Scudder v. Ames

• Decision Date: 30 April 1886
• Citation: 89 Mo. 496
• Court: Missouri Supreme Court
• Parties: SCUDDER et al. v. AMES.¹

89 Mo. 496

SCUDDER et al.

v.AMES.¹

Supreme Court of Missouri.

April Term, 1886.

Cross-appeals from St. Louis court of appeals.

G. G. Vest, W. F. Boyle, and G. P. B. Jackson, for Lucy V. S. Ames, administratrix, appellant.

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Broadhead & Haeussler, Krum & Jonas, and Douglass & Scudder, for John A. and William H. Scudder, executors, respondents.

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SHERWOOD, J.

This cause comes here from the St. Louis court of appeals, which court affirmed pro forma the judgment of the circuit court. Both parties appealed from the judgment, as well as from the judgment of affirmance. The cause originated in the probate court, and the litigation grows out of exceptions filed by the executors of the will of Henry Ames, deceased, to the final settlement of Lucy V. S. Ames, administratrix, settling the partnership estate of Henry Ames & Co. The probate court, after hearing evidence on the numerous exceptions, found a balance against the administratrix of $42,-554.43, and gave judgment against her in favor of the exceptors, for $21,277.43, that amount being the distributive share of the estate of Henry Ames, deceased. From this judgment the exceptors appealed to the circuit court, and that court, upon hearing the evidence, the record of which is very voluminous, and after sustaining several of the exceptions, made certain findings of fact and law, and rendered judgment against the administratrix for precisely the same amount as that rendered by the probate court. The correctness of these rulings of the circuit court is now to be determined.

1. Of the sale of the good-will of the firm of Henry Ames & Co. by the administratrix, it is needless to say more than this, that it is evident from the language of the proposal of William H. Scudder and Mrs. Catharine Ames, and of the bond they gave the administratrix, that the good-will of the firm was not sold. This fact supersedes the necessity for the discussion of the point. If the exception made had instead been one as to whether Edgar Ames should have charged himself in his inventory with the good-will of the firm as an asset thereof, a different question might have been presented, the investigation of which now would be altogether superfluous.

2. Relative to the payment of the Lindell Hotel bonds, in order to redeem the hotel property from the lien of the first mortgage, and relative to the payment of the bonus of $5,000 to the Boatman's Savings Bank to take up those bonds prior to maturity, a majority of the court are of the opinion that that property was partnership property, and that the act of the administratrix in redeeming that property was a necessary act, and beneficial to the partnership estate, and that, inasmuch as she subsequently obtained for that act the approval of the probate court, such subsequent approval had a retroactive effect, making the prior act of the administratrix of equal validity as if she had in the first instance obtained from the probate court an order to redeem the hotel property. And, by reason of like considerations, they also hold that the bonus aforesaid, used to take up the bonds before maturity, was validated by subsequent approval. The majority of the court also hold that all commissions arising out of these matters claimed by the administratrix should be allowed her. On these points I do not concur. I hold that the property in question was not partnership property, and, even had it been, that an order to redeem, an order to take up the bonds should first have been obtained, and that the probate court, not having been applied to as required by the statute, had no jurisdiction to act in the premises, whether the property in question were individual or partnership property. There were no exceptions taken in the probate court only in relation to the commissions on the sums aforesaid, but, as the consideration of the commissions on those sums necessarily involved the consideration of the other features of the cause which have been discussed, and as the case goes back for retrial, it has been thought best to discuss them.

3. The majority of the court holding, as they do, that all the real estate owned by the brothers, Henry and Edgar, was partnership property, hold also that, in consequence thereof, the administratrix should be allowed all appropriate credits and commissions for repairs, taxes, insurances, etc., on all such real estate, whether situate within or without the state of Missouri. I do not subscribe to any such doctrine. I hold that there is no room for doubt that the property was held by the brothers as tenants in common, and not otherwise, and that, in any event, neither the duties nor the powers of the administratrix extended beyond the limits of this state.

