Kimball v. Walker

Breese, J. A question was presented on the argument of this cause, which was not made in the court below, as to the jurisdiction. The rule is well settled that where adequate relief can be had at law, and where the subject-matter of controversy is purely a question of law, a court of chancery will not entertain jurisdiction. The authorities hold, however, if the objection is not taken advantage of by plea or demurrer, in the first instance, it cannot be urged on error or on appeal. 1 Daniel’s Ch. Practice, 636. This is no doubt the rule as to the parties, but we hold it is in the power of the court at any time, to interpose the objection, for its own protection, and thus prevent drawing into the vortex of a court of chancery, matters purely cognizable at law, and that by the management and consent of parties interested. If such a power did not exist, the lines dividing the jurisdiction of courts of law and of chancery would be speedily obliterated. It having been suggested, however, that denying now, the jurisdiction of a court of chancery in this case, the complainant below may be subjected to great loss by reason of lapse of time barring an action at law, we have concluded to examine into the merits of the controversy. The notes executed by complainant, referred to in the bill of complaint, were indorsed by Walker, and, he says in his answer, he was jointly interested with complainant in the purchase. These notes were deposited with William Yernon, the book-keeper of the old firm of John Frink & Go., and acting as its agent. Afterwards, but at what precise time is not shown, the other defendant, Moore, by the consent of the other partners, came into the concern and signed the notes so left with Yernon, after which time the business was carried on in the firm name of Kimball, Moore & Go., he, Moore, being an equal partner as from and after the first of July, 1854, the date of the purchase. Of these notes, Walker, about the 22nd of September, 1854, paid on account thereof, one thousand dollars, and one year thereafter the sum of $17,638.85, and the complainant paid the balance, about the first of October following. This partnership having existed near two years, was dissolved by complainant selling out his interest to the defendants on the 1st of April, 1856, as appears from this agreement signed by these parties : “Whereas, Granville Kimball, James Moore, and Martin O. Walker, have been staging in the State of Missouri and Territory of Kansas, under the name and style of Kimball, Moore & Oo.; and whereas, said Kimball has sold his interest in said joint concern to said Martin O. Walker and James Moore; and whereas, a settlement of all joint affairs and interest up to this date is agreed upon between said Kimball of the one part, and Walker and Moore of the other part: Mow know all men by these presents, that this contract, made and entered into by and between the said Granville Kimball of the one part, and Martin 0. Walker and James Moore of the other part, witnesseth, That the said Granville Kimball, for and in consideration of the undertakings on the part of said Walker and Moore, hereinafter expressed, has granted, bargained, sold, assigned, set over and delivered to said Martin 0. Walker and James Moore all the right, title, claim and interest of said Kimball in and to all the personal property heretofore and at present belonging to the said firm of Kimball, Moore & Co., inducting stages, horses, mail contracts with the United States; also, all the property not herein enumerated; also, all the interest of said Kimball in and to all the real estate belonging legally or equitably to said firm of Kimball, Moore & Co., including leasehold and all other interest, whatever the same is, now in said firm, or in the name of either or any of the individual members of said firm, or in the name of any other parties. And it is agreed by and between the parties hereunto, that deeds, releases, and all necessary evidences of title, be, within a reasonable time, made by said Kimball to said Moore and Walker, for his said interest in such real estate. It is further agreed by and between the parties hereto, that the partnership heretofore existing between said parties, is this day dissolved by mutual consent, it being understood that such business is to be continued by said Walker and Moore. And it is agreed by and between the parties hereunto, that an account is to be taken and settlement made by William Vernon, of and concerning all moneys received by said Kimball belonging to said. firm, and of and concerning all disbursements made by said Kimball for and on account of said firm; and all accounts between said late firm of Kimball, Moore & Co. and said Kimball are to be finally and fully settled by the decision of said Vernon, and in the settlement of said accounts, said Kimball is to be allowed the sum of twelve hundred dollars per year, since July, A. D. 1854, as a salary for his services. And in consideration of the above sale, the said Walker and Moore agree to convey to said Kimball all the interest which the said Moore now has in a tract of about thirty acres of land lying north of Dixon, which is estimated at twenty-five hundred dollars, the one-half of said land already belonging to said Kimball; and said Walker and Moore agree to' pay to said Kimball the sum of five thousand dollars within four months from the date hereof; and said Walker and Moore agree to pay, within three years from this date, to said Kim-ball, the sum of thirteen thousand one hundred and sixty-six dollars, with interest annually at ten per cent.