Dimond v. Henderson

Cole, J. This action was brought for the dissolution of the copartnership of Henderson, Coon & Co., a firm doing bnsi — 173 — ness at Sister Bay, Door county, and for winding up and settling the affairs of that partnership. The firm was composed of Dimond, the plaintiff, H. E. Coon, deceased (who is represented by his administrator, M. W. Coon), and the defendants Henderson and Wilson. The' two former members of the firm were each entitled to one-third interest in the concern; Henderson and Wilson owned the other third. At the same time Henderson and Wilson were doing business at Palmyra, under the firm name of Henderson & Wilson. On the trial of this cause the business transactions of the latter firm seem to have been largely inquired into, and an unfortunate attempt was made, as we regard it, to adjust the affairs of that firm by the judgment rendered in this action. Of course it was competent for the court in this suit, on the dissolution of the partnership of Henderson, Ooon & Co., to determine the rights and liabilities of the members of that firm as between themselves, and to distribute the partnership property to those who were entitled thereto, according to their respective shares. But it could only lead to confusion to attempt at the same time to settle the affairs of Henderson & Wilson, and to adjust the rights of the partners of that firm in its property. Consequently, so much of the judgment of the circuit court as adjudges that the defendant Z. Wilson have and recover of the defendant A. Henderson the sum of $2,377.97, as his share of the copartnership funds now in said Henderson’s hands, we deem erroneous. This may possibly be the true amount which would be found due Wilson from Henderson, growing out of their private dealings or the business transactions of the Palmyra firm, but it has no connection with this suit and should not enter into the accounting here made. It will be seen that by the articles of copartnership of Henderson, Coon & Co., Henderson and Wilson were entitled to a one-third interest in the property real and personal of that concern, and to a like share of the profits of the business. The plaintiff and the estate of H. E. Coon were each entitled also to a third of the — 174 — same. There would seem to be no difficulty in distributing the effects and property of that firm upon that basis, leaving the affairs of the partnership of Henderson & Wilson to be adjusted in a distinct suit, should this become necessary. In stating the account of the partners as between themselves, it would obviously be correct that each should be charged with all the debts and moneys which he owes, or is accountable for, to the partnership of Henderson, Coon & Co. The referee found from the evidence produced before him, that there was in Henderson's hands, belonging to the firm of Henderson, Coon & Co., the sum of $2,268.37. With the exception of one item, which we think should be credited to Henderson, we are not prepared to disturb this statement. There is an item of $314.60 on page 161 of the ledger, according to exhibit 11, which is made up of charges against Henderson, and which, the referee says, does not appear from the books ever to have been deducted from his credits. But this is a mistake, as was clearly pointed out by the learned counsel for Henderson on the argument; for on the same page of the ledger it plainly appears that this sum of $314.50 was deducted from the aggregate credit of Henderson amounting to $2,047.74, leaving the “ balance due,” as there stated, of $1,733.74. This sum of $314.50, therefore, should be deducted from the amount found by the referee to be in Henderson's hands belonging to the firm. It is barely possible that there is error in some of the other findings of the referee, which does injustice to Henderson; but we are unable to tell wherein it consists, if such there be. And this arises from the fact that the books of the firm, which were introduced on the trial, were kept in such a confused and unintelligible manner that it is impossible to get at the real state of the accounts. The business of the copartnership was entrusted entirely to the management and control of Henderson. He was paid a salary for keeping the books and transacting the business in a proper manner, and if he kept the books — 175 — so imperfectly and badly that the true state of the accounts and the transactions of the firm cannot he ascertained from them, it is'but fair that every presumption to his disadvantage should be adopted. It is a case where the maxim, Omnia prcesunwnter contra spoliatorem, should be applied, for it is wholly his fault' that the means of ascertaining the truth are not furnished by the account books themselves. The learned counsel insists that the referee had no right, upon the testimony before him, to charge Henderson with any more for supplies and provisions for the support of his family than the amount which appears upon the books of the firm. But there is ample evidence tending to show that there were groceries and provisions taken from the store of the firm, for the use of Henderson’s family, which were not weighed, measured or charged. The referee has gone into a quite minute examination of Henderson’s account for groceries, provisions, clothing, etc., which were used for the support of his family during the three years he had charge of the copartnership business at Sister Bay, and reached the conclusion that the amount shown by the books is quite inadequate for the purpose. We are not inclined, under the circumstances, to disturb the finding of the referee upon that point; for when it appears that goods were taken from the store which were not measured or weighed, and which were used in the defendant’s family, it is impossible to rely upon the account as being accurate. From the nature of the case, other means or sources of information had to be resorted to to get at the truth of the matter; and that was what was done by the referee. The same remark may likewise be made with regard to the finding as to the amount which should be charged Henderson for servants’ wages. The account of that matter is quite confused, and, notwithstanding the ingenious explanation of counsel with regard to it, is of that character that raises a violent presumption that it is not worthy of credit. "We have already said it was the duty of Henderson to have kept accurate and intelligible accounts of all the trans — 176 — actions of the firm. The fact that he failed to do this furnishes a strong inference against him. The referee charged Henderson with $20 for the hoard of an insurance agent, which had been improperly charged to the firm. It is admitted that this item should not be in the firm account, and the statement of Henderson that the firm had received credit for it in some freight charges was disregarded. There was no error in this finding of the referee. There remains only one other matter in the report of the referee which we deem of sufficient importance to require notice. Henderson was charged with interest at the rate of seven per cent, upon the money in his hands belonging to the firm, for the time he held it. It is said that this was error; that in no event could he be charged with interest until a balance had been struck or an accounting had. In many cases this would undoubtedly be so, as this court decided in Marsh v. Fraser, 37 Wis., 149, and Fates v. Shepardson, 39 Wis., 173. But the reason of the rule fails here, because Henderson kept the account books, and knew, or had the means of knowing, the precise amount which he held in his hands belonging to the firm. He even professed to make a full statement of the property, profits, losses and condition of the firm at the closing of the business in the fall of 1874, which he gave to his copartners, but which statement was found not to be correct. Under these circumstances we therefore think it was not necessary that any formal balance should be struck in order that he might ascertain just what he had belonging to his co-partners. He could have ascertained it, and paid over the amount, had he been disposed to be just. In a case where one partner had withdrawn funds from the partnership contrary to the articles of copartnership, and employed them in trade, Chancellor Kent required him to account not merely for interest, but for the profits of that trade. Stoughton v. Lynch, 1 Johns. Ch., 467. This case comes fully within the spirit and reason of that decision. We — 177 — therefore think it would be right to charge Henderson with interest upon the money in his hands. Ve d.o not deem it necessary to make any further comments on the case. By the Court.— The judgment of the circuit court is reversed, and the cause remanded with directions to enter judgment on the report of the referee in accordance with the views expressed in this opinion.