Treacy v. Power
| Decision Date | 23 September 1910 |
| Docket Number | 16,599 - (175) [2] |
| Citation | 127 N.W. 936,112 Minn. 226 |
| Parties | ANNIE T. TREACY and Others v. GEORGE C. POWER and Others |
| Court | Minnesota Supreme Court |
After the decision on the former appeal, reported in 103 Minn. 212 (114 N.W. 700) defendants amended their answer as stated in the opinion. Plaintiffs amended their reply and admitted the execution of the accounting agreement in February, 1901 which valued and divided the assets of Brown, Treacy & Company "other than the interest of said firm in said firm of Brown & Bigelow," and alleged that interest was not included in such agreement; that the division of assets and agreement therefor was prepared by Brown and was entered into by Sperry and the administratrix of Treacy upon the representations of Brown, which were relied upon by them as true; that the interest in Brown & Bigelow was not a part of the firm assets, and that on March 19, 1898, Brown, Treacy & Company contributed to the capital of Brown & Bigelow the sum of $2,250; they admitted that subsequently an entry was made on the firm books crediting Brown with a bonus of $2,400 and charging him with $2,250; denied these entries were made on December 1, 1900, but alleged they were made by Brown or under his direction after the death of Treacy, without the knowledge or consent of either of the other members of the firm.
The undisputed facts were as follows: In 1894 Hiram D. Brown Michael Treacy and Dennis S. Sperry entered into a partnership under the firm name of Brown, Treacy & Company for the purpose of carrying on the printing and stationery business, and agreed to share equally in the profits and losses. This partnership was dissolved by the death of Treacy in December, 1900. An accounting was had and an accounting agreement, dated February 25, 1901, was entered in a supplementary ledger, and was signed by the surviving partners and by Annie T. Treacy, administratrix. This stated that at the death of Michael Treacy the assets, which are enumerated and posted into the supplementary ledger, amounted to $72,000, the interest of the Treacy estate in which amounting to $24,000, had been purchased by the two surviving partners. The account also specified other items of property (real estate, bills and accounts receivable) amounting to $35,839, which it was agreed should remain undivided for the purpose of being converted into cash, so as to net the most to the parties interested, and should be owned jointly in equal interests by Brown, by Sperry and by Mrs. Treacy as administratrix. It was further agreed that out of the joint property or the cash therefrom certain accounts payable amounting to $3,596.25, were to be paid.
On February 7, 1896, Hiram D. Brown executed a written copartnership agreement with Herbert H. Bigelow, to continue for the term of five years, for the purpose of engaging in a general advertising novelty business, under the name of Brown & Bigelow, by the terms of which Brown agreed to contribute one-half of the capital necessary to conduct the business and to provide the capital for Bigelow, so that their interests should appear equal, and Bigelow agreed to put in $500 and to pay eight per cent. interest per annum for all moneys advanced him. It was agreed that all work done by Brown, Treacy & Company should be charged to Brown & Bigelow at actual cost.
The new firm was established in the buildings leased by Brown, Treacy & Company, and for three or four years its accounts were kept by the bookkeepers of the old firm and the expense thereof divided pro rata. Brown made no contribution to the capital of Brown & Bigelow. On March 19, 1908, that firm was indebted in open account to Brown, Treacy & Company in the sum of $4,939.54. On that day Bigelow paid in a further sum of $2,250 and gave his note to Brown, Treacy & Company for $439.54. On the books of Brown & Bigelow the payment by Bigelow was credited to a new account, entitled H. H. Bigelow, Capital Stock, and capital stock to the amount of $2,250 was credited to an account entitled Brown, Treacy & Company, Investment Account. On the books of Brown, Treacy & Company the account of Brown & Bigelow was credited with the amount of Bigelow's note, $439.54, with the $2,250 from H. H. Bigelow, and with the $2,250 from Brown, while a new account, entitled Brown & Bigelow Investment Account, was opened and credited with $2,250. There was evidence that in April or May, 1900, Brown directed the bookkeeper to erase the name Brown, Treacy & Co. and substitute the name Hiram D. Brown in the ledger account on Brown & Bigelow's books entitled "Brown, Treacy & Co. Investment Account," and that Bigelow knew of this change at the time it was made.