—said last mentioned sum to be lessened or increased according to the result of the settlement to be made by said William Vernon, as aforesaid. And said Walker and Moore agree to pay all indebtedness and liabilities now owing and unpaid by said late firm of Kimball, Moore & Go., and to indemnify and save said Kimball harmless therefrom. As witness our hands this first day of April, 1856.” Vernon proceeded in his arbitration of the matters submitted to him by this agreement, and awarded against the defendants, as due from them to the complainant on their partnership concerns, the sum of eight thousand seven hundred and seventy-eight dollars and thirty cents, the notes given to John Frink & Co. and paid by complainant and Walker being excluded by the arbitrator in his investigation and award, he only embracing within it what he considered matters especially embraced in the submission. The question arises here, was this a regular submission, and if so, of what matters ? and was there an award in pursuance of the submission ? It is not necessary a submission should have any particular form. The parties here agree that their partnership is dissolved, and that complainant has transferred all his interest in the stage stock, and all his interest in the real estate, leasehold and otherwise, to the defendants, and they agree that Vernon shall take an account and make a settlement “ of and concerning all moneys received by complainant, belonging to the firm of Kimball, Moore & Co., and of and concerning all disbursements made by said Kimball for and on account of said firm ; and all accounts between said late firm of Kimball, Moore & Go. and said Kimball, are to be finally and fully settled by the decision of said Vernon.” There is no submission of any individual matters or claims. What this shall be termed, a submission or a reference, is immaterial. It is an agreement in writing, not under seal, to refer all the accounts growing out of the partnership to the decision of Vernon, and he is “fully and finally to settle them.” The account taken by Vernon, explained by his testimony, shows clearly, that the terms of the reference were not overleaped, and, therefore, as to all these matters, the parties must be bound by his award or decision, in the same manner as though they were parties to an action, and a judgment had been rendered against them. There is no question made as to the power of these parties to make this reference, or as to the form of the award, nor is it attacked in any way. What, then, is the rule of law in such cases ? Regarding it as an arbitration, in the absence of any fraud or mistake, or charge of undue influences or corruption, the award must be held to be conclusive, upon the matters submitted. This finding of the referee disposes of the partnership concern, and shows a balance due complainant, on that account, of eight thousand seven hundred and seventy-eight dollars and thirty cents, after allowing all just credits and counter-claims, and all’other accounts growing out of the partnership. The stock notes, so called, which were signed by Moore and indorsed by Walker, and paid as above stated, were not taken into this account. It appears by the testimony of Vernon, that the complainant insisted they should be taken into the adjudication, and that defendants objected to their coming in, and he not deeming them within the terms of the submission, did not adjudicate upon them. The bill is filed to subject these defendants to reimburse complainant for his part of the payment of these notes, as well as to account for partnership matters. The agreement of these parties, which we have inserted at length, stipulates that they will pay complainant five thousand dollars within four months from the date of the agreement, and within three years the sum of thirteen thousand one hundred and sixty-six dollars, with interest annually at ten per cent., “ said last mentioned sum to be lessened or increased according to the result of the settlement to be made by said William Vernon.” It appears by the settlement made by Vernon, that on the day of the sale of .these partnership effects and property to the defendants, viz., on the first of April, 1856, there was a balance due by complainant to the concern, of $4,387.70, with which he is charged—complainant is also charged with the five thousand dollars, as having been paid within the four months, and is credited by this sum and the thirteen thousand one hundred and sixty-six dollars, subject to any reduction or increase Vernon might allow, making complainant’s credits eighteen thousand one hundred and sixty-six dollars. Deducting from this amount the' debits of complainant as above, being nine thousand three hundred and eighty-seven dollars and seventy cents, makes the balance as stated by Vernon, as due complainant, of eight thousand seven hundred and seventy-eight dollars and thirty cents. Eor this, complainant is entitled to a decree, with interest. In the same agreement the defendants stipulated, that they would “ pay all indebtedness and liabilities now ” (1st April, 1856,) “ owing and unpaid by said late firm of Kimball, Moore & Co., and to indemnify and save said Kimball harmless therefrom.” These stock notes, according to the testimony of Vernon, had been paid by complainant, to John Frink & Co., about the first of October, 