American Bonding Company v. State ex rel. Whisler
| Decision Date | 22 November 1907 |
| Docket Number | 6,089 |
| Citation | 82 N.E. 548,40 Ind.App. 559 |
| Parties | AMERICAN BONDING COMPANY ET AL. v. STATE, EX REL. WHISLER, RECEIVER |
| Court | Indiana Appellate Court |
From Wabash Circuit Court; U.S. Lesh, Special Judge.
Action by the State of Indiana, on relation of David Whisler, as receiver of the partnership of Lawrence & Company against the Amercian Bonding Company, and another. From a judgment for plaintiff, defendants appeal.
Reversed.
Ayres Jones & Hollett and J. Clyde Hoffman, for appellants.
Shively & Switzer and Warren G. Sayre, for appellee.
This was an action brought by the State, on the relation of David Whisler, receiver of the late copartnership of Lawrence & Company, against appellants, Elizabeth H. Mills and the American Bonding Company of Baltimore, for recovery upon a bond executed by said Elizabeth H. Mills, surviving partner of the firm of Lawrence & Company, as principal, and said American Bonding Company of Baltimore, as surety, for alleged breaches thereof. Upon issue joined, the cause was submitted to the court, and, upon request, special findings and conclusions of law were made, upon which judgment was rendered for appellee.
Exceptions were reserved by each of said appellants to each of said conclusions of law. Each of said appellants then filed separate motions for a venire de novo and for a new trial. It is contended that the motions for a venire de novo should have been sustained, for the reason that the special findings are imperfect, indefinite, and uncertain, in that the court did not find the amount of funds of said trust with which appellant Mills should be charged. Item two of the findings shows that on April 9, 1901, she filed an inventory and appraisement of the partnership assets stating that "said appraisement showed the firm assets to be as follows:
The stock of merchandise appraised at
$ 13,823.05
Accounts classed as good
2,366.98
Accounts classed as doubtful
498.92
Accounts classed as bad
194.61
Making a total of
$ 16,883.56"
This is the only finding as to the value of the property or what she received out of the trust, except that item four finds that up to February 15, 1902, appellant Mills had collected of the choses in action $ 787.35.
It is well settled that it is the province of special findings to find the ultimate facts, and the finding of evidentiary facts is not sufficient. Minnich v. Darling (1894), 8 Ind.App. 539, 542, 36 N.E. 173; Taylor v. Canaday (1901), 155 Ind. 671, 57 N.E. 524; Perkins v. Hayward (1890), 124 Ind. 445, 24 N.E. 1033.
The finding that the appraisement showed certain things is not a finding of an ultimate fact, but of an evidentiary fact ( Hasselman v. Japanese Develop. Co. [1891], 2 Ind.App. 180, 27 N.E. 318); nor is it a finding that appellant Mills received that amount of property; nor, in view of the other findings, necessarily a finding that she should be charged with that amount. It is true, as counsel for appellee state, that as a general rule a trustee is charged with the amount of the inventory and appraisement filed in the trust. But when, as in this case, the suit is for a breach of the bond, and the other findings of the court show that the trustee was not so charged in making calculation to determine the amount converted, the rule fails, and there should be a definite finding somewhere of the amount of the partnership property received and with which the trustee should be charged. The court found that appellant Mills collected $ 787.35 of the choses in action prior to February 15, 1902, but does not find that this was the whole amount she collected or with which she should be charged. The court also found that she had expended in the performance of her trust the sum of $ 3,486.28, and that she had paid on the debts of the partnership, out of the partnership's property, $ 3,855.25; that she paid on partnership debts $ 596.90 out of an equity in lands she owned, $ 828.71 out of other lands owned by Jennie C. Lawrence and Elizabeth H. Mills jointly, $ 17,366.62 out of the proceeds of the sale of bank-stock owned by said Lawrence and Mills in their separate capacities, and pledged as security for said debts, and $ 652.71 on another partnership debt out of the same proceeds; that she expended $ 800 to replenish stock; that the services of August C. Mills rendered said trust was of the value of $ 1,500, and that she converted to her own use of the trust funds, $ 6,257.52. How did the court arrive at this amount? It is urged that this amount is excessive. How is this court to determine