Handy v. Andrews

Chalmers, J., delivered the opinion of the court. This was a bill filed by Andrews for settlement of the account of a partnership previously existing between himself and Handy, as state agents of the American Life Insurance ■Company. Before the institution of the suit the matters of difference were submitted to arbitration. The arbitrators performed only ;a portion of their duty, deciding that Handy should pay to Andrews $2,500, partly in cash and partly on time, for his [630] interest in the renewal premiums to accrue to the concern upon the policies previously taken by the firm, and leaving open the-, question wbat, if anything, was due Andrews upon the books-, of the firm, arising out of past collections. Both parties were-dissatisfied with this award, but, after several interviews, between Handy and Calhoon, the solicitor of Andrews, the-money was paid. This suit being afterward commenced, the performance of the award was pleaded in bar by Handy, as constituting a settlement in full, and the refusal of the chancellor to so regard it is assigned for error. An attentive perusal of the evidence fails to satisfy us that this was erroneous. The award showed upon its face that it was not in full, and, though both parties expressed dissatisfaction with it, Handy averred a willingness, somewhat reluctant, to abide by it. Andrews, on the contrary, insisted upon a bill being filed, to set it aside. In the interviews between Handy and Calhoon the point discussed seems to have been in relation to whether the whole amount should be paid in cash, and, if so, what discount should be allowed therefor. It is quite evident that both parties regarded the matter of the amount that might be due on the books as being left open, since they parted with assurances on the part of Handy that the books woxild show little or nothing-due Andrews, as could be demonstrated at any time by an inspection of them. Counsel for appellant insists that, if the payment of the award was not received as in full, it was at least coupled with an agreement that there should be no litigation, but that all other matters should be arranged by a mutual, amicable examination of the books, and that, there-, fore, before suit could be maintained, it was Andrews’ duty to' have paid back the money which he had received upon this, understanding. We do not so understand the proof. There was indeed much talk between Calhoon and Handy about a friendly investigation of the books, and we think it probable that they parted with the idea on both sides that further matters would. [631] be settled in that way.. We do - not think, however, that this expectation constituted any part of the consideration for the payment or reception of the money. The bill was filed for a settlement of all past transactions/ It resulted in a decree in favor -of Andrews for more than $7,000. The record is exceedingly voluminous, containing exhibits showing the entire business transactions of the firm during its three years of existence, and covering more than 700 pages. The principal of these exhibits is the one filed with the answer of Handy, marked No. 2, and produced in obedience to Andrews’ prayer for a discovery. • It purports to give a full, true, and perfect transcript from the books of all the dealings of the firm. Its correctness is attested - by the oath of defendant and by the deposition of the book-keeper and of some other clerks. It showed by its balance an inconsiderable amount due complainant. During the progress of the case, and while one Gould, a witness for defendant, was being examined, defendant’s solicitor, desiring to show the commissions derived from policies issued by the firm from July, 1872, to August, 1873, handed to the witness a memorandum thereof prepared by the bookkeeper, and asked Gould if the same was correct. Gould answered that it was, as he knew by a personal inspection which he had -made of the books. • This memorandum, filed with the deposition of Gould, and known as Exhibit II, shows an excess in receipts, during the time specified, of $8,915.22 over the showing made during the same period by Exhibit No. 2. Upon the hearing, therefore, the chaircellor, by an interlocutoi-y decree, adopted this 'Exhibit II as giving the correct statement of the receipts dux-ing the time embraced by it, aixd adopted Exhibit No..2 as to the balance of the time. A commissioner was appointed to state an account upon this basis. The amount shown to be due complainant by this exhibit forms a large part of the sum decreed in his favor, and its allowance coixstitutes the principal error relied on. [632] Exhibit II was manifestly erroneous. It showed, for in-' stance, that during the period covered by'it the net earned commissions retained by the firm amounted to something more than $18,000, while the amount paid out by them to sub-agents was something more than $6,000. That this is a gross error is shown by all the proof in the case', which establishes the fact, unquestioned indeed, that the amount paid to sub-agents always exceeded that retained by the firm, and was usually twice as great. It is evident, also, that Exhibit II showed large sums as earned by the firm during the period covered by it, which were also embraced in that portion of Exhibit No. 2 which gave the transactions of the firm anterior to that period, so that when the ' court adopted Exhibit No. 2 'down to July, 1872, and Exhibit II after that time, these sums were counted twice. These errors in Exhibit II, and the manner of their occurrence, were shown upon the coming in of the commissioner’s report, to which exceptions were filed, and also upon an application for a rehearing, subsequently made. ■ The exceptions to the report were overruled, and final decree rendered upon the basis indicated. Counsel for appellee insists that even if Exhibit II. was erroneous,, and did appellant injustice, he cannot complain, because it is his own paper, introduced by himself, and substantiated by hisj witness. We do not concur in this reasoning. It was shown' by affidavits that solicitor for defendant, having called upon the book-keeper of the firm for certain information, was furnished by him with this paper. Supposing it authentic, it was presented to the witness Gould, by him declared correct, and annexed as an exhibit to his deposition. The errors in it-were not discovered until disclosed by the argument of opposing counsel on the final hearing. Under such circumstances, to refuse to allow defendant, upon reasonable terms, to controvert it, for the reason that he himself had offered it, when its injustice was made manifest by the testimony in the case, was sacrificing the substance to the shadow, and perverting a salutary rule of evidence into an instrument of injustice. The chancellor seems [633] "to have become satisfied that wrong had been done defendant ~by the decree, and, upon application, granted a rehearing, but •upon terms'so onerous'that defendant declined to accept them, rand preferred to bring the case here by appeal. . The terms ■were that defendant should pay all the costs of the litigation; That the books, with which he was still conducting business, -shouvl be taken out of his possession and put in the hands of :a commissioner, and that he shofild pay for all testimony thereafter taken by either party. These terms were extraordinary .and unwarranted. They amounted to a requirement that •defendant should purchase the right to-have correction made •of the injustice that had been done him. The English practice in regard to rehearings is to grant "them upon petition certified- by solicitor’s, and upon payment of costs accrued since the decree, and security given for future costs. 2 Daniell’s Ch. Pr., 1560. The rule seems to be substantially the same in America. 1 Barbour’s Ch. Pr., 353, et seq. By the rules of the old superior court of chancery of Missis■sippi the certificate was required to be signed by two disinter•ested solicitors, but there were no conditions imposed as to •costs. Rule 26, Freem. Ch., 24; S. & M., 125. We think that this rule, coupled with a requirement of security for future costs, a safe one. It is unnecessary to notice the other assignments of error. Eor the errors indicated, both the final and the interlocutory •decree will be reversed and the cause remanded, with the right ■to both parties to take further testimony. Should it be deemed advisable to appoint a commissioner to •examine the books of the firm, or to take and state an account ■therefrom, said commissioner, together with complainant and his •solicitors, will be allowed to have access thereto at all reasonable hours, or, if preferred, within certain specified hours of •each day. Mr. Justice Campbell, having been of counsel, takes no part in this decision. . >