Vanduzer v. McMillan

1st. Where a long and complicated account between mercantile partners, had been referred, by the presiding Judge, to an auditor to report thereon, and his report being filed, on the first day of the term of the Court at which the trial was had, and the defendant and his counsel having made an affidavit in writing, that they believed that said report was erroneous in its results, that they had objections to the same, and desired to except thereto, that they could not do justice to said cause without further time to examine the same, and that his counsel, on account of their engagements in the Court, have not had time to make the necessary examination of the report and to file exceptions thereto, that the application for continuance was not made lor delay, but to enable them to make a proper preparation for the trial of said cause : Held, that under the peculiar state of the facts which existed in this case, the ends of justice required, that a continuance of the cause should have been granted by the Court. 2. Where an auditor had been appointed by the Chancellor in vacation upon the ex parte application of the complainant, without the consent of the defendants, to investigate the accounts between the parties and report the result thereof to the next term of the Court: Held, on exception being taken to the report of such auditor and to his appointment, that the provisions of the Code upon this subject superceded the Act of 3858, and that, by a fair construction of the 3070, 3071st and 4112th sections of the Code, a Court of Chancery in this State may refer complicated accounts to a master in chancery, at the discretion of the Court, with or without the consent of the parties ; but neither such Court, nor the chancellor in vacation, can appoint an auditor to investigate complicated accounts between the parties and make report thereon without the consent of both parties thereto. The three sections of the Code being in pari materia, must be construed together. 3. Held, also, that where one of two mercantile partners is an attorney at law, and after the dissolution of the copartnership, a part of the debts due to the firm are placed in the hands of one partner and part thereof in the hands of the other partner for collection, the notes and accounts so being placed in the hands of the partner, who is an attorney at law, does not authorize him, as such partner, to charge commissions for such collection against the other partner, in the absence of any special agreement to that effect; the legal presumption is that he was to collect the debts as partner for the benefit of the concern. If, however, it had become necessary to institute suits for the collection of the debts, and such suits were instituted by him, as an attorney at law, he might be allowed for his necessary professional services, the same commissions as would have been required to have been paid to some other attorney at law for the same services, in the absence of any evidence that his professional services as an attorney was to be rendered under the copartnership contract. Judgment reversed.

Equity. Tried before Judge William M. Reese. Elbert Superior Court. September Term, 1867. A skeleton report of the one hundred and seven pages of this record will furnish all the data necessary for an understanding of the opinion of the Court. Ira Christian and Moses E. Mills were partners in merchandise under the style of Ira Christian & Co. On the 30th of March, 1850, Christian sold to McMillan, one-half of his undivided half interest in the stock and assets of the firm. Mills and McMillan and Christian continued the business under the old style, Mills controlling the business, papers, etc., until the 1st of January, 1851, and then they dissolved the firm ; each took and disposed of his share of the stock Mills kept the books and papers till February, 1852, and then gave to McMillan, in notes supposed to be good, $4776.84, and in accounts, bad and doubtful, $685.43, which McMillan was to collect and ajiply to the payment of the firm debts. The firm owed various persons — say $9000.00; $1615.77 in open accounts were still on the books. Ira Christian individually owed the firm $4001.09; Mills owed it $1239.93, and other sums unknown; and McMillan owed it $555.58. The creditors of the firm were importunate. . McMillan paid them out of his own funds, debts amounting in principal and interest, on the 3d of January, 1855, to $10,754.58; whereas, up to that time $166-9.44 was the sum total of his collections for said firm. On the 1st of January, 1852, McMillan and Ira Christian discharged many of said firm’s notes by giving theirs in lieu of them, and paid out money to discharge others of them. Said firm also owed McMillan & Christian, as members of another firm, $1200.00. McMillan was willing to give up his papers and come to a full settlement, but Mills and Christian refused to do so. Therefore, he filed his bill for discovery account and settlement of both firms, to which was attached exhibits of the various papers, accounts current, etc., etc., referred to in the foregoing allegations in his bill. The bill was served on both defendants; the record does not show any answer to it by Mills, and there was no appearance for him on the trial; Christian died before answering, and Wm. T. Vanduzer, his administrator, was made a party. He answered the bill so far as he knew the facts. The main facts, as to the formation and dissolution of the firm aforesaid, he admitted; but he gave a list of the choses in action, left with McMillan by Mills for collection, amounting to $7,393.75, and