Thompson v. Mylne

4 La. Ann. 206

Opinion

The judgment of the court (Eustis, C. J. not sitting, having been of counsel for plaintiff',) was pronounced by

Rost,, J.

Before the decision of the Supreme Court in the case of Thompson v. Mylne, in 2 Rob. 349, the defendant had filed two accounts, showing the situation of George B. Milligan with the firm of A. (& J. Dennistoun & Co., and with the Bellechasse plantation. After the case was remanded, the intervenors, who appear from that time to have superseded the plaintiff in the management of it, filed an opposition on a great variety of grounds, among which are the following: 1. The intervenors oppose all items in the accounts foreign to the concerns of the partnership, the same not being within the jurisdiction of the District Court. 2. They oppose the charge of $4,462 35, for Milligan's third of the cost of 708 shares of Union Bank stock, secured on the plantation, on the ground that it was the private property of the defendant, who held it in his name, and borrowed money on it on his own account. 3. They oppose the manner in which interest is calculated in the whole account no. S, as it imports interest on interest, contrary to all legal principles, and in violation of art. 1934 C. C. They asked, at the samo time, that the defendant might be ordered to file, in place of the accounts opposed, other detailed accounts, showiug every transaction, every receipt and disbursement by and between the - parties, reserving to themselves all legal objections to the same and to eveiy part thereof, when they shall have been filed.

The court, without going into details, or giving - any reasons, ordered that a$ the exceptions be sustained, except that in relation to the charge of the price of the bank stock, which was reserved to be investigated by the auditors about to be appointed. The court then ordered “that auditors be appointed, and that-all matters of account be referred to them, with instructions to examine and investigate the same, and to report to the court 1he balance, if any, which may be due by the estate of Milligan, on the price of bis third part of thejBellcchasse plantation and slaves, conformably to the judgment of the Supreme Court, jmd the present judgment.”

Auditors were accordingly appointed. The defendant produced before] them the new account he was ordered to file in court, and they made a report thereon, in conformity with the directions of the court.

The intervenors having taken a rule upon the defendant to show cause’why the report should not be homologated, he opposed tho homologation on the following grounds: 1. That the auditors have rejected all the charges in the account which are personal to the late G. B. Milligan, and foreign to tho partnership. 2. Thatthey have rejected the charge for the cost of Union Bank stock. 3. That they have neglected to observe the mode of stating the accounts and of calculating interest, pursued by him, and by the firm of A. Sf J. Dennisiountl i Co.

The intervenors contend that two at least of these three grounds of opposition have been already decided in their favor, by tho decree appointing the auditors; that this decree has not been appealed from, and that the delays for rappealing having expired, it forms res judicata. There is a fatal objection to the finality and binding force of this alleged judgment. It does not contain the reasons upon which it was rendered. If it was valid in form we could view it in no other light than as a preparatory decree, directing the auditors how to proceed in the adjustment of the accounts. The record contains ample evidence that it was so considered by the parties, by the auditors, and by the judge. Viewing’ it in that light, it is necessarily before us on the appeal from the judgment of homologation.

In relation to the first ground of opposition, it was held by the Supreme Court that the accounts concerning the partnership were within the jurisdiction of the District Court, but that all private claims against Milligan should be settled and liquidated before the Court of Probates. The jurisdiction of that tribunal having since merged in that of the District Court, and the evidence of the private, as well as of the partnership, debts being before us, we will proceed to adjudicate upon the whole, as far as the state of the case will permit us to do so.

The Bellechasse plantation was first acquired by Dennistoun &f Co., who sold one-third interest in it to Milligan. ' The accounts in the record show that the price of this third has stood ever since on the books of the firm as a debt duo to-it, and that the subsequent transfers of the property have not changed the original relation between the firm’ and Milligan. By the articles of partnership this firm was appointed factors of the plantation. It has acted in that capacity, ever since, made all the necessary advances, and kept all the partnership accounts. In these accounts of the plantation, no items were charged or credited which did not appertain to the joint concern. But, besides those accounts, the partners Rad private accounts with their factors, and Milligan, who lived on the plantati°n> was in the habit of drawing upon them for all the small items of his private expenditure. In making up tho yearly accounts, one-third of the nett proceeds of the crop was placed by the factors to the credit of Milligan; out of this third and of his salary as manager, tho amount of his private account was first deducted, and the balance was credited to him on the price he had agreed to pay for his interest in the plantation.

