Harrah v. State ex rel. Dyer
| Decision Date | 12 December 1905 |
| Docket Number | 5,301 |
| Parties | HARRAH ET AL. v. STATE, EX REL. DYER, ADMINISTRATOR |
| Court | Indiana Appellate Court |
Rehearing denied April 25, 1906, Reported at: 38 Ind.App. 495 at 507. Transfer denied June 28, 1906.
From Sullivan Circuit Court; Orion B. Harris, Judge.
Action by the State of Indiana, on the relation of Mattie W. Fellows as administratrix of the estate of Frank A. Fellows, deceased (Fred E. Dyer being substituted as administrator), against William B. Harrah and others. From a judgment for plaintiff defendants appeal.
Reversed.
Cyrus E. Davis, John S. Bays, W. L. Rude and Fred F. Bays, for appellants.
Henry W. Moore and Louis B. Ewbank, for appellee.
This action was commenced in the Greene Circuit Court. Upon motion of the appellant Harrah the venue was changed to the Sullivan Circuit Court, where such proceedings were had as resulted in a judgment for the plaintiff.
The single paragraph of amended complaint is founded upon a bond, executed by appellant Harrah as principal and by his coappellants as sureties. A demurrer to the complaint was overruled, and an answer in two paragraphs filed--the first a general denial, and the second setting up affirmative facts. A demurrer was filed to this paragraph of answer, but no ruling thereon was made. The cause was referred to a commissioner, who heard the evidence and reported the same, together with his conclusions of fact, which were approved and adopted by the court, and finding and judgment rendered accordingly, appellants' exceptions to the report being overruled, as were separate motions for a new trial and to modify the judgment.
Facts averred in the complaint and not disputed at the trial are that the relatrix was the duly appointed and acting administratrix of Frank A. Fellows, who was at his death a member of a partnership, composed of himself and appellant Harrah, engaged in the sale of hardware at Worthington, Greene county, the business being a profitable one and the firm having on hand a large and valuable stock of merchandise. Harrah, within sixty days after the death of his copartner, filed, in the clerk's office of Greene county, an inventory and appraisement of the assets of said firm, together with a statement of its liabilities, and also executed and filed the bond in suit, the conditions of which were as follows:
"The condition of the above obligation is, that the above-bound William B. Harrah has taken upon himself the duties to settle according to law, as the surviving partner thereof, the partnership of the late firm of Harrah & Fellows, composed of William B. Harrah, surviving partner, and Frank A. Fellows, deceased; now if said William B. Harrah shall faithfully discharge the duties of his trust therein according to law, then the above obligation is to be void, else to remain in full force."
He thereupon took upon himself the administration of said business according to law.
Ten breaches of the bond in suit are specifically assigned. They are in substance: (1) That after entering upon the settlement of said partnership, Harrah continued the business, buying and selling goods in the usual course of trade at an expense and loss of $ 5,000, all of which was done unlawfully, with the fraudulent intent to speculate and make money for himself out of the assets of said partnership. (2) That after advertising the stock for sale, he hindered and prevented a profitable sale thereof by saying to probable bidders that the purchaser would have to move out of the building; that no one could afford to give more than fifty cents on the dollar, and by refusing to give information concerning said stock, with the fraudulent intent of purchasing it himself. (3) That, with the same fraudulent intent, he refused to offer the good-will of said business for sale. (4) That, with the fraudulent intent to speculate and make money for himself, he restocked said business after the death of his partner. (5) That, with the same fraudulent intent, he sold said stock for $ 5,000, less than it was worth, whereby the relatrix was compelled to and did employ attorneys and contract attorneys' fees of $ 250, in order to set aside said fraudulent sale. (6) That he included in the final sale of said stock, horses and other personal property, not connected with the business or included in the petition to sell. (7) That while pretending to settle the business he borrowed money and paid interest out of the assets, it not being necessary to do so. (8) That he has failed and refused to collect the notes and accounts due said estate. (9) That he has failed to close up said partnership as speedily as practicable, but has fraudulently delayed the same, to the injury of the estate of said deceased partner. (10) That he refuses to close up said partnership business, although often demanded, and although possessed of sufficient funds. (11) That he has collected rents and profits of partnership real estate and wrongfully withheld the same from the relatrix.
The affirmative paragraph of answer above referred to contains a recital of the facts relative to the undertaking to settle the partnership as above stated, and sets up further proceedings therein to the effect that, after duly qualifying, Harrah made application to the Greene Circuit Court for an order to postpone the sale of said stock, which was duly granted, and said sale was postponed until May 4, 1903. On March 11 he applied to said court for an order to replenish said stock from time to time during the period until sale, as aforesaid, said purchases not to exceed $ 1,500 at any one time, and not to exceed $ 2,000 in all, which order was duly granted, and remained in force until the sale of the stock, on May 25, 1903. On March 14, 1903, he procured an order to sell said stock, and to advertise the same, and to seek bidders, and did all things required of him. The property was sold and duly reported. The sale was not approved by the court. The property was resold on May 25, which sale was duly confirmed and approved by said court, its judgment to that effect being still in full force. The settlement of said estate is now pending in said court, and the final report has been filed in said court. Denials of various averments of the complaint are incorporated in this answer.
It is disclosed by the complaint that the surviving partner complied with the statute and undertook to make settlement in accordance therewith. The relatrix, so far from objecting to this action, expressly ratifies it by bringing her suit to recover on the bond therein given. The judgment appealed from is as follows:
Proceedings in the settlement of partnerships by the surviving partner are governed in this State by statute. Acts 1877, p. 136, §§ 8122-8129 Burns 1901. Equity jurisdiction embraces the administration of estates, but in the United States such administration is had in accordance with specific statutes. The statutory rules are largely based upon principles declared in equity, the doctrines of which are constantly enforced by probate courts, but this head of equity jurisdiction has been practically abandoned in all the states. The foregoing statement adapted from 2 Pomeroy, Eq. Jurisp. (2d ed.), § 77, is equally applicable to the settlement of the affairs of a partnership dissolved by the death of one partner. The principles embodied in the statute are, generally speaking, those which, in the absence of a statute, would be applied in equity; but such settlements must be made in accordance with the statutory provisions.
Where the surviving partner neglects to qualify, or qualifying, wastes firm assets, or does not properly settle, any interested person may procure the appointment of a receiver. §§ 8126, 8127 Burns 1901, §§ 6050, 6051 R. S. 1881. The receiver "shall proceed to settle the same as though a voluntary assignment for the benefit of the creditors had been made by the surviving partner."
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