Hefferlin v. Karlman

74 P. 201, 29 Mont. 139, 1903 Mont. LEXIS 168

• Court: Montana Supreme Court
• Decided: November 16, 1903
• Docket: No. 1,678
• Status: Published

Opinions

MR. COMMISSIONER CALLAWAY

prepared the opinion for the court. - .

This is an appeal from a judgment entered against defendants upon the verdict of a jury, and from an order denying their motion for a new trial.

The complaint is in two counts, which we shall consider separately :

1. In the first' count plaintiffs allege themselves to be co-partners, and charge that a like relation exists between defendants. Then follows an allegation that between the 15th day of September, 1899, and the 21st day of December, 1899, the plaintiffs sold and delivered to the defendants, at their request, goods, wares and merchandise amounting to-, and of the value of, $1,679.74, which sum the defendants agreed to pay plaintiffs, and that no part thereof has been, paid. The defendants make general denial to this count, except that they admit themselves to be copartners.

Defendants assert that the evidence is insufficient to sustain the verdict. A discussion of the evidence in detail will serve no useful purpose. Suffice it to say that we have examined the ’ record carefully, and find a substantial conflict upon all disputed points^. The defendants, Nariman & Jennings, were railroad contractors engaged in building a railroad at Trail Creek, in Park county1. At the trial the plaintiffs claimed that one Dunlevy was defendants’ foreman, and that, as such foreman, he opened an account with them on defendants’ credit, and with the understanding that Nariman, the partner immediately in charge of the business at Trail Creek, would make definite arrangements concerning' tbe account; that in about two- weeks thereafter Nariman confirmed what Dunlevy bad' said, and authorized plaintiffs to furnish him what he wanted for his “camp.” It was necessary to provide for a number of men who were in Dunlevy’s charge. Plaintiffs introduced evidence tending to show that both Nariman and Jennings, after the commencement of the suit, acknowledged the correctness of the account, and said it should be paid. Plaintiffs’ proof tended to show that Nariman’s statements and agreements amounted to an original promise on the part of Nariman & Jennings — in other words, that defendants were the principals who- dealt with plaintiffs. Defendants claimed that Dunlevy was not their foreman, but was merely a subcontractor, and denied that they, or either of them, had ever authorized the running of the account, or promised to pay it, or acknowledged its correctness. They contended that plaintiffs opened the account with Dunlevy as principal, and should look to him for their pay. The jury heard the testimony, observed the witnesses upon the stand, and found for the plaintiffs. This court will not undertake to disturb the verdict of a jury, predicated upon a substantial conflict in the evidence. (Nelson v. Great Northern Ry. Co., 28 Mont. 297, 72 Pac. 642, and cases cited.) We shall therefore pass to- some of the alleged errors of law occurring at the trial to which defendants took exception. „

Counsel for plaintiffs offered in evidence an account book denominated “Exhibit A,” to which defendants objected on the ground that no sufficient foundation had been laid to warrant its introduction. Then this question was asked: “I will ask you, Mr. Hefferlin, whether or not this account book was kept in the regular course of business, and was made up at the time the items were purchased, or immediately thereafter?” This qustion was objected to on the ground that it is leading. The court overruled the objection. The witness answered, “It was; yes, sir,” and proceeded to testify at length concerning his method of keeping books as well as upon other matters. After a considerable period of time the book was offered in evidence again without objection on part of the defendants. The question, however, was merely preliminary, and it was within the sound discretion of the court to permit it to be asked. Speaking on a similar point, the Supreme Court of California said: “Four or five specifications of error relate to rulings made by the court in denying objections by counsel for plaintiff to leading questions asked by counsel for Heffner in the direct examination of his witnesses. But these are not errors for which a new trial will be granted. We are not aware of any ease, in which a verdict has been set aside for the reason that leading questions, although objected to, have been allowed to be put to- a witness.' Green v. Gould, 3 Allen, 466; Hopkinson's Adm’r v. Steel, 12 Vt. 582; Parsons v. Huff, 38 Me. 137; Mershon v. Hobensack, 22 N. J. Law, 372. And the reason is that the examination of a witness in the. trial of a case is a matter within the sound discretion of the trial court, who may, in the exercise of that judicial discretion, allow1 or disallow1 leading questions. Sections. 2044-2046, Code Civ. Proc. A matter resting in judicial discretion is not reviewable in an appellate court; it is only the abuse of such a discretion of which we will take cognizance. In this case no such, question is presented by the record.” (Moran v. Abbey, 63 Cal. 56.)

