Leonard v. Smith , 162 Pa. 284 ( 1894 )

Opinion by

Mr. Justice Mitchell,

The referee found the facts as to the value of the plumbing work done by the plaintiff’s firm for the defendant, and the first ten assignments of error are directed mainly to an attack on the evidence on which the findings were based. It would be tedious and unprofitable to go through them in detail. The plaintiff’s bookkeeping was loose and afforded opportunity for error if not for fraud on the part of plaintiff’s workmen. Had the case been tried on strict law, the entries as to many of the items would probably have been excluded. But they were not necessarily wrong, and a large number of the entries having been admitted without objection, and the parties having then come to an agreement as to what the rest of the books showed, the question of the total amount was before the referee on the whole evidence, and we cannot say that he was wrong in drawing his conclusions from all of it together.

The letters referred to in the eleventh assignment were clearly inadmissible.

The numerous succeeding assignments relate to findings of fact which this court does not review.

This leaves the only real question in the case, the defendant’s claim of set-off. It is admitted that he had a small bill for professional services against the firm, and larger ones against the individual partners, which he claimed the firm had assumed or become liable for. The referee allowed the entire set-off claimed by defendant, but the court struck out the bills against the individual partners, and allowed only that for services directly to the firm. There is no dispute as to the law. A partner cannot pay his individual debt with firm assets except with the consent of all the partners. The referee and the court below agreed upon the rule, and the difference in their application of it arose from a difference of views as to the facts and the conclusions to be drawn from the evidence.

The .referee found that “by an agreement entered into between the defendant and some one or more members of the firm all of the accounts were assumed by the firm, and it was agreed that defendant should be permitted to purchase material etc. as an offset to his accounts.” The learned court below thought this finding insufficient to sustain the set-off, and further that the requisite agreement of the partners was negatived by the additional finding of the referee that it was made with T. F. Leonard alone, and his refusal to find that Bartley Leonard either understood or acquiesced in it. This view appears to us too narrow a construction of the referee’s language, and also overlooks the force of the other conceded facts. In finding No. lli the referee was asked to say “ This arrangement was understood and acquiesced in by Bartley Leonard, the other member of the firm,” and his answer was “I cannot specifically find as requested in this point. However I do not think it is material.” The wording of this answer is peculiar. To all the other requests for findings his answers were “the facts are found ” or “ are not found ” as requested. The exceptional language of this answer admits of two constructions, either that the referee could not find an express agreement by Bartley Leonard, or that he could not on the evidence find expressly, “ specifically,” one way or the other as to the particular fact. The first construction seems to us to reach the true meaning, in view of the words which follow, “ I do not think it is material.” The necessity of acquiescence by both the partners was admitted on all hands. It was therefore a most material point, and the learned referee, whose report displays an accurate knowledge of the law, could hardly have overlooked or meant to disregard it, as he would certainly have done, had he negatived the fact but added that it was not material. And it is still more improbable that he would have reached the general conclusion that there was no agreement and yet allowed the set-off which depended upon it. But if we read the answer as referring to an express agreement, all difficulty disappears. No express agreement was required (Todd v. Lorah, 75 Pa. 155) and the referee might properly say that its existence was not material.

Turning now to the other construction suggested, that the referee’s answer was a refusal to find the fact either way, we are at liberty, though not required, to look into the evidence and find the fact ourselves. In this there is no difficulty at all. It is admitted that in 1880 the balance of the accounts between the parties was in defendant’s favor, and lie wanted his moneju The referee’s tenth finding is that he sent his bill to the firm, and that this bill included services to the individual members. One of the firm thereupon expressly agreed that defendant instead of insisting on cash should take out his whole claim in materials and work to be furnished by the firm. Such materials and work were accordingly furnished from time to time for a period of eight years, the firm calling for no payment on what defendant owed them, and making no payment on what they owed him. Both partners knew that the firm .and each of the partners owed the defendant money which they had not paid, and which he had not again asked for, and both knew, and were bound to know from his presentation of the bill in 1880, that he was treating all his services on the same basis, and looking to the firm to pay the whole. The inference is irresistible that both partners knew and agreed to the arrangement by which the whole debts on each side were to be treated as mutual, and set off against each other. The referee was therefore right in allowing the set-off. His finding as to the amount was upon evidence before him, and we do not review it.

Judgment reversed, and judgment ordered to be entered in. accordance with the report of the referee.