Opinion
No. 29907.
September 26, 1932.
1. APPEAL AND ERROR.
Chancellor's finding must stand unless against overwhelming weight of evidence.
2. PARTNERSHIP.
In final accounting administration of alleged partnership estate, evidence held to sustain finding that partnership existed.
3. PARTNERSHIP.
In final accounting by administrator of partnership estate, evidence held to sustain finding that allowance of one thousand, six hundred nine dollars out of deceased partner's share for his funeral expenses was not unreasonable.
4. PARTNERSHIP.
Advances out of deceased partner's share of partnership assets for his reasonable funeral expenses, made by surviving partner as administrator of partnership estate, held chargeable against widow's and heirs' share and not against partnership assets.
5. PARTNERSHIP.
Expenses of suits involving partnership's accounting including fees of experts, accountants, auditors, and attorneys are payable out of partnership assets.
6. PARTNERSHIP.
Attorneys' fees incurred by surviving partner in defending his right to administer and wind up partnership estate held allowable out of partnership assets.
7. DEPOSITIONS. Objection to deposition as whole, dictated during trial, on ground of apparent irregularities in giving notice to opposing counsel of taking deposition held properly overruled ( Code 1930, section 1548).
Such objection was properly overruled in view of objecting parties' failure to comply with Code 1930, section 1548, providing that all objections to a deposition, in whole or in part, shall be made in writing and filed before the beginning of the trial, court to determine the objections before the trial.
APPEAL from chancery court of Claiborne county. HON. R.W. CUTRER, Chancellor.
Brandon Brandon, of Natchez, for appellant.
There is no credible evidence in the record to show that any partnership ever in fact existed.
There can be no partnership without an agreement of the parties. The agreement must embrace the essential elements of co-partnership."
Partnership, often called co-partnership, is usually defined to be a voluntary contract between two or more competent persons to place their money, effects, labor, and skill, or some or all of them in lawful commerce or business with the understanding that there shall be a communion of the profits thereof between them.
Storey on Partnership, page 2; Barthold v. Goldsmith, 24 How. (U.S.) 536; Hunt v. Oliver, 118 U.S. 221; Ward v. Thompson, 22 How. (U.S.) 333; Meehan v. Valentine, 145 U.S. 611; Kerick v. Hanaman, 165 U.S. 334; 3 Kent Commentaries, page 23.
In an action between the parties, inter sese, there is no presumption of law as to the existence of the relation of copartnership.
Phillips v. Phillips, 49 Ill. 437; 22 Am. Eng. Ency. of Law (2 Ed.), page 14; 22 Am. Eng. Ency of Law (2 Ed.), 50; 47 C.J. 648.
A contract of partnership will no more be created by the courts against the will of a party than will those of any other character.
Fairley v. Nash, 70 Miss. 193, 12 So. 149; Cudahy Packing Co. v. Hibour, 92 Miss. 234, 46 So. 73; Atwood v. Meredith, 37 Miss. 635.
The court erred in holding that the express money orders, bank exchange, currency and coins, and deposit in bank, all of which were in the individual name of George W. Quine, and at the time of his death in his personal possession and control were partnership assets.
This is not an action for an accounting between partners. A partner is only authorized under the law to administer the partnership assets. If upon an administration of the partnership estate it should be found, or Mr. Wolcott should determine that he was entitled to money from the estate of George W. Quine with which to make himself whole as a partner, his recourse would be by an action for an accounting as against the administratrix of the estate of George W. Quine.
It is an elemental principle of evidence as to the title and ownership of property, be it real or personal, that the possession of property raises a presumption of ownership which in the absence of affirmative evidence to the contrary the law will assume to be correct. The possession of a chose in action payable to the person in whose possession it is, is presumed to belong to that person. Affirmative evidence is required to rebut these presumptions of law and fact.
See Evidence, 22 C.J., page 126, sec. 65 and notes; Falconer v. Holland, 5 S. M. 689; Grand Gulf Bank v. Bryan, 8 S. M. 234; Stevens v. McReary, 12 S. M. 9; Nixon v. Carcos, 28 Miss. 414; Roach v. Anderson, 28 Miss. 234; Turnipseed v. Burton, 58 So. 959; Bowdin v. Bradley, 66 So. 823; Annotation 30 A.L.R. 1492, et seq.
