Douthit v. Douthit

32 N.E. 715, 133 Ind. 26, 1892 Ind. LEXIS 245

• Court: Indiana Supreme Court
• Decided: November 29, 1892
• Docket: No. 15,805
• Status: Published

Opinion

Elliott, J.

There is a single assignment of errors comprising several specifications, in which all of the appellants join. The rule is that, although there are separate specifications of error,-the assignment must be good as to all who j oin in it, or it will not be available to any of the appellants. This is the well-settled rule. See authorities, cited in Elliott’s Appellate Procedure, §§318, 401, 299, notes. Under this familiar rule we can not consider the rulings upon the demurrers to the complaint, since it undoubtedly states a cause of action against some of the appellants, and shows that the appellee is, at least, entitled to part of the relief demanded. The only specification in the assignment of errors which presents questions available to all of the appellants is the one which is founded on the exceptions to the conclusions of law stated upon the facts specially found.by the court. Even if we should depart from the rule forbidding the consideration of errors where they are jointly assigned by several parties, and the assignment is not good as to all, we can not reverse if it be true that it appears from the special finding that the errors on rulings upon the pleadings, if there were errors, were harmless. The special finding is part of the record proper, and where it affirmatively shows that no substantial injury was done an appellant there can be no reversal for errors committed in the formation of issues; for where the record proper shows that the ultimate conclusion is right, intermediate errors will be disregarded. See authorities cited in Elliott’s Appellate Procedure, §§590, 591, 635. In the case before us the principal questions argued by counsel in their attack upon the rulings on demurrer arise on the special findings, so that we have given careful study to appellants’ arguments upon all the material questions.

The special finding and conclusions of law read as follows:

First. “The court finds that on the 4th day of July, 1887, the plaintiff, James L. Douthit, and Alonzo Douthit, entered into a partnership for the purpose of threshing wheat and other grain; that, by the terms of the partnership,'they were to be equal partners, sharing equally in the loss.and profits, each owning an equal interest in the property used in the business; that James S. Douthit assumed and agreed to pay the one-half of the indebtedness on the engine, which was the sum of $260.00, and one-half of the indebtedness on the separator, which was $100.00, as the consideration for his interest in said property and business then purchased from said Alonzo.

Second. “ That said parties engaged in said business, and continued therein till the 1st day of August, 1887, at which time they dissolved said partnership by mutual agreement, by the terms of which Alonzo Douthit was to keep all the partnership property, and pay all the outstanding indebtedness on said property.

Third. “ The court finds that, while said parties were so engaged in said partnership business, William Leslie became indebted to them, for threshing, in the sum of $3.48; David Unil, in the sum of $6.70; Thomas Goble, in the sum of $5.60; Ered. Schepple, in the sum of $20.00; Edward Melis, in the sum of $4.20; William Kinsley, in ' the sum of $20.00; Lot Barger, in the sum of $17.12; James M. Bassett, in the sum of $50.32; James S. Douthit, in the sum of $34.12; making a total of $163.64.

Fourth. “ That during the time they were engaged in threshing, viz., on the 8th day of July, 1887, James M. Bassett obtained a judgment, before Isaiah C. Owens, a justice of the peace, for the sum of $92.80 against the defendants, Alonzo Douthit and one George Baker, upon which execution had been issued; that said judgment was on the debt of Alonzo Douthit; that thereupon it was agreed between plaintiffs and said defendant, Alonzo Douthit, that the plaintiff should collect said several items of indebtedness and apply them in payment of said judgment and the residue on the liabilities of the firm under said agreement.

Fifth. “ That said Alonzo Douthit, in the year 1887, collected debts due the firm, of other parties than those above named, the sum of $58.60; that it was agreed, -at the time said money was advanced from the firm in payment of said judgment against said Alonzo, that the plaintiff should he indemnified, for his interest out of other moneys due the firm, hut that the defendant, Alonzo Douthit, collected said sum of $58.60 and appropriated the whole thereof to his own-use, except $9.50, which he paid to one “Patterson,” on a firm account; and that, for the purpose of cheating and defrauding the plaintiff, said Alonzo entered into agreement with his co-defendant, James B. McEadden, to sue the plaintiff for the items collected by the plaintiff and paid out as herein-before found; that, the defendant, McEadden, with a knowledge of all the-facts, brought a suit against the plaintiff, in the Shelby Circuit Court, for Alonzo Douthit, for the identical items herein-before set out; that said Alonzo and McEaddenknew that the plaintiff intended to defend against said suit, but said defendants advised and informed the plaintiff' that he need not appear to said action, but that they would let the matter pass on until the plaintiff and the defendant could meet and have an accounting and adjustment between themselves as to all of said partnership matters ~ that the plaintiff relied upon said advice and promises,, and had no means of knowing, and did not know, that, the same.were not made in good faith.

