Skinner v. Whitlow

ALLEN, J. -This is an appeal from a judgment overruling exceptions of appellant, the widow of Warner Whitlow, deceased, to the final settlement of respondent, Joseph W. Skinner, as administrator of the partnership estate of “Warner Whitlow;” the respondent having administered thereupon as the surviving partner. The record discloses that, some time prior to his death, Warner Whitlow had a contract for doing-certain railroad work in the State of Arkansas, and that, for the purpose of carrying out this said contract, he entered into an agreement with respondent Skinner, as follows: “This agreement made this 11th day of July, A. D. 1901, by and between Warner Whitlow, party of the first part and J. W. Skinner, party of the second part, Witnesseth: That said Warner Whitlow having entered into a contract with J. H. Reynolds & Co. to do the pile driving, bridging and pipe laying on the White River Railway to about Sta. 1010 and the spur track to the phosphate mine and whereas the said Whitlow is desirous that the said J. W. Skinner shall superintend the construction of said work, therefore it is mutually agreed between the parties hereto, that in consideration of the said J. W. Skinner superintending said work the profits arising from said work are to be — 237 — equally divided between the said "Warner Whitlow and J. W. Skinner.” After the completion of the railroad work in question, the “outfit” used in doing the same, and which consisted of tools, horses, scrapers, pile drivers, etc., was brought to the city of St. Louis. Whitlow died on the 28th day of July, 1904, and thereafter Skinner applied to the probate court of the city of St. Louis for letters of administration as his surviving partner. Such letters were granted to respondent as the surviving partner, and later the property here involved was sold by order of the probate court. It appears that Mrs. Skinner, wife of respondent, presented a claim against the partnership estate for a sum in excess of $1500. Her claim was allowed by the probate court for $1207.05, and from the judgment allowing the same the appellant herein appealed to the circuit court. The latter court referred the cause to a referee who, upon reporting to the court, recommended the allowance of a portion of this claim. In passing upon exceptions to the referee’s report, the court found that tiae referee erred in holding that a partnership existed between respondent and Whitlow, and ordered and adjudged that the claimant, Mrs. Skinner, take nothing by her suit. From the latter judgment of the circuit court Mrs. Skinner was granted an appeal to this court, but her appeal was thereafter1 dismissed for failure to prosecute the same, and the judgment of the circuit court in the premises became final. Thereafter the respondent, as administrator, filed his final settlement of the alleged partnership estate in the probate court. In this settlement the respondent charged himself with cash on hand amounting to $2317.30', and took credit for the following disbursements: “Advertising final settlement, $5.25; attorney’s fee, $100; probate court costs, $12.50; bond premium, $5; ‘return of cash advanced by Joseph W. Skinner, $99.59;’ ‘accounts of no value, $1321.85.’ ” — 238 — These credits totaled $1544.19, leaving a balance of $773.11. The probate conrt approved this settlement, and made an order of distribution, to the effect that Skinner, the respondent, should retain one-half of the balance in his hands and pay over the remaining one-half thereof to the appellant, Addie L. "Whitlow, executrix of the last will and testament of Warner Whitlow, deceased. The appellant herein filed exceptions in the probate court to the final settlement, which that court overruled. Appellant thereupon appealed therefrom to the circuit court where all of her exceptions were overruled, except as to the item of $5, for which the respondent had taken credit for payment of a premium on his bond as administrator, and the respondent was ordered to pay appellant one-half of the balance in his hands, subject to the payment of costs, and $100 allowed by the court as a fee to the administrator’s attorney for services herein in the circuit court. From this judgment the appellant prosecutes her appeal to this court. I. Whether the ruling of the circuit court in the matter of Mrs. Skinner’s claim against the estate, to the effect that no partnership existed between Whitlow and Skinner, was res adjudicata as to that question between the parties to this action, as is insisted by learned counsel for appellant, it is unnecessary for us to decide. II. Whether a partnership existed is a question of intention on the part of the parties, which must be arrived at from the contract itself; for such relation springs, if at all, from an agreement of the parties evidencing an intention to enter into the same. Where, as here, a written agreement has been entered into, the intention is to be ascertained by a construction of the writing itself; though in construing the instrument regard should be had to the surrounding circumstances, — 239 — where resort' to the latter is necessary to arrive at the real intention of the parties. The instrument here in question shows upon its face that Whitlow had previously entered into a contract with J. H. Eeynolds & Co. to do certain railroad work; that he desired Skinner to superintend this work, and, in consideration of Skinner’s so doing, the latter