As to the funeral bill of sixteen hundred and nine ($1609.00) dollars. We have two propositions to submit in this proceeding as to this item: The first is that regardless of whether or not Mrs. Mary E. Quine agreed and consented to the debt being incurred for the casket, preparation of the body, and the vault, such item is not a proper charge in the proceeding, but is rather one which should be presented in the matter of the administration of the estate of George W. Quine, deceased, with Mrs. Mary E. Quine as administratrix, which administration, as shown by the record in this case, is pending in the State of Michigan with ancillary letters issued to Mrs. Mary E. Quine by this court in the State of Mississippi. The second proposition is that it is clearly shown by the record in this case that neither Mrs. Quine nor the other respondents (these appellants) consented or acquiesced in that portion of this item which represents the purchase of a copper vault at the cost of eight hundred and fifty ($850.00) dollars. The record in this case shows that this expense item of sixteen hundred and nine ($1609.00) dollars was incurred by F.S. Wolcott individually. It was not and could not be an item of partnership expense.
The death of a member of a partnership immediately dissolves and terminates the partnership agreement, and in common law upon the death of a partner the surviving partner is entitled to the right to control and manage the partnership estate for the purpose of satisfying the trusts which rest upon it. A surviving partner, however, has no right to enter into or make any contract which shall be binding upon the firm or affect its assets or prejudice those entitled to a share in its property after the debts are paid.
20 R.C.L. sec. 235.
We submit that this probated claim of F.S. Wolcott cannot be allowed for the reason that same is not supported by any sufficient evidence other than the affidavit of Wolcott himself to his own account.
The general rule in the absence of an agreement to the contrary is that interest is not to be allowed on partnership accounts until after a balance has been struck.
20 R.C.L., page 1021, sec. 263.
Not only do the books of the partnership show no such balance to have been struck in the amount due Wolcott, but the books of the partnership are silent altogether as to any such account being owing.
We come now to the prayer of Wolcott for an allowance to him of attorney's fees to be paid out of the partnership assets. In the first place there is no statutory provision for such an allowance; in the second place there is no authority at common law for such an allowance.
A surviving partner was not entitled to compensation for services for administering the partnership estate, unless compensation is authorized by a statute, partnership agreement, or some other valid understanding.
Byrd v. King, 82 So. 312.
Since no compensation can be allowed to a surviving partner for his services in winding up the affairs of a partnership, it follows that no allowance can be made by the court to him with which to pay his attorneys for doing that for him which the law required that he do.
J.T. Drake, of Port Gibson, for appellee.
While not so stating, the appellant seems to take the position that the partnership agreement should be in writing. This is not the case. A verbal agreement is sufficient.
Unless within the statute of frauds, the contract of partnership may be oral or written, express or implied.
47 C.J. 649, sec. 38; Randel v. Yates, 48 Miss. 685.
The existence of the partnership was clearly proved.
Mrs. Quine is objecting to the payment of any sum whatever, and while she objects to the size of the charge, she also objects to any charge. This has been paid, and if her objection is sustained the result will be that the funeral expenses will be foisted on the surviving partner, and that this deceased partner's heirs will receive the gross share of the partnership estate, and not pay any part of the decedent's just expenses.
Objection is made to the introduction of the deposition of the undertaker; the facts are these; as shown by the return of the sheriff serving copies on appellant's counsel, the notice with the copies attached were served February 7, 1931; commission issued February 17, 1931, ten days later. True a filing date is shown of February 18, both on the notice, return and interrogatories; this necessarily the date when the notice and interrogatories with the sheriff's return showing service, reached the clerk, as the return itself shows service on G.H. Brandon of the firm of Brandon Brandon, on February 7th, which service was handing him "a true copy of the above notice, with true copy of attached interrogatories.
Objections must be made in writing filed before the beginning of the trial.
Code 1930, sec. 1548.
No objection was made in writing at all, and the only objection made was when the deposition was offered, that objection not being in writing.
Advances from firm funds, or property made by a surviving partnership to the widow or heirs of a deceased partner, should be charged against the share of such widow or heirs and not against the partnership assets.
