Ward v. Hartley

• Court: Missouri Supreme Court
• Writing for the Court: VALLIANT, J.
• Citation: Ward v. Hartley, 178 Mo. 135, 77 S.W. 302 (Mo. 1903)
• Decision Date: 25 November 1903
• Parties: WARD, Appellant, v. HARTLEY

77 S.W. 302

178 Mo. 135

WARD, Appellant, v. HARTLEY

Supreme Court of Missouri, First Division

November 25, 1903

Appeal from St. Louis City Circuit Court. -- Hon. D. D. Fisher Judge.

Reversed and remanded (with directions).

Carl Otto for appellant.

(1) Public policy of Missouri in the early spring of 1893 did not forbid the expenditure, in an honorable way, of money at an election for president of the city council of St. Louis. Keating v. Hyde, 23 Mo.App. 561; 15 Am. and Eng. Ency. Law (2 Ed.), 984; State etc., v. Bland, 144 Mo. 534. (2) The test as to whether a demand connected with an illegal transaction be capable of being enforced is, whether the plaintiff must rely on same to establish his case, or if plaintiff can not open his case without introducing same, the courts will not hear him. Tyler v. Larimore, 19 Mo.App. 458; Green v. Corrigan, 87 Mo. 370. (3) In the United States courts (Brooks v. Martin, 69 U.S 70) the rule, "where the transactions which were illegal have become accomplished facts and can not be affected by any action of the court in the case, it is difficult to see what rule of public morals will be weakened by compelling the holder of the fruits to account for same," has been stated and followed in Ottaway v. Bank, 15 Mo.App 578. (4) It may be stated, as a general rule, that the courts will not assist the members of an illegal partnership in any way to enforce or carry out their illegal objects, nor can a suit for an accounting of the partnership business be maintained. 22 Am. and Eng. Ency. of Law, 74. (5) Greenhood on Public Policy, 108, says: "And the facts that a partnership engages in one transaction, which is opposed to public policy, is no objection to a bill to compel each partner to account to the other for the profits of the general business, though the profits of such transaction be included," citing Gualloh v. Thrasher, 42 Ga. 429. (6) Our position is this: The firm spent its money strictly according to law and public policy, but, whether in accordance with, or against public policy, is immaterial; the fact was recorded as and when it occurred. Nothing resulted either for or against public policy from this expenditure.

T. J. Rowe for respondent.

OPINION

VALLIANT, J.

Plaintiff and defendant entered into co-partnership, in 1890, in the city of St. Louis, to transact the business of building and bricklaying. The firm continued in business from the date above named until September, 1895, during which period they transacted a large business, the gross receipts from which amounted to more than $ 300,000.

There had been no statement or adjustment of their accounts between themselves in September, 1896, when, to enforce such settlement, this suit was begun. By agreement the cause was referred to a referee who, after due hearing, stated the account and made his report. After that report was filed it became necessary to refer the case again to the same referee to supplement his report by taking account of payments of debts of the firm which the plaintiff had since paid. The referee made his second report which was final. The conclusion of the referee was that if neither party had drawn anything out of the firm treasury there would be in the treasury for division between the two $ 9,114.11, whereof each would be entitled to $ 4,557.05, but that defendant had drawn out for his own use $ 9,765.10, while the plaintiff had drawn out nothing, and therefore but for one outstanding debt amounting to $ 671.01, the defendant would be indebted to the plaintiff in the sum of $ 5,208.04. But the report recited that the plaintiff, for the sake of a final disposal of the case, without further delay, consented that the referee might state the account as if that firm debt had been paid by the defendant, and in pursuance thereof the referee so stated the account and found that there was a balance due from the defendant to the plaintiff of $ 4,872.54, for which sum the referee recommended that judgment be rendered in favor of the plaintiff and that each party pay half the costs.

It is unnecessary to state the account more in detail, for the reason that there is really but one item in dispute, that is, $ 7,200 charged in the firm's expense account under the head of "election expenses." The report of the referee on this item is as follows:

"This item is one of the main points of disagreement between the partners. And it seems to have stood in the way of their arriving at any settlement of their accounts among themselves. In the spring of 1893 plaintiff was a candidate for the office of president of the City Council. And he claims that the expenses he incurred in that election amounted to about $ 9,000, and he charged $ 7,200 of this amount to the firm. He testifies that it was agreed between him and defendant that his election expenses should be borne by the firm. Several other witnesses testified to the fact that defendant told them that the firm was paying the election expenses of plaintiff. It appears that plaintiff had been a member of the House of Delegates, and he testified that the firm secured its business largely by reason of the fact that he was in politics. He further testified that his election would further the chances of payment of several claims which the firm held. Defendant was present at the hearing before me but was not sworn as a witness. I accordingly find that defendant believed that the election of plaintiff would be an advantage to the firm in a business point of view, and that defendant did agree that the firm would pay the election expenses of plaintiff and that they might be paid with the funds of the firm. Having agreed that the firm funds should be paid out for this purpose defendant can not now object to that expenditure. Ordinarily, defendant would be entitled to an itemized statement of the expenditures; from the nature of the expenditures it might not be reasonable that all the items of small expenditure should be given in detail, but defendant would be entitled to a statement itemized to a reasonable degree, at least. But it was testified by plaintiff and Mr. O'Reilly that this item of $ 7,200 was entered in the books of the firm in June, 1893, a few months after the election, and that defendant some times looked over the books. Defendant did not take the stand at all, but remained silent. I conclude, therefore, that this item was entered in the books at the time stated and was seen by defendant. But he does not appear to have made any objection to it until sometime in 1896. And then, as I gather from the testimony, his objection was to the entire item as an unauthorized expenditure. Defendant having agreed that the expenditures should be paid by the firm when he saw the amount entered in the books if he questioned the correctness of the amount, he should then have called for an itemized statement or other proof of the correctness of the sum entered in the book, and not let the charge stand unchallenged for about three years."

Accompanying the referee's report is a schedule showing the works upon which the firm had been engaged, from which its receipts had been derived. Much the larger part of these were public works in the city.

The defendant filed exceptions to the report of the referee, the chief of which was aimed at this item of election expenses which the referee had allowed. The main ground of the defendant's exception to the item was that the agreement that the firm should pay it was void because it was without consideration and against public policy. The court sustained the exception and struck out that item, the effect of which was to reduce the amount which plaintiff was entitled to recover to $ 1,272.54, for which sum judgment for the plaintiff was entered, each party to pay half the costs.

The plaintiff appeals from that judgment and assigns for error the action of the court in striking out that disputed item.

When an agreement has no legal considerations to support it, it can not be made the basis of a cause of action nor of an affirmative defense. If such an agreement is relied upon for the cause of action, the plaintiff can not prevail; if such is relied on by the defendant in a plea of confession and avoidance, the defense will fail. The...