was to receive one-half of the profits. There is no suggestion or intimation of a partnership between the parties; but, on the other hand, the language used would seem clearly to negative any such idea. It appears that Whitlow had an “outfit” for doing such work, and from the agreement in question it seems quite clear that Skinner was merely being employed by Whitlow to superintend the work which Whitlow had contracted to perform, and that he was to be compensated for his services by receiving one-half of the profits, in lieu of salary- or wages. In interpreting the contract, the object is to reach the actual intention of the parties — the intention expressed in the writing which they themselves employed to portray it, and consistent therewith. They seem to have used appropriate language to express their intention and meaning, and it seems quite clear that no partnership was intended or created. Eespondent lays much stress upon the provision to the effect that the profits were to be equally divided between Whitlow and Skinner, and respondent says that the sharing of profits raises a presumption, prima facie, of the existence of a partnership. In this connection we are referred to Torbert v. Jeffrey, 161 Mo. 645, 61 S. W. 823; Lengle v. Smith, 48 Mo. 276; Steckman v. Bank, 126 Mo. App. 664, 105 S. W. 674. It is true that it has been frequently held, as said in Torbert v. Jeffrey, supra, that “participation in the profits of a business raises a presumption of the existence of a partnership.” But this merely means that, in the absence of proof of the actual agreement between the — 240 — parties, such presumption prima facie obtains. Necessarily this presumption is dissipated and disappears where the actual agreement of the parties is shown in evidence, from which it appears that they did not intend to form a partnership. Such intention necessarily controls. See Ellis v. Brand, 176 Mo. App. 383, 158 S. W. 708; Graf. Dist. Co. v. Wilson, 172 Mo. App. 612, 156 S. W. 23, and authorities to which we referred in those cases. And in Ellis v. Brand, supra, we said: “Whatever may be said as to the presumption arising, prima facie, from evidence alone of an agreement to participate in profits and losses, such presumption takes flight upon proof of the complete contract existing between the parties showing that no partnership relation was intended or created.” Not only is the presumption here sought to be raised rebuttable, but, like any other presumption of this character, it does not arise or obtain when the facts themselves are at hand. The law indulges such presumptions ex rei necessitate, where evidence is lacking as to the actual facts, and thus it has been said: “Presumptions may be looked on as the bats of the law flitting in the twilight but disappearing in the sunshine of actual facts.” [Lamm, J., in Mockowik v. Railroad, 196 Mo. 571, 94 S. W. 262.] See, also, Tetwiler v. Railroad, 242 Mo. 194, 145 S. W. 780; Rodan v. Transit Co., 207 Mo. 411, 105 S. W. 1061; Sowders v. Railroads, 127 Mo. App. 124, 104 S. W. 1122. Here, the contract between the parties appears to be complete on its face. It is not doubtful, ambiguous, or uncertain in its terms, but its meaning quite definite and clear. Manifestly it does not contemplate a community of interest in the property involved in the enterprise in question, nor a joining of the parties as principals in a joint undertaking. It does not purport to give Skinner any voice in the management or conduct of the business or control over the prop — 241 — ert'y used iu prosecuting the same; neither does it make him anywise liable for losses incurred. The essential elements of a partnership are wanting; and the idea that the creation of such relation was intended is excluded by the fact that the contract merely purports to give Skinner one-half of the profits arising from certain work in consideration for his personal services in superintending the- same. [See Sawyer v. Burris, 141 Mo. App. 108, 121 S. W. 321.] Nor do the surrounding' circumstances, so far as they appear in evidence, afford any ground for extending the meaning: of the contract beyond the clear import of the language used. It is conceded that the business in question was conducted solely in the name of Warner Whitlow. It is said that this was because of personal obligations of Skinner and the latter’s then financial condition. However1, the evidence fails to establish that he ever exercised the power and authority of a partner in the management and conduct of the business. In this connection we may say that the testimony, by way of depositions, of Mr. Sonth, an attorney of Arkansas, in so far as it was admissible, is without influence. His testimony, to the effect that Whitlow and Skinner were partners in some, if not all, of the work contracted under Reynolds, is but the statement of a conclusion of the witness, and is without probative force. This, as well as the other testimony of this witness, is consistent with the existence of what is frequently termed a “partnership in the profits,?’ and those participating in the profits of an undertaking are often referred to as “partners,” where in law no actual partnership exists. At the hearing upon Mrs. Skinner’s claim before the referee, the latter permitted the respondent, Skin -1 ner, to testify to transactions and conversations ■ between himself and Whitlow. In passing upon excep — 242 — tions to the referee’s report, quite properly the court held that this testimony was incompetent. In the trial of the cause now before us, appellant’s counsel sought to introduce .certain portions of the referee’s report as bearing upon the question of res adjudieata, to show that the existence of a partnership had been litigated in the former cause. The court thereupon said that the entire referee’s report would be considered as in evidence, and that the court’s attention might be called to such parts as counsel deemed necessary. And appellant’s counsel read therefrom a small portion of the testimony therein contained. Learned counsel for respondent now contends that appellant thereby waived respondent’s incompetency, and that all of the latter’s testimony contained in the referee’s report is in evidence in this cause, and respondent has accordingly set forth much of this testimony in an additional abstract filed. We are not prepared to say that this testimony, even if otherwise competent, in view of the written contract between the parties, is sufficient to justify any interpretation of that instrument other than that indicated above. And it does not appear that there was any subsequent contract, or modification of the original one. But the referee’s report came into evidence in this case, in the manner above stated, merely for the purpose of showing that the question of the existence of the partnership was litigated in the former case, by reason whereof it was claimed that this question was res adjudieata in this case; or, in other words, for the purpose of showing that the subject-matter of the two cases was identical in this respect. This, we think, did not make respondent competent to testify to any transactions or conversations with the deceased (see Jones on Evidence [2 Ed.], sec. 781, p. 981), nor constitute such a waiver as to.let in any such incompetent testimony contained in the referee’s report, for general purposes in the case. That the trial court did not so intend is quite evident from — 243 — the fact that thereafter respondent was sworn as a witness in his own behalf, and, upon objections interposed, he was not permitted to testify to any conversations or transactions had with the deceased. The canse was tried before the court without a jury, and it is not to be supposed that any incompetent testimony contained in the referee’s report had any effect or influence upon the court, especially in view of the fact that like testimony was expressly excluded when respondent took the stand as a witness in his own behalf. We shall not, therefore, consider any such testimony in disposing of the case. Other questions raised in this connection need not be noticed. We are not concerned with the question as to whether the relation existing between respondent and deceased was such as to constitute them partners as to third persons, but the question before us relates purely to the existence of a partnership inter sese; and we are of the opinion that there was no evidence to justify a finding that a partnership existed between the parties with respect to the property here involved. III. Counsel for respondent insists that the granting of letters of administration to respondent, as the surviving partner, was res adjudicaba as to the existence of a partnership. But counsel is mistaken as to this. It is true that respondent, as administrator, was acting under a valid appointment, good until set aside, and which afforded protection to him in administering upon the putative partnership estate. His title to the assets, however, was but a qualified one, and he held the property as trustee for those entitled to participate therein. [See Byers v. Weeks, 105 Mo. App. 72, 79 S. W. 485; Richardson v. Cole, 160 Mo. 372, 61 S. W. 182, 83 Am. St. Rep. 479.] The authorities upon which respondent relies in this regard hold that an order of the probate court grant — 244 — ing letters of administration cannot be attacked in a collateral proceeding. This is quite true, but the order appointing respondent as administrator is not here sought to be attacked. It may be in fact that respondent was entitled to be recognized as the surviving partner of deceased with respect to the profits, if any, arising from the undertaking in question. Respondent says that there would have been profits had all collections been made, but it appears that certain accounts carried upon Whitlow’s books were not collectible, and they were charged off in the final settlement, and thus it appears that no profits were realized. The moneys on hand at the date of respondent’s final settlement were the proceeds of the sale of the personalty constituting: the “outfit” for-doing the work in question. Under the facts disclosed by the record it appears that these chattels were not the assets of a partnership between respondent and the deceased, even though respondent may have been the surviving partner with respect to any profits that might ultimately be realized. [See Strode v. Gilpin, 187 Mo. 392, 86 S. W. 77.] IY. The trial court quite properly sustained appellant’s exception to the credit taken by respondent for the premium paid on the latter’s bond as administrator. And the credits for advertising final settlement and for costs in the probate court are not in controversy. The attorney’s fee of $100' appearing in the final settlement is attacked upon the ground that the estate is not liable therefor, and as being excessive. This is an expense incurred by the