Moore v. Huntington

84 U.S. 417 (1873) 17 Wall. 417

MOORE
v.
HUNTINGTON.

Supreme Court of United States.

Messrs. John S. Watts, W.M. Evarts, and J.W. Noble, for the appellants; Messrs. W.W. McFarland and S.B. Elkins, contra.

Mr. Justice MILLER delivered the opinion of the court.

We are of opinion that the ruling which decided the interest of Webb in the Fort Union branch of the concern to have been one-third was erroneous. No witness ever saw any articles of agreement. It is not contended now that any such were proved to have had an existence. No witness was ever present at any conversation between the partners on that subject. One witness, a brother-in-law of Webb, states that he heard Webb say he was an equal partner in the business, which statement was made while Moore was in the room where it was said, but he cannot say that Moore heard it, or that it was said in his immediate presence. Other declarations of the decedent are proved to the same effect, but they are not competent evidence. The statements of Moore and Mitchell are explicit responses to allegations which they are called on to answer, and they are unshaken by anything in the record. It must be held that the interest of Webb in the Fort Union branch of the business was only one-eighth.

This necessarily reverses the decree, but other points demand attention.

It is asserted that the suit cannot proceed because the mother of decedent is not made a party, as she is one of his heirs-at-law. But this is not a suit for distribution, and although the complainant does assert herself to be sole heir, her suit may, nevertheless, be sustained as administratrix, in which right she also complains. A decree rendered in her favor in that capacity would not interfere with the rights of others who might claim of her a distribution after she received the money. That objection is not, therefore, tenable.

A cross-bill was filed by defendants against complainants, which was answered. No notice was taken of it in the final decree, which should have been done, though the court undoubtedly supposed it was disposing of the whole case. On the return of the case this may be corrected, and if on the next hearing the plaintiffs in the cross-bill are entitled to any relief, the pleadings are a sufficient foundation for a decree in their favor.

The master presented two schedules or separate statements of the two branches of the business. The Texan and Southern New Mexico venture he styles the firm of N. Webb & Co., and the original partnership W.H. Moore & Co. To this there seems to be no objection. Numerous exceptions were taken to his report, which were overruled, and a decree for $97,596.19 was rendered in favor of complainant. This sum was reduced on appeal to the Supreme Court of the Territory by the sum of $24,675.44, and a final decree rendered there for the remainder. But on what ground this deduction was made, or to what exception it is referable, does not appear.

The decree was rendered in the Supreme Court jointly against the defendants and their sureties in the appeal bond, and it is alleged for error that no such judgment could be rendered against the latter. But there is no error in this. It is a very common and useful thing to provide by statute that sureties in appeal and writ-of-error bonds shall be liable to such judgment in the appellate court as may be rendered against their principals. This is founded on the proposition that such sureties, by the act of signing the bond, become voluntary parties to the suit and subject themselves thereby to the decree of the court.

Other exceptions to the report of the master, of considerable value in amounts, seem to us to be well taken.

1. In the schedule which refers to the business of N. Webb & Co. the assets are charged to defendants at $78,879.16 for goods, wares, and merchandise, and $76,103.03 for debts due and owing to the firm.

Immediately after this the defendants are charged in items Nos. 3, 4, and 5 with cash received by W.H. Moore of $10,258.75, $8166.70, and $2000.

It seems to us that these items are for money received on account of assets already charged, or for debts collected already charged, and are, therefore, twice charged against defendants.

2. So in the schedule of W.H. Moore & Co., the goods on hand at Fort Union July 2d, 1866, are charged to defendants at $182,656.71 and debts due the firm at $322,958.77.

Looking to the exhibit in the answer of Moore, on which this estimate is based, it is quite clear that in this latter sum, the item of $101,330.95, due by Moore, Adams & Co., is for all or a part of the goods charged in the first item of $182,000, purchased at the time that inventory was taken, and counted afterwards as part of the assets of the old firm. It is thus charged twice against defendants.

3. The defendants are credited in the schedule of N. Webb & Co. with fifty per cent. of the debts due the firm, after deducting what Webb and his wife owed that firm, and in the other schedule they are credited with $100,000, both for bad debts. This may or may not do justice, and it may possibly be the only approximate mode of doing it. But it goes upon the ground of charging the defendants with everything at the date of the decedent's death at its value at that time. Such is not the true rule. It was a legal right of the defendants, as surviving partners, to close out the concern, collect and dispose of its choses in action, and its property, pay what it owed, and then pay over to the plaintiff her just share of what was left. They were not bound to become purchasers of the decedent's interest at a valuation. But they were bound to use reasonable diligence and care in closing out the business, and in taking care of the decedent's interest. If they used such care and diligence they are only liable for what was realized in their hands when it was done. If they did not they are liable for what might have been realized by the use of such care and diligence. In this latter view it is not now possible to say with accuracy what the state of the account should be, and it is the duty of the master to ascertain this and make proper report on this point as well as others.

4. Again, while the defendants are charged with the value of certain real estate of the partnership, the title of it, which is in the plaintiff, is left there by the decree.

In short, the basis of the account being entirely erroneous in assuming the interest of Webb at one-third instead of one-eighth in the partnership of W.H. Moore & Co., and considering the loose and unsatisfactory character of the whole report, among which are doubtless other errors than those above mentioned, it is utterly insufficient as a foundation for any decree. Nor can we here undertake, with no other report, to render one with which we would be satisfied.

It is, therefore, ordered and decreed that the decree of the Supreme and District Courts be REVERSED; that the case be remanded with directions to set aside the entire report of the master; that a new master be appointed, with directions to adjust the accounts on the basis of an interest of one-eighth in Webb in the Fort Union branch of the business, and one-third in the other, and that such adjustment be made in conformity with this opinion, so far as it can serve for a guide, and that the final decree to be rendered in the case shall be a full settlement of all the matters litigated in the bill, cross-bill, and answers.