Silva v. Pickard

Per Curiam: This action was brought for the settlement of what is claimed to be a partnership account, and the distribution of a considerable sum of money, in the hands of Frederick H. Auerbach, belonging to the partnership. From the record it appears that on or about the 1st day of May, 1883, W. L. Pickard, Henry Cohn, and F. Auerbach and. brother, constituting the firm of H. Cohn & Co., and V. M. C. Silva, for the purpose of trading in wool, as partners, entered into written articles of copartnership, as copartners under the name and style of the “ Territorial Wool Association,” specifying in such articles that they enter into this agreement of copartnership “ each for himself, and to each other.” These articles are drawn in the shape of a constitution and by-laws, and are signed by the parties, and form a part of the complaint. Section 11 of these by-laws is in the following -words, to-wit: ífSec. 11. The profits, if any, after deducting the expenses incurred in selling the wools, such as interest, brokerage, insurance, storage, labor, and other incidental expenses, shall be divided equally into three shares between W. L. Pickard, H. Cohn & Co., and V. M. 0. Silva, the three members or firms of the association subscribing to these articles of association, and the losses, if any, shall also be equally divided.” Section 12 of these by-laws further provides as follows, to-wit: “ Sec. 12. As soon as the whole amount of wool is closed out in Boston, the executive committee shall prepare a statement of all sales and expenses pertaining thereto, and submit the same to the association, and if any funds remain to the credit of the association, or the account with the Mass. Loan & Trust Co. representing the same, the same shall — 83 — be subject to draft of tbe president of the association, who, as soon as he is notified that the same has been duly honored, shall subdivide the same into equal parts between W. L. Pickard, H. Cohn & 'Co., and Y. M. C. Silva.” Said agreement was for the period of one year, but it is agreed by all parties that, in so far as the original articles of agreement are concerned, they remain in full force between the parties up to the trial of this cause. Under the pleadings, and at the trial, Silva and Pickard alleged an addition thereto, made in 1887, of the following resolution, to-wit: “Resolved, that, in view of the large amount of wool carried over from last season, we limit our entire purchase of wool for this season to one million (1,000,000) pounds of wool equally between us.” Under the pleadings, and at the trial, H. Cohn & Co. denied that said last-named resolution was passed, or that the original articles of copartnership had been altered in any particular. It seems that all parties to the suit stand upon the common ground that, if the resolution was in force (part affirming it was, and part denying), that this was the only change in the original articles, and, with the exception of the resolution (if that was an. exception), the Territorial Wool Association was acting and conducting its business under the original articles.. The association made a good deal of money in the years 1883, 1884, and 1885, and the profits were shared equally between Silva, Pickard, and H. Cohn & Co. In 1886 the association lost money, but, under the articles of the association, the losses were apportioned in the same manner. In the early part of the season of 1887, the price of wool in the eastern market was low, but as the season advanced telegrams were received by the association here stating a heavy advance in the price of wool in the eastern market. In consequence of this news, all the members of the association commenced buying wool íreely, H. Cohn & Co. purchasing 701,403 pounds, Pickard, — 84 — 366,5-71 ponnds, and Silva, 330,398 pounds. When these purchases reached a market, wool had fallen in price, and remained so low that the wool of the Territorial Wool Association was closed out in the .east at a very heavy loss. In winding up the settlement with their eastern consignees, there was in January, 1886,, remitted back to the association here a large sum of money, to be distributed to those entitled to it, and, pending distribution, placed in F. Auerbach’s keeping, bearing interest. The amount so held by Auerbach, Silva and Pickard place at $30,000, and H. Cohn & Co. at $27,804.42. After the receipt of said money by Auerbach, H. Cohn & Go. attempted to obtain a settlement from Pickard and Silva, upon the basis that ill. Cohn & Co. should bear one-third of the losses, Pickard one-third, and Silva one-third, according to the terms of the original articles; upon which basis Pickard would have been entitled to $381.26 out of the money in F. Auerbach’s hands, II. Cohn & Go. would have been entitled to all the residue of the money in F. Auerbach’s hands, and also to an additional contribution and payment to them, from Silva, of $5,533.02; said Silva being that much behind his equal proportion of one-third of the losses. Finally, in the latter part of 1889, or the early part of 1890, Silva claimed and asserted, and, as far as H. Cohn & Go. claimed to have any knowledge thereof, for the first time claimed and asserted that the resolution in regard to one million pounds of wool had been passed and adopted by the association, and that, having been so adopted, the effect of it was to throw the whole burden of the losses for the excess of one million pounds in buying upon the parties who bought more than one-third of said one million pounds. On such claim being made by said