Tierney v. Klein

Woods, C. J., delivered the opinion of the court. The complainants, as creditors of George M. Klein, exhibited their original and amended bills against George Klein, Julius Klein, and William Klein, to reach and subject to the payment of their demands as against George Klein his alleged interests in the insurance agencies of Julius Klein & Co., and of Julius Klein & Bro., the averments being that these insurance agencies were either conducted in the interest of George Klein solely, or that George Klein was interested as a partner in them. It is strenuously insisted by counsel for appellants that, as it is shown George Klein had an equal interest with Julius Klein in the insurance agency of Julius Klein & Co. until November, 1883, this agency and its good-will constitute an equitable asset which is to be accounted for by Julius Klein to the creditors of George Klein. In the light of the undisputed facts that the agency of an insurance company is transferable at the pleasure of the company; that George Klein by his own act put an end to the existence of the firm of Julius Klein & Co. in November, 1883; and that the various insurance companies, whose agencies Julius Klein & Co. had held up to that time, put an end to the existence of the agencies themselves by transferring the right to represent them thereafter to Julius Klein alone on the day after George Klein’s assignment, we think this contention without merit. The firm had ceased to exist by George Klein’s own act, and the agencies of Julius Klein & Co. had likewise ceased to exist by the action of the companies in transferring them from that firm to Julius Klein alone, and, in this situation, the old agencies and their good-will were most intangible assets. Unquestionably, any profits, or any unfinished business, involving commissions on premiums, remaining in the firm in November, 1883, and unaccounted for by Julius Klein, were assets held for the benefit of George Klein’s creditors. But the evidence affords no support to this proposition. . It is also earnestly contended that the payment of the note of Julius Klein & Co. for $3575 in favor of John A. Klein, to E. B. Klein, was in fraud of the rights of complainants, and that they are entitled to a recovery to that amount at any rate. [179] This contention is based upon the alleged insanity of John A. Klein at the date of, and prior to, the assignment of George Klein, whereby the power of attorney from John A. Klein to George Klein, theretofore made, had been revoked and annulled, and the endorsement and transfer of said note by George Klein, as such attorney-in-fact, to E. B. Klein, was unauthorized and void, and its subsequent payment by Julius Klein was fraudulent. This contention is not maintainable, in our opinion, for the reason that in none of the bills of complainants is such an issue presented. Moreover, the supplemental bill filed by complainants, by which the administratrix of John A. Klein was made a party to this proceeding, was filed only on the first day of May, 1889, and was promptly met by an answer denying all the allegations of complainants’ bills, all demanding strict proof of the same. Six days thereafter the cause was set down for final hearing, and was submitted on the evidence taken before John A. Klein’s administratrix had been made a party defendant. In this state of the case, surely it cannot be insisted that any decree, fixing liability on John A. Klein’s estate, should have been rendered in the court below.' Furthermore, the record before us nowhere discloses the date of the transfer by endorsement of this note of $3575, by George Klein as attorney-in-fact. Whether this transfer was made before John A. Klein’s insanity began, or afterwards, nowhere appears. If this had been an issue presented by the pleadings (and it was not), it would have been incumbent on the complainants to make out their case by some sufficient evidence. The evidence fails to disclose when, or under what circumstances, the transfer of the note was made, and the payment of the same by Julius Klein to the endorsee is not shown to have been fraudulent. The chancellor was thoroughly warranted in the views he entertained, and the decree is, Affirmed. Wade JR. Young, for appellants, filed a lengthy suggestion of error, making the points noted in the response, and in addition to the authorities given in his former brief cited the following in sup [180] port of the position that the good-will was a part of the assets of the partnership : Hudson v. Trenton, etc., Mfg. Co., 1 C. E. Green (N. J.), 475-478 ; Izard v. Bodine, 1 Stockt. 