McIntosh v. Zaring

49 N.E. 164, 150 Ind. 301, 1898 Ind. LEXIS 184

• Court: Indiana Supreme Court
• Decided: January 27, 1898
• Docket: No. 16,787
• Status: Published

Opinion

McCabe, J.

The appellees sued the appellants in the Washington Circuit Court to recover attorneys’ fees upon a written contract. There was an answer filed leading to issues of law and fact. The venue was changed to the Jackson Circuit Court. A trial of the issues of fact in that court resulted in a verdict and judgment in favor of the plaintiffs in the sum of $7,500.00 over appellants’ motion for a new trial. Among the numerous errors assigned, are that the trial court erred in overruling a demurrer to the amended complaint for want of sufficient facts, that said complaint does not state facts sufficient to constitute a cause of action, and that the court erred in overruling the defendants’ motion for a new trial. The contract sued on is as follows: “Ellen McIntosh and Andrew J. McIntosh her husband, have this day employed as counsel to contest the will of W. C. De-Pauw, deceased, and to conduct all legal proceedings for that purpose Friedly & Giles, of Bedford, Indiana, Zaring and Hottel, of Salem, Indiana, and C. L. & H. E. Jewett, of New Albany, Indiana. Suit to contest said will is to be filed immediately and prosecuted with all reasonable dispatch; and for all their services, of every kind performed in relation to said suit, said attorneys are to receive the following compensation, and no other, viz: For their services in the event that the will of W. O. DePauw is set aside and Ellen McIntosh declared entitled to share in his estate, a fee equal to twenty-five and a half (25|- per cent.) per cent, of the value of the estate which she shall thus be entitled to and does receive, and in the event of a compromise or adjustment before a trial is begun, whereby said will is allowed to stand, a sum- equal to twelve and one-half per cent. (12£ per cent.) of the amount so received or stipulated to be received by her. They agree to pay said fee as follows: One-third to Friedly & Giles, one-third to Zaring and Hottel, and one-third to C. L. & H. E. Jewett. Ellen McIntosh. A. J. McIntosh. Friedly & Giles. C. L. & H. E. Jewett. Zaring & Hottel.” The complaint alleged the performance of the contract on the appellees’ part, and that the suit was compromised before trial by which appellant Sarah E. McIntosh received from the estate of said W.C.DePauw $250,000.00, and that she fraudulently concealed the knowledge of the amount so received, and falsely represented to them that she had only received $50,000.00 from said estate by said compromise; that relying on such representations the appellees had settled with and accepted from her 12£ per cent, of $50,000.00; that 12J per cent. on. the excess received by her was still due them and remained unpaid, demanding judgment for $30,000.00 and other proper relief. It is also alleged that Charles L. and Harry E. Jewett refused to join, as plaintiffs, and for that reason they were made defendants. They filed an answer disclaiming all interest in the suit. It is also alleged in the complaint that the appellees John A. Zaring and Milton B. Hottel were attorneys at law engaged in the practice of their profession under the firm name and style of Zaring & Hottel at the town of Salem, Washington county, Indiana, and that appellee Joseph Giles and the said George W. Friedly were at said date engaged in the practice of law in the city of Bedford, Lawrence county, Indiana. That after the performance of said services under said contract said George W. Friedly had died and the plaintiff Edith M. Friedly had been appointed administratrix de bonis non of the estate of said deceased. We hold that the contract sued on' did not create a joint right Of action in all the plaintiffs and hence the legal effect of the written contract was the same as if there had been three several and separate written contracts in favor of each of the three several firms or groups of attorneys and hence we hold that the contract itself did not create a joint right of action in said attorneys and cite the following cases supporting that conclusion. Goodnight v. Goar, 30 Ind. 418; Tate v. Ohio, etc., R. R. Co., 10 Ind. 174; Lipperd v. Edwards, 39 Ind. 165; Martin v. Davis, 82 Ind. 41; Harris v. Harris, 61 Ind. 117; Elliott v. Pontius, 136 Ind. 641.