47 C.J. 1080, sec. 679.
There can be no distinction drawn between an advance made direct to widow or heirs, and one made at their request, especially where the request is that a preferred claim against the deceased partner's estate shall be paid.
An attorney's fee necessarily incurred is certainly a lawful expense of administering the trust and ought to be allowed.
The statutory administrator (in this case Wolcott) is entitled to credit for all lawful expenses, including attorney's fees.
47 C.J., page 1065, sec. 64; Rose v. Jones, 118 Miss. 494.
R.B. Anderson, of Port Gibson, for appellee.
The court held that there was a partnership. Whether or not a partnership exists is purely a question of fact.
47 C.J. 733, par. 140.
The action of the court below is presumed correct unless error is made manifest by the record. This rule is of universal application with reference to courts of general jurisdiction, and recognized in every other court; and there can be no reversal unless the record show error affirmatively.
Carstarphen v. Jones, 67 So. 177; Wilson v. Brown, 47 So. 545; Mississippi Cotton Oil Co. v. Blake, 20 So. 156; Gulf S.I. Ry. Co. v. F.L. Riley Merc. Co., 104 So. 81.
We must decline to admit that the property was in Quine's possession. It was in possession of the partnership, in the partnership safe of the partnership car.
There is ample evidence in the record to sustain the chancellor in his finding that this property belonged to the partnership.
The law admits of an advance to the widow and family of a deceased partner out of the partnership estate, and the court below held it proper to charge the amount of the funeral bill against the share in the partnership estate of the Quines. Ordinarily, the rule is that only partnership bills are to be paid out of the partnership assets. The reason of this is that creditors of the partnership have the right to payment of their demands before individual creditors may share or before distribution to the personal representatives or heirs. But there is no reason for the application of this rule here, even ignoring the theory of the lower court that it was an advancement to the family, in as much as the partnership estate was perfectly solvent, and paid its debts.
47 C.J. 1080; Sterling Products Co. v. Watkins, 95 So. 313; McIntyre v. Forbes Piano Co., 100 Miss. 517; Graves v. Hull, 27 Miss. 419; Bettman v. Hertz, 116 So. 298.
For a time in Mississippi, an executor or administrator was not allowed to pay an attorney for services rendered to an estate, as such employment was considered as the employment of agents or servants by a trustee. But the statute providing for these payments was passed in 1906 being section 2131, brought down as section 1734 of Code of 1930.
In annual and final settlements, the executor, administrator or guardian shall be entitled to reasonable credit for such reasonable sums as he may have paid for the services of an attorney in the management, or in behalf of the estate if the court be of the opinion that the services were proper and rendered in good faith.
Sec. 1734 Code of 1930.
The statutory administrator is entitled to credit for all lawful expenses including attorneys' fees.
47 C.J., par. 648, p. 1065; In re Trout, 192 P. 1050; In re Curlee, 43 So. 165; Wolfert v. Reilly, 34 S.W. 847.
It is proper and legal for the court to allow an administrator counsel fees where an unsuccessful effort is made to revoke his letters.
23 C.J., pp. 1108 and 1124; Armstrong v. Boyd, 140 Ga. ___, 79 S.E. 780; Yankel's Estate, 13 Pa. Dist. 402.
Argued orally by G.H. Brandon, for appellant, and by R.B. Anderson, for appellee.
Appellants contend that the court erred in finding that appellee and Quine were partners in the "F.C. Huntington's Mighty Minstrels." There was no controversy between the parties as to the applicable principles of law; it was purely an issue of fact as to whether there was a partnership and as to the interest of each partner in the business. The chancellor found as fact that there was a partnership and that appellee and the deceased were equal partners. Unless such finding of fact is against the overwhelming weight of the evidence it must stand, as this court has repeatedly held. It is true that the evidence tending to show the partnership and the interest of the partners in the business was largely circumstantial, but there was direct evidence of declarations to that effect made by Quine in his lifetime. We think there was ample evidence to sustain the finding of the chancellor.