311; Sharp v. Morrow, 6 Monroe, 300; Remsen v. Remsen, 2 John. Ch. 501; Story on Part., § 99; Williams v. Williams, 4 Sand. Ch. 405; Holdin v. McMakim, 1 Pa. Sel. Cas. 270; Dougherty v. Van Nostrand, 1 Hoff. Ch. 68 ; Biniger v. Clark, 10 Abb. Pr. (U. S.) 264; Willet v. Blandford, 1 Hare, 253; Bradbury v. Dickens, 77 Beav. 53; Wedderburn v. Wedderburn, 22 Ib. 84; Mellersh v. Keen, 27 Ib. 236 ; Smith v. Everett, Ib. 446 ; Crawshay v. Collins, 15 Ves. 218 ; Story Part., §§ 337, 341. The executrix of Jno. A. Klein was concluded by the evidence offered at the trial. Her .solicitors were present and took part in the hearing without objection. The court in the opinion overrules Hart v. Bloomfield, 66 Miss. 100. Woods, C. J., delivered the opinion of the court in response to suggestions of error, filed by appellants’ counsel, to the former opinion delivered in this cause. The elaborate argument submitted with the suggestions of error is, in the main, a new and strong presentation of the original case, and as such can receive no response. The 2d and 3d suggestions of error show that counsel has wholly misapprehended our former opinion. These suggestions of error are as follows, viz :— “ 2. Your honorable court has erred in deciding that the goodwill of an established insurance business, which has been repeatedly bought and sold, and which has a value fixed and recognized by the custom of the trade, is not an asset of a partnership.” We have already said counsel has totally misapprehended our views, as ■contained in the former opinion, and we need only say it is the counsel who is in error as to what was decided by us. “3. Your honorable court has erred in deciding that such an asset, upon the dissolution of a partnership by the death, or insolvency, or retirement of one partner, survives to the continuing partner, ,and that he can appropriate the good-will of the business, [181] to the exclusion of the creditors of the insolvent partner, by personally soliciting the customers of the old business, and thus depreciate and destroy the trust property before terminating the trust relation.” Here, also, the counsel is amazingly inaccurate in his understanding of our former opinion, and appears to have wholly misinterpreted our views. To the suggestion of error involved in our affirming the decree of the chancery court, because the court did not make an interlocutory decree referring the cause to a master to state an account, we reply that it is not the duty of the court to refer when, on the proofs taken and submitted to the court, it is manifest that there is nothing calling for an account, or nothing on which an account could be framed. The action of the chancery court rested upon this well-known rule of law, and we saw no reason to take issue with that court on its action in entering a final decree dismissing complainants’ bill, without a reference to a master for the purpose of stating an account. The 4th and last suggestion of error is, “ That the court erred in deciding that there is no issue regarding the validity of the payment of the note of Julius M. Klein & Co. in favor of John A. Klein.” It is matter of regret to us that a question of this character should be raised, after due deliberation, by counsel. The pleadings no where contain the remotest allusion to this matter, and much less do the proceedings present any such issue. The existence even of such a note is first disclosed incidentally in the progress of the cause, in the deposition of a witness. We repeat, with all possible emphasis, that no issue regarding the validity of the payment of the note in question was ever made by the pleadings. Counsel invites our attention, in considering this 4th suggestion of error, to the fact (as he understands the matter) that “ in deciding that the executrix of John A. Klein was not concluded by the evidence offered at the hearing, you (we) have unwittingly overruled the decision rendered at the last term, in Hart v. Bloomfield.” Here, too, counsel is again clearly mistaken. In Hart v. Bloomfield [182] it was argued that a reversal must be had because the case was set for a hearing one day before the expiration of the five months allowed by law for the taking of proof after answer filed. The court refused to reverse because it was held that the five months had expired, and because, even if true, as contended by that appellant, the period of five months lacked one day of having expired, complainant was present by her counsel and took part in the hearing of the cause without objection on her part. Here, in the case before us, the executrix of the will of John A. Klein, deceased, was made a party fourteen months after the filing of the original bill, and after all the proofs had been taken by the original parties. She had answered that she was simply trustee of the dead man’s estate, and that she knew nothing whatever of the matters involved in the litigation, and required strict proof of every charge affecting her testator’s estate. Six days only after this executrix had filed this answer, the cause was set down for hearing on the pleadings and proofs. How markedly different this case from that of Hart v. Bloomfield, and how easily distinguishable! The case in all its aspects was carefully and thoroughly examined and considered originally; it has again received such treatment at our hands, and we adhere to our former opinion.