Scudder v. Ames

• Decision Date: 23 December 1897
• Parties: SCUDDER et al. v. AMES.
• Court: Missouri Supreme Court

43 S.W. 659

142 Mo. 187

SCUDDER et al. v. AMES.

Supreme Court of Missouri.

December 23, 1897.

SURVIVING PARTNER — SETTLEMENT — PRIVATE ACCOUNTS — PARTNERSHIP ASSETS — INTEREST — ACCOUNTING — INCOME TAXES — GOOD WILL — ATTORNEY'S FEES — APPEAL AND ERROR.

1. A surviving partner is not entitled to credit for a commission paid to an agent for procuring an allowance of a partnership claim against the county, in the county court, when such claim had already been allowed, and there Was no evidence that the agent performed any service other than to receive the money and pay it over to the estate.

2. Where an account due a partnership estate is kept open by the surviving partner in his individual capacity, and further advances made thereon, in the absence of any special arrangement as to the payment of these subsequent advances, any sum realized from the account must be first applied to the portion of it due the estate.

3. Two brothers were partners, and kept everything in common. That one drew from the firm for his private expense more than the other made no difference in the adjustment, each private account being charged to "expense" at the

end of the year, and settled in that way. Held that, on the death of one, the other could not draw from the firm assets a sum necessary to make the amount drawn by him equal to that drawn by his brother.

4. A surviving partner neglected to inventory the assets of a certain branch of the business, and keep a separate account of them after his partner's death, but conducted the business as before. No loss to estate or benefit to the surviving partner accrued by reason of this neglect, and it appeared that an amount equaling three-fifths of the assets were paid out to discharge then existing liabilities of the business, and it did not appear that such partner realized any interest on such assets. Held, that he is not chargeable with interest thereon from the date of his partner's death to the date when the account was settled.

5. Neither a surviving partner nor his administratrix is chargeable with the duty of accounting in the state courts for partnership assets which are outside the state until such time as the proceeds thereof actually come into their hands, within the state.

6. An allowance of expenses and attorney's fees to an administratrix, by the referee and the lower court, before whom the expenses were incurred and the services rendered, will not be disturbed where there is no showing of unfairness in the allowance.

7. Exceptions to an allowance made in accordance with a ruling of the court on a former appeal of the case must be held to have been adjudicated by the former decision where no new evidence is introduced on the subject.

8. A surviving partner is not chargeable to the partnership estate for the good will of the partnership business when part of the testimony was that such good will was worth nothing, and the witnesses who considered it of value testified that it would not be so where the surviving partner continued to carry on the business.

9. An administratrix of a partnership estate, who in good faith pays special tax bills issued against the estate under an ordinance which was afterwards held void, is not chargeable with such payments, although at the time they were made, but unknown to her, a demurrer to a petition in another case, seeking to collect such tax from another estate, had been sustained, and was pending in the supreme court on appeal.

10. The allowance of a payment, by a surviving partner out of the partnership estate, of a sum in compromise of a contract over title to land previously sold by the partnership, will not be disturbed, on the purely technical ground that it should have been paid out of the separate estates of the partners.

11. An administratrix of a surviving partner received a sum of money, resulting from an old transaction of the firm, and upon the representation of the person who had conducted the transaction, and who had long been the trusted agent of the partners, she, after a careful investigation, allowed him a portion as his share. Held, that she is not chargeable with the amount so allowed, it appearing from the testimony of the agent that there had been an agreement with the partners that he was to receive such portion.

12. A surviving partner is not chargeable for his failure to further prosecute, at a considerable expense, a partnership claim which his attorney advised him there was little or no chance of winning, although others afterwards realized from a further prosecution of the claim, unknown to him.

13. A surviving partner is not chargeable for his failure to further prosecute in behalf of the estate a suit involving a claim to property, after it has been decided against the estate in the United States supreme court, although others having a different claim to the same property afterwards successfully prosecuted it.

14. Attorney's fees paid by an administratrix of a surviving partner, in litigation growing out of her efforts to make a settlement of the partnership estate to which there are complicated and conflicting rights, are properly charged to the estate.