Such appears to have been the course of dealing between tho parties up to the death of Milligan. It was made known to Alexander Dennistoun, who so far from complaing, sanctioned it, requesting merely the firm 1o keep Milligan’s private account down as closely as possible. The very sum of $2,575 59, duo by Milligan for his proportion of loss in a cotton speculation, which is specially objected to by the intervenors, appears to have been paid out of the proceeds of crops, with the assent of Dennisloun. Neither he, nor the defendant, have over objected to these appropriations, and they do not object to them now. The intervenors have no right to raise the objection for them. Bludworth v. Jacobs, 2 An. 24. Dunbar v. Bullard, 2 An. 821.

It is alleged that this course of dealing, and die acquiescence of Dennistoun in it, are only proved by documents which, although found in the record, are not properly in evidence. The record shows that, on motion of counsel for the defendant, the plaintiff was ordered to produce and file in court, four days after the date of the order, all the papers and accounts which wore inventoried in Milligan’s succession, under the description of “A bundle of papers, containing Bellechasse accounts, and marked letter C.” These papers were accordingly produced by the plaintiff, who, at the time of filing them, made oath of their identity.

The intervenors complain that this order was obtained ex parte, and granted in the dark, without any notice to them. Those complaints appeal’ to us unfounded. No law requires personal notice to be given to intervenors in such cases. The application was made and the order granted in the usual form, and in open court, where intervenors are always presumed to be ready to plead. C. P. 391. The order bears date the 16th February, 1846, the véry day on which the decree ordering the appointment of auditors was rendered. The minutes show that, on the next day, the counsel of the intervenors was present at the opening of the court, and appointed one of the auditors; the reading of the minutes must have informed him of the order granted the day before. He was bound to know, and, we have no doubt, did know, tho contents; of the minutes. Several days elapsed after this before the accounts were filed, and fifteen months were wasted in litigation before the rendition of tho judgment appealed from. The intervenors had notice of the order and of the documents after they were filed, and suffered them to be received as evidence, without alleging either collusion or fraud against tho other parties to the suit, or raising any other objection. They now contend that there is no evidence of the identity of those papers and accounts with those which were found by the judge in making the inventoiy; that they do not appear to have been paraphed and numbered as the law requires, and should not be considered as evidence. The defendant cannot bo prejudiced by the omissions of the magistrate who made the inventory. It was ■ stipulated in the contract of partnership between Milligan and the linn of Dennistoun Sf Co., that annual accounts should be rendered to Milligan by liis factors. His inventory makes mention of a bundle of accounts and letters found in his succession, and his executor, being ordered to produce those accounts and letters, has filed in court such accounts as the factors were bound to render, and letters of Mr. Dennistoun and of the firm explaining some of those accounts. The warrantors were aware that the documents inventoried had not been paraphed by the judge, and that the inventory made no mention of their number. They might perhaps have opposed on those grounds their introduction as evidence, and required prooí of their identity beyond the oath of the plaintiff; or, after the papers were filed, they might themselves have controverted that identity and attempted to disprove it by the books of Dennistoun ¿y Co., by the witnesses to the inventory,,or by-other persons present when it was taken. But as this has not beon dono, we must hold the return made by the executor to be prima facie true, and give effect to the evidence filed by him.

We stated at the beginning of this opinion that, on the first trial of the causo in the_ District Court, the defendant offered in evidence the account of Milligan With the Bellechase plantation, taken from the books of A. ¿y J. Dennistoun Co. This account contains the following entry :

“One-third cost of seven hundred and eight shares of Union Bank stock, bought on account of plantation and owners, $4,4G2 50.”

The judge of the District Court considered that the word otoners must have reference to Mylne and Milligan, and gave this, as his own reason, for deciding that Milligan was one-third owner of the plantation. On appeal, this decision was affirmed.