said if they had not been collected it was McMillan’s fault. As to the other allegations, charging Christian, he insisted on proof. And he set up against McMillan that he and Christian had on the 1st of January, 1851, borrowed 1,500.00 of Joseph Rucker, (of which only $200.00 had been paid,) and had collected on a draft drawn by Christian $500.00, which two sums were placed in McMillan’s hands to pay the firm debts; that McMillan was to pay the board, charges, etc., of the Clerk, and Christian had paid them; that Christian paid out large expenses in going to Charleston for the firm, and in paying certain debts (exhibited), and claimed that McMillan should be charged with one-half of these items in the settlement. By amendment of his bill in August, 1860, McMillan averred that $2,000.00 of the claims left with him for collection were insolvent, and that he had incurred extra expenses in collecting and paying out the proceeds, and claimed that $1,000.00 as fees should be allowed him therefor. Vanduzer, in answer, replied that he was collecting as partner, and not as attorney, and had already charged two and a half per cent, commissions, and should have no more. At September Term, 1859, Jno. C. Burch, Esq., was appointed an auditor of said claims, but never made any report. It was afterwards agreed that Judge Reese should hear and determine all the said matters, but this was not done. At September Term, 1866, Col. Samuel Barnett, of Wilkes county, was appointed a master in chancery, to determine them; but defendant objected to him, because he lived out of the county, etc. Then John H. Jones, Esq., was appointed master in chancery for the case, and defendant objected, because he was not the general master of the circuit, and he declined to act. Finally, in Chambers, complainant’s solicitors prayed that an auditor be appointed to adjust the accounts, etc., and thereupon E. P. Edwards, of Elbertoa, was appointed auditor, without notice to complainant. Upon hearing of his appointment Vanduzer protested against his acting as auditor, because his appointment was without notice to him, upon complainant’s ex parte application, and at Chambers, and because he was appointed auditor, and not master in chancery. On Monday, the first day of the term, the auditor filed in office his report stating- only that Mills owed McMillan $2,768.31, and Vanduzer, as administrator of Christian, owed McMillan $10,375.72. On the next day the case was called for trial, complainant was ready, but defendant, Vanduzer, wishing to continue the case, the chancellor required him to make a showing in writing: It was substantially this : By said order at Chambers, said auditor was appointed; he sat on the 16th of July, 1867, did not return his report till yesterday; defendant has objectiohs to said report, which he desires to prepare and file, and believes the report erroneous in its results; defendant’s counsel believe they can not do justice to said cause without opportunity to examine the report and prepare objections to it; their engagements and the recent filing of the same have denied them such opportunity; because it was pending before the auditor, and their expectations being that time would be given to examine the report, they had not prepared for trial at this term; the case is extensive and complicated, requires careful and minute preparation, which they were prevented from making by waiting for said report; one of them, Mr. Akerman, about two weeks before, applied at the clerk’s office for the report, and learned it had not been put into his office; that he, also, frequently applied to them for the interrogatories, and found most of them out, though an inspection of them was necessary for such preparation, (complainant’s solicitors have had the papers in the case for seven weeks last past); they were too busy in Court then to prepare the case, and this showing was not made for delay only, etc. This was sworn to by Vanduzer and his solicitors, Akerrnan and Hester. The Court refused the continuance, but stated he would give them till Thursday to file their exceptions to the report; they asked a longer time, reiterating the reasons aforesaid, but the Court would not give more time. They excepted to the report on the grounds that the auditor was appointed in vacation, without their consent or notice of the application or opportunity to object to the appointment or to the person appointed; that the auditor was not sworn; that he had acted against defendant’s protest; that his report did not state the evidence submitted to him, nor on what evidence he acted; nor what demands pro and eon were allowed, and what rejected; nor from what dates he counted interest, nor what is principal and what is interest; nor how the accounts stand between each partner and the firm, nor in what proportion he held defendant liable to plaintiff on indebtedness between the firm and each partner; that the report makes defendant liable to complainant for more than one-fourth of the indebtedness of the firm to complainant, and of his intestate to the firm; Ira Christian’s estate does not owe as much as is reported against him; and lastly, the auditor had before him a paper relating to the case, written by the complainant, which was objected to as incompetent evidence, and because it was no part of the pleadings or papers belonging to the case. (What this paper was, does not appear by the record.) It was admitted that the auditor was not sworn. The Court held none of the grounds of exception good, except the failure to distinguish the principal and interest ; in this respect the auditor amended his