Gresham v. Harcourt, Administratrix

The plaintiff in error and one John J. Harcourt were partners in the business of sheep husbandry under the firm name of Gresham Harcourt. On October 1, 1893, Harcourt died, and the plaintiff in error assumed control of the property and business as surviving partner. On November 12, 1896, the defendant in error, as the administratrix of the estate of the deceased partner, filed this suit against plaintiff in error for an accounting and settlement of the partnership business.

The case was tried upon an amended petition, which contained, in the first place, allegations as to the death of Harcourt and the appointment of the plaintiff as administratrix of his estate; the formation of the partnership, — the articles being set out in haec verba; and also as to the nature and value of the partnership property existing at the time of his death. The amended petition then proceeds: "Plaintiff further avers, that, at the death of said Harcourt and dissolution of said partnership, said partnership had on hand, in addition to the property above mentioned, the sum of $1775 in money, all of which said property aforesaid, including said money, passed to and vested in said defendant as surviving partner in trust for the payment of any debts against said partnership and distribution between said Gresham and the legal representatives of said Jno. J. Harcourt, deceased. Plaintiff avers that at the time of the dissolution of said partnership by the death of said Jno. J. Harcourt, said partnership was not indebted to anyone, but that all of the debts thereof had been, prior thereto, paid off and discharged, and she avers that said Harcourt was not indebted to said Gresham in any sum whatsoever. That upon the dissolution of said partnership by the death of said Harcourt, as aforesaid, his legal representatives and heirs were entitled to a partition of said property aforementioned, but that said defendant, doing violence to his trust as surviving partner, failed and refused to account to the legal representatives and heirs of said Harcourt for that part of said property, and she avers that said defendant, after the death of said Harcourt, continued to run said business on his own account until about May, 1895, when, plaintiff is informed, believes, alleges, and charges that he, in violation of his trust as surviving partner and in disregard of the legal representatives of said Harcourt, contracted another and distinct partnership with one James Welsh for the management, conduct, and carrying on the said ranch business with said property aforesaid and excluded plaintiff from any participation therein, and although she often demanded of said defendant a final accounting and distribution of said property, he failed and refused and still fails and refuses to make any." After averring certain credits to which her intestate was entitled and certain debits with which he was chargeable, the petition again proceeds as follows: "Plaintiff avers that said defendant during said period received from said ranch a large quantity of the wool and other proceeds thereof, the items and amount plaintiff is unable to state because the account thereof was kept by said defendant, but she avers that the amount received by him exceeds the sum of $8148.34. That the said sum of $8148.34 is made up of various items and in various amounts advanced by defendant during said time, but the defendant has the accounts thereof and plaintiff is unable to give an itemized statement thereof as the same is within the knowledge of defendant, and to be shown by his books.

"Premises considered, plaintiff prays as in her original petition and that upon a trial hereof she have judgment against said defendant for a full and complete accounting and settlement of the partnership accounts and dealings of said partnership of said Gresham Harcourt, and for judgment against said defendant for any amount which may be found due and owing on said settlement to the estate of said John J. Harcourt, deceased, for a partition of the property of said partnership, for the appointment of commissioners to partition same, for interest and costs of suit, and should it appear that said defendant has disposed of said property, for a proper judgment against defendant requiring him to pay over any sums of money on hand or in bank, and for such other general or special relief, legal or equitable, as she may, under the law and facts, be entitled to."

The case was tried by the court without a jury and the court found the following conclusions of fact, as is shown by the recitals in the judgment:

"On the 1st day of October, 1893, date of the death of plaintiff's intestate, John J. Harcourt, said partnership of Gresham Harcourt was indebted to said John J. Harcourt in the sum of $2006.18, and said partnership of Gresham Harcourt was indebted to said Walter Gresham in the sum of $4857.18, leaving a balance due to Walter Gresham by said partnership of Gresham Harcourt of $2851.00. And the court further finds that said partnership, on the first day of October, 1893, the date of the death of John J. Harcourt, had on hand the following property, to wit:

"850 mutton sheep of value of $1.50 each................ $1275.00 "1150 ewes, of value $1.00 each......................... 1150.00 "900 lambs, of value $0.75 each......................... 675.00 "Ranch, including tanks, troughs, well, windmill and fixtures, houses, fences, and all other improvements and leasehold of value of ............................................. 1400.00 "25 bucks, of value of.................................. 175.00 "2 horses, of value of.................................. 55.00 "1 wagon, of value of................................... 15.00 "1 buckboard, of value of............................... 30.00

