Teter v. Moore

• Decision Date: 08 May 1917
• Citation: 80 W.Va. 443
• Parties: Dwight H. Teter, Adm'r, v. Samuel A. Moore.
• Court: West Virginia Supreme Court

80 W.Va. 443

Dwight H. Teter, Adm'r,

v.Samuel A. Moore.

Supreme Court of Appeals of West Virginia.

Submitted April 18, 1917.

Decided May 8, 1917.

1. Partnership Bill for Accounting Plea in Equity Sufficiency.

A plea denying the existence of a partnership relation, accompanied by pleas of the statute of limitations, interposed to a bill alleging a partnership between the plaintiff and defendant and frauds and errors in settlements of the alleged partnership business, and praying annullment of the settlements and ascertainment of the true state of the affairs of the partnership and the rights of the parties, is not a sufficient plea in equity, in the technical sense of the terms. (p. 447).

2. Same Bill for Settlement Plea of Lachet:.

Nor is laches proper matter, in such a case, for such a plea, because application of the principle the plea invokes cannot be determined without consideration of the evidence pertaining to the several demands set up in the bill. (p. 44 7).

3. Appeal and Error Partnership Separate Pleas of Statute of

Limitations Harmless Error.

Separate pleas of the statute of limitations, to the' several demands stated in such a bill are proper, but, if an answer tendered with such pleas invokes the statute of limitations generally, and the cause is heard and its merits developed on the bill and answer, erroneous rejection of the pleas is harmless, (p. 447).

4. Same Harmless Error Premature Reference.

The error in an interlocutory decree prematurely referring to a commissioner, a cause in which the depositions were subsequently taken before the commissioner and notaries, at sundry places, the cause fully developed on its merits and a decree entered, settling the principles thereof, is harmless and insufficient ground for reversal of such decree, if it is sustained by the pleadings and proof. (p. 449).

5. Equity Reference Disqualification of Commissioner Waiver.

Disqualifying interest on the part of a commissioner to whom a cause is referred is waived by a party who, having full knowledge of such interest, makes no objection to the appointment of the commissioner and permits the procedure before him to go on, without objection. (p. 450).

6. Partnership Bill for Accounting and Settlement Scope.

A bill attacking one partnership settlement, on the grounds of error and fraud, by complaint as to particular items or parts thereof, and a subsequent one showing no correction of errors or wrongs in the first, by allegations of procurement thereof by misrepresentations made with intent to cheat and defraud the plaintiff, is broad enough in its allegations to include the second settlement. (p. 450).

7. Same Purposes Purchase and Sale of Bealty.

Purchase and sale of real estate for profit may be made the primary subject matter of a partnership agreement. (p. 450).

8. Same "Partnership Agreement" Contract for Procuring Option.

A written contract providing for procurement of options on coal in place, by one of the parties thereto, for the mutual and equal benefit of both and for equality of burden as to expenses and advantages as to profits, under which large areas of coal are purchased and disposed of for profit, constitutes a partnership agreement. (p. 450).

9. Same Partnership Agreement Construction.

Though such an agreement specifies certain territories in which the enterprise is to be conducted and an indefinite maximum of coal to be optioned, it extends to coal in other neighboring and adjacent territories, increasing the aggregate beyond that mentioned, bought and sold to the same party, within the period of the operations contemplated by the written agreement and in the same or a similar manner, and the proceeds of which are treated and disposed of as if they were within the terms of the agreement, (p. 459).

10. Limitation of Actions Obstruction of Cause of Action.

As to matters included in a partnership settlement, the statute of limitations runs from the date of the settlement, and, after five years from that date, the settlement cannot be impeached or set aside otherwise than by allegation and proof of obstruction of the right of action thereon, within the meaning of sec. 18, ch. 104 of the Code. (p. 461).

11. Same Obstruction of Right of Action.

Allegation and proof that a party to such a settlement, having the custody of social property and funds, authority to incur and pay expenses and make, and cause to be made, entries of such expenses in the firm books, as charges against its assets, made entries therein of large charges, as for expenses paid, of money which had not been paid and for payment of which there was no obligation, right or basis and so procured a settlement leaving such sums of money in his own hands as secret, wrongful and clandestine profits, makes out a case of obstruction of right of action, within the meaning of said statutory exception, (p. 461).