4. Edgar Ames, when making his inventory of the partnership estate, omitted to include a large stock of goods which his firm had also in Vicksburg, Miss. Of this stock he made no appraisement, but carried on the business on his own account as if the property were his own. An inventory of this stock of goods, taken July 1, 1866, which was but about six weeks before Henry Ames' death, showed that the stock was worth at cost price $78,300.68. Edgar Ames should have sold this stock of goods and should have accounted for the proceeds, and could not be allowed to take the goods at a valuation. His administratrix coming in in 1870, with her final settlement of the partnership estate, was allowed to claim a large percentage for depreciation on this stock of goods. This claim for depreciation was allowed upon the testimony of witnesses as to the estimated depreciation years after the property was taken and appropriated by Edgar Ames as his own, four years after the death of Henry Ames, and after the stock of goods had been destroyed by fire. The circuit court allowed this claim for depreciation to the extent of 20 per cent., stating, in the opinion, that such depreciation or discount was fixed by the surviving partner. There is no such evidence. My associates, however, concur with the lower court and allow the depreciation. I do not concur in this.

5. As to interest on all claims the amounts of which the administratrix collected, but willfully omitted to account for in her settlements, she should, according to the opinion of a majority of this court, be charged only the lowest rate of simple interest from the time of her reception of the money. On this point I do not concur, thinking the rate should be greater and that there should be annual, or at least frequent, rests. In relation to interest on any sums which she reported to the probate court as collected, the majority of the court are of opinion that she should not be charged any interest whatever, no matter how long the money may have remained idle in her hands or in the bank, and no matter whether she could have loaned the same under the order of the probate court or not. The opinion of the majority on this item, as was the opinion of the lower court, is based on the fact that it does not appear that any interest was obtained by the administratrix on these sums, and that she kept the partnership funds in the bank separate from her own. I do not concur on this point.

6. It had been the custom of the brothers, Henry and Edgar, composing the firm of Henry Ames & Co., to keep everything in common, and whether one brother drew from the firm for his private expense more than the other made no difference in the adjustment, as all these sums were charged to “expense,” and settled in that way at the end of the year. This custom had acquired the binding force of a contract supported, too, by a valuable consideration, to-wit: That whereas, one brother might draw out, in any one year, more than the other, the latter might do the like the next year; and this in all probability was the current of such events, and led to adoption of the custom in question. The act, then, of Edgar Ames, in drawing out from the assets of the firm, after his brother's death, the sum of $10,356.06, to make the amount drawn out by him equal to that drawn out by his brother, was wholly unwarranted. And, as no evidence was adduced as to the terms of the partnership contract between the brothers, it may not unreasonably be inferred from the long-continued dealings between the partners what those terms were; and, even if there was a written contract of partnership, this would not prevent such a custom from being engrafted thereon by the force of long usage. The maxim in this case applies: Consuetudo societatis, est societatis lex. The amount just mentioned constitutes a proper debit against the estate of Edgar Ames, and, as the administratrix failed to charge him therewith, she ought to be charged with it on her final settlement of the partnership. The correctness of this result is not affected by the opinion of William H. Scudder that it was proper for Edgar Ames to do as he did in this matter. Edgar Ames certainly would not have been permitted to have pursued this course in the life-time of his brother, and a fortiori he would not, after his brother's death.

7. Edgar Ames was not entitled to commissions for his services in administering on the partnership estate. His administration on that estate was under the common law; he did not follow the statute, and, even if he had given bond as required by the statute, (sections 57 and 60,) he would not then have been entitled to commissions. This point was so ruled in the case of Gregory v. Menefee, 83 Mo. 413. The effect of the statutory requirement as to giving bond only being to impose the burden of giving security on the surviving partner, but not bestowing any emolument upon him, leaves him, in this respect, as he was at common law, bound to discharge his duties in relation to preserving and caring for the partnership estate...