that fact? With which of the above amounts did the court credit her? Certainly not all; and we cannot discover any combination of the above amounts, together with the amount found to have been converted, that will come anywhere near to the amount of the appraisement. Counsel for appellee have endeavored to aid us in this search, by suggesting that the court in its calculation deducted from the amount of her appraisement the amount of $ 2,273.16, the difference between the appraised amount of the choses in action and the amount of the same found to have been collected prior to February 15, 1902, and taking the balance of the appraisement left after this deduction as the amount with which she should be charged, and grouping together certain of the above amounts as credits, thus obtained the result found. But there is no finding that such a deduction should be made, and, to obtain the basis, we must go into the field of speculation and indulge in inferences. This, under the well-settled rules of law, we cannot do. Crowder v. Riggs (1899), 153 Ind. 158, 53 N.E. 1019; Craig v. Bennett (1897), 146 Ind. 574, 45 N.E. 792, and cases cited.
Item ten of the finding is, in substance, as follows: That prior to the death of said Jennie C. Lawrence the partnership of Lawrence & Company became indebted to the Lawrence National Bank and to Susan H. Eagle in various sums, which, when paid, amounted to $ 17,366.62; that when said loans were made by said bank and said Susan H. Eagle there was pledged by said Jennie C. Lawrence and said Elizabeth H. Mills certain bank-stock then held and owned by them in their individual capacities as collateral security for said loans; that in August, 1902, said bank-stock so pledged with the knowledge and consent of said Elizabeth H. Mills was sold by said creditors for $ 18,150; that the money thus received was applied to the payment of the debts so secured in the sum first-above stated, and in the payment of another partnership debt of $ 652.71, the residue being paid to Elizabeth H. Mills. This item is indefinite and uncertain, in that it does not find in what amount each of said partners held the bank-stock in question. Counsel for appellant contend that the finding that the two partners owned and held certain pledged bank-stock in their individual capacities creates of necessity the presumption that they owned it jointly and equally. While it might be true that as to such a finding with regard to a single article of property that is indivisible--such as a house, a share of stock or the like--this presumption would arise; yet when this language is applied to an aggregation of property, such as a large number of shares of stock, such a presumption does not necessarily follow. For the foregoing reasons, the special findings must be held insufficient to support the judgment. While this determines the case so far as this appeal is concerned, there is a question presented that will necessarily arise on another trial and should be settled at this hearing. It appears that in the performance of her trust as surviving partner appellant Mills used certain of the trust funds in her private affairs and out of her private funds paid partnership debts, and appellants insist that she should have credit for the partnership debts thus paid. Appellee contends that, since the partnership debts were also her individual obligation, when paid they were extinguished; that, since a partner cannot be a creditor of his own partnership, he cannot be subrogated to the rights of a creditor whose debt he had paid; and therefore appellant Mills was not entitled to reimburse herself out of the partnership fund, and should not be allowed credit for the amount of the partnership debts so paid out of her private funds. If the surviving partner was making this claim for her own benefit, in a controversy between herself and the firm creditors, there might be some virtue in this contention; but here the court found that appellant Mills, as well as the estate of Jennie C. Lawrence and the firm of Lawrence & Company, was at all times after the death of Jennie C. Lawrence insolvent. Therefore the partnership creditors had no right or claim in or to the individual property of the partners. Huff v. Lutz (1882), 87 Ind. 471; Weyer v. Thornburgh (1860), 15 Ind. 124.
The suit is not one wherein the surviving partner is claiming a benefit for herself, but is a suit upon the bond for a breach thereof, the alleged breach being that the principal received assets of the partnership for which she failed to account. There is no question of...
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