12. Same.

A bill charging such a state of facts, without an allegation of concealment of the fraud, in terms, sufficiently alleges obstruction of right of action, since the act complained of naturally and necessarily conceals itself, (p. 461).

13. Evidence Judicial Admission.

An answer to such an allegation, admitting the existence of the charges on the books, not denying the making thereof by the defendant, or at his instance, and averring payment of the money represented by them to a person other than any of those named in the entries, for the persons so named, is a judicial admission that such sums were paid out and not retained, and is conclusive upon the defendant in all of its tendencies, bearings and aspects, wherefore evidence of rightful retention thereof is neither admissible nor probative. (p. 462).

14. Limitation or Actions Obstruction of Bight of Action.

An entry made in partnership books, by a member of the firm, of a credit to himself for services rendered, which the other member, having access to the books, could have discovered by the exercise of ordinary care and diligence, does not, in and of itself, work such concealment as obstructs right of action and makes out a case within the exception provided by sec. 18, ch. 104, Code, even though such entry may be fraudulent. (p. 464).

15. Partnership Settlement Invalidity Fraud.

Establishment of fraud, by a member of a copartnership, in the making of a settlement of the partnership business and affairs, between or among the members thereof, vitiates the entire settlement in which it was perpetrated and all subsequent settlements based thereon, and such settlements will be wholly set aside and restated in equity, on judicial complaint of the injured party, (p. 465).

16. Evidence Extrajudicial Admission Bebuttal.

An extrajudicial admission, or one made in a suit or action other than the one in which it is relied upon and between other parties, is not conclusive upon the party by whom it was made, and it may be overthrown by other evidence. (p. 465).

17. Witnesses Impeachment Contradictory Statements.

A witness testifying on cross-examination, as to matter concerning which he did not testify on his examination in chief, may be impeached or contradicted by the party who introduced him, as to such matter, by proof of his statements variant from his testimony on cross-examination, relating thereto. (p. 465)..

18. Partnership Partnership Assets Contribution.

A partner who has been compelled to pay notes and other obligations assigned by the firm and endorsed by him jointly with his copartner has right of reimbursement from the firm assets and contribution from his copartner in the event of insufficiency of firm assets, (p. 466).

Appeal from Circuit Court, Barbour County.

Bill by Dwight H. Teter, administrator, against Samuel A. Moore, for the annulment of a partnership settlement, and for the ascertainment of the true state of partnership affairs, and of the rights of the parties. Decree for complainant, and defendant appeals.

Affirmed in part. Reversed in part. Remanded.

Cato & Bledsoe, Wm. T. George and J. Blackburn Ware, for appellant.

J. Hop Woods and Harry H. Byrer, for appellee.

pofpenbarger, judge:

If the procedure and practice in this cause are sufficient to raise them, the three vital questions developed are; (1), whether a copartnership respecting the subject matter of the controversy or a joint interest so far analogous to a relation of copartnership as to make applicable, in the settlement thereof, the principles governing a settlement of copartnership matters, existed between the plaintiff's decedent and the defendant S. A. Moore; (2), whether any settlements were made between the parties to such relation; (3), whether, if, in any settlement, the defendant perpetrated fraud upon the plaintiff's decedent of such character and extent as, in law, wholly and entirely vitiates the settlement, The circuit court, regarding the procedure as sufficient, entered upon these inquiries, responded to them affirmatively, by its decree, set aside the settlements found to have been made, and ordered a full and complete accounting. Defense was made under the equitable principle of laches and the statute of limitations. Of the two statements revealed and relied upon as settlements, the bill specifically attacks only the first. Relying upon the second as being final, complete and conclusive, the defendant denies the sufficiency of the bill to reach it. A demurrer and answer in one instrument and twelve separate special pleas were tendered at the same time. The first plea denied the partnership, the second set up an account stated, the third interposed the defense of laches and the other nine set up the five year statute of limitations a.gainst the several demands of the bill, predicated upon allegations of fraud and mistake. All these defenses were likewise made in the answer. On motion of the plaintiff, the court struck out all of the special pleas, except plea No. 2, and then the defendant withdrew that plea. Assignments of error are predicated upon these rulings. Alleged...