If this entry, found in the books of the common factors of tho parties, is sufficient to prove the interest of Milligan in the plantation, it must a fortiori prove his interest in the stock. It has been urged that-this account cannot make proof in favor of the defendant, by reason of his interest in the firm who kept it. Milligan was apprized of the existence of that interest when he made the contract which has given rise to this controversy, and the will by which he entrusted the settlement of his estate to the plaintiff in this suit. In selecting the firm as his factors, and the plaintiff as his executor, he intended to invest them with the rights of factor and executors ; and so long as no fraud is alleged or shown, it is proper not to lose sight of that intention, and to give these parties the bene* fit of the character for truth and integrity upon which the confidence of Milligan reposed.

But it is shown, moreover, that the account containing the charge for the price of Union Bank stock, was rendered to Milligan with a memorandum, stating that it had been put in the name of Milligan for tho salce of convenience, but belonged, in truth, to the owners of the plantation. A letter of Alexander Dennistoun corroborating this item of the account was also found in his possession; it is not shown that he ever repudiated the purchase, and no reasonable doubt can exist, that it was made on joint account. Milligan could not have been president of the Union Bank, if he.had not been a stockholder of that institution.

The stock having no market value when the plantation was sold to Benjamin and Packwood, and standing at the time in the name of tire defendant, it was not necessary to include it in the sale, and the transfer of it by the defendant on the books of the bank does not affect the right of the firm to charge the cost of it as it has done.

The last ground of opposition relates to the mode of stating the accounts, and of calculating interest. At the end of eveiy year, a balance of accounts and a balance of interest was struck, and earned together to the new account, thus calculating capital and interest, and charging interest upon the whole. This ¿rode of stating the accounts, was rejected by the auditors as being in violation'of art-1934 of the Civil Code, and the question now submitted to us is, whether that article is applicable to merchant’s accounts.

The commercial law, as settled in the other States of this Union, has been uniformly followed by the courts of Louisiana, when no statutory provision has prevented a resort to it. Under that law it is well settled that, when it is the custom of a place and the practice of the parties to strike a balance at fixed periods, .and to render the account, it brings it to the case of a fresh agreement, at the beginning of each period, to lepd the sum then due; though acquiescence in the account rendered is not considered per se an agreement to it, it is evidence from which it may be inferred that the party who receives the accpunt without objection, thereby agreed to continue the course of dealing and to retain the balance in his hands, rather than to pay it; the balance due is viewed as the capital ■ of the creditor, which he loaves in the debtor’s hands, on paying interest. The rule is that where regular merchant’s accounts are settled from time to time, interest on interest is allowed. Bainbridge & Co. v. Willeox, 1 Baldwin, 536, and authorities there cited.

In.'France, where a-disposition of law veiy similar to art. 1934 of our Code •exists,.it is not considered as applying to merchant’s accounts. “Les comptoscourants pe.uvent étre arrétés des époques aussi rapprochóes qu’il plait aux parties. Chaquefois I’intoret s’y liquido, et fait partie du soldé transporté azi nouveau ;compte ouvert. II so trouve ainsi converté en capital pour le compte suivant. Láa'égle .du Droit Civil qui ne- permet de capitaliser les interets qu’au bout.d’une année, -est .dans ..ce cas sans .application. Vincens, 2, 158. Peu importe que le-compte soit elabli entre deux,commerfants, on etre un commerjant et un simple ;particulier.” Dalloz, ,vol..40, ,221.

In adjudicating upon commercial.transactions much-uncertainty often arises in consequence of the non-adoption of the commercial Code, prepared by the framers of our CivibCode. It is safe to presume, however, that, in framing the Civil Code, they intended to leave our commercial jurisprudence as it was before, in harmony with that of other commercial nations. The -application of art. 1934 to a case like this is inconsistent with that presumption, and we concua with the courts and jurisconsults of France that it is not applicable.

It is well understood, between planters and their factors, that-the latter are to render accounts annually after the sale of each crop, and if the'balances existing pi their favor are not paid, interest is to be charged upon them at the rate agreed upon, although they may be made up of capital and interest. The fact that this course of dealing is universal and never questioned so long as the relation of principal and factor continues, shows the popular interpretation of the commercial law on this point; but the rights of the factors in this case, to make annual rests in their accounts, does not depend upon usage ; it results from an expresa stipulation in the contract of partnership. In the accounts rendered to Milligan under that stipulation interest was charged in the manner objected to; his agreeing to continue the same course of dealing after receiving them, was a tacit consent to their correctness so far as they could be ratified.

