Knipe v. Livingston

Per Curiam,

The learned judge below found that there had been a defective and unscientific method of bookkeeping by Bodey, the partner having charge of that department of the business, but that the books were at all times open to inspection of his partner, and that after the death of Bodey an examination by Livingston, the surviving partner, “ with the assistance of counsel and trusted friends failed to point out any item showing a mistake or error in the bookkeeping except as to the interest paid with the cash of the firm,” the objection to which was not sustained. The learned judge therefore found explicitly that “ it was not shown that this imperfect method of bookkeeping was due to any wrong motive or improper purpose on the part of Mr. Bodey, or that it resulted in any injury or disadvantage to Mr. Livingston.”

It appeared that there had been great laxity by Bodey in the collection of outstanding accounts and some had been lost which more diligent attention might have saved, but that this was known at the time to Livingston and not objected to and the accounts had finally been charged off to profit and loss with his assent. The court therefore refused to surcharge Bodey’s estate with these items.

It also appeared that the assets of the firm were greatly overvalued for a series of years partly from carrying the bad debts on the books as good and partly from imperfect inventories and failure to allow for depreciation of stock. The result of this was the misleading of the firm as to its financial strength. But this was caused by error of judgment, not by fraud. It operated to mislead both partners alike, and no advantage was intended or accrued to Bodey from it.

The learned judge below,' in the face of these difficulties after a careful and patient investigation stated an account between the parties, and we have not been convinced that it is erroneous-in any of the particulars complained of.

Decree affirmed at the costs of appellant.