1855, and were not outstanding against the firm of Kimball, Moore & Co., and could not have been aken into the account under this stipulation, that being to pay all “outstanding indebtedness and liabilities then” (April 1, 1856,) “ owing and unpaid by said late firm of Kimball, Moore & Go.” At that date they had been paid by complainant, and the scope of this bill is to subject the defendants to account to complainant jointly therefor, as an advancement to the firm. Is there any ground for this claim % In the agreement of April 1, 1856, on the dissolution of the partnership of Kim-ball, Moore & Co., no allusion is made to these notes as having been paid by the complainant—or any reference whatever to them. It was claimed before the referee by the complainant, that they should be taken into the account, but the defendants objected without assigning any reason, and they were not adjudicated upon. When John Frink & Co. dissolved and sold out, July 1, 1854, the complainant alone became the purchaser of the stock, and executed his own notes in payment with Walker, his indorser. Walker, in his answer, says, that the purchase was made for the joint benefit of himself and complainant, and the firm was Kimball & Co., hence his indorsement. Sometime after this, the date not given, the complainant, without the knowledge of Walker, sold to Moore one-third interest in the concern, Moore signing the notes. Now, as this was done without the knowledge or consent of Walker, he might have repudiated his own indorsements, the notes having been materially altered since they were made; but he makes no objection, but becomes a member of the firm of Kimball, Moore & Go. By signing these notes without objection by Walker, his indorsements being upon them, they became jointly and severally liable to pay them. This appears from the receipt given by complainant to Walker, dated Chicago, September 22,1855, and is exhibitfour. Previous to this time, on the 23rd of August, 1854, Kim-ball, Moore & Co. had drawn on Walker for one thousand dollars, which Walker, on the 22nd September, 1854, paid “ as part for contribution to the capital stock of said Kimball, Moore & Co., toward the Missouri stage stock and property, which G. Kimball originally purchased from J. Frink & Co., July 1, 1854.” The receipt is dated Dec. 12, 1855, and is part of same exhibit. This is understood to be a payment on the notes given for that stock. On the 22nd September, 1855, by this same exhibit four, it appears complainant received of Walker, $17,638.85, on account of the original purchase of this stock, and making allowance for the advance payments, as the notes to Frink & Co. were not due, extinguished Walker’s entire indebtedness for his one-third of the stock. Bnt how is it with Moore’s ? Has he paid any part of the notes, or reimbursed complainant in any manner ? The bill of sale from complainant to him, dated December 5, 1854, is as follows : “ Whereas, upon the dissolution of the late firm of John Frink & Co., stage proprietors, they sold and conveyed unto me, the undersigned, all the property, real and personal, owned by said firm of John Frink & Co., in the State of Missouri, which property consisted of real estate, leasehold interest and stage stock; and whereas, I have this day sold unto James Moore, of St. Louis, one equal undivided third part of all the same property as it now stands: Now, therefore, know all men by these presents, that I, Granville Kimball, the undersigned, in consideration of the sum of seventeen thousand six hundred and sixty-six dollars, to me paid by said James Moore, have bargained, sold and conveyed, and by these presents do bargain, sell and convey unto the said James Moore, his heirs and assigns, one equal undivided third part of all the said property, real and personal, as it now stands, which was conveyed to me by the said John Frink & Co., subject to one-third of all liabilities now outstanding thereon. To have and to hold the same unto the said James Moore, his heirs and assigns forever. “In witness whereof, I have hereunto set my hand and seal, this 5th day of December, A. D. 1854.” This bill of sale was drawn by C. B. Lord, Esq., in his office at St. Louis, at the time it bears date. He says, no money passed at the time of the delivery of the paper, or at any other time, so far as he knows. Kimball and Moore came to his office together, and Kimball said, in presence of Moore, that he and Moore were jointly interested in the purchase of certain stage property from Frink & Co., and said that Moore desired a deed from him for his interest in the property, stating at the same time that he (Kimball) held the title to the property so purchased, but that the purchase was made on account of himself and Moore, or himself and Moore and Walker, one or the other—that Moore said he had made himself liable to pay his portion of the purchase-money, and he thought it was right he should have a paper showing or acknowledging his interest—witness was then directed to draw the paper which was delivered by Kimball to Moore, in his presence, as he believes. This is the explanation the attorney gives of the execution and delivery of the bill of sale, and shows conclusively, by the admission of Moore, connected therewith, that he wanted the bill of sale or deed as evidence of his interest in the concern, he having made himself liable on the notes by signing them. He did not then pretend anything more. No money was then paid, nor did