Considering that art. 1934 of the Civil Code is not applicable to merchant’s accounts, A. Sf J. Dennistoun Sf Co. were authorized, under the contract of partnership, to charge interest at the rate of six per cent per annum on the entire balance of every annual account, rendered by them; but the laws regulating the rate of interest are applicable to commercial as well as to ordinary transactions, and they could not charge interest at the rate of eight per cent per annum 'on-Üie cost of'the bank stock, .without an agreement, in writing of Milligan'te pay it. The bank stock account never having been paid, the intervenors are entitled to a reduction of two per-cent on the rate of interest charged. With this amendmenfthe charges far interest are not illegal.

The defendant has asked that the -case be remanded for-a final adjustment of the accounts by the court from which the present appeal is -taken. There can be no objection to this course. He farther asks that, for the balance which mq-y be found under that final adjustment, the firm of Dennistoun 8¡-Co. may be decreed to -.be a -creditor of .the partnership. . ..

When this case was before'the Supreme Court it was stated .in ¡the (opinion ¡that, the balance which may remain due onithe price of Milligan’s share in the •premises in partnership could not be considered as a partnership debt, to he satisfied by preference out of the partnership property; .that his vendors, as -such, .cannot-pretendto set up their claim as being a debt of the firm, to be. paid out of ¡the partnership assets; but in itbe decretal part, the right in question is .not specifically and finally adjudged. After affirming the decree of -the District (Court, which was a final decree upon the title, and which title was-thus finally adjudged, the-decree proceeds'to remand (the (cause for further proceedings in ¡the partition df the partnership-property and in the-settlement and liquidation of‘the-partnership concerns, and of the crops which the-defendant is -bound'to account for as negoiiorum gestor, for the purpose iof liquidating ¡the -balance, .if .any,-that ¡may be-due to the defendant, .according to .the legal principles, recognized in.this (opinion, reserving to said defendant his right to prosecute .his.claim for suchibalance 'before,the Probate .Courtin due.course of law.

This is not (to be considered.as afina! decree upon-those rights of the parties mot specifically adjudicated and closed by the decree itself. It is a preparatory •decree, prescribing the manner of proceeding deemed necessary by the court to ¡arrive at;a final decision, and necessarily under its .control .until that decision is-made. Res judicata dicitur quee finem controversiarum pronunciatione judiéis accipit, quod vel condemnatione vel absolutione eontingit. L. 1, ff. De Re Judie.uThe thing adjudged does not exist before the judge has definitively pronounced •on the contestation submitted to his decision, before he has admitted or rejected the claim, contemned or absolved the defendant.”

These requisites have not been fulfilled in this case. The defendant has not been condemned by the decree of the court. Further proceedings were .necessary to constitute res judicata, and the opinion of the court stands only as the enunciation of the legal principles which it considered applicable to the. case,, and. remains as such under the control of the court, and subject to their revision Perkins v. Fourniquet, 6 Howard, 208. Sibbald v. United States, 11 Peters, 491. Clay v. His Creditors, 9 Mart. 521. Kittredge v. Breaud, 2 Rob. 40. 4 Rob. 79.

These views are not in contradiction with those expressed in the cases of the. Succession of Durnford, 1 An. 92, and Kellam v. Rippey, 3 An. p. 202.

In the first of these cases the former decree of the Supreme Court reversed the judgment of the .Court of Probates, and remanded the case with directions to the judge below to give McDonough a credit on his account for the sum of $18,000, and to close the account according to law. The Succession of Durnford was thus finally condemned to pay that sum, and the court could not review a matter finally determined by the decree.

Jn the other case, Kellani, the plaintiff, had be.en finally condemned to pay the defendant for his improvements, and the case having only boon remanded for the purpose of ascertaining tlioir value, this was tha only question before the court on the second appeal.

Wo ai'e satisfied that the question whether the debt due by Milligan is or is not a partnership debt, is .still open, and as we cannot now finally pass upon tho case, it must be referred to the District Court in which the succession is opened, to bo decided in the classification of the debts.

It is, therefore, ordered that the judgment in this case be reversed, and the case remanded to the District Court for further proceedings, in conformity with the views expressed in the foregoing opinion; the intervenors and appellees paying tho costs of this appeal.