Sherwood, J., dissenting.

In banc. Appeal from St. Louis circuit court; D. D. Fisher, Judge.

Lucy V. Semple Ames, administratrix of the estate of Edgar Ames, filed in the probate court an amended final settlement of the accounts of the partnership estate of Henry Ames & Co. From a judgment of the circuit court affirming a judgment of the probate court settling this report, John A. and William H. Scudder, executors of the will of Henry Ames, appealed. It was reversed and remanded, and referred to a referee, from whose report exceptions were taken, and the case retried in the circuit court. From a final order therein, both parties appeal. Remanded.

Boyle & Adams and Geo. W. Lubke, for plaintiffs. Jas. O. Broadhead, Douglas & Scudder, and Campbell & Ryan, for defendant.

BRACE, J.

On the 14th day of August, 1866, Henry Ames died, leaving a will by which his brother, Edgar Ames, was made executor, and, in the event of his death, John A. and William H. Scudder were to become executors thereof. For many years prior thereto the brothers, Henry and Edgar Ames, as equal partners, had been engaged in the pork-packing and commission business in the city of St. Louis. The profits of their business were not divided, but invested in real estate, stocks, bonds, and ventures of various kinds, all going into the partnership account. Among these ventures was that of buying cotton within the Confederate lines during the latter part of the Civil War, in which they employed J. J. Garrard, Miles Sells, and Alpheus Lewis, who were sent South to make purchases of cotton for them, under an arrangement whereby Ames & Co. were to furnish all the money required, to sustain all losses, and be entitled to one half of the profits, and the other parties were to receive the other half of the profits for their services. This business was carried on in Mississippi, Tennessee, and Louisiana, and the account thereof kept on the books of Ames & Co., in St. Louis, in the name of Garrard, Sells & Co. At the close of the war, in connection with this cotton-buying business, they opened a store at Vicksburg, Miss., which was conducted by one of their clerks, named Satterlee. This business was carried on first in the name of George A. Satterlee & Co., and afterwards in the name of J. J. Garrard & Co., and with each concern an account was separately kept on the books of Ames & Co. When Henry Ames died the account of Garrard, Sells & Co. stood open on the books of the concern showing, apparently, a large indebtedness from that concern to Henry Ames & Co., but representing in fact their own transactions in that firm name, and showing an immense loss. The account of George A. Satterlee & Co. had been transferred to the account of J. J. Garrard & Co., which also stood open on the books, and was then the only active account representing actual assets in these Southern ventures. After the death of his brother, Edgar Ames conducted the business as before in the firm name on his account. On the 4th of September, 1866, he qualified as executor of Henry Ames, and on the 31st of October, 1866, being the last day of the usual fiscal year of the partnership concern, he balanced the partnership books, made an inventory of the partnership assets on hand on the 1st of November, 1866, and filed the same in the probate court on the 7th of November, 1866. On this inventory the balances shown by the books to be due from Garrard, Sells & Co. and from J. J. Garrard & Co. appeared as part of the assets of the partnership in his hands on the 1st of November, 1866; but no account was taken of the real assets of the partnership in the South, which the account of J. J. Garrard & Co. represented. The amount of these accounts, thus inventoried, was as follows: Garrard, Sells & Co., $573,819.51; J. J. Garrard & Co., $16,980.58. Edgar Ames, as surviving partner, continued in the administration of the partnership estate from the 1st of November, 1866, until the 9th of December, 1867, when he died, intestate, without having made any settlement, as such surviving partner, with the partnership estate. On the 18th of December, 1867, letters of administration on the estate of Edgar Ames were granted to his widow, Lucy V. S. Ames, who gave bond and also took charge of the assets of Henry Ames & Co. for final administration; and she continued in the administration thereof, making annual settlements, until June 30, 1870, when she presented to the probate court her accounts for final settlement, when, for the first time, the actual assets of the Southern venture, as shown by what is known in the case as the "Webb Exhibits," filed therewith, were brought into the account. Among these assets were uncollected accounts due Satterlee & Co. and J. J. Garrard & Co., amounting to $69,365.39. These, with the other uncollected...