Catron v. Shepherd

Maxwell, Ch. J. On the tenth day of October, 1872, the defendant purchased of A. N. Pierce, of Texas, eleven hundred and six head of cattle for the sum of $20,362, the money to be paid in installments as provided in a written contract executed by the parties at that time. The plaintiff was appointed agent by Pierce to collect and receipt for the payments. Various payments were made by the defendant upon the contract up to the twenty-sixth day of June, 1874, when there remained due and unpaid about the sum of $3,000.00 This sum the defendant appears to have been unable to pay, and Pierce offered to take one thousand dollars for the claim if Shepherd could pay within a certain time. O. P. Mas.on, with whom the claim was left, testifies as follows: “It was not paid at the time, and Pierce instructed me to sell for $500.00 and attorneys’ fees, and I notified Shepherd and Catron. I left the papers in my office, and afterwards it was sold to Catron. Catron appeared to be assisting Shepherd in getting as favorable a compromise as possible out of Pierce, and it was a long time afterwards that Catron bought the claim.” This testimony is not denied. In August, 1874, the plaintiff and defendant entered into the following contract: “This is to certify that I the undersigned have agreed with James H. Catron to furnish on my farm in Wayne county, Iowa, and Apinnoose county, Iowa, feed lots, all my pastures, from — 313 — the first of September through the fall and winter for $200.00, about ninety acres of corn at seven dollars per acre. Also, some four hundred dollars in money, or this amount in corn, making over twelve hundred dollars. Also, what tame grass hay at $4.00 per ton, to be fed into James IT. Catron’s cattle. Upon these conditions, that this feed lot and money is to go in as so much money, entitling the undersigned to half the profit or loss in these cattle at a previous fixed valuation, with interest at fixed rate as in Nebraska. The said Catron to furnish money to feed and buy what hogs he may deem expedient. The said Catron holding all right and title in all above mentioned property. The undersigned is given authority to go and buy corn to feed these cattle and hogs, taking a receipt for all moneys paid out, and to return any balance in his hands to the said Catron. Is to receive a fair compensation for actual services in buying corn and attending cattle, Catron’s time per day to offset Shepherd’s time per day. “(Signed), JOHN É. SHEPHERD.” This contract appears to have been made to take the place of another that had existed between the parties for some time. In January, March, and April, 1875, the plaintiff sold the stock and retained the entire proceeds, amounting to a very large sum; the profits due the defendant exceeded the sum of $1,900. On or about the sixth day of April, 1875, Catron, being about to leave for Iowa to ship and sell the last lot of stock, purchased of Mason and Lehman, the attorneys for Pierce, the account due from Shepherd to Pierce for the sum of $500, and he claims to have paid one Hicklin $500 in addition, though for what particular purpose is not clear. This account Catron appears to have sought to turn in at its face in his settlement with Shephérd. The defendant offered to take the account — 314 — in settlement at the sum the plaintiff had paid for it. This the plaintiff refused and instituted this action on the account to recover the sum of $3,787.55 and interest and costs. The cause was submitted to the court without the intervention of a jury, and the court “ doth find that the plaintiff and defendant were partners engaged in the business of feeding and selling cattle and hogs; that the plaintiff made all sales and received the proceeds thereof, and while he had a considerable amount of partnership funds in his hands, and while the partnership affairs were unsettled, he purchased with his own money the claim sued on in this action; that while they were such partners, plaintiff purchased said claim at defendant’s request, under an agreement that the amount paid, together with interest thereon at the rate of twelve per cent per annum, should be charged and allowed by the defendant in the final settlement between them; and that plaintiff paid for said claim the sum of $1,000 on the sixth day of April, 1875; and there is now due plaintiff from defendant thereon the sum of $1,318.” The plaintiff filed a motion for a new trial, which was overruled by the court, and judgment rendered on the finding. The plaintiff brings the cause into this court by petition in error. A number of errors are assigned that, in the conclusion we have reached, it is unnecessary to notice in detail. The rule is well settled that the authority of a partner to dispose of the partnership funds extends only to the business of the partnership itself; and any disposition of those funds by any partner beyond such purpose is in excess of his authority as a partner, and a misappropriation of the funds for which the partner is responsible to the partnership. Rodgers v. Batchelor, 12 Pet., 230. Dob v. Halsey, 16 Johns., 34. Gram v. Cadwell, 5 Cowin, 489. Homer v. Wood, 11 Cush., 62. — 315 — Purdy v. Powers, 6 Barr, 492. Greeley v. Wyeth, 10 N. H., 15. Sauntry v. Dunlap, 12Wis., 364. Viles v. Bangs, 36 Ind., 136. Let us apply this principle to the case at bar. Here, during the existence of the partnership, and while one of the partners was holding a, large surplus of profits in his hands belonging to his copartner, he purchases a claim against his copartner for a little more than twenty-five cents on the dollar of its face value, and seeks to set it up against his copartner for the entire sum due on the face of the contract. We are told that the court has found that this claim was paid for with funds belonging to the^plaintiff, and not with partnership funds. This finding must be considered with reference to the other finding that the purchase was made by the plaintiff' “while he had a considerable amount of partnership funds in his hands, and while the partnership affairs were unsettledand also with reference to the testimony, which shows he sought to bring this debt due on the contract in to satisfy the amount due from him