Ehrmann v. Stitzel

• Decision Date: 17 January 1906
• Citation: 90 S.W. 275,121 Ky. 751
• Parties: EHRMANN v. STITZEL.
• Court: Kentucky Court of Appeals

90 S.W. 275

121 Ky. 751

EHRMANN v. STITZEL.

Court of Appeals of Kentucky.

January 17, 1906

Appeal from Circuit Court, Jefferson County, Chancery Branch, Second Division.

"To be officially reported."

Suit by Hilmar Ehrmann against A. P. Stitzel. From a judgment sustaining a demurrer to the petition, plaintiff appeals. Reversed.

O. A Wehle and Louis B. Wehle, for appellant.

A. E Willson and M. B. Gifford, for appellee.

SETTLE J.

This is an appeal from a judgment of the lower court sustaining a general demurrer to appellant's petition and dismissing the action, which was one in equity to surcharge a partnership accounting made 6 months and 15 days before the filing of the petition. It appears from the averments of the petition: That appellant, Hilmar Ehrmann, and appellee, A. P Stitzel, had been partners for more than a year in the wholesale and retail liquor business in Louisville, and that the partnership was to continue 10 years. That appellant had contributed to the partnership capital $30,000, and appellee $10,000, and that the profits and losses of the business were to be divided between the partners in the same proportion. But, notwithstanding the fact that only a short part of the time for which the partnership was to run had expired, the partners on July 31, 1902, agreed on a dissolution thereof upon the following terms: That appellant should take all the assets and assume all the liabilities of the partnership that appellee, who had been in charge of the books and is a competent bookkeeper, should make an accurate inventory and valuation of the assets and statement of the liabilities of the firm, and that on the basis of such inventory, valuation, and statement by appellee, the profits would be ascertained, the balance struck, and the settlement between the partners made; that such inventory, valuation, and statement were made by appellee and represented by him to be correct, upon which appellant implicitly relied, and that the statement of appellee showed the profits of the partnership business to be $12,799.20, and appellee's share thereof $3,199.80, which, together with the $10,000 he contributed to the capital of the partnership and was entitled to withdraw, made the amount apparently due him upon the settlement $13,199.80; and upon this basis appellant settled with appellee, by paying $1,199.80 in money and executing to him 48 notes, each for $250, all bearing interest from August 1, 1902, the first payable September 1, 1902, and the last August 1, 1906. That the partners signed a written agreement, which sets forth the dissolution of the partnership, conveys to appellant all the interest of appellee in the partnership assets, and recites the consideration thereof. This writing was filed with and made a part of the petition, and, though signed by the parties July 31, it was dated July 1, 1902; but all the calculations and estimates of appellee constituting the basis of the settlement and dissolution of the partnership, as well as appellant's purchase of appellee's interest in the partnership property and assets, were brought down to and valued as of August 1, 1902. The petition also particularly sets forth a great many specific errors committed by appellee in making the inventory, valuation, and statement of account intrusted to him, such as inventorying 35, instead of 30, barrels of whisky, underestimating the storage and insurance charges on whisky in bond, the amount due from the firm to the city creditors, and the amount of expenses incurred, but not due, which appellant was to assume and pay. All the errors complained of are fully set forth in a written statement exhibited with and made a part of the petition. According to this statement, and the averments of the petition, the errors in question amount in the aggregate to $2,223.60, and by reason thereof appellant, upon the dissolution of the partnership, settled with appellee for $555.90 more than he was entitled to receive under the agreement between them. The petition contains in substance the further averments that appellee was permitted by appellant to make out the statement constituting the basis of the dissolution of the partnership and the latter's purchase of his interest in the property and assets thereof because of his belief that he was a reliable bookkeeper and honest man; that he accepted appellee's work, relying upon his honesty, good faith, and accuracy; that the wrongful entries, misstatements, and misrepresentations of appellee in the estimates, calculations, and statement of account furnished by him as a basis for the settlement of the partnership were made either by mistake or with the fraudulent intention of deceiving appellant and making him settle with appellee for a larger amount than was justly due him; and that one or the other of these facts is true, but appellant does not know which of them is true. The prayer of the petition asks that the settlement of the partnership be corrected, and appellee be ordered to surrender enough of the settlement notes to equal the errors in the settlement, or that one of them be surrendered and another credited with the remainder, and, if appellee has sold the notes, then for personal judgment against him for $555.90, and for all general and proper relief. It also appears from the allegations of the petition that appellee, after receiving of appellant the several notes executed in settlement of his (appellee's) interest in the partnership property and assets, assigned them to his father, Philip Stitzel, who was joined as a defendant in the action; but, the latter having died after the institution of the action, the same was revived against his widow as administratrix of his estate.

It is contended for appellee that the petition is bad on demurrer, because (1) it seeks by parol evidence to show that the settlement and dissolution of the partnership between appellant and appellee, as well as the purchase by the former of the latter's interest in the partnership property, occurred July 31, instead of July 1, 1902, as shown by the date of the writing signed by the parties; (2) that it seeks to recover $555.90 on account of errors in the partnership settlement, whereas the written agreement shows a contract of sale of all appellee's interest in the partnership assets for $13,199.80; (3) that the petition is fatally defective, in that it does not allege that appellant had exercised a due surveillance over appellee in his work of making the inventory and statement for the partnership settlement.

As to the first contention, it is sufficient to say that ordinarily the true date of every paper is the time of its delivery, and this may, even as between the parties themselves, be shown by parol evidence, although a different date be upon the paper. Indeed, this is the rule, unless there are in the document itself provisions that refer to its date as material and show it to be essential to the rights of the parties. The writing in the case at bar contains no provision that refers to its date as material, or makes it so. On the contrary, it indicates August 1, 1902, as a more important date than July 1, 1902, for by its terms the notes executed by appellant to appellee are to bear interest from August 1, 1902, instead of from July 1, 1902, the date of the writing. But, as only one transaction is involved, it is for the purpose of the action immaterial when that transaction occurred. The view of the law above expressed is supported by the following authorities: Taylor on Evidence, § 1150; Perrin v. Broadwell, 3 Dana, 596; Miller v. Hampton, 37 Ala. 342; Aldridge v. Bank of Decatur, 17 Ala. 45; Burns & Co. v. Moore, 76 Ala. 339, 52 Am. Rep. 332; Battles v. Fobes, 21 Pick. 239; Shaughnessey v. Lewis, 130 Mass. 355; Russell v. Carr & Co., 38 Ga. 459.

The second contention of counsel for appellee is bottomed upon the theory that the transaction between appellant and appellee was a purchase by the former of the latter's interest in the partnership property and effects. Therefore there can be no surcharging of the settlement made between them as in a case of mere accounting, but appellant's remedy is by an action for damages. We are, however, unable to adopt this view of the matter. While the instrument of writing between the parties expresses a sale, as well as conveyance of appellee's interest in the property and business of the firm, it is not a naked sale, such as would have resulted if one partner, acting upon his own judgment and from his personal knowledge of the property and business of the...