Pomeroy v. Benton

77 Mo. 64
CourtSupreme Court of Missouri
DecidedOctober 15, 1882
StatusPublished
Cited by52 cases

This text of 77 Mo. 64 (Pomeroy v. Benton) is published on Counsel Stack Legal Research, covering Supreme Court of Missouri primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Pomeroy v. Benton, 77 Mo. 64 (Mo. 1882).

Opinions

Sherwood, J.

When this cause was in this court on a former occasion, (57 Mo. 531,) we examined the record with the most patient and laborious attention. The result of that examination was, that the defendant was declared a fraudulent trustee, the judgment reversed, and the cause remanded with directions to have an accounting on that basis. The defendant did not move for a rehearing in this court either on matter of fact or matter of law. The cause on its return to the circuit court was committed to a referee, with instructions to hear all competent testimony that may be offered by the parties, and state the account between said parties in accordance with the opinion of the Supreme Court herein, and make report,” etc. The sole duty of the referee, as seen from those instructions, was simply to take an account of the amount due by defendant, treating him as a fraudulent trustee, for this was “ in accordance with the opinion of the Supreme Court herein.” But the learned referee could not, as seen by his report, [80]*80confine himself within the narrow limits assigned him; he must needs investigate other things and look into other matters, de hors his duties and instructions. He must needs see whether the opinion of this court was correct, and wherein he deemed it incorrect, he must needs proceed to correct it.

The record now.before us does not substantially differ from that- presented on a former occasion. There was an array of evidence showing the defendant’s fraud, which we regarded as conclusive, and so found and declared when we reversed the judgment and remanded the cause.. We have ruled that where we have remanded a cause with directions as to the further proceeding of the trial court, that there the case does not present the same phase as if there had been a simple reversal and remanding; that when special directions have been given as aforesaid, it is out of the power of the lower court to open the cause and have a new trial. Chouteau v. Allen, 74 Mo. 56. Under this ruling even the circuit court would have been powerless to have done otherwise than as in our mandate directed, and of consequence so would the referee. But the referee was not content to yield obedience either to our mandate or the instructions of the circuit court. We found in the record abundant indicia of fraud. The referee took it upon himself to say that there was no fraud, although upon every hand, in this, as in the former record, fraud and fraudulent practices on the part of the defendant in appropriating the funds, credits and assets of the partnership to his own use; in deceiving his partner by a false balance sheet, and false representations concerning the same; in the destruction and fabrication of evidence; in evading at the hearing direct questions as to matters with which he must have been familiar, and with which a court of equity-will hold he was familiar; in answering that he did not know, could not remember, etc., respecting amounts, dates and other things touching the transactions in which 'he had been engaged, which even the most ordinary memory [81]*81could not fail to recall — are patent to even the most cursory observation. The referee, however, notwithstanding that, in the face of the finding and judgment of this court, and it may be added in the face of the most convincing testimony to the contrary, he acquitted the defendant of the charge of fraud, yet nevertheless, he found the defendant indebted to the plaintiff in a comparatively small sum, $15,350.60-|, with simple interest thereon from date of suit brought January 13th, 1868, at six per cent.

This finding and ruling of the learned referee was erroneous upon the facts in evidence as it was illogical in law. If there was no fraud on the part of the defendant in any of the ways charged in the petition, then the plaintiff’s case fails, and that is the end of the matter. In the absence of fraud or improper concealment, its equitable equivalent, the agreement, the bill of sale of January 1st, 1865, being sufficiently comprehensive in its terms, passed to defendant every right and interest in the partnership affairs which the plaintiff possessed, and operated, on its execution, as an absolute discharge of further liabilities of defendant to the plaintiff respecting the same. This view of the point was very properly taken by the court of appeals, His Honor, Judge Bakewell,very pertinently observing, (in an opinion which does not appear in print): “But if that deed was obtained in good faith it was clearly a complete discharge. To hold that the settlement with, and deed of Pomeroy, was not a discharge, is plainly to hold that they were obtained by misrepresentation; that the balance sheet exhibited to plaintiff" by defendant, upon the faith of which plaintiff" sold his interest in the concern to defendant for $275,000, was accompanied with concealment concerning the business of the firm and the value of plaintiff’s interest in it.”

This is what the Supreme Court finds. The referee finds the contrary. The two findings cannot stand together. If Benton was guilty of no unfairness, he should not have been charged at all; the settlement should not [82]*82be opened. If he is to be considered in all respects as a fraudulent trustee, he should have been treated and charged in all respects as a fraudulent trustee. Interest should not have been computed without rests, merely as simple interest at six per cent, and presumptions should have been indulged against him, which on his theory of the case the referee did not and could not indulge. To say, as the Supreme Court does, that Benton is to be treated in all respects as a trustee, is to find that he obtained an unfair advantage, or the words have no meaning at all.” But the learned judge speaks apologetically for the referee, by saying, “ He felt himself hampered, no doubt, by the opinion of the Supreme Court, and having arrived upon the same evidence at an opposite conclusion on the question of fraud.” Had the learned judge been at the pains to read the evidence as well as the ruling made by the referee, which he confesses he did not, he would not have thought that the latter “ felt himself hampered ” either by the opinion of this court, or indeed by that of any other court or by the text writers.

Eor instance, among the rulings of the learned referee (which' were for the most part in favor of the defendant), the plaintiff offered as evidence in chief the deposition of defendant taken in this cause June 8th, 1868. To this deposition defendant’s counsel took two novel objections: 1st, That it could not be read as a deposition because the. defendant was present. 2nd, Nor as an admission because it was a deposition. These objections were held well taken and the deposition rejected. Nor was it admitted at all, except as impeaching evidence. It is scarcely necessary to say that this ruling of the learned referee has no support either in reason or authority. If defendant had made an admission verbally on the street respecting the subject matter of the suit, it would have been original evidence against him and a fortiori would it, when contained in a deposition taken under the solemn forms of the law. Weeks [83]*83on Dep., § 464; Kritzer v. Smith, 21 Mo. 296; Charleson v. Hunt, 27 Mo. 34.

The deposition, however, is preserved in the record, and we shall treat it as though admitted in chief. The learned referee did not see fit in his voluminous report to make allusion to this important ruling, which so far as concerned his action, deprived the plaintiff of most important and original evidence.

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Bluebook (online)
77 Mo. 64, Counsel Stack Legal Research, https://law.counselstack.com/opinion/pomeroy-v-benton-mo-1882.