to his copartner. Can it make any difference whether he took the money to pay for this claim out of a different drawer from that in which the partnership funds were kept, so long as he was keeping the entire partnership funds as his own ? In his view of the case this was his own money; and that is all he swears to. He nowhere testifies that the money to pay for this claim was not derived from the partnership. Where a transaction is carried on with partnership funds it inures to the benefit of the partnership. No partner has a right to use the, partnership stock or funds for his own private benefit. The law of partnership is but a branch of the law of principal and agent. Each partner is a principal, and each is an agent for every other partner; and, within the scope of the partnership, all are bound by the con — 316 — tract of one. Partners owe to each other the most perfect good faith, reasonable diligence, and the exercise of their best judgment and discretion. Profits made by an agent inure to the benefit of his princi. pal. Story on Agency, s. 210, and cases cited. And why should not the same rule obtain in cases of partnership, particularly where the partner is holding back the proportion of funds due his copartner ? In such a case it is safe to assume that the purchase was made with funds belonging to his copartner, it being sought to apply the claim in satisfaction of the amount due. Upon the termination of the partnership, the parties are entitled to an accounting. This has been had between the parties in this case, and a large sum found due the defendant. This fund the plaintiff holds' in trust for the defendant’s use; and, while holding such fund, he cannot be permitted to profit at the expense of the defendant by retaining it. In the absence of a contract therefor, the plaintiff could not recover the face of the contract. But the court finds that the plaintiff agreed to purchase the claim for the defenddant; and all the testimony tends to support this-finding. The defendant testifies that he entered into such an agreement. Mason testifies that the plaintiff “ appeared to be assisting the defendant in getting as favorable a compromise as possible out of Pierce.” And the plaintiff does not deny this testimony. He states, “ I was Mr. Shepherd’s friend at that time, and I told Mr. Pierce, and he said he would talk the matter over before another account came in from Texas.” On his re-direct examination, he testifies that he never had any conversation with Shepherd after the time testified to by Judge Mason. Can it be that these negotiations of the plaintiff with Pierce, under the guise of friendship for the defendant, were simply to reduce the price of the claim to as low a sum as possible, to — 317 — enable Mm to profit by it? We must reject tMs conclusion, and accept the testimony showing that the transaction was for the benefit of the defendant. This being the case, the record fails to disclose any reason why he should not adhere to his contract. The pretext that the parties’ quarreled about the sum of $175.00 is too trivial to admit of consideration. The court erred in adding the amount of $500.00 paid to HicMin, who seems to have had no interest in the claim but a mere right to purchase it, which had not been perfected. It is claimed by the plaintiff that the court erred in admitting the testimony of the defendant tending to prove the agreement mentioned in the finding of the court, and also in permitting the defendant to amend Ms answer to conform to the facts proved. In answer to the first objection it is sufficient to say that no objection was made by the plaintiff to the testimony of the defendant upon that point. After the plaintiff had testified without objection, that the plaintiff was going to help him “ get it (the claim) along in February,” objection was made to his testimony as to the price; but that was not material, and could not have prejudiced the plaintiff. Besides, Mason and the plaintiff both testify without objection as to the price. The rule is well settled in this court that where testimony is admitted without objection, error cannot be predicated thereon, and a party objecting to the admission of testimonymust assign the reasons for the objections. Morgan v. Larsh, 1 Neb., 367. Tecumseh Town Site case, 3 Id., 279. Pyle v. Warren, 2 Id., 248. Horbach v. Miller, 4 Id., 48. Michel v. Ware, 3 Id., 235. The objection to the amendment of the answer is not well taken. In Curtis v. Cutler, 7 Neb., 317, the petition did not state a cause of action, and the defendant objected to the introduction of any testimony on — 318 — that ground. During the progress of the trial the court permitted an amendment of the petition. The defendant objected to the introduction of testimony under the amended petition, upon the ground that it did not state a cause of action. The court overruled the objection and admitted the testimony, and on the conclusion of the trial permitted the plaintiff to file an amended petition, to conform to the facts proved. This the court held could not be done. Butthis rule has no apjfiication where testimony is admitted without objection. In such case, the court may order the pleadings amended to conform to the facts proved. In the case at bar, nearly all the objectionable testimony was admitted without objection on the part of the plaintiff, and much of it introduced by the plaintiff himself. Under these circumstances the court did not err in permitting an amended answer to be filed, and the amendment should have included affirmative relief to the defendant for the amount due him, the testimony being before the court. The affidavits in support of the motion for a new trial are merely cumulative, and fail to show that the plaintiff was taken by surprise by the amendment of the answer, or that he has been injured in the least. It is clear that there is no error in the record of which the plaintiff can complain. The judgment of the. district court is affirmed .with costs, and as the bill of exceptions shows that the defendant soon after the settlement, offered to allow the plaintiff the amount he had paid for the claim, which he refused, he cannot now recover costs in the court below. Judgment accordingly.