Southern Fertilizer Co. v. Reames

• Decision Date: 14 April 1890
• Citation: 11 S.E. 467,105 N.C. 283
• Parties: SOUTHERN FERTILIZER CO. v. REAMES.
• Court: North Carolina Supreme Court

11 S.E. 467

105 N.C. 283

SOUTHERN FERTILIZER CO. v. REAMES.

Supreme Court of North Carolina

April 14, 1890

Appeal from superior court, Orange county; GRAVES, Judge.

Where an agreement is entered into by two persons by which one of them advances the capital and the other performs the services necessary to carry on the business, the capital to be paid out of the partnership stock, and the balance, after payment of expenses, to be equally divided as profits, the mere fact that the partner who advances the capital charges interest on it cannot change the relation of partnership to that of creditor and debtor.

Batchelor & Devereux, Fuller & Snow, and E. C. Smith, for appellant.

John W Graham, for appellee.

SHEPHERD J.

Several exceptions are made by the plaintiffs to the findings of fact by the court below, and it is insisted that these should now be reviewed by us. It appears from the record that the parties agreed that the judge should find the facts, and it is well settled that, where such an agreement is made, the findings are conclusive. Cooper v. Middleton, 94 N.C. 86; Vaughan v. Lewellyn, Id. 472; Barbee v Green, 92 N.C. 471; Battle v. Mayo, 102 N.C 413, 9 S.E. Rep. 384. The only exceptions that will be entertained in such cases are that there was no evidence to support the findings; that competent or incompetent testimony was rejected or admitted; and that the court or referee refused, or failed after request made in apt time, to pass upon some material issue or question of fact when there was testimony tending to support the same. Much difficulty was experienced under the Code of New York upon the last-mentioned question of practice, and it is now provided by statute in that state that "before the cause is finally submitted to the court of the referee, or within such time afterwards, and before the decision or report is rendered, as the court or referee allows, the attorney for either party may submit in writing a statement of the facts which he deems established by the evidence, and of the rulings upon questions of law, which he desires the court or the referee to make," etc. Code Civil Proc. N.Y. § 1023. When the court or referee refuses or fails to pass upon such facts, and the court can see that they are material, the party making such request may, as a matter of right, have the case remanded for further findings. Id. § 993. Before this provision was made it was held that, where there was a failure to find upon all the issues involved in the action, the appellant must, upon the settlement of the case, require the court or referee to make such findings upon questions of fact as are necessary to the proper presentation of the questions of law arising thereon. People v. Railroad Co., 57 Barb. 209; Manley v. Insurance Co., 1 Lans. 20; Van Slyke v. Hyatt, 46 N.Y. 259; Smith v. Insurance Co., 62 N.Y. 85. This, we apprehend, there being no statutory regulation, is the proper practice with us, and, if it is not observed, the case will not be remanded as a matter of right, unless it clearly appears from the report that some material matter has been omitted, or that further findings are necessary to a just and intelligent disposition of the cause. Straus v. Beardsley, 79 N.C. 59; Norment v. Brown, 79 N.C. 363. Applying these principles to the case before us, we see no reason for disturbing the facts as found by his honor. There is no exception that there was an absence of evidence to support the findings, nor that there was any improper ruling upon the admission or rejection of testimony. The exceptions are, in effect, that the court found against the weight of testimony, which we have seen cannot be passed upon here. It is true that exceptions 1, 4, 5, and 8 are addressed to the refusal or failure of the court to find certain specified facts; but this by no means implies that the court refused to consider or pass upon them at all, and this must explicitly appear before this court can entertain such exceptions. We must therefore consider the case upon the facts set forth in the findings of the court and accompanying exhibits.