he claim that he had paid any, at any other time. His having signed the notes constituted the basis, and was the sole consideration, as he then stated, for the bill of sale. But his counsel deny the right of the complainant to introduce parol evidence to explain the bill of sale, it being under seal, either in respect to the payment of the purchase-money, or in respect to its recitals of the purchase by Kimball of Frink & Co. being for himself, and that he is estopped, his heirs and assigns, by the recitals and admissions in the bill of sale under seal, from denying or contradicting a fact there deliberately recited and admitted. The general rule, that a plain and unambiguous writing, whether under seal or not, cannot be varied or explained by parol, is not questioned, but it is subject to some exceptions. A receipt absolute on its face, may be contradicted ; so may the recital of a money consideration in a deed of land as having been received by the grantor, be denied and explained or contradicted by parol. It has often been held, that the usual clause in a deed of land or other property acknowledging the receipt and declaring an acquittance of the consideration money, even though it be followed by a receipt of the same money indorsed on the deed, is not only inconclusive in an action of covenant, assumpsit, etc., for the purchase-money or any part of it, but some of the cases maintain that it is evidence of the lowest kind—that such a recital in a deed, or receipt on the back of it, are a mere formal part of the deed, often inserted when not a dollar has been paid. This we all know from experience and observation. Hamilton v. Ex'rs of McGuire, 3 Serg. & Rawle, 354; Weigley's Administrators v. Weir, 7 ib. 309. It has been so' ruled in Massachusetts. Wilkinson v. Scott, 17 Mass. 256. And in several cases in New York. Shephard v. Little, 14 Johns. 210; Bowen v. Bell, 20 ib. 338. And in New Hampshire. Pritchard v. Brown, 4 N. H. 397; Morse v. Shattuck, ib. 229. And in Kentucky. Hutchinson's Administrators and Heirs v. Sinclair, 7 Monroe, 291; Gully v. Grubbs, 1 J. J. Marshall, 388. And in this State. Ayres v. McConnell, 15 Ill. 230. The same rule is adopted in Connecticut. Belden v. Seymour, 8 Conn. 313, against the opinion of Hosmer, C. J. And in Virginia. Harvey v. Alexander, 1 Randolph, 219; Duval v. Bibb, 4 Hen. & Mun. 113. The doctrine of these courts is, that it is only prima facie evidence of payment, and only conclusive when not contradicted. In England, such an acknowledgment is held to be conclusive, and such is the rule in Maine, Maryland, North Carolina, and perhaps some other States. The decision of this court in the case referred to, as well as the others cited, were upon deeds for the conveyance of land, the money consideration being acknowledged to have been received by the grantors, the only operation of which is, to prevent a resulting trust in the grantor, and to estop him forever to deny the deed for the uses mentioned in it. It does not, technically, vary the deed, if that be the only operation of the acknowledgment of a consideration. The fact that the deed was upon a certain consideration, cannot be denied, but the other fact-, that the money was paid, maybe. Perhaps the rule is well laid down in Sprigg v. The Bank of Mount Pleasant, 14 Peters, 206, where the court say, that parol evidence is inadmissible to contradict, or substantially vary, the legal import of a written instrument. Now, the legal import of a deed of bargain and sale for a certain consideration, is, simply, that there is no resulting trust in the grantor, and he is estopped from ever thereafter denying that the deed was executed for the uses and purposes mentioned in it, but not, that the money was paid to him. This is the most reasonable rule, and ought to be applicable to all writings, whether under seal or not. Their legal import cannot be varied by parol, but other facts recited in them may be. Now, testing this question by these views, what is the legal import of the deed from complainant to Moore ? It is, that complainant had purchased the property from Frink & Co., and had sold one equal undivided third part of it to Moore. This recital cannot be contradicted by parol, and therefore, so much of the testimony of Judge Lord, going to vary or contradict this, that the property was bought for complainant and Walker, or for complainant, Walker and Moore, was inadmissible. The other part of his testimony, as to what Moore said at the time, that he had signed the notes, and thereby had made himself responsible for their payment, and wanted some evidence of his ownership, not being in contradiction of the legal import of the deed, was proper evidence to a jury to rebut the presumption of payment arising from its acknowledgment expressed in the deed. But Moore’s own conduct shows that no money was paid by him at or before the execution of the bill of sale, for he contended, that certain receipts signed by complainant, being exhibits seven, eight, nine and ten, qnd in his favor, were, and should be taken and considered by the referee, as so much money paid by him to complainant on stock amount, or on account of these notes. If he had paid for his share of this property, at or before the execution of this bill of sale or deed, he would so have stated to the referee, and would not have offered these receipts as evidence of such payment. The claim, based upon these receipts was also exploded, and by Moore’s own admission