Klauber v. Wright

Cole, C. J. In this case we have been favored with the opinion of the learned circuit judge, given on the motion to confirm the report of the referee, and on sustaining the garnishee’s exceptions to that report. This opinion contains such a full, clear and satisfactory discussion of the questions of law and fact involved in the case, that it might, in the main, be adopted as presenting our own views on these questions. The fact that a settlement was made between the garnishee and principal debtor, Noyes, on the 26th of April, 1876, is too conclusively established to admit of doubt. A memorandum in writing of such settlement was drawn up and signed by the parties at the time, which memorandum states that on that day all book accounts and all other demands were settled between them “ except the wood account.” The writing states the amount which was found due Noyes, and the manner in which the same was to be paid. Now a creditor of Noyes attempts to overhaul and set aside this settlement, on the ground that it was made in fraud of his rights. There is not the least scintilla of evidence that either party, in making the settlement, intended to defraud any one. So far as creditors are concerned, the settlement seems to have been made in perfect good faith, for the purpose of adjusting the mutual dealings and business transactions of the parties to "it. But it is said that the appellaqj;, at this time, was a creditor of Noyes, and that Noyes was in failing circumstances, to the knowledge of the garnishee, who obtained an advantage in the settlement — in other words, that several hundred dollars more were actually due Noyes than were stated to be due him in the memorandum. But the learned circuit judge found that at the time of making the settlement neither of the parties to it acted under any mistake of fact as to the items or matters included in the settlement, or omitted therefrom, or as to the correctness of any such item. This being the case, the learned judge held that, even if Noyes made an improvident settlement — one which diminished his ability to pay his debts,— this afforded 313 no ground or reason for setting the settlement aside at the instance of a creditor of one of the parties to it. It seems to ns there can be no doubt about the soundness of that proposition; for any other rule would, in the language of the circuit judge, tend to overturn all the transactions of an unsuccessful business man, and would be destructive of all confidence among men. But we remark further that we see no ground for holding, upon the evidence, that the settlement should be set aside either on the application of Noyes or of a creditor of his. The burden was upon the appellant of impeaching the settlement by showing fraud or mistake therein.' There was no sufficient evidence in this case to authorize the court to open it. This court has more than once recognized and enforced the elementary doctrine that “ the evidence to surcharge an account should be clear and satisfactory.” Marsh v. Case, 30 Wis., 531. “Principle and public policy alike require that when parties, after a full and fair opportunity of examining and deciding upon their mutual accounts, have adjusted and settled them, the settlement should be conclusive. Any other rule would be dangerous and oppressive, and often work the greatest injustice. Martin v. Beckwith, 4 Wis., 219; Wilson v. Runkel, 38 Wis., 526. In this case, the proof shows that the settlement was deliberately made after a full examination of the accounts, and we see no reason for affirming that it was not fairly made. Even if we were to go behind the settlement, and examine into the state of the accounts and business transactions, we should have difficulty in arriving at the conclusion that the garnishee obtained any advantage in the settlement, or was actually owing Noyes any more than the memorandum stated was due him. But we do not intend to go behind the settlement, for its substantial fairness is not impeached. And we content ourselves' with stating the result at which we have arrived after a consideration of the testimony, without discussing the evidence in detail. The case affords a fine illustration of the wisdom of the rule that a settlement once deliberately 314 made is not to be opened except upon the clearest and most positive .proof of fraud or mistake therein. The business transactions investigated by the referee extended over a period of twelve or fourteen years. No regular books of account were kept by either party. The only account or memoranda of their dealings were kept in little diaries or upon loose papers. . 0'n the settlement made in April, 18'76, many of these papers were destroyed. Now, on the data or memoranda presented on the trial, it is impossible to get a clear and satisfactory statement of the real state of the account between the parties. We certainly cannot assume or conclude, from anything appearing in the exhibits or testimony, that any mistake was made in the settlement which would justify us in opening it; and it must stand. The garnishee was first examined before a commissioner. He commenced his examination with a positive denial that he owed Noyes anything, or that Noyes had any just claim upon him. The examination of the garnishee before the commissioner covers more than three hundred folios, questions and answers. The plaintiff was not satisfied with the answer of the garnishee, and took issue thereon. On the trial of that issue, the garnishee was permitted to explain, contradict or qualify admissions and statements made by him before the commissioner, against the objection of appellant. It is now claimed that it was error to allow the garnishee to do this, because his whole examination before the commissioner was in the nature of a pleading, upon which issue had been joined. We do not think the whole examination before the commissioner should be treated as a pleading which the garnishee was bound by until it was amended by leave of court. The general denial of indebtedness might, with liberality, be deemed a pleading, perhaps. All the rest was mere examination to get at the real facts; and the garnishee had the undoubted right to correct, on the trial, any mistakes which he had made in his examination before the commissioner. The circuit court 315 so ruled, and there can be no doubt of the correctness of that view. Of course it was the duty of the garnishee to answer fully and truthfully all proper questions put to him on the first examination. But, when the inquiry was as to business transactions extending over a series of years, which had once been settled, and many papers relating to these dealings had been destroyed, it is not surprising that the garnishee would make mistakes when he was attempting to give a history of them. These observations are all that we deem it necessary to make in the case. By the Court.— The judgment of the circuit court is affirmed.