Defendants also contend that the court committed error in allowing plaintiffs’ witnesses to testify to' conversations had with defendant Nariman, because, as they assert, “neither one of the partners had a right to assume any obligations of a third person, or promise to pay the indebtedness of a third person, so as to bind his copartner.” Hnder plaintiffs’ theory of the case, defendants did not assume any obligation óf a third person, nor did they agree to pay a third person’s indebtedness. Plaintiffs contend that the action of Nariman in agreeing to pay for all of Dunlevy’s purchases was an original promise on the part of Nariman & Jennings. The goods which Dunlevy bought before Nariman came to plaintiffs’ store were all paid for by Nariman on December 2d. The other goods were bought after tbe alleged arrangement between tbe plaintiffs and Nari-man was made.

Our Civil Code (Section 3281) provides: “Every general partner is agent for tbe partnership in tbe transaction of its business, and bas authority tot do whatever is necessary to> carry on such business in tbe ordinary manner, and for this purpose may bind bis copartners by an agreement in writing.”

Section 3233 provides: “A partner is not bound by any act of a copartner, in bad faith toward him, though within tbe scope of tbe partner’s powers, except in favor of persons who have in good faith parted with value in reliance upon such act.”

It is not asserted by defendants that any of tbe acts of which they complain were tainted with bad faith, nor is there any allegation in defendants’ pleadings that their partnership was not a general one. So far as the record discloses, they were general partners. “Every general partner is liable to third persons for all the obligations of the partnership, jointly with his co-partners.” (Cavil Code, Sec. 3250.) It was within the province of the jury to determine from the evidence adduced whether the debt created was in the usual and ordinary course of defendants’ business, and within the scope of their partnership adventure; and, if it was, the individual member who made the purchases had lawful authority to bind his partner thereby. (Dowling v. Exchange Bank, 145 U. S. 516, 12 Sup. Ct. 928, 36 L. Ed. 795.) “The general principle which lies at the foundation of a partner’s liability is that every partner has full and absolute authority to bind all the partners by his acts or contracts in relation to the business of the firm, in the same manner and to the same extent as if he held full powers of attorney from all the members.” (Manville v. Parks, 7 Colo. 128, 2 Pac. 212.)

Defendants say that the court erred in giving instruction No. 1, in which the jury are told that if they find from the evidence that plaintiffs did sell and deliver to the defendants, at their request, goods, wares and merchandise, as set forth in the complaint, and that the defendants had not paid therefor, they should find for tbe plaintiffs, state in tbeir verdict the. value of the goods sold, not to exceed the sum mentioned in the first count, and allow interest thereon at the rate of 8 per cent, per annum from December 22, 1899. Special objection is made to that portion of the instruction which refers to the allowance of interest. This involves a question, of considerable importance. As observed above, the suit is brought upon an open account for goods, wares andi merchandise alleged to have.been sold to defendants by plaintiffs between September 15, 1899, and December 21, 1899. So far as the record shows, plaintiffs made no demand upon defendants for payment after December 21st and prior to the commencement of this suit. Of course, the beginning of the suit was a demand; but we are unable to ascertain from the record when it was begun, as the case was tried upon the amended complaint, which was filed March 17, 1900. We have two sections in the Civil Code which treat of interest upon accounts. Section 2585, as amended by Act approved February 28, 1899 (Sess. Laws 1899, p. 125), reads as follows: “Unless there is an express contract in writing fixing a different rate, interest is payable on all moneys at the rate of eight per cent, per annum after they become due on any instrument of writing except a judgment, on an account stated, and on moneys lent or due on any settlement of accounts from the date on which the balance is ascertained;, and on moneys received to the use of another and detained from him. * * *” This section, it will be noticed, in so far as it relates to accounts, applies when the amount due the creditor is determined — when a balance is ascertained. From, such time a certain sum of money is due the creditor.

Section 4280 reads as follows: “Every person who is entitled to recover damages certain or capable of being made certain by calculation, and the right to recover which is vested in bim on a particular day, is entitled alsoi to recover interest thereon from that day, except during such time as the debtor is prevented by law or by the act of the creditor from paying the debt.”