Silva, H. Cohn & Co. demanded of Silva the evidence of the passage of any such resolution, and denied that any such resolu — 85 — tion was passed. But Silva did not then, nor at any time before the bringing of this suit, produce to H. Cohn & Co. any evidence of the passage of said resolution, but claimed it was passed, and on the trial of this action Silva produced for the first time, as such original resolution, a sheet of paper, in his own handwriting, but not signed by any one, which was as follows, to-wit: “ Salt Lake, Utah, May 4, 1887. At a meeting of the Territorial Wool Association, held this day, at the office of W. L. Pickard, the following members being present: F. H. Auerbach, W. L. Pickard, H. Cohn, Y. M. C. Silva, — the following resolution was unanimously adopted: Besolved, that, in view of the large amount of wool carried over from last season, we limit our entire purchase of wool for this season to one million pounds (1,000,000) of wool, equally between us. There being no further business, we adjourned.” Pickard joined Silva in the position taken by Silva as to the resolution and the effect thereof, and on March 25, 1892, this suit was brought by Silva, plaintiff, v. the defendants. H. Cohn & Co. answered the complaint and filed a cross complaint. Pickard answered complaint, and filed a cross ■complaint. Silver and Pickard severally answered the cross ■complaint of H. Cohn & Co. H. Cohn & Co. answered the cross complaint of Pickard. By reason of the losses which ensued, the plaintiff claims, defendant Pickard in his answer admits, and in his own complaint alleges, the ■other defendants deny, and the referee decided, that, as to the purchases of the parties up to .the agreed limit, the losses should be equally divided; that each member of the partnership should bear the loss on all purchases by him.self in excess of 333,333 pounds to each party. The decree below declares the losses and disposes of the money between the parties upon these principles. Defendants Cohn & Co. appeal from this decree. Silva and Pickard, who seem to have' acted together in the proceeding; and to have a com — 86 — mon interest, and are satisfied with the decree, are respondents. 'It appears from the testimony that Pickard was acting as secretary and F. H. Auerbach as president of the association during the entire period of this relationship; that the resolution of May 4, 1887, was in the handwriting of Silva, and not in the handwriting of Pickard, the secretary; it was not signed by any one, nor copied into any record book, but was left as produced at the hearing. It is not claimed that one week’s notice was given prior to its alleged adoption, as required by article 9 of the constitution, nor is it shown that Pickard, the secretary, kept or made the record as required by article 6 of the constitution. Nor does the proof establish the fact that this resolution was adopted by the executive committee under section 13 of the by-laws. Both Silva and Pickard testify that the resolution was adopted at the time of its date, when all the parties except Samuel Auerbach were present, at a meeting of - the association, and was written down by Silva because he was a ready penman. The appellants, Auerbach and Cohn, positively assert that such resolution was never adopted at any meeting of such association; that it was never assented to by them, and that they knew nothing of its pretended existence until in the latter part of 1889, or fore part of 1890, when Silva for the first time claimed there was such a resolution; and that it was never seen by either until the hearing of the case. It also appears that after the 4th of May, 1887, a dispatch was received by Pickard from his son in Boston advising the probable rise in the price of wool, and that in accordance therewith, and with the advice of all members, each party commenced the purchase of wool to a large extent, with the approbation of each partner. Soon after these purchases by each party, as before stated, wool declined heavily, to the great loss of the association and — 87 — tbe members thereof. Whether this resolution was in fact adopted by the association, as claimed by Silva and Pick-ard, was about the only matter in controversy between the parties at the hearing. For the purpose of corroborating Silva and Pickard, Mr. Reybould was permitted, against defendants’ objection, to testify that in May, 1887, Pick-ard and Silva separately but repeatedly stated to him,, while cashier of the TJnion National Bank, and at a time when they desired credit, or an extension of time on payment of their indebtedness on account of advances made by the bank to them for wool purchases, that the members of the wool association had agreed and determined to limit the purchase of wool for the season of 1887 to 1,000,000 pounds; and for the same purpose, and against the defendants’ objection, the witnesses Knauss and West were permitted to testify that in May, 1887, Silva, the plaintiff, made a like statement to them. The admission of this testimony is assigned as error. Upon this subject, the court says, in People v. Doyell, 48 Cal. 91, that “a witness cannot be confirmed by proof that he has given the same account before, for his mere declaration is not evidence. His having given a different account, although not upon oath, necessarily impeaches either his veracity or his memory; but his having asserted the same thing does not in general carry his credibility further than, nor so far as, his oath. Such declaration may,. however, be admissible in contradiction of evidence tending to show