Sixth. “ The court further finds that on the next judicial day of said Circuit Court the defendant, McEadden, viz.: on the 17th day of Octobei’, 1887, took a default against the plaintiff; and, afterwards, on the 29th day of October, 1887, in said court, took a judgment on said, default against the plaintiff for $98.20, on a part of said items of account so collected and paid out by the plaintiff.

Seventh. “ That, in furtherance of said fraudulent purpose to cheat the plaintiff, the said Alonzo, on the 12th day of November, 1887, assigned said judgment to said McEadden on the order book of said court; that said Mc-Eadden took said assignment with full knowledge that: the sum for which it had been taken had been collected by said James S. Douthit from the partnership assets and by him expended upon the individual liabilities of said Alonzo.

Eighth. “ That the said Alonzo is wholly and notoriously insolvent, and has no other means with which said partnership liabilities, or any part thereof, to the plaintiff can be paid.

Ninth. “ That in pursuance of said conspiracy said defendants, on the — day of —, 1888, caused an execution to he issued by the clerk of the Shelby Circuit Court to the defendant, Henry Meer, the sheriff of said county, and said sheriff heretofore, to wit: on the — day of —, 1888, levied said execution on the property of the plaintiff*, and advertised it for sale; that said sheriff was proceeding to sell said property to satisfy said execution, and would have done so if he had not been enjoined and restrained from so doing.

Tenth. “ That all the debts and partnership matters have been fully settled and debts collected and all the matters of said partnership closed up, except the accounting and settlement of the individual matters between the plaintiff* and said defendant Alonzo, and a small sum due one Claver, viz.: $14.00; that all of the items as between them are still open, unsettled and unadjusted.

Eleventh. “ I further find that in addition to the amount herein-before mentioned that said firm, at the time of its dissolution, was, and at this time is, indebted to the plaintiff for other expenditures by him made for the benefit of the firm, in the sum of $36.50, making a total sum of $181.05 paid out by the plaintiff for the benefit of the ■firm, and $92.80 of which, at the request of the defendant, Alonzo Douthit, was paid out of the firm assets for his individual benefit; that plaintiff should be indemnified •out of the firm assets for such payment."

Twelfth. “ I further find that there ought to he an accounting between said partners as to all the partnership matters, including said judgment taken in the Circuit Court for said sum of $98.20, and that so much of the amount paid out by the plaintiff, as hereinbefore found as equals the amount of said judgment, ought to he set off against the same.

Thirteenth. “ I further find that the total amount of the partnership assets collected by the plaintiff and defendant Alonzo was $221.94; that each of the partners was. and is entitled to the one-half of said amount.

Fourteenth. “I find that the total amount of partnership indebtedness paid by plaintiff and the defendant. Alonzo was $97.75, which indebtedness should have been paid equally by said partners.

Fifteenth. I find that of the indebtedness of the firm the defendant Alonzo paid $9.50, and the plaintiff paid $88.25.

Sixteenth. “ I find that defendant Alonzo received the partnership assets, including the Bassett judgment, that was paid out of the partnership funds, the sum of $150.45, and the plaintiff received of the partnership assets, after deducting the amount paid per Alonzo on said judgment, $70.54.

Seventeenth. “ I find that there is due the plaintiff from the defendant Alonzo ou the amount collected of the partnership assets, after canceling the judgment for $98.20 recovered in the Circuit Court by Alonzo against plaintiff and assigned to McEadden, the sum of $40.43; that there is also due the plaintiff from the defendant Alonzo for an excess of money paid out on partnership liabilities that said Alonzo was liable for, the sum of $39.37, making in all an amount due the plaintiff from the defendant Alonzo of the sum of $79.80; that said Alonzo is entitled to a credit of $7.00, being the one-half of the item of partnership liabilities to said Clover, making a total balance due plaintiff from said defendant Alonzo in the sum of $72.80.

“Upon the facts so found, the court concludes the law to be that said defendant should be enjoined from enforcing said execution and judgment; that said judgment should be deemed cancelled and satisfied; that the plaintiff, in addition to said sum included in said judgment, is entitled to recover of and from said Alonzo Douthit the sum of $72.80.”