The plaintiffs are the judgment creditors of H. A. Reames, and the indebtedness was contracted and judgments obtained prior to the business transactions between the said Reames and Eugene Morehead. No levy was ever made upon the tobacco, the subject of the insurance; and, the tobacco having been destroyed by fire, the plaintiffs are seeking, by proceedings supplementary to execution, to subject the money due upon the policies of insurance to the payment of their judgments. These policies were originally payable to Reames, but in 1884, before the loss, they were, with the consent of the insurance companies, made payable--some to "Eugene Morehead," some "to Eugene Morehead as his interest may appear," and others "to E. Morehead & Co. as their interest may appear." In these proceedings the insurance companies were summoned to appear, and they denied any liability upon the said policies. A receiver was thereupon appointed, who brought actions in the superior court of Durham county against the said insurance companies. In these actions, Reames, Morehead, and E. Morehead & Co. were joined as plaintiffs. All of the actions were removed to the circuit court of the United States, where they were consolidated and tried, the plaintiffs recovering the full amount of the policies. The fruits of this recovery, some $25,000, are now in the hands of the receiver, awaiting the direction of the court in the present proceedings. The plaintiffs contend that this money stands in the place of the tobacco; that Reames alone had an insurable interest; and that the money, being his, is subject to the payment of his indebtedness. In support of their contention they insist that the money was recovered upon the theory that Reames was the sole owner of the tobacco, and that Morehead is estopped to claim any interest in the amount recovered. One of the defenses in the circuit court was that Reames had made a false representation in effecting the insurance, in that he had stated that he was the sole owner of the subject of the insurance. The court held that he was the sole owner of the tobacco, "within the meaning of the words of the policy," and the opinion seems to treat Morehead as a creditor only, holding the policy as collateral security. This much it passes upon as material to the determination of the plea of the insurance companies, but it by no means declares that Morehead is not entitled to have the amount recovered applied to the satisfaction of his claims. It does not appear what testimony was before that court, and we are therefore unable to see whether its opinion and judgment were based upon the same facts as are presented to us. Conceding, however, that the facts were the same, it is plain that the parties to the proceeding are not estopped by the rulings of the circuit court upon any matters incident to the trial before it. The suit was brought upon the understanding that it was only to determine the liability of the insurance companies, leaving the other questions to be settled in these proceedings. This clearly appears from the case upon appeal, which states that "a joint recovery was effected [in the circuit court] under an agreement that the rights of the parties to the cause should be determined under the proceedings heretofore commenced." This express agreement frees us from any supposed estoppel growing out of the trial in the said court, and we are therefore to determine the questions presented solely upon the facts found by the judge.

As the insurance companies have no interest whatever in this controversy, much, if not all, of the law peculiar to the defense of such companies against the insured is eliminated from the case. For instance, the contention that Morehead had no technical insurable interest has no application here. The companies alone can avail themselves of such a defense, which is based entirely upon grounds of public policy, which condemns "wagering" or "gambling" policies of insurance. It is very clear to us that, whatever rights the judgment creditors may have in a fund like the present, (Stamps v. Insurance Co., 77 N.C. 209,) they must be pursued in equity, for the plaintiff creditors had no lien upon the tobacco, nor have they any legal interest whatever in the insurance money. On the contrary, the legal title is in Morehead and E. Morehead & Co. by reason of the assignment of the policies to them. That such an assignment, with the consent of the company, is valid, is well settled. In Fogg v. Insurance Co., 10 Cush. 337, Chief Justice SHAW says: "But there is another species of assignment or transfer, it may be called, in the nature of an assignment of a chose in action. It is this: 'In case of loss, pay the amount to A. B.' It is a contingent order or assignment of the money should the event happen upon which money will become due on the contract. If the insurer assents to it, and the event happens, such assignee may maintain an action in his own name, because, upon notice of the assignment, the insurer has agreed to pay the assignee instead of the assignor. But the original contract remains the assignment, and assent to it forms a new and derivative contract out of the original." May, Ins. § 378. The legal title, then, being in the assignees under an express contract with the insurance companies, let us now examine the reasons advanced why the money recovered should be taken from such assignees and given to the plaintiffs.

We will first consider the policies payable to Eugene Morehead, and to Eugene Morehead as his interest may appear. There is no suggestion that the assignment is not supported by a full and valuable consideration, nor is there any intimation of actual fraud in...