Nugent v. Allen
Nugent v. Allen
Opinion of the Court
The present case is an offshoot of the case of Allen v. Shanks, reported in 6 Pickle, 359. In that case it was by this Court decreed, in substantial affirmance of the decree below, among other things, that Thos. H. Allen was indebted to the estate of Dr. Lewis Shanks, growing out of his acts as one of the executors, in the sum of $38, - 678.28, and that the estate was indebted to the firm of Thos. H. and J. M. Allen & Co. in the sum of $10,604.55.
After this and other decrees were affirmed in this Court, and the cause remanded, a motion was made on petition filed on behalf of the present complainants for the relief now prayed for, which was refused and the petition dismissed.
The present bill was thereupon filed, June 19,-1893, by Perry Nugent and Eugene Soniat, the latter in his representative capacity as syndic in insolvency of Jno. B. Lallande against Thos. H. Allen and all the parties interested in the estate of Dr. Shanks, and J. M. Hill, the co-executor with Allen of Shanks’ estate, in which it is charged, in substance, that the decree of January 15, 1891, purporting to
The bill seeks to set aside the consent deci’ee of January 15, 1891, and the decree of this Court affirming the same, of date February 24, 1893, at least so far as it directs the firm’s judgment to be set off in toto against the individual judgment against Allen, conceding, however, that Allen’s interest or share in the same may be so set off, and judgment is asked in favor of each for his proportionate part of said firm judgment, and for a sale of Dr. Shanks’
From this decree all the defendants,' except Allen and Jno. C. Latham, appealed, and they have assigned errors.
Without talcing up the assignments in detail, we only state the substance of the contention by each. Defendants insist that Nugent and Lallande were, as a matter of fact and law, represented by Thos. II. Allen in the matter of the consent decree, and that the set-off was authorized, by the express or implied assent and authority of all the partners of Thos. II. and J. M. Allen & Co.; that, independent of any express authority, Thos. H. Allen, as surviving and liquidating partner, with full control and unlimited power to collect the judgment, had a right to make the offset and .agree to the decree, and it will be binding, unless actual fraud is shown in its procurement; that Nugent and Lallande, by seeking to ob
On the other hand, complainants contend that, as a matter of fact, Allen did not consent to the decree either for himself or for them; that he had no authority, in law or fact, to assent to such decree as to their shares in the Shanks judgment; that the relative rights of the partners having been previously fixed by them in certain proportions, they had a right to recover in such proportions; that all parties in interest knew that the claim belonged to the firm, and not to Allen individually, and that the attempt to
While there is conflict in the testimony on some material points, it satisfactorily .appears that the claims of T. H. and J. M. Allen & Co. against the estate of Dr. Shanks were placed in the hands of Thos. EL Allen by his partners for collection prior to March, 1869, and with unlimited power and discretion as to their management and mode of collection. The firm had dissolved, and at that time, and for long years afterward, Allen was a man of great wealth, unlimited credit, and unbounded confidence. His assumption of the debt as his own, and to be accounted for by him, would have been agreeable to the partners at any time. He had it thus under his management for over twenty years, and so unlimited was his authority and discretion, that Mr. Nugent states he had almost lost sight of it, and his right to collect it by offset, or in any other way, during this time, would not have been questioned. If he did not have express authority, under these circumstances and facts he had implied authority to make any kind of settlement or collection, by offset or otherwise, that he saw proper, and the parties dealing with him were well warranted in so believing, under the unlimited and unquestioned authority exercised by him, without protest or question from his partners for more than twenty years.
It is a general rule of law that one partner may not use the partnership assets in payment of his indi
But in this case there can be no actual fraud, and, under the facts, no constructive or legal fraud. It is urged that this fraud arose out of the representation made in the decree that Thos. H. Allen was the surviving partner of the firm, and had control of the claim with authority to make the set-off. The claim was originally filed in the name of Thos. H. and J. M. Allen, without adding “& Co.” to the name of the creditor, but no fraud is predicated of this filing, and it seems to have been but a clerical omission. J. M. Allen had died, and Thos. H. Allen was treated as the surviving partner, and was so believed to be not only by the other parties to the suit, but also by the attorneys who represented Thos. Ii. Allen and the firm, for they state that they did not know that complainants, or any other person, had any interest in the judgment except Thos. H. Allen alone.
Again, we are of opinion complainants have been guilty of such laches in making their claim as must estop them from questioning the authority of- Thos. H. Allen to consent to such decree, and must be held to have ratified his action in regard to it. It is evident that the parties interested in the estates of Dr. Shanks and Mr. Hill would now be greatly prejudiced by setting aside the consent decree, inasmuch as the judgment against Thos. H. Allen cannot now be collected on account of his insolvency, and, in consequence of the offset, he did not give a bond on appeal to cover the amount of the judgment. Their bill was not filed until two years and six months after the consent decree had been -rendered, -and until after it had been affirmed in’ this Court, and yet the firm of Thos. H. and J. M. Allen & Co. was dissolved in 1876, and their claim filed for payment in 1869. The firm has never been wound up, and Mr. Nugent, in his deposition, says it cannot be until the assets are settled, which may take a hundred years, unless the partners can sell out to each other. He states that the firm had real estate and more than 1500,000 uncollected claims, which have never been divided. Collections have
As opposed to this version, we have the recitals in the decree, and the fact that on appeal he was only required to give bond in the sum of $1,000, sufficient to cover cost, but not the debt if not set off, and also the statement of his attorneys that he fully understood the terms of the decree, and authorized and consented to it, as well as their statements that he represented that he had the right' so to do, and their ignorance that any other persons were interested
In no event could Mrs. Allen be allowed to recover. If we grant that the proceedings in Louisiana were valid, and had any force beyond the State, still, it clearly appears that, after Thos. H. Allen had consented to set off the judgment in favor of the firm against the Shanks judgment, he bought this interest of Lallande’s at insolvent sale, and paid for it with his own funds, and then assigned it to his wife, Mrs. Allen, in consideration of her' having previously waived certain rights of homestead and dower in lands in Arkansas, which he had conveyed for the benefit of his creditors. The transaction was virtually a transfer from the husband to the wife (for a, voluntary, or, at least, a past, consideration) of this interest, which he had previously authorized to be set off and extinguished. Having vested in him by his purchase and payment of the price, it must go as he had previously directed, in set off of the Shanks decree to its full extent, and Mrs. Allen has no right of recovery in her. The decree of the Chancellor is erroneous, and it is reversed and the bill dismissed with costs.
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