report, and then the exceptions were overruled, with the understanding that the defendants might introduce evidence as to how the accounts stood between each partner and the firm, and as to whether the report was based on charging defendant with more than one-fourth of the indebtedness of the firm. The complainant then read in evidence the report and amended report of the auditor aforesaid (defendant objecting,) and closed. Defendant read in evidence the renewal note of McMillan and Christian to Jos. Rucker, for $1,646.00, dated 6th of June, 1854, and due one day thereafter, for borrowed money, and the original papers in a common law action brought to September Term, 1858, in said Court, Robt. McMillan vs. Wm. T. Vanduzer, administrator of Ira Christian, deceased, on said note, (for contribution,) and on other demands in which, at March Term, 1866, plaintiff had a judgment for $-. Vaedttzeb. then testified that complainant, on the 14th of December, 1856, while Christian was sick, (he died on the 27th of that month,) spoke to him of his and Christian’s business, said the money was gotten from Rucker and applied by complainant to the debts of the Mills firm, and the complainant then considered half of the Rucker note a debt on Christian. Circumstances impressed this conversation on his mind, and he made a memorandum of it; that Christian boarded Wood, the clerk, who was his brother-in-law, from -to-, and board was worth $10.00 per month ; that complainant employed him as an attorney at law to collect some of the firm debts after dissolution, he collected several hundred dollars, and was paid by complainant 2| per cent, for his fees. The defendants then examined Edwards, the auditor, and proved by him what claims he had allowed pro and eon, and that he had allowed McMillan $1,000.00, it being 10 per cent., as commissions for collections.' The only evidence before him in relation to commissions, was the statement of McMillan, who stated in his place, that ten per cent, was a reasonable fee for such collections, and he, (the auditor,)having knowledge of such matters as a lawyer, thought it a reasonable fee. They introduced a mass of papers to show indebtedness of McMillan, and payments by Christian and his administrator, and examined General Robert Toombs, who testified that he had practiced law for thirty-seven years, that 5 per cent, was usual attorneys commissions for plain collections, 10 per cent, for litigation, and, perhaps, more than 5 per cent, on Justices’ Court claims. In rebuttal the complainant came with another mass of papers making in his favor, — showed, by Hester, that attorneys’ fees varied from 2J per cent, to 10 per cent., according to circumstances, and by other witnesses, that Mills was solvent till the emancipation of the slaves, but left Elbert county, in 1865, for Alabama,' being then insolvent. To this last item of evidence Yanduzer objected. The verdict against Yanduzer as such administrator was for $9,860.02 and costs. The defendant moved for a new trial, alleging that fhe Court erred. 1st, In refusing the continuance. 2d, In refusing time to prepare objections to the auditor’s report. 3d, In overruling the objections to the report. 4th, In admitting the report as evidence. 5th, In allowing evidence of Mills’ insolvency. 6th, In saying, in his charge to the jury, “At the last term of this Court, against the protest of Mr. McMillan, I ordered this case to be laid before a master in chancery. I say this on account of the remark of counsel for defendant that Mr. McMillan had not dared to face a jury,” there being no evidence in the case of such protest. 7th, In charging as to the Rucker note, that “the record of of the common law action introduced, shows conclusively that Christian received half of the money got from Rucker on this note, ” and in declining to charge, as requested, that “ if the money got on that note was applied by complainant to payment of the debts of the firm for which he claimed credit on his suit, half the amount should be allowed to Christian in this settlement. 8th, In charging that if McMillan’s services “ were rendered outside of the business of the firm and as an attorney, he was entitled to compensation for them,” there being no pleadings or evidence to authorize such charge. 9th, In charging that “the notes of Jackson and others signed by Christian and McMillan jointly after the dissolution, if shown to be firm notes, and paid subsequently by McMillan, ought to have been allowed by the auditor, unless it is shown by proof that the notes were taken in payment by the firm creditors,” and in declining to charge as requested, that “ such notes, if founded on firm debts, were evidence of a joint payment of such debts by McMillan & Christian, entitling each of them to be allowed half of the amount of such notes in his settlement.” 10th, In charging that, “ if Mills is insolvent, half the amount of his indebtedness to complainant as a creditor of the firm, should be charged to Christian’s estate.” 11th, In charging that the principles of the settlement made by the auditor are correct, and that a settlement on any other principles would be wrong; and lastly, because the verdict was contrary to law, against the evidence, etc. The Court refused a new trial. Pie then passed an order allowing the auditor $500.00, ,of which complainant was to pay $300.00, and Vanduzer was to pay $200.00, as part of his expenses in administering the estate. To this order as to Christian’s estate Vanduzer excepted. His solicitors here assign for error this last order and the refusal of the new trial on the grounds taken.