On February 7, 1901, Hiram D. Brown and H. H. Bigelow entered into new articles of agreement to continue their business for another term of five years, each partner agreeing to contribute one-half of the capital necessary to conduct the business, with provisions as to what should be done in case either partner died before the expiration of the partnership.
The case having been placed on the jury calendar of the district court for Ramsey county, the court ordered that the case be tried without a jury, except that the two issues of fact mentioned in the opinion be submitted to a jury. The case was tried before Orr, J., and the jury answered the questions submitted to it as stated in the opinion. After the return of the special verdicts, defendants moved to vacate them on the ground they were not justified by the evidence and were contrary to law, and to grant a new trial for errors of law, duly excepted to, and for the reason the verdicts were not justified by the evidence. The motions were denied and subsequently the court made findings, in which it approved the verdicts and ordered judgment in favor of plaintiffs that the plaintiff Sperry was entitled to one-third of $262.80 received by Hiram D. Brown in his lifetime and to one-third of $48,766.73, less one-third of the sum of $2,250, and the other plaintiffs were entitled to an equal amount, and the plaintiffs were entitled to a decree reversing the order of the probate court appealed from and allowing each claim in the sum of $15,593.17. Defendants moved to amend the findings of fact and conclusions of law so as to include, among others, findings whether there was at any time any understanding between Hiram D. Brown and Dennis S. Sperry that the contribution of $2,250 to the firm of Brown & Bigelow should be considered the personal property of Brown; whether Sperry had any part in the control of the affairs of Brown & Bigelow; whether Sperry knew of the making of the entries on the books of Brown, Treacy & Company charging the $2,250 to the personal account of H. D. Brown; whether Sperry and Treacy's administratrix signed the accounting agreement of February, 1901, with the knowledge of such entries, and whether Sperry and Treacy's administratix before the signing of the accounting agreement agreed that the Brown & Bigelow interest should be treated as belonging to H. D. Brown and with that understanding signed the agreement. The motions were denied. From an order denying a new trial, defendants appealed. Affirmed.
Dissolution of partnership -- account stated -- tracing firm asset in hands of partner.
H.D.B., of the partnership of B.T. & S., entered into a contract with one H.H.B. to engage in business under the firm name of B. & B. Certain moneys were advanced by H.D.B., charged on books of B.T. & S., and other moneys by H.H.B. The firm of B.T. & S. was dissolved, and an accounting of all its affairs had, and an account stated signed by all the partners. The instrument did not expressly refer to the B. & B. business. H.D.B. had charged himself on the books of B.T. & S. with $2,500 on account of the B. & B. business. Subsequently H.H.B. under the contract provisions purchased H.D.B.'s interest in the B. & B. business for $48,766.73. S. and the legal representative of T. brought an action against the representatives of H.D.B. to recover a proportionate share in the proceeds of the sale of the B. & B. business. The jury expressly found that H.D.B., for the benefit of the copartnership of B.T. & S., entered into a contract of partnership with H.H.B., under the firm name of B. & B., and that the members of the firm of B.T. & S. did not subsequently or at any time agree that the contribution of $2,250 to the firm of B. & B. should be treated as having always been the individual property of H.D.B. The trial court gave the plaintiff one-third of the proceeds received by H.D.B. during his life and one-third of the sum for which the B. & B. business was sold less one-third of $2,250. It is held:
1. That the trial court did not err in submitting the issues to the jury.
2. That errors in the charge of the trial court, upon a construction of the charge as a whole, fell within the rule of Steinbauer v. Stone, 85 Minn. 274.
3. That the account stated signed by B.T. & S. and the book entry by H.D.B. charging himself with $2,250 on account of the B. & B. business did not operate conclusively to defeat plaintiff's rights, but were to be considered together with the other evidence relating to the same matter.
The conclusion of the trial court on this point was reasonably sustained by the evidence, notwithstanding that account stated and that entry.
Parties to an account stated signed by them are not concluded by the presumption that it was a final settlement of all valid debts, debits, and credits as to matters which were not contemplated by them or which were not in fact included in the statement, though they existed at the time. Either party may show that the balance found was struck upon a partial and not upon a general accounting, and either party may avail himself...
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