The court allowed appellee to retain out of the share of Quine in the partnership assets the sum of one thousand, six hundred nine dollars paid out by him for Quine's funeral expenses. The allowance of this item of the account is objected to on two grounds: First, that it is exorbitant and unreasonable, and, second, that under the law appellee as surviving partner had no right to retain the amount out of the partnership assets, conceding that it was a just claim for which Quine's individual estate was liable. We will consider these questions in the order stated. There was sufficient evidence to sustain the finding of the chancellor that the claim was not exorbitant and unreasonable. The evidence of the undertaker showed that the charge was reasonable, and furthermore there was evidence tending to show that appellant Mrs. Mary E. Quine, the widow of the deceased, recognized the reasonableness and justness of the claim and agreed that it should be paid by appellee out of her husband's share in the partnership assets. In considering the second ground it must be borne in mind that partnership creditors were not concerned in this allowance. The partnership debts had been paid. The question arises between the surviving partner and the administrator of the estate of the deceased partner. In its last analysis the question is whether or not appellee, as surviving partner, shall lose this amount, an amount which the chancellor found to be a reasonable and just claim against the estate of the deceased partner.
This cause is one of equitable cognizance, therefore equitable principles are to be applied. We hold that advances from partnership assets made by a surviving partner to the widow or heirs of a deceased partner are chargeable against the share of such widow or heirs, and not against the partnership assets. 47 C.J. 1080, sec. 679 F.
Appellee probated a claim against the estate of Quine in the sum of nine hundred fifty dollars. This was allowed by the chancellor. We think there was sufficient evidence to sustain the allowance.
The court allowed appellee the sum of four hundred fifty dollars to reimburse him for attorney's fees expended by him for the services of his attorneys in the administration of the partnership estate, including their services in defending the proceeding by appellants in the chancery court to remove appellee as administrator of the estate. The chancellor on sufficient evidence found the amount reasonable. It is contended that under the law the allowance of attorney's fees to the surviving partner for such services is not authorized. There is no merit in this contention. The costs and expenses of suits involving partnership accounting, including the fees of experts, accountants, auditors, and attorneys, are to be paid out of the partnership assets. 47 C.J. 1271, sec. 1007. Under the law appellee had the right to administer and wind up the partnership estate, and it was his duty to defend that right when it was attacked. In so doing he was not acting for himself alone, but for the benefit of all the parties interested. The employment of attorneys to defend the action was a necessary expense incurred in the administration of the partnership estate and allowable as any other necessary expense of its administration.
In the progress of the trial appellants dictated into the record an objection to the deposition, as a whole, of Smith, the undertaker. The ground of the objection was apparent irregularities in giving notice to opposing counsel of the taking of the deposition and the issuance of the commission and the filings. Under the view we take, it is unnecessary to set out these grounds. The court overruled the objection. This action of the court is assigned and argued as error. Section 1548 of the Code of 1930 provides, among other things, that "all objections to a deposition, in whole or in part shall be made in writing and filed before the beginning of the trial. The court, on motion of either party, shall determine the objections so made and filed before entering upon the trial, and if the objections or a part thereof be sustained, may, in proper cases, allow time to retake the deposition." That course prescribed by the statute was not followed. The policy of the statute is at once apparent. Its purpose was to avoid unnecessary expenses and delay. To illustrate: A trial proceeds with witnesses produced before the court by both sides; near the close of the evidence one party offers a deposition; the adversary party objects to it for the first time upon certain grounds; the court holds that the objection is well taken, but orders, for a sufficient reason, that the party offering the deposition be allowed to retake it, and for that purpose continues the cause until the next term of court. Time and expense have been incurred in the trial of the cause up to the time of the offering of the deposition. At the next term of the court the deposition has been retaken. The whole trial is gone over again. The fault in the first taking of the deposition has been cured and it is admitted.
Appellants contend that the evidence was insufficient to show that the money orders, bank drafts, cash, and other property found in the safe in the show car, and also the deposit of two thousand, five hundred two dollars and eighty-eight cents in the bank at Port Gibson in the name of Quine were partnership property. This was an issue of fact found by the chancellor in favor of appellee, based on sufficient evidence. We cannot see that it would answer any useful purpose to set out the evidence pro and con on this issue.
We do not think there is sufficient merit in the other questions argued by appellants to call for a discussion by the court.
Affirmed.