But there is an element in the complaint beyond the scope of the mere written contract that exerts an influence upon the right of the several obligees or payees therein to maintain a joint action thereon. That element is the allegation of fraud and misrepresentations of the defendants as to the amount Mrs. Mein-, tosh had received from the estate of her father on the compromise, thereby inducing the said attorneys to accept a much smaller sum in full satisfaction ofrthe contract than they'were entitled to under its terms according to the facts as they really existed. These allegations were material in order to enable the plaintiff's to avoid the settlement; because without avoiding that settlement none of them could recover on the contract. While neither one of the firms of attorneys in the contract mentioned were interested in either of the other firms recovering, thereon, so as to enable them to join in a suit thereon, yet they were all interested in the other element which was essential to be established, without which neither of them could recover, namely, the fraud by which they had been induced to accept a smaller sum in full settlement and discharge of the contract than was really due them. In other words, they were all alike interested in avoiding the settlement. Our code provides: “All persons having an interest in the subject of the action, and in obtaining the relief demanded, shall be joined as plaintiffs, except as otherwise provided in this act.” Section 263, Burns’ R. S. 1894 (262, R. S. 1881). Another section of the code provides that: “When the action arises out of contract, the plaintiff may join such other matters in his complaint as may be necessary for a complete remedy and a speedy satisfaction of his judgment, although such other matters fall within some other one or more of the foregoing classes.” Section 281, Burns’ R. S. 1894 (280, R. S. 1881). These sections of the code have the effect even to broaden the rule in equity in such cases. That rule was that several separate creditors might unite in an action where a part of the relief prayed was common to all. But the rule required them to first reduce their respective claims to judgments at law. However there were some exceptions to that rule. Where the debtor was dead or had absconded from the State they could join in such action without obtaining judgments at law. Kipper v. Glaneey, 2 Blackf. 356; Ruffing v. Tilton, 12 Ind. 259. The sections quoted have been construed as authorizing such creditors to join as plaintiffs, though their claims be separate and distinct, and even though the debtor is alive and has not absconded, if plaintiffs have a common interest in any of the relief sought, whether their claims have been reduced to judgments or not, and if they have not they may recover separate judgments on such claims, in connection with the relief sought common to all, such as suits by creditors to set aside fraudulent conveyances, and subject their debtor’s property to the payment of their debts and the like. And, accordingly, persons who have any interest in the relief demanded are properly joined as plaintiffs. Durham v. Hall, 67 Ind. 123; Strong v. Taylor School Tp., 79 Ind. 208; Field v. Holzman, 93 Ind. 205; Elliott v. Pontius, 136 Ind. 641; Armstrong v. Dunn, 143 Ind. 433; Carmien v. Cornell, 148 Ind. 83; Pomeroy’s Rem., sections 266, 267, 268; 1 Dan. Ch. Prac. 235. We therefore hold that the relief sought against the alleged fraud was such as was common to all the plaintiffs and was essential to the right of any of them to recover on the contract, and hence such allegations gave them a right to join as plaintiffs, and in that respect the complaint was not bad for want of sufficient facts., It is true there was no specific prayer asking that the settlement be set aside on account of the alleged fraud, but the facts were stated entitling plaintiffs to such relief and there was a general prayer for judgment and other proper relief, and that is sufficient under the code to entitle the plaintiff to all relief that the facts stated will warrant. We find that it does not allege that Friedly and Giles were partners at the time, but it does allege that Zaring and Hottel were partners, engaged in the practice of law. It is contended however that enough appears in the complaint and the written contract sued on to disclose that Friedly and Giles executed the contract as partners. And in support of this contention we are cited to Cook v. Frederick, 77 Ind. 406; Henshaw v. Root, 60 Ind. 220; Western Union Tel. Co. v. Huff, 102 Ind. 535; Crowell v. Western Reserve Bank, 3 Ohio St. 406, and other authorities. We have examined them and find they do not sustain the appellants’ contention as to the point in question. The manner in which the contract was signed by Friedly and Giles would be competent evidence as tending to prove the existence of a partnership between them, and that is as far as the authorities cited by appellants go. Competent evidence tending to prove a material fact, is not the fact, or the equivalent thereof. The fact must be alleged affirmatively before the demurrer admits it to be true. A demurrer admits as true only such allegations as are properly and sufficiently pleaded. Peyton v. Kruger, 77 Ind. 486; Johnston v. Griest, 85 Ind. 503; Platter v. City of Seymour, 86 Ind. 323; State, ex rel., v. Foulkes, 94 Ind. 493. It must therefore be held that the complaint does not allege or disclose the existence of a partnership between Friedly and Giles thereby showing a want of sufficient facts to constitute a cause of action as to one of the plaintiffs, namely, Edith M. Friedly, administratrix of George W. Friedly, deceased. It is contended by the appellants that there is another element in the complaint having the same effect as if the existence of said partnership between Friedly and Giles had been alleged in the complaint. And that is that while the contract sued on is separate and distinct as to, and between the three firms or groups of attorneys, .as if it had been written on three separate papers, and each separately signed by the several firms, that it is joint as between the members of each firm or group of attorneys. And this contention we think must prevail. The amount stipulated to be paid to Friedly and Giles was in soUdo. It was not.stipulated what amount of the share to be paid to them should be paid to either Friedly or Giles. And the same is true as between the other two firms or groups of attorneys mentioned in the contract. An eminent author on contracts says: “Where the payment in the first place is of one sum in solido and afterwards to be divided among the payees there, generally, the interest of the payees is joint; but where the first payment is in several sums among the several payees, there, generally, their interest is several.” Pars. Cont. (5th ed.) 19. The interest therefore of Friedly and Giles, even in the absence of a' partnership between them is, as between themselves, joint in the share to be paid to them under this contract. On such a contract the law vests the right of action exclusively in the survivors where one or more of the joint obligees have died. 1 Pars. Cont. (5th ed.) 31. As was said b*y this court in Indiana, etc., R. W. Co. v. Adamson, 114 Ind., at p. 285: “The question with which we have to deal is important, and not entirely free from difficulty, but, after the most careful study we have been able to give the subject, we feel bound to hold that the code does not change the common law rule. The question goes back of the procedure and takes up the element of the right itself. The right, the statute does not profess to change; it reaches only the remedy. In the case of a joint contract the whole right — the unified interest — vests in the survivors. Upon them falls the entire right. If they do possess the entire right, then they are the real parties in interest, since it is inconceivable that if they do possess the entire right any other person can be a real party in interest. The principle of the common law vesting the whole right in the survivors is not changed by the code, and so long as the principle remains unchanged the persons possessing this entire right must be regarded as the real parties in interest. It requires legislation to abrogate a rule of law, and the courts cannot assume the functions of the legislature.

