Painter's Executors v. Painter

PER CURIAM. Appeal from a judgment for plaintiffs and from an order denying the defendants a new trial. The ease was before this court on appeal from a former judgment and similar order in favor of plaintiffs, and reversed, reported in 4 Cal. Unrep. 636, 36 Pac. 865. The case, stated generally, and so far as identical on the two appeals, or noting divergences, is as follows: The defendants and the plaintiffs’ testator, Jerome Painter, were brothers, and at the time of the death of the latter he and Theodore were partners, under the firm name of Painter ’& Co., in the business of printing and of manufacturing type in the city of San Francisco. Jerome died February 6, 1883, and by his will the plaintiffs and the defendant Theodore were named as executors, and qualified as such; but the latter resigned May 3, 1888. On the death of Jerome the business and assets of the firm came to the hands of Theodore as surviving partner. But shortly afterward he formed a partnership with the defendant Milton under the firm name of Painter & Co., and thereafter the business of the old firm and that of the new was carried on under the same management, under the name of Painter & Co., up to May 17, 1889, when a receiver was appointed, who took possession of all the properties in. the possession of the defendants as partners, whether of the old or of the new firm. Thus far the facts are undisputed. But it was found on both trials that after the defendants took possession the business was managed by them as if it were their own, and under claim to that effect; and in the findings on the last trial, now under review, it is found that this claim of defendants was based on a bequest in the will of Jerome (being the bequest referred to in Painter v. Painter, 113 Cal. 371, 45 Pac. 689); and that, under this claim, they continued, to the commencement of the suit, to hold the assets of the old firm, and to use them for their own benefit, or, more specifically, in “the conduct of the business of the old firm of Painter & Co., claimed by them as aforesaid”; and also that the defendant Theodore failed to keep the books of the concern correctly, or to keep a just or true account of its business, for the reason that the books have been kept by the new firm as accounts of their own; and that “such omission and neglect was not with fraudulent [679]intent, but was willfully and wrongfully careless and negligent.” It was further found on the last trial—and, in effect, on the former—that the business continued to be the business of the old firm, and that all the properties in the hands of the defendants when taken from them by the receiver were the properties of the old firm. On the former trial it was found that the irregularities in the books were the result of fraudulent design of the defendants to cheat and defraud the estate; on the latter the findings negative the existence of fraud on the part of defendants. Otherwise, with regard to the facts found, the general ease presented on the two appeals is substantially the same. But, with regard to the effect to be given to the facts, the conclusions reached by the court, and the judgments rendered in accordance therewith, are widely divergent; and, as one of the questions to be now determined is as to the effect of the former decision as the law oj: the case, a brief statement of the effect of the findings and judgments on the former trial will be necessary. On that trial the settlement of the accounts of the partnership was carried up to the date of the commencement of the suit, at which time the business of the old firm, as also that of the new, was terminated by the receiver taking possession of the assets of both; and in the findings there is contained a statement of the account of Theodore as of that date. This is based on a statement of the “resources and liabilities” made out by the plaintiffs’ expert, and put in evidence by them, which may, therefore, be regarded as part of the finding. From this it appears that the net capital of the firm (the old and new firm being regarded as one) at the date of accounting (“assuming all resources as collectible,” etc.) was the sum of $113,142.31, and the share of each $56,571.15; but that Theodore was to be charged with various amounts, to be deducted from his share, aggregating $67,246.19. These items (with the exception of two, amounting to $15,208.86) were charges against Theodore to correct credits in his favor on the books, found by the court to be unauthorized; and with reference to all of them this court on appeal held the findings not to be justified by the evidence. This (with the exception of the items specified) leaves the account as shown by the boobs. Another correction is, however, required with reference to a charge of $21,201.50, or more, credited on the books to Jerome as the purchase money of certain school lands,