Does-this section apply to a case like tbe present? We con-elude that it does. What, then, is tbe “particular day” from wbicb tbe plaintiffs are entitled to charge interest? Speaking of interest upon open, running accounts, Mr. Sutherland, in bis work on Damages (Section 322), says: “Where there is no definite credit tbe parties deal upon tbe assumption by tbe debtor that, although be has no claim to forbearance, yet payment will be requested, and on part of tbe creditor that tbe account has no time to run, and will be paid on demand-. Hence interest is not payable before demand, for tbe same reason that it is never payable, except by) agreement, while tbe debtor has a right to retain tbe money. In such cases it is not payable on tbe ground of default until tbe creditor has put tbe debtor under a present duty by rendering tbe account or requesting payment.” We are therefore of tbe opinion that, as interest does not begin to run upon an open account until a demand basi been made for tbe payment thereof, tbe plaintiffs may not be allowed interest in this action prior to tbe beginning of tbe suit, in tbe absence of allegation and proof of a prior demand.

There is no merit in any of tbe other objections made by defendants to tbe instructions, with the- exception of instruction 2, which applies to tbe second count only.

2. As to tbe second count. This reads as follows: “For other and further cause of action, tbe plaintiffs complain and allege that 'being partners as aforesaid, and tbe defendants, G. W. Nariman and M. Jennings, being partners doing business as Nariman & Jennings, tbe plaintiffs, between tbe 15th day of September, 1899, and tbe 21st day of December, 1899, under and by virtue of an agreement entered into between tbe plaintiffs and tbe defendants, sold and delivered to divers employes of tbe defendants goods, wares and merchandise of tbe amount and of tbe value of one hundred and sixty-five dollars and ninety-five cents, with tbe agreement and understanding with tbe said defendants that they, tbe said defendants, would pay tbe plaintiffs tbe value of said goods, wares and merchandise so sold to their employes, retaining tbe amount thereof out of tbe wages of sncb employes”; tbat, under said agreement and understanding witb tbe defendants, tbe plaintiffs sold and de^ livered goods to tbe said employes of tbe defendants; and then follows a list of persons to wbom plaintiffs allege tbey sold tbe goods, witb amounts. T'ben tbis allegation: “Tbat tbe plaintiffs, under said agreement witb tbe defendants, took and have assignments of tbe time checks of the several parties to- wbom tbey sold goods aforesaid, as evidence of payment under said agreement witb tbe defendants, and tbat each and all of tbe several sums so paid became and were due December 21, 1899, and tbat tbe plaintiffs are entitled to tbe sum of $165.95. That' no part thereof baa been paid to plaintiffs.” Tbe amounts of goods which these employes are alleged to have purchased are tbe same in amount as tbe time checks mentioned. It is claimed by defendants that said count does not state facts sufficient to constitute a cause of action for two reasons.

Tbe first objection is tbat tbe plaintiffs’ allegation, “For other ’and further cause of action, tbe plaintiffs complain anl allege tbat, being partners as aforesaid, and tbe defendants, Gf. W. Nariman and M. Jennings, being partners doing business as Nariman & Jennings,” is an insufficient statement of tbe respective partnership relations, which is not cured by reference to tbe first count by use of tbe words “as aforesaid.”

Tbe rule announced in McKay V. McDougall, 19 Mont. 488, 48 Pac. 988, does not extend so far as to compel tbe repetition of mere formal matters. “It should be held to embrace those material and issiiable facts- * * * which constitute tbe cause of action.” Introductory matter, such as tbe character in which tbe plaintiffs and defendants are made parties to an action, need not be repeated in a succeeding count or cause of action. See Polneroy’s Code Remedies, 575, referred to in McKay v. McDougall, supra.

In their answer to tbe second count, defendants, while denying all of tbe other allegations of said count, admit themselves to be copartners, and thus supply tbe alleged defect, so far as their own partnership relation is concerned.

"Defendants also claim tbat plaintiffs’ pleading is obnoxious under the rule laid down in Conrad National Bank v. Great Northern Ry. Co., 24 Mont. 178, 61 Pac. 1, because “it is not alleged in the second count of the complaint that the defendants agreed to pay for the amount of goods sold to the! alleged employes, but were to retain the same out of their wages.” The allegation is, “with the agreement and understanding with the said defendants that they, the said defendants, would pay the plaintiffs the value of said goods, wares andi merchandise so1 sold to their employes, retaining the amount thereof out of the wages of such employes.” In the case at bar it reasonably appears that the defendants agreed to pa.yi for the goods sold their employes by plaintiffs, “retaining the amount thereof out of the wages due the employes.” The rule laid down in Conrad National Bank v. Great Northern Ry. Co., supra, is that “either the express promise should be alleged, or the facts fropn which it may be implied, as that the credit was extended to the employer, and not to the-employe.” It seems from this pleading that the plaintiffs, upon the agreement, looked to the defendants, and not to the employes, for the payment of the alleged' amounts-. The undertaking of the defendants was therefore an original promise.