“Mr. Pomeroy, who has as strongly as any one urged a liberal .construction of the code and an extension of its provisions, affirms that the common law principle has not been abrogated. In discussing the question he said: ‘In actions ex contractu, all the persons having a joint interest must be made plaintiffs, and, when one of them dies, the action must be brought or must proceed in the names of the survivors; the personal representatives of the deceased obligee or promisee cannot be joined as co-plaintiffs; and in the same manner, in actions ex delicto for injuries to personal property, all the joint owners must unite, and if one of them dies, the action is to be prosecuted by the survivors alone. These common law rules remain in full force.’” It follows that the complaint shows upon its face that it did not state facts sufficient to constitute a cause of action in favor of one of the plaintiffs, namely, Edith M. Friedly, administratrix of. George W. Friedly, deceased, the same as if the complaint had alleged the existence of a partnership between Friedly and Giles. But the existence of such a partnership was directly alleged by the second paragraph of the answer to which the court sustained a demurrer for want of sufficient facts. It averred that at the time the contract sued on was executed, and the time the services were performed thereunder by Friedly and Giles they were partners in the practice of law. It concludes with the statement: “That Edith M. Friedly, admx., etc., is therefore not a proper party to this suit and is improperly joined as plaintiff herein, wherefore said defendants pray judgment.” The code provides that: “Where any of the matter enumerated in section éighty-five [section 309] do not appear upon the face of the complaint, the objection (except for misjoinder of causes) may be taken by answer." Section 346, Burns' R. S. 1894 (343, R. S. 1881). The matters enumerated in said section are the grounds for demurring to a complaint, among which is that the complaint does not state facts sufficient to constitute a cause of action. The answer in question being filed for the purpose of taking an objection to the complaint which did not appear on its face, the facts stated in such answer must be considered along with those stated in the complaint in determining such objection. Otherwise this objection to the complaint can never be raised at all, because the concluding part of the section of the codé quoted provides that: “If no such objection is taken either by demurrer or answer the defendant shall be deemed to have waived the same except only the objection to the jurisdiction of the court over the subjéct of the action, and except the objection that the complaint does not state facts sufficient to constitute a cause of action.” And that objection so far as the fact of said partnership is concerned cannot be presented except by answer. It would therefore seem that in presenting it by answer, if issue is taken on that answer and the proof establishes the truth of the answer, it defeats the complaint in the same manner as if the facts of the answer appeared in the complaint and a demurrer had been sustained to it. But by the action of the court in sustaining the demurrer to such answer the facts in it are admitted of record in connectionwith the complaint. Hence, it would seem that the court ought to have carried the demurrer to the answer back to the complaint, if such answer stated facts enough to show that the administratrix of the deceased partner had no right of action on the contract sued on as we shall presently see. Heiser v. Kelly, 73 Ind. 582; Dorrell v. Hannah, 80 Ind. 497. But the right to carry the demurrer back to and sustain it to the complaint depends entirely on whether the facts stated in the answer as an objection to the complaint, and admitted by the plaintiff’s demurrer to said answer, can be considered as a part of the facts on which the complaint rests. Be that as it may, if the answer stated a valid objection to the complaint the court erred in sustaining the demurrer to it. It is thoroughly settled law that the right of action to collect the debts and assets due to a partnership where any of the partners are dead is vested by law exclusively in the surviving partner or partners. Needham, v. Wright, 140 Ind. 190; Valentine v. Wisor, 123 Ind. 47; Anderson v. Ackerman, 88 Ind. 481; Nicklaus v. Dahn, 63 Ind. 87; Willson v. Nickolson, 61 Ind. 241; Cobble v. Tomlinson, 50 Ind. 550; Parsons Partnership (4th ed.), sections 32, 286, 342; Roys v. Vilas, 18 Wis. 179; 2 Bates Partnership, section 1147. As was said in Anderson v. Ackerman, supra: “Where a partnership is dissolved by the death of a member of the firm, the law invests the surviving partner with the exclusive right of possession and management of the entire assets and property of the partnership, for the purpose of settling and closing up the firm’s business. The administrator of the deceased partner has no claim upon the specific property or assets of the firm, as such.”