to Yernon, made repeatedly, that he had never paid into the concern but about fifteen hundred dollars, and that Yernon’s award was within five hundred dollars of his calculations. Moore then has paid none of these stock notes, nor any part of them. The question now comes up, is Walker liable, he having fully paid for his own share of the purchase ? This involves an inquiry into the nature and origin of this firm of Kimball, Moore & Go. The purchase of the staging stock of Frink & Go., was made in the first instance by complainant himself, but its true character is manifested by the following writing, which binds Walker, as he has had the benefit of it. It is a part of the answer of L. Gr. Spalding, and an exhibit in the cause and referred to above: " Si1!, 638.85. Chicago, Sept. 22, 1855. Rec’d from M. 0. Walker, seventeen thousand six hundred and thirty-eight and 85-100 dollars, on account of the original purchase from J. Frink & Co., of the stage stock and real estate in Missouri, at the original cost thereof, to wit, fifty-three thousand dollars, which said purchase, although in the name of G-. Kimball, nevertheless was understood and agreed, by and between said Kimball and said Walker, should be joint and equal interest to each party; and subsequently was further agreed to admit James Moore as a joint and equal partner in said stock and real estate, he paying, or to pay, his respective share of the cost thereof, with interest; in which event, the said Kimball, Moore and Walker should each respectively own and hold equal shares and interest of one-third each, the purchase of which to date and take effect on and from July 1, 1854, the same as purchased from J. Frink & Co. a. KIMBALL.” It was admitted that the handwriting of the body of this paper is the handwriting of Walker, and the signature thereof, complainant’s. It is apparent from this paper that Walker acknowledged himself a joint partner-with complainant in the first instance, and after Moore was admitted, he also acknowledges that he was a joint partner with complainant and Moore, each holding equal shares and interest of one-third, and this to take effect from the 1st day of July, 1854, the date of the purchase from Erink & Co. This concludes Walker—it estops him from denying that he was a joint partner, and, as such, responsible for the liabilities of the firm. Here the question arises, were these notes given to Frink & Go. and paid by complainant, a liability of the firm ? They were not signed by the firm name, that is certain. The debt, in its origin, was the individual debt of complainant, for which he gave the notes with Walker’s guarantee. When Moore signed the notes with Walker’s guarantee upon them, he not objecting, the guarantee continued, and on Moore’s failure to pay Frink & Co., Walker would have been liable to pay them. If Walker had paid all the notes, complainant and Moore would have been liable to him, for as to the payees, Frink & Co., all were jointly liable. As to each other, each was bound to pay one-third of the note. This was done both by Walker and complainant, but not by Moore, Kimball paying Moore’s part for him. The question arises, was this one-third which Moore was bound to pay, but which was in fact paid by complainant, an advance by complainant to the firm or to Moore? It is not indispensable to decide this question, for if it was an advance to the firm by complainant, it was released to Walker and Moore, or assigned to them when complainant assigned and transferred his interest to them, by complainant’s assignment of his interest in the firm property and assets, when he sold out to Walker and Moore. Taylor v. Coffing et al., 23. Ill. 273. But if it was an advance by complainant to Moore, then it created no liability against Walker, but against Moore only, for whom .the advance was made, and to him alone must complainant look for reimbursement. The question of liability, we, of course, leave open and undetermined in this suit. Walker not being liable to contribute for the advance made by complainant in the payment of the stock notes, the defendants, however, are liable for the amount of the award, for which, being eight thousand seven hundred and seventy-eight dollars and thirty cents, with interest from its rendition, complainant is entitled to a decree. The decree of the court below is reversed, and the cause remanded, with directions to enter a decree for the amount of said award and interest, if the same, or any part thereof, has not been already paid and satisfied. Decree reversed. It is ordered, that the judgment and decree heretofore entered in this cause be so changed as to refer to the master in chancery of the Cook Circuit Court the question of the indebtedness of Moore to Kimball, and of Walker to Kim-ball, severally, and that a decree be entered for the amounts so found respectively in favor of Kimball. Per curiam. The motion for a re-hearing in this case must be overruled. In deciding this motion we deem it proper to say, that the last order entered in October last should not be so construed as in any way to deprive the court below of any of its control over the master’s report. That report will be disposed of like any other report of a master, upon a reference made by that court in any other case. The principal opinion settles the principles of liability so clearly that the court below can have no difficulty in ascertaining whether anything be due on the award, either of principal or interest.