One of the positions taken by the counsel of the appellants is that there can be no recovery because it does not. appear that there had ever been an accounting between, the members of the partnership. In support of this position we are referred to the cases of Thompson v. Lowe, 111 Ind. 272; Lang v. Oppenheim, 96 Ind. 47; Warring v. Hill, 89 Ind. 497; Meredith v. Ewing, 86 Ind. 410; Coleman v. Coleman, 78 Ind. 344; Crossley v. Taylor, 83 Ind. 337; Page v. Thompson, 33 Ind. 137. It is the law that one partner can not sue another to recover profits or to recover his share of partnership assets where the partnership is unsettled, although he may sue for an accounting and for the recovery of whatever may be found due upon a settlement of the partnership affairs. But this rule does not. apply to all cases growing out of partnership contracts^ Where there is an agreement adjusting partnership affairs, and that agreement awards to one partner a specific sum, or creates a specific duty in his favor, he may maintain an action upon a breach of the duty or promise. Snyder v. Baber, 74 Ind. 47; Warring v. Hill, 89 Ind. 497; Lawrence v. Clark, 9 Dana, 257, S. C. 35 Am. Dec. 133; Foster v. Allanson, 2 T. R. 479; Wrignt v. Hunter, 1 East, 20; Neil v. Greenleaf, 26 Ohio, St. 567; Wells v. Carpenter, 65 Ill. 447. The facts contained in the special finding bring; the case fully within the rule just stated. These facts require the conclusion that there was an agreement of dissolution wherein were contained specific promises and stipulations creating specific duties, and there was no necessity for an accounting embracing all partnership matters, since only specific matters were in controversy.

As there was no necessity for an accounting, there was„ of course, no reason for making a demand. Nor was a, demand necessary to create a complete right of action for a breach of the specific promises and duties embraced in and created by the contract of dissolution. Where one partner, upon dissolution, unconditionally agrees to pay a designated sum or a specified debt he is absolutely bound, and no demand is required to fix his liability. Anderson v. Ackerman, 88 Ind. 481.

Where a partner collects money which he agrees shall be collected by his copartner as his individual property, and'after collection converts it to his own use, the partner to whom the money belonged may maintain an action for its recovery without a prior demand. As Alonzo Douthit had collected and appropriated $50 which he had agreed should belong to his copartner, the latter had a complete right of action for that sum when the former wrongfully converted the money. The general rule is that where there is an actual wrongful appropriation of money or property a demand is not required. That general rule applies with peculiar force to this case.

If it should be conceded that there were no specific agreements which entitled the appellee to maintain an action, it would still be quite clear that the appellant Alonzo Douthit is in no situation to insist that the action can not be maintained, for he himself brought an action which operated as an election. By suing his copartner, and wrongfully obtaining a judgment, he elected to'treat the partnership matters as adjusted, and he can not be permitted to occupy inconsistent positions. It would be flagrantly unjust to allow him to secure a judgment on the theory that the appellee was in his debt for the wrongful conversion of partnership money, and deny the appelIfee the right to assail that judgment, secure its cancellation, and recover what is justly due him.

It is true, as the appellants contend, that facts not contained in a special finding are, as against the party having the burden of proof, presumed not to have been proved, but while the appellants are substantially correct in their statement of the general rule they are radically wrong in their application of the rule. They attempt to apply the rule as to make it necessary to hold that, as it does not appear that Alonzo Douthit did not indemnify the appellee for paying the Bassett judgment, therefore it must he assumed that he did indemnify him. This is, it is very evident, a radical error. The appellant Alonzo Douthit was the actor, and upon him rested the burden of proving that the appellee was indemnified.

It is earnestly contended that the facts do not show that, there was fraud in securing the judgment which the court decreed should he cancelled and against which the injunction w&s directed. Counsel for the appellants say: “ hTor does the fact that after the commencement of the suit, against the appellee, the appellants, Douthit and McEadden, both advised the appellee not to make any appearance thereto nor make any preparation for a defense against the same, and accompanied said advice with a promise that they would not take any judgment against the appellee, and that the appellee relied on the same, contribute in the slightest degree ^to the appellee’s right of recovery.” The authorities would require us to sustain the decree annulling the judgment, even if there were no other facts stated in the finding than those contained in counsel’s statement. Nealis v. Dicks, 72 Ind. 374, and authorities cited; Detwiler v. Schultheis, 122 Ind. 155, and cases cited. "Where parties and counsel prevent an appearance and defense by representations and promises,, they are guilty of fraud if, in violation of the promises and contrary to the representations, they take a default in a case where they know there is a defense. In this case, however, the trial court finds that there was a conspiracy between attorney and client, who had knowledge that there was no cause of action, to take a judgment, and that in order to carry out the premeditated design and to accomplish the object of the conspiracy they made the representations and promises which deceived the appellee. Upon the facts stated, there can he no doubt that the judgment obtained by the appellant Alonzo Douthit ought not to stand.

Filed November 29, 1892.

"Whether the final decree is or is not in form correct, or . whether it does or not award the proper relief, are questions we have not examined, as there is no motion to modify. It is settled that to present such, a motion to modify must be made in the trial court and proper exceptions taken and exhibited. See authorities cited, Elliott’s Appellate Procedure, sections 345, 346.

Judgment affirmed.