And as was said in Willson v. Nickolson, supra: “It has long been a well settled rule of law, that a surviving partner is entitled to the exclusive possession and control of the assets of his firm, including choses in action, for the purpose of settling and closing up the business of the partnership, and we see nothing in the act requiring him to file an inventory and an appraisement of such assets, which changes the rule. 1 R. S. 1876, p. 641,” citing Morrison v. Kramer, 58 Ind. 38, holding that the failure to inventory did not affect exclusive right of the surviving partner to sue for and collect the debts of the firm. To the same effect are Hadley v. Milligan, 100 Ind. 49; State v. Matthews, 129 Ind. 281; First National Bank v. Parsons, 128 Ind. 147; Havens, etc., Co. v. Harris, 140 Ind. 387. It follows from what we have said that there was no right of action on the contract in appellee Edith M. Friedly, administratrix of the deceased member of the firm of Friedly and Giles, both because it appears on the face of the complaint that the contract sued on created a joint interest in Friedly and Giles, the right to enforce which was vested by law exclusively in the surviving joint contractor Giles, and because of the facts alleged in the second paragraph of the answer that they were partners in the contract, in which case, as we have seen, the law vests the exclusive right to collect the assets of the firm in the surviving partner. The question then remains, what is the effect on the complaint when it appears from its face that no cause of action is stated in favor of one of the plaintiffs, and what effect on the right of the other parties to maintain the action where other facts are stated in an answer to which a demurrer has been sustained showing that one of the plaintiffs has no right of action.

