Bricker v. Stone

Smith, P. J. This is a suit by plaintiff against defendants on a bond for $2,000. The bond was given to secure the faithful accounting by defendant Stone to plaintiff for the money used in business of a certain copartnership which had been entered into between plaintiff and said Stone. I. The appealing defendants, against whom the plaintiff had judgment in the court below, assail the petition on the ground that it does not state a cause of action. The question thus presented is whether the petition states a breach of the conditions of the bond by Stone, the principal therein, for which the other defendants, who are securities therein, are liable. The rule has been long settled in respect to the liability of a surety, that he is not to be held beyond the precise terms of his contract. His liability cannot be extended by implication. Hofsinger v. Hartwell, 84 Mo. 549; Prior v. Kiso, 81 Mo. 241. The petition states that it is recited in the obligation of the bond that, ‘ ‘ Whereas Stone & Bricker have formed a copartnership for the purpose of engaging in the lumber business,” * * * and “whereas Bricker is to furnish the sum of $2,000 or more as the capital of said business, and the said Stone is to be the active partner to conduct and manage said business, ” etc.; “now, therefore, — 534 — if said Stone shall truly and faithfully account for. all moneys used in said business and shall render monthly statements of the transactions of the business the obligation is to be void.” The breach of this obligation was alleged in the petition to be that the said Stone took charge of the partnership business and a large amount of the assets belonging to said copartnership to be accounted for according to the conditions of said bond. It was further alleged that the said Stone committed a breach of the bond in that he failed to truly and faithfully account for all money used in said business ; that the said plaintiff and Stone made a settlement of the partnership business, whereby there was found to be due plaintiff by said Stone $1,081.33 ; that the partnership was by mutual consent then dissolved; and that the said Stone neglected to pay plaintiff the said balance due him so ascertained. The old rule that a pleading should be construed most strongly against the pleader has been abrogated by statute: The rule now in force is that the language of the pleading should be taken in its plain and ordinary meaning, and such an interpretation given it as fairly appears to have been intended by the pleader. Stillwell v. Hamm, 92 Mo. 579; Warnick v. Baker, 42 Mo. App. 439; State v. Pace, 35 Mo. App. 458. Having in view this rule of pleading as well, as that in relation to the liability of a surety already referred to, we are of the opinion that the facts alleged in the petition as constituting a breach of the bond by Stone show a liability of Stone for which his sureties should be held. If it be true as alleged that, after a settlement of the partnership business and a dissolution thereof, there remained in the hands of Stone the amount charged as part of the assets of the partnership, which under the partnership agreement belonged to plaintiff and which Stone refused to pay over, no reason is perceived in the law why the sureties under the terms of their contract, which was to the effect that Stone “shall truly and faithfully account — 535 — for all moneys used in the business,” would not be liable-therefor. The allegation, that the said Stone refused to-pay over to plaintiff after demand the balance found on settlement to be due by him to plaintiff, sufficiently charges a conversion by Stone of the partnership assets-to which plaintiff was entitled. The sureties by the-terms of the bond guaranteed that Stone would faithfully account for all moneys used in the partnership-business in which it appears by the allegations of the petition that he made default. They by its very terms-made themselves liable to the extent of the penalty therein named for the alleged default and misconduct of Stone. We think the petition states a cause of action. II. No error is perceived in the action of the court in denying the defendants’ application for a continuance. We are not satisfied that the application shows that measure of diligence on the part of the defendants enjoined by law. Besides, such applications are always addressed to the discretion of the court, which will not be interfered with by the revisory courts unless it is apparent that there has been an abuse, which we think is not the case here. III. The defendants further complain of the action of the trial court in admitting evidence of the so-called settlement between plaintiff and Stone of the partnership business, whereby the balance was ascertained from the partnership books of account to be due by the latter. An examination of the bill of exceptions shows that the defendants objected to this evidence because incompetent and irrelevant. Such an objection does not constitute the basis of an -exception. If evidence is objected to for incompetency or irrelevancy or on any other general ground, the objection should specify why or in what. Clark v. Loan Co., 46 Mo. App. 248. But we think the evidence of the settlement of plaintiff and Stone was properly admitted. It was — 536 — Stone’s duty under the partnership agreement as manager to keep the books and accounts of the business and to make monthly reports thereof. This he did not do; after the business had run some six months the plaintiff discovered that Stone had grossly mismanaged it, and that there was a defalcation by him. Owing to the confusion and entanglements in his accounts, the plaintiff was unable to ascertain therefrom the exact condition of the business of the partnership. It was then agreed between' plaintiff and Stone that the books, accounts and vouchers of the firm should be placed in the hands of a skilful accountant to go over and ascertain therefrom the true and correct condition of the partnership business. This task was confided to Captain Peagans, who investigated