiffs to the extent of their disbursements, and taxable attorneys’ fees not exceeding twenty-five dollars.