"1 set harness, of value of............................. 10.00 "Money on hand and afterwards invested in sheep......... 427.00 ---------

"Making a total value of.......................... $5212.00

"That deducting therefrom the balance due by said firm to Walter Gresham, to wit, $2851.00, leaves a balance of $2361.00 on hand for distribution between plaintiff and defendant, said plaintiff as administratrix of the estate of John J. Harcourt, deceased, being entitled to receive one-half thereof, to wit, the sum of $1180.50, and it appearing that defendant Gresham used due diligence to effect a sale and wind up the business of said partnership, and that May 28, 1895, was as early as such sale could be made, and on said day said Gresham, with the consent of plaintiff, sold an undivided one half of all said property to James Welsh, and at which time plaintiff became entitled to receive her interest in said property after payment of debts," etc. Thereupon the court gave judgment for the plaintiff for the sum of $1180.50, thereby charging the defendant with the value of the partnership property at the time of the dissolution of the firm, although it had been found as a fact that the property had been properly administered.

This action of the court is assigned as error. It is the duty of a surviving partner to take possession of the assets of the partnership and to preserve and administer, and, so far as may be necessary to pay the partnership debts, to dispose of the same, and otherwise settle the partnership business. If he exercise reasonable diligence in the care, management, and disposition of the estate, and, if during the process of administering it the property depreciate in value, he is not responsible for the loss. It seems to us, therefore, that the court acted upon an erroneous theory in stating the account of the defendant as surviving partner; and that for the error, the judgment must be reversed, unless he has estopped himself from taking advantage of the ruling. To obviate the effect of the court's ruling, the plaintiff (the defendant in error) invokes the principle of "invited error." The principle is, that if, during the progress of a cause, any party thereto request or move the court to make an erroneous ruling and the court rule in accordance with such request or motion, he can not take advantage of the error upon appeal. For example, if a special instruction be requested and the court give the instruction, either in the form requested or in substance, the giving of the charge can not be successfully urged as error. But, in our opinion, the rule does not apply in this case. Here the evidence disclosed that some two years after the death of Harcourt, the defendant sold a half interest in the property to one Welsh, and the plaintiff sought to introduce testimony as to the value of the property at that time, — apparently with a view of charging the defendant with such value. To this the defendant objected and the evidence was excluded. The objection was upon the ground, as shown by the bill of exceptions, that "the value of the property could only be shown as of date of Harcourt's death, October 1, 1893, at which time the balance should be struck, and that the value of said property at any other time was immaterial." Now, while the petition alleges the sale to Welsh and the formation of a new partnership in May, 1895, it does not seem to us that its purpose was to allege a conversion, so as to charge the defendant with the value of the property at that date. If such was the purpose, the value at that time should have been alleged, which was not done. Besides the prayer is simply for an accounting and for partition. Under such allegations and such a prayer, the defendant should have been charged with what he had received and credited with what he had lawfully paid out on the partnership business. If it was sought to charge him with the conversion of the property of the estate in his hands, not only should the facts in relation thereto and the value have been averred, but the petition should have contained a specific prayer that he be charged with the value of the property so converted. This we think necessary in order to reasonably apprise the defendant of the case he is called upon to meet. We are therefor of opinion that, under the pleadings and evidence in the case, the value of the property at the time of the sale to Welsh was an immaterial matter and that the defendant had the right to have it excluded. That was what he requested should be done, and we think he should not now be precluded from urging the error of the court in stating the account, upon appeal, merely because he asserted in argument that the value of the property, at the date of Harcourt's death, should be taken as the basis of the account. The testimony was properly excluded, and hence we do not see how the plaintiff was prejudiced or wrongfully placed in a worse position by its exclusion. If it had been necessary to the establishment of the plaintiff's cause of action that she should prove the value of the property at the time of the death of Harcourt or at the time of the trade to Welsh, then the rule of "invited error" may have applied; but that is not the case as we understand it. We conclude that the court erred as complained of in the assignment under consideration; and that for the error, the judgment must be reversed. This makes it proper for us to pass upon some other assignments of error.

To the action of the plaintiff, the defendant pleaded, by way of set-off or counterclaim, a note executed to him by John J. Harcourt, of which the following is a copy:

"$5440.40. "GALVESTON, TEXAS, July 5, 1888.

