Fisher v. Tuller

• Decision Date: 30 January 1890
• Citation: 23 N.E. 523,122 Ind. 31
• Parties: Fisher v. Tuller.
• Court: Indiana Supreme Court

122 Ind. 31

23 N.E. 523

Fisher

v.Tuller.

Supreme Court of Indiana.

Jan. 30, 1890.

Appeal from circuit court, Vigo county; William Mack, Judge.

An action by Ulysses E. Fisher against George M. Tuller. Judgment for defendant. Plaintiff appeals.

Farris & Hamil, T. H. Nelson, and I. N. Pierce, for appellant. C. F. McNutt, J. G. McNutt, F. A. McNutt, and I. H. C. Royse, for appellee.

Elliott, J.

The appellant and Owen Tuller were partners, and as partners carriedthe United States mails in Missouri, under a contract with the government. During the war of the Rebellion, Confederate soldiers captured and destroyed property of the partnership to the value of $25,000. In the year 1866 the firm filed a claim for the value of the property, and the prosecution of the claim was intrusted to Tuller. He received from the government in payment of the claim, in the year 1867, $20,000, which he appropriated to his own use. He concealed from Fisher the fact that he had received the money. After the dissolution of the partnership, which occurred in 1866, Tuller informed Fisher that the claim had not been paid, and that it had been disallowed, and finally disposed of by the government. Fisher relied upon the statements of Tuller, and was wholly ignorant of the fact that Tuller had received and appropriated the money due the partnership; nor did he obtain knowledge of the fact until September, 1884. Fisher has been a resident of another state since the year 1860. Tuller died in 1873, leaving as his only heirs his widow, Janet C. Tuller, George M. Tuller, Owen Tuller, and Emma J. Tuller. Tuller died the owner of real and personal property of the value of $150,000. His estate was administered upon, and in 1879 was finally settled. The property remaining after settlement was distributed to the heirs, and $10,000 was received by the appellee, George M. Tuller, from the personal estate of his father; and he also received land to the value of $50,000, which was set off to him by an order of partition. He is still the owner of the land thus acquired from the estate of Owen Tuller. All of the heirs of Owen Tuller are non-residents of this state except the appellee.

The facts stated in the complaint would avoid the bar of the statute of limitations, if the case were one between Owen Tuller or his administrator and the appellant; for they are sufficient to establish a fraudulent concealment by Owen Tuller of the cause of action. The relation which existed between Tuller and Fisher, his partner, was one of trust and confidence; and the latter had a right to rely upon the statements of the former. Partners are not strangers, dealing at arms-length, in matters connected with the partnership business; for the relation requires that each shall deal with the other in the utmost good faith. It would be impossible to conduct a partnership business unless the members of the partnership were held bound to exercise, in all their dealings with each other, the strictest good faith; and this requires that there should be neither intentional concealment nor intentional misrepresentation. In this instance there was a flagrant breach of duty; for there was not only fraudulent concealment, but a positive false representation.

It is true that the partnership had been dissolved before Tuller received the money, but it is also true that he still occupied a fiduciary relation to the appellant. He was intrusted with the prosecution of a claim due the partnership, and was bound to act in good faith towards his former partner, who had imposed confidence in him. As to the collection and disposition of the proceeds of the claim intrusted to him, he was in every essential particular in substantially the same position that he would have occupied had the partnership not been dissolved. He was acting for the partnership by virtue of his interest in the firm, and under the trust and confidence imposed in him by his associate. This trust he had no right to abuse or betray. The peculiar relations existing between the parties warranted Fisher in relying upon the statements of his associate. Even where no fiduciary relations exist, a party may rely upon the statements of another as a matter of record. Campbell v. Frankem, 65 Ind. 591;Dodge v. Pope, 93 Ind. 480;West v. Wright, 98 Ind. 335;Bristol v. Braidwood, 28 Mich. 191.

The money received by Tuller from the United States was received by him as trust funds of the partnership. As a partner he had a right to collect the money; but when he did collect it he became chargeable as a trustee. Occupying, as he did, the position of a trustee with trust funds in his hands. he was bound to act in the utmost good faith towards the beneficiary of the trust, or else be held guilty of fraud. Any departure from duty made him liable; and any fraudulent concealment or false statement would have precluded him, had he been living, from availing himself of the defense of the statute of limitations. Speaking of the rule upon this...