McGillvray v. Moser

Opinion by Holt, C.: None of the testimony submitted to the referee is brought here, but there is a controversy concerning the opportunity or want of opportunity of the plaintiff to present a bill of exceptions to the referee before his report was filed in court. Upon this issue there is quite a voluminous amount of conflicting and contradictory testimony, which it would be profitless to discuss; it is enough to say that we shall not disturb the ruling of the district court against the plaintiff on this phase of the ease, as it is upheld by some substantial evidence. The plaintiff objected to the judgment of the court for the reason it was not supported by the report and findings of the referee, and to the taxation of all the costs against him. It appears from the findings that the plaintiff had drawn out more than his share of the cash proceeds of the firm, but there was still left in the defendant’s hands a considerable amount of property — a horse, two lots in the city of Hiawatha, accounts, judgments, and a large number of notes. The referee found as a conclusion of law concerning this property, that each party was entitled to a one-half interest therein. No [223] order was asked for by either party after the referee’s report was filed, to have a receiver appointed, or that the sheriff be directed to sell the property, or any other method suggested by which this property could be turned into money-and the affairs of the firm closed; simply a judgment was rendered against the plaintiff for $38.42 and the costs of suit. This judgment was erroneous, and not authorized by the findings. The report itself shows, as we have suggested, that there was still in the hands of the defendant a considerable amount of property belonging to the partnership. If it had been converted into money, it is altogether probable that instead of having overdrawn the plaintiff might have had something to his credit in the hands of the defendant. Until this was disposed of there should certainly have been no personal judgment for money only against the plaintiff. The plaintiff in his petition complains that the defendant refused to settle with him, and had failed to use diligence in collecting the debts of the firm. Eor all that these findings show the defendant might have collected many more of the notes and accounts, and disposed of the other property for cash. If instead of collecting nearly $8,000 he had collected only $6,000, and there had remained in his hands $2,000 worth of good notes, then a judgment against plaintiff upon the theory upon which this judgment was rendered would have been for a large amount; while on the other hand, if by using a little more activity he had collected $100 more than he did, then the judgment, instead of being against plaintiff for the amount named, would have been in his favor. In other words, the more careless and negligent he might have been in the winding-up of the business under their agreement, the more favorable the judgment would have been for him, and the more faithful and diligent he might have been, the greater probability of a judgment against him. This would have been placing a premium upon negligence, and a penalty upon diligence. The law does not tolerate such practice. Eor this error in disregarding in the judgment the property of the firm in the hands of the defendant, and the taxation of all the costs [224] against the plaintiff, we recommend that the case be remanded for further proceedings; and suggest that either a receiver be appointed to take charge of the remaining property of the firm and convert it into money, or that the sheriff be directed to sell it, or such method be adopted as may be agreed upon by the parties or directed by the court, in order that all the assets of the firm may be converted into cash, and then judgment rendered as the law and evidence may warrant. From the record brought here, the taxation of the costs is now important to the parties, and we therefore suggest that in actions of this nature the question of costs lies entirely within the sound discretion of the court, (Civil Code, § 591; Hottenstein v. Conrad, 9 Kas. 436.) There is nothing in the findings of the referee which would indicate that all the costs should be taxed against the plaintiff. There is nothing to show that he wished to unnecessarily prolong this litigation, or in any way obstruct the due course of procedure. Nor is there anything that shows that he dealt fraudulently with defendant. The trial court being acquainted with all the surroundings of this action and its trial before the referee, is in a position to use its discretion wisely, either in taxing all the costs against either one of the parties, or dividing them in such proportion as may seem right and equitable. We recommend that the case be reversed. By the Court: It is so ordered. All the Justices concurring.