Gunnell v. Bird

77 U.S. 304, 19 L. Ed. 913, 10 Wall. 304, 1869 U.S. LEXIS 1067

• Court: Supreme Court of the United States
• Decided: November 21, 1870
• Status: Published

Opinion

Mr. Justice BRADLEY

delivered the opinion of the court.

The opinion of the court is that the auditor committed an error,- and we should refer the cause back for a further report if we deemed it necessary to do so; but the facts are confined within such narrow limite, and are so clearlv ascer taiucd by the proofs and admissions of the parties before the auditor, that we deem it a useless formality.

The error of the auditor consists in not charging Gunnell with the capital contributed by the partners and placed in his hands, and not crediting him with the cost of the lumber originally contributed by himself.

Being the active managing partner, it is plain that he should be charged with—

First, the whole capital, ...... $14,403 21

Secondly, the. proceeds of sales, ..... 93,471 11

Amounting in all to.....$107,874 32

He received these amounts, and he should be charged with them.

On the other hand, it is equally plain that he should be eredited’with—

First, the lumber on hand when the business was commenced, he having disposed of it, and being charged with the proceeds instead.

This, as charged to him, was . . . • . . $6,627 56

Secondly, the amount paid out by him to others for lumber, which was ....... 55,146 55

Thirdly, the general expenses of the business, . . 12,242 95

Fourthly, the item paid for lime, .... 732 18

And the item paid for rent,..... Ill 00

Amounting in all to.....$74,860 24

And leaving a balance in hand, at the conclusion of the business, of.......$33,014 08

The original capital had been increased to this sum, and had the assets all been good, there would have been a clear profit of $18,610.87. But the bad and uncollected debts being deducted, the profit is reduced to $13,149.31; one-half of which, besides his or their original capital, belonged to each party.

Gunnell’s capital was......$6,627 56

His half of the profits was...... 6,574 65

Total amount due to Gunnell,.....$13,202 21

Bird and Hepburn’s capital was .... $7,775 65

Their half of the profits was..... 6,574 66

Total amount due to Bird and Hepburn, . . . $14,350 31

There remains to be adjusted a question of interest due to Bird and Hepburn for having contributed more capital than Gunnell whilst the business was being carried on. The - auditor makes this interest $183.52, one-half of which should be deducted from the share of Gunnell, and added to that of Bird and Hepburn. This would reduce the former to $13;110.45, and raise the latter to $14,442.07.

Now the books show that Bird and Hepburn drew and collected only $7552.68. This left a balance still due them of $6889.39 to be accounted for by Gunnell.

In this account neither party is charged with the bad and uncollected debts. They are simply deducted from the profits, and the loss is thus equally divided. It is' claimed by the defendant that Bird and Hepburn should be charged with the whole of this loss because they had the securities and failed to collect them, when, by the use of due diligence, they might have done it. This fact does, not appear in the case except by the unsupported allegation of the defendant, made in his answer to the bill of revivor. This portion of the answer was entirely impertinent to the bill, which was strictly and purely a bill of revivor. No formal replication was required to avoid its effect as evidence in the cause.

The result is that the complainants are entitled to a decree against the defendant for the sum of $6889.39, with interest from' the 1st day of May, 1849, and costs. The decree of the District Court must be reversed, and a decree rendered For the complainants accordingly.