It is firmly settled in this State that a complaint which does not state a good cause of action as to all, though it does as to some of the plaintiffs, is bad as to all, for want of sufficient facts to constitute a cause of action. Berkshire v. Shultz, 25 Ind. 523; Davenport v. McCole, 28 Ind. 495; Debolt v. Carter, 31 Ind. 355; Patman v. Leet, 41 Ind. 133; Maple v. Beach, 43 Ind. ; Sim v. Hurst, 44 Ind. 579-586; Griffin v. Kemp, 46 Ind. 172-177; Neal v. State, 49 Ind. 51; Yater v. State, 58 Ind. 299-301; Parker v. Small, 58 Ind. 349-352; Harris v. Harris, supra; Nave v. Hadley, 74 Ind. 155; Schee v. Wiseman, 79 Ind. 389; Martin v. Davis, supra; Headrick v. Brattain, 83 Ind. 188; Hyatt v. Cochran, 85 Ind. 231; Thomas v. Irwin, 90 Ind. 557; Darkies v. Bellows, 94 Ind. 64; Dill v. Voss, 94 Ind. 590; Holzman v. Hibben, 100 Ind. 338-340; Brumfield v. Drook, 101 Ind. 190; Brown v. Critchell, 110 Ind. 31; Peters v. Guthrie, 119 Ind. 44; Traders Ins. Co. v. Newman, 120 Ind. 554; Sedwick v. Ritter, 128 Ind. 209; Brunson v. Henry, 140 Ind. 455. To obviate the inevitable conclusion to which these authorities lead, appellees’ learned counsel invoke the aid of another section of the code reading thus: “Judgments may be given for or against one or more of the several plaintiffs, and for or against one or more of several defendants; and it may, when the justice of the case requires it, determine the ultimate rights of the parties on each side as between themselves.” Section 577, Burns’ B. S. 1894 (568, R. S. 1881). They therefore insist, in effect, that, under this provision of the code, a judgment may be rendered in favor of each of the plaintiffs as have a cause of action stated in their favor in the complaint, and judgment may be rendered against the others in favor of whom no cause of action is stated in the complaint. If that is the true force and effect of that section of the code then all that long line of decisions of this court last cited is wrong, and every one of them ought to be overruled. But the section is wholly inapplicable to a question of pleading, and that is the question we have been dealing with. The section referred to relates to a question of evidence, and the manner of the rendition of judgment in such cases. The section authorizes the rendition of judgment in favor of some of the plaintiffs and against others of them, when the evidence requires or justifies it. That could not be done at common law. But the section assumes that the complaint is good, stating facts sufficient to constitute a cause of action in favor of all the plaintiffs. Accordingly it was said in speaking of this section by this court in Nicodemus v. Simons, 121 Ind., at p. 567: “If, therefore, two or more persons bring a joint action, alleging a joint cause of action, and it turns out upon the trial that upon the facts alleged in the complaint some, but not all, of the plaintiffs are entitled to recover, the court or jury, as the case may be, will so find, and judgment will be rendered accordingly. * * * But, as we have already held, the complaint is good, and the question before us is one of evidence, and not of pleading; upon the evidence before them, the jury found for the female appellee and the court rendered judgment in her favor. This, we think, was proper, and is in accordance with the provisions of said section 568, R. S. 1881.” It is very clear that the section quoted is in no way inconsistent with the long line of cases cited holding that a complaint by plaintiffs will be bad for want of sufficient facts if it does not state a cause of action in favor of all the plaintiffs. It follows from the principle decided in that line of cases that the complaint before us failing to show that Edith M. Friedly, admx., etc., had any right of action on the contract, and showing affirmatively that the interest of her intestate and the appellee Giles in said contract was joint, and vested in the surviving joint contractor the sole right of action thereon; and therefore the complaint failing to state a cause of action in favor of Edith M. Friedly it did not state facts sufficient to constitute a cause of action as to any of the other plaintiffs. It also follows from what we have said that the court below erred in sustaining the demurrer to the second paragraph of the answer. A very strong showing is made in argument that there were many reversible errors involved in the motion for a new trial, in the giving and refusal of instructions, rulings on motions to suppress portions of depositions, the admission and rejection of evidence, and many other things. But the record is in such a conditon that we cannot pass upon any of the questions involved in the motion for a new trial. In the first place the evidence is not in the record, because there is no showing that the longhand manuscript was ever filed in the clerk’s office of the court from which the appeal came, before its incorporation in the bill of exceptions. The instructions are in the record, but, unfortunately, we think the motion for a new trial was made too late to be available. The verdict was returned in the Jackson Circuit Court on the last day of the term, the case being tried by a special judge. The regular judge on that day made an order calling an adjourned term, appointing a time for it to begin; that made the adjourned or special term come between that and the next regular term. Due notice was given, and such adjourned term was held accordingly. The motion for a new trial was not filed on the day the term of court closed, but the court allowed defendants until the first day of the next term to present their motion for a new trial, but without consent of or notice to plaintiffs. The defendants did not present or file the motion at the adjourned or special term. The statute provides: “The application for a nqw trial may be made at any time during the term at which the verdict or decision is rendered; and if the verdict or decision be rendered on the last day of the session of any court, or on the last day of any term, then, on the first day of the next term of such court, whether general, special, or adjourned.” Section 570, Burns’ R. S. 1894 (561, R. S. 1881). The court had no right to extend the time for filing the motion beyond the time fixed by law for filing the same, especially in the absence and without the consent of the appellees. Cutsinger v. Nebeker, 58 Ind. 401; Pennsylvania Co. v. Sedwick, 59 Ind. 336; Evansville, etc., R. R. Co. v. Maddux, 134 Ind. 571. The statute carried the motion forward to the next term whether general, special, or adjourned. .Whichever one of these kind of terms came next after the term at which the trial took place would be and was the next term within the meaning of the statute. Therefore the application should have been made at the adjourned term.

For the errors of overruling the demurrer to the complaint for insufficiency of the complaint, and error in sustaining the demurrer to the second paragraph of the answer, the judgment must be, and is, reversed.