But conceding that the agreement alleged1 in this count would be within the statute of frauds unless in writing, we must presume it to be a written agreement, there being nothing to show, the contrary. (Sweetland v. Barrett, 4 Mont. 221, 1 Pac. 745 Maygerv. Cruse, 5 Mont. 485, 6 Pac. 333.)

So* far as we can ascertain from the record, no' objection was made to this pleading in the court below, and while it is loosely drawn, and would have been subject to a motion to> malee more specific, or to a special demurrer under Subdivision 7, Section 680, Code of Civil Procedure, it does state a cause of action,, and cannot be attacked by defendants, on account of the defects they urge at this time.

The only testimony in support of this second count is substantially as follows: The witness-Dunlevy testified: .“The papers1 which you now show me, marked Exhibits D to- E, have my signature attached to them. I signed themj all as Kalph Dunlevy, contractor. The word ‘Contractor’ was printed on them. I did not sign Karlman & Jennings, by their foreinan, because it was not necessary. I say these checks were signed by me.” The time checks were in the following form:

No. 395. Karlman & Jennings, K. R. Contractors.

Butte, Montana, Dec. 18, 1S99.

Mr. Donnelly lias worked 12.G days in the month of December at $2.50 per day.

Total . $31 50

Less deductions for board. 13 50

Less deductions for merchandise. 4 30

Less deductions for hospital...<. 50

Total deductions . $18 30

Balance due . 13 20

Ralph P. Dunlevy, Contractor.

Payable.

Subject to legitimate corrections.

At the time they were offered in evidence, defendants objected to their introduction, but the objection was overruled. Thereafter Dunlevy, being called by defendants for further cross-examination, testified as follows: “I told Karlman that we had to issue time checks for the purpose of getting money to pay the men off, and he said it was all right; and I asked Henry Heffer-lin if he would cash the time checks, and he said he would.” Counsel for defendants then moved toi strike out this evidence for the reason that it is not alleged in. the complaint that the plaintiffs cashed anyi of the time checks for the defendants* Karlman & Jennings, or either of them, and the suit is not brought for cash paid out or expended. ■ The court overruled the motion. It is evident that this was error. There was a fatal variance between defendants’ proof and the allegations of the pleadings. Moreover, plaintiffs utterly failed to support this count by any material testimony whatsoever. The defendants claim the evidence is insufficient to justify a verdict upon this count, and of this contention there can be no doubt. Under this state of facts, the court erred in giving instruction No. 2, which reads as follows: “The court instructs the jury that the plaintiff's have sued the defendants in the second count of their complaint for goods, wares and merchandise delivered by them to various employes of the defendants, amounting in tlie aggregate to the sum of one hundred! and sixty-five dollars and ninety-five cents ($165.95'), for which it is alleged in the amended complaint herein that the defendants agreed to pay to the plaintiffs. And if the. jury find and believe from the evidence that under such agreements the plaintiffs had taken up and had duly'assigned to them certain time checks, then you will find for the plaintiffs for the amount of the time checks paid by them, not to exceed the sum mentioned in the second count of their complaint, as shown by the evidence, together with interest thereon at. the rate of 8 per cent, per annum from December 22, 1899.'’ This instruction is not applicable to the proof adduced. It is also subject to criticism because it does not sufficiently state to the jury the nature of defendants’ alleged agreement lo pay plaintiffs.

We are therefore of the opinion that this case should be remanded to the district court, with directions to modify the judgment founded upon the- first count by computing interest on the sum- of $1,619.14 a.t the rate of 8 per cent, from the date of filing the complaint, provided that be not prior to December 22, 1899, that being the date from which interest is claimed in the prayer of the complaint; when so modified that the judgment and order should be affirmed; and that as ta the second count, the judgment and order should be reversed and a new trial ordered.

Per Curiam.

For the reasons given in the foregoing opinion it is ordered that this cause be remanded to the district court' with directions that the judgment founded upon the first count be modified by computing interest therein from the date of filing the complaint, provided that be not prior to December 22, 1899, and upon the entry of the judgment as modified, the judgment and order be affirmed; and as to the second count, that the judgment and order be reversed and, a new trial granted.