that the account is a fabrication of late date, when it may be shown that the same account was given before its ultimate effect and operation (arising from changed circumstances) could have been foreseen; and also, perhaps, in other peculiar cases.” In Stolp v. Blair, 68 Ill. 541, the general rule, with its exceptions, is stated in the syllabus as follows: “Proof of the declarations of a witness made out of court in corroboration of testimony — 88 — given by him on the trial of a canse is, as a general rule, inadmissible, even after the witness has been impeached or discredited; but, where the witness is charged with testifying under the influence of some motive prompting him to make a false statement, it may be shown that he made similar statements at a time when the imputed motive did not exist, or whén motives of interest would have induced him to make a different statement of facts.” In Com. v. Jenkins, 10 Gray, 485, it is said that “where a witness is sought to be impeached by cross-examination or independent evidence, tending to show that at the time of giving his evidence he is under a strong bias or in such a situation as to put him under a sort of moral duress to testify in a particular way,, it is competent to rebut this ground of impeachment, and to support the credit of the witness, by showing that when he was under no such bias, or when he was free from any influence or pressure, he made statements similar to those he had made at the trial.” In 2 Tayl. Ev. § 1476, it is said: “But evidence that he [the witness] has on other occasions made statements similar to what he has testified in the cause is not admissible, unless he be charged with the design to misrepresent, in consequence of his relation to the party, or to the cause; in which case it may be proper to show that he has made a similar statement before that relation existed.” In 1 Whart. Ev. § 570, it is said: “Statements made by a witness corroborating bis evidence upon the trial, such statements being uttered soon after the transaction, and at a time when the witness could not have been subject to any disturbing influences, are competent when proof has been offered to impeach him by showing that he had recently fabricated the narrative or had testified corruptly.” See, also, People v. Doyell, 48 Cal. 85; Munson v. Hastings, 12 Vt. 346; Ellicott v. Pearl, 10 Pet. 412, 438, 439; Conrad v. Griffey, 11 How. 480; Queen v. Hepburn, 7 Cranch, 290; — 89 — Robb v. Hackley, 23 Wend. 50; Reed v. Spaulding, 42 N. H. 114; 1 Thomp. Trials, §§ 573, 574; 1 Greenl. Ev. § 469; Mason v. Vestal, 88 Cal. 396, 26 Pac. 213. The admission of this class of testimony is considered dangerous, and tbe exception to the rule should not be extended, except it be in extreme cases and where the rejection of it would produce real and ' manifest wrong. And in no case should such evidence be admitted where it appears that the party making such declarations has any interest or motive in making them, or where it does not satisfactorily appear that the account given by the witness which is subject to be shown in corroboration was made at a time before its ultimate effect- and operation arising from a change of circumstances could have possibly been foreseen, or where the witness is not shown to be free from any influence, pressure, or interest in making the declarations. At the time these statements were shown to have been made, both Silva and Pickard were parties to the'contract, and directly interested in the purchase and sale of wool as members of this association. They were both heavily in debt in consequence of their purchases under their arrangement out of which this litigation grew. They were both asking extensions at the bank. Eeybould testified that Silva and Pickard were each indebted to the bank for over $10,000 at this time, and that the effect of the statements made by Silva and Pickard to him and to the bank as to the passage of such resolution to limit the purchase of wool by the association to 1,000,000 pounds for the year 1887 was to induce the 'bank to extend their credit, and that credit was extended to them by the bank on the strength of such representations made by them on that subject. For this court to extend the rule making admissible unsworn declarations of a party to the cause, under the circumstances that these statements are shown to have been made, would be to open the doors to fraud, — 90 — and make easy the way by which a designing schemer and dishonest party could readily overreach his antagonist, and nse the courts of justice as an instrument to advance his dishonest purposes. After considering all the facts and circumstances surrounding this transaction, we have come to the conclusion that these statements were made by Silva and Pickard at a time when their own interest was being served by the making of such statements; at a time when they were both subject to disturbing -influences, and when the ultimate effect and operation arising from a change of circumstances could have been, and probably was, foreseen by both. This testimony doubtless had a controlling influence in the decision of the case. We think the objection taken to the admission of this testimony before the referee should have been sustained, and that the admission of such testimony was error. There are many other assignments of error, but we consider the one passed upon decisive of the case. It is the opinion of this court that the judgment of the court below should be ■ set aside, and a new trial granted. We concur: Merritt, C. J., Bartoh, J., Sjiith, J., MINER, J.