administrator in the course of administration and while the property was allowed to remain in his hands. It was proper for the probate court to allow reasonable attorney’s fees for legal services rendered the estate. The evidence in the record is meager as to the amount and character of the services rendered; but the reasonableness of the — 245 — allowance was passed upon by tbe probate judge, wbo was in a position to know tbe Value of tbe services rendered, and we tbink that the allowance should not be disturbed. Tbe credit taken for moneys claimed to bave been advanced to tbe estate by Skinner must be presumed to bave been properly allowed by tbe probate court, as no evidence to tbe contrary appears. As to tbe credit for $1321.85 for uncollected account's, and which were charged off as uncollectible and worthless, section 240', Revised Statutes 1909, authorizes tbe probate court to give credit to tbe executor or administrator for debts charged in tbe inventory as due the estate— “if tbe court be satisfied that such debt was not really due to tbe estate, ... or that from any other cause it was impossible for tbe executor or1 administrator to bave collected such claim by tbe exercise of due diligence.”- Tbe next section (section 241) provides that: “The court may in its discretion order tbe executor or administrator to sell at public auction all notes, accounts and cboses in action remaining in his hands, . . . or tbe court where there are no creditors of tbe estate may order tbe same to be turned over to tbe heirs and legal representatives of tbe deceased, wbo shall bave tbe right to sue for and recover thereon in any court of competent jurisdiction.” Tbe provisions of these sections are evidently applicable to partnership estates. [See section 99, Rev. Stat. 1909.] Under the circumstances, we must presume that tbe probate court was satisfied that it was not possible for tbe administrator to collect tbe accounts here in question, by tbe exercise of due diligence. This being true, we must bold that appellant’s exception to this credit is not well taken. However, since the conclusions we have reached herein necessitate a further set — 246 — tlement and order of distribution, should the accounts in question appear tó be now of any value whatsoever, the probate court will doubtless make appropriate disposition thereof. The circuit court, upon motion, allowed to respondent an attorney’s fee of $100 for defending the final settlement in that court against the exceptions filed thereto, and ordered one-half of the balance on hand to be paid to appellant, subject to the payment of this fee and the costs. Such an allowance by the circuit court for defending a final settlement has been upheld, even where certain credits were disallowed. [See Jacobs v. Jacobs, 99 Mo. 437, 12 S. W. 457; In re Estate of Meeker, 45 Mo. App. 197.] In an ordinary case we would have no disposition to interfere with an allowance for such purpose, where the executor or administrator has faithfully discharged his duties, and in the main rendered a true account of his trust, though certain items in the settlement were technically objectionable. The difficulty here is that the principal question litigated pertained to the distribution of the assets remaining in respondent’s hands. Upon the facts revealed by this record we hold that the appellant is entitled to all thereof, and the question is whether she should be compelled to bear respondent’s counsel fees incurred in such litigation. The general rule is that an administrator cannot be allowed counsel fees incurred for services rendered in defense of his own personal interest, or where the litigation is in reality between beneficiaries, and not for the benefit or in the interest of the estate as a whole. [See 2 Woerner on Administration (2 Ed.), sec. 516, and authorities cited; In re Final Settlement of Peter’s Estate, 128 Mo. App. 666, 107 S. W. 406.] In the main, the contest here was in reality between beneficiaries, and the result affects, not the estate, but the personal interest of respondent therein. — 247 — However, counsel fees for defending the settlement against the exceptions to credits taken by respondent therein are properly chargeable against the estate. [Jacobs v. Jacobs, supra.] There is, of course, some practical difficulty in separating such charges, or apportioning the fees, but it seems that in such a case this should be done; distinguishing1 between that which is properly allowable against the estate and that which the administrator should bear personally. [See 2 Woerner on Administration (2 Ed.), sec. 516; Price’s Estate, 81 Pa. 263; Fox’s Appeal, 125 Pa. 518, 17 Atl. 451.] It would appear that the allowance in gross made by the circuit court was improper; and the order made in the premises should be vacated without prejudice to the right of respondent to apply to the probate court for the allowance of such attorney’s fees as in the opinion of that.court should be allowed for defending the final settlement against the exceptions which pertain alone to the credits taken by respondent therein. For the reasons given above the judgment is reversed, and the cause remanded, with directions to the circuit court to enter judgment herein in accordance with this opinion and to duly certify the same to the probate court; the costs below and of this appeal to be taxed against the respondent individually. Reynolds, P. J., and Nortoni, J., concur.