the partnership books, accounts, and vouchers which had been kept by Stone, and he ascertained therefrom that after allowing Stone credit for everything to which he was entitled that there was the deficit sued for. The books, accounts and vouchers were original evidence, and they showed when posted the unaccounted for balance claimed. The result was not ascertained from statements or admissions of Stone after the severance of the partnership relation. The entries on the books of account, as well as the memoranda and vouchers from which the balance was ascertained, were made by Stone while in the active management of the partnership business. The undertaking of the sureties covered this period. They were bound by the very terms of that undertaking that during this period Stone would faithfully account for the money used in the partnership business. The entries in the books, together with such other memoranda and vouchers there made by him, constituted the very best evidence. They were admissions and statements made at a time he was authorized to act and speak and thereby bind his sureties. This evidence tended to show acts constituting a legal liability which would bind the sureties, and it was not subject — 537 — to the objection that it was not part of the res gestee. It did not consist of admissions and acknowledgments made by Stone after he ceased to act in his partnership capacity. Besides this, it was his duty as manager of the partnership to have rendered monthly statements of the transactions of the partnership. It was his duty at least to have made a final statement from his books of the condition of the partnership. ' He could have done this, or he could, as was the case, have employed another to do it. The act of the accountant must be regarded as but the performance of a neglected duty by Stone himself. The evidence of what is termed the settlement shows what Stone’s acts were during the time he was transacting the partnership business. It is a record of the current partnership transactions, and we . think the statement based thereon was admissible for the purpose of establishing a prima facie liability on the part of the sureties. What has just been said finds abundant support in the principles announced in the'* following cases: Low v. Taylor, 41 Mo. App. 518; Father Matthew Society v. Fitzwilliams, 12 Mo. App. 445; Stetson v. Bank, 2 Ohio St. 167; Hatch v. Elkins, 65 N. T. 489. The statutes in relation to the subject of references is only directory. The court was not bound to refer the case. It was a matter entirely within its discretion. Fitzgerald v. Haywood, 50 Mo. 516. IV. The next error assigned by defendants is that the court erred in instructing the jury for plaintiff to the effect that the settlement between plaintiff and Stone, by which it was agreed between plaintiff and Stone, that, allowing said Stone for all losses and bad debts, there was $1,081.53 due plaintiff as assets and cash that he had not accounted for and paid over, and they then dissolved and settled them, that such settlement is presumed to be correct, and defendants are bound by it unless the evidence shows to the contrary. — 538 — This instruction is erroneous. The assent or admission of Stone, after the dissolution of the partnership, that any amount was due by him could not bind his ■sureties. The sureties were bound for any déíalcation ■made by him while managing the partnership business, but it was improper to direct the jury that the amount of such defalcation could be established by the subsequent agreement of plaintiff and Stone. And were it not for a similar error in one of the instructions asked by the defendants themselves, we should feel compelled to reverse the judgment. The defendants asked the court to instruct the jury that the defendants, Stone’s ■sureties, were not concluded by any settlement or ■agreement as to the amounts that may have been made between plaintiff and Stone. This instruction of the ■defendants thus recognizes the theory of the plaintiff’s .instruction. It gave sanction to the very error in the plaintiff’s instruction of which complaint is made. 'The theory of both of these instructions, that defendant Stone could bind his sureties as to the amount of his defalcation by an admission or agreement made by Tiim subsequent to the dissolution of the partnership relation, would not be tolerated were it not that the ■error just referred to is common to the instructions of both sides of the case. Y. The defendants further contend that the court -erred in refusing the third, fourth and sixth instructions, and giving the same in a modified form, and also .giving on its own motion those numbered ,7 and :8. The defendants maintain that these instructions are erroneously based upon the theory that Stone should not only account for money used in the business, but that he should pay over to Bricker all money and property used in the business, no matter how the loss ■occurred. These instructions are unobjectionable when viewed in connection with other instructions given by ilhe court, and particularly the second and third of the defendants, which told the jury that the sureties were — 539 — only bound to make good to the plaintiff whatever amount of money, if any, that Stone failed to account for during the continuance of the partnership, and that they were not liable for any loss of profits on lumber sold, bad debts or accounts contracted in business. So that it is not believed that the jury could have been misled by the language of the instructions complained of. VI. We cannot say that there was no evidence to authorize the amount of the verdict, or that it was excessive. VII. The petition alleges that Stone did not faithfully account for all money used in the business of the partnership, and that there was the balance sued for due by defendants to plaintiff. This was a sufficient allegation under the statute, as construed in Stillwell v. Hamm, supra, and, therefore, the motion in arrest was properly overruled. ' The judgment will be affirmed. All concur.