"One year after date, I promise to pay to the order of Walter Gresham, at his office in the city and county of Galveston, State of Texas, the sum of fifty-four hundred and forty and 40-100 dollars with interest thereon at the rate of ten per cent per annum from date until paid. This note is to be credited with one-half of the net proceeds of wool now in hands of W.L. Moody Co., owned by said Gresham and myself, and this note is secured by my half interest in the sheep in the ranch in Runnels County, Texas, in accordance with the terms of the contract between said Gresham and myself that was executed the first day of June, 1883, and is in settlement of all indebtedness to date.

(Signed) "JOHN JAY HARCOURT."

The note was entitled to certain credits, but it was claimed that there was a balance unpaid of more than $1000. The plea was excepted to upon the ground that the debt was barred by the statute of limitations and the exception was sustained. More than a year elapsed after the death of Harcourt before letters of administration upon his estate were issued. Hence for one year the statute of limitations did not run, but the note had been due more than five years when the plea was filed. It is insisted, however, on behalf of the plaintiff in error, that he could not enforce his lien upon the sheep during the existence of the partnership and that therefore the statute did not begin to run until the partnership business was settled. We can not, however, accede to this proposition. Conceding, for the sake of argument, that an action to enforce the lien when the note fell due could not have been maintained, it does not follow that suit could not have been brought upon the note and judgment obtained thereon. The note, in our opinion, was clearly barred when the plea of counterclaim was filed. But the statute of limitations did not extinguish the debt. Goldfrank v. Young, 64 Tex. 432. The question therefore suggests itself, whether, when the proceeds of the property upon which plaintiff in error had a lien, came lawfully into his possession, he did not have the right to apply them or so much thereof as was necessary to the payment of his debt. If Harcourt had continued to live, and if, by agreement, the duty had been devolved upon the plaintiff in error to wind up the partnership business, and if, after settlement, a fund, the proceeds of the property upon which he had a lien, had been left in his hands, we should be loth to hold that he could not appropriate so much thereof as belonged to Harcourt to the payment of the balance due on the note, although no action could be brought for the debt by reason of the bar of the statute. But the case before us is materially different. Here the plaintiff in error became intrusted with the partnership assets, not by direct agreement of the parties, but by the act of Providence and the operation of law. Hence, in no sense could the possession be considered in the nature of the possession of a pledgee. Again he is seeking to assert his lien against an estate of a deceased person which is in process of administration in the county court. Under our probate laws, liens of the character in question are made subordinate to funeral expenses and expenses of last sickness, expenses of administration, and allowances for the widow and children, if any; and it is peculiarly within the jurisdiction of the county court to classify these claims and determine the order of payment. It can not be done in a collateral proceeding of this character. There is no averment in the plea that the interest of the deceased in the fund will not be necessary to the payment of prior claims. On the contrary, it is alleged that Harcourt owned no other property except his interest in the partnership assets, and that that interest did not exceed in value the sum of $3000. We think the exception to the plea of counterclaim was properly sustained.

We are of opinion that the court did not err in holding that the plaintiff in error could not prosecute in this suit a cross-action against Mrs. Harcourt in her individual capacity. It is a general, if not a universal, rule, that only such counterclaims can be urged to an action which exist against the plaintiff in the same capacity in which he sues. If he sue as trustee, the claim must be against him as trustee; if in his individual capacity, a claim against him as trustee can not be set up either by way of set-off or of recoupment. We see nothing in the case made by defendant in error to take it out of the general rule. Clearly, if another person had administered upon the estate of the deceased and had brought the suit, Mrs. Harcourt, by reason of her individual transactions with plaintiff, could not have been drawn into it; and we do not see that the fact that she became the administratrix, and, as such, is plaintiff in the action, should make a difference.

In a cross-assignment of error, the appellee in the Court of Civil Appeals (the defendant in error in this court), complained that the trial court erred in not charging plaintiff in error with the sum of $1775, money on hand at the time of Harcourt's death. The Court of Civil Appeals sustained the contention and enlarged the recovery accordingly. This ruling of the Court of Civil Appeals is assigned as error in this court. It seems that this money came to the hands of Mrs. Harcourt after her husband's death. She claimed it was received by her as agent of plaintiff in error, but he denies that she was his agent. The defendant in error testified that she expended the money for the benefit of the partnership estate under the directions of the plaintiff in error. Upon a proper statement of the account, Gresham should have been charged with the amount and credited with so much of it as was expended for the benefit of the estate.

The articles of partnership provide that Gresham is to advance the money necessary to carry on the business and that he was to receive 10 per cent interest upon the advancement. No reason is seen why, upon a proper settlement of the account, he should not be credited with the interest upon his advancements.

The judgment of the Court of Civil Appeals and that of the District Court are reversed and the cause remanded.

Reversed and remanded.