settled that Mr. Converse was chargeable for interest from the time he used it. He received this money as her agent or attorney. In Miller v. Clark, 5 Lansing, N. Y. R. 390, it is said: "If an agent mixes the money of his principal with his own, and makes use of it, he is liable to pay interest on it from that time, or if he uses it separately, and makes a profit upon it, or puts it to interest while in his hands, the principal is entitled to such profit or interest." "But as a general proposition, an agent is not liable to be charged with interest upon moneys received, and held by him for the use of the principal. In order to render him liable for interest some other fact must be shown in addition to the mere receiving and retaining the money in his hands." Dunlap's Paley on Agency, 49, 50; Williams v. Storrs, 6 Johns. Ch. 353. In Lewis v. Bradford, 8 Ala. N. S. 632, it is said: "Where one has the money of another in his hands and uses it, he cannot avoid the payment of interest, by answering that he does not know what profit was made by its use. In such a case he is, at least, liable for interest while it was so employed." We think this a clear and just statement of the law upon the subject. To the same effect is Hinckley, Recr. v. Gilman, C. & S. R. R. Co., 100 U. S. 153, Bk. 25 L. Ed. 591; Wharton's Agency and Agents, s. 243. Mr. Wharton says: "An agent who mixes his principal's property with his own is liable for interest; and the burden of proof will be on him to distinguish the two masses. If he fail to do this, the aggregate may be charged to him as the principal's." He cites a large number of cases in support of this doctrine. The last sentence of the quotation implies that the agent derives a benefit from the use of the property. We should not be prepared to say that the agent or attorney who deposits his principal's or client's money to his own credit, in his general bank account, would thereby make himself liable for interest. But we think, when he has so mixed his principal's money with his own, and has used it by making drafts upon it for his own use, the law presumes he gains a benefit from such use; that he is thereupon called upon to show what benefit he has derived from such use, and on his failing to show the benefit derived, will be charged with interest upon it. Hauxhurst v. Hovey, 26 Vt. 544, is not opposed to these views. That case holds that an agent or attorney who collects and retains the money of his principal will not be chargeable with interest unless he has orders to remit as fast as collected, or the money has been demanded, or some other fact is shown to place him in legal default. The referee's report does not show the amount of interest Mrs. Blodgett's estate would be entitled to on this holding. The case will be sent to the clerk to have this computation made, and for other purposes hereafter indicated. II. We do not think a request to settle with an expressed willingness on the part of Mr. Converse, but a neglect to do so, because neither party was quite ready to take up the matter, equivalent to a demand to pay over what was in Mr. Converse's hands. From all that is found, the reason the settlement was not made might have been quite as much the fault of the plaintiffs as of the defendant. The facts reported do not bring the case within the cases relied upon for the plaintiffs. In Hall & Chase v. Peck & Co., 10 Vt. 474, a demand for payment after the writ was dated, but before it was served, was held sufficient to authorize the commencement of the suit, and if the commencement of the suit, the commencement of interest, as damages. But in this case, with what accompanied it, the request for settlement cannot be held equivalent to a demand for payment. In Gleason v. Briggs, 28 Vt. 135, an attempt at settlement, in which each party denied the claims of the other, was held, a little doubtfully, to be a demand for payment by both parties. Says Judge REDFIELD, "They met and attempted to settle, which was fairly enough, perhaps, regarded as a demand or claim of payment upon both sides for what should happen to be due." This was said in upholding the action of the auditors in casting interest for both parties, as of that date. But as is said in Hauxhurst v. Hovey, supra, to authorize the allowance of interest against an agent or attorney, there should be something shown to make it appear "that the party is legally in default." This does not appear from the facts reported, when all are considered. This contention for the plaintiffs is not sustained. III. We think, from the principles already stated, it follows that where an agent or attorney has interest-bearing securities in his hands belonging to his principal, the law presumes that he receives the interest thereon and the principal, and that the burden is cast upon the agent to show that he has not received the interest as it became due, nor the principal. By shoving such investments into the agent's hands, he is made accountable therefore. He cannot escape liability by silence, nor by saying: "I don't know what I received thereon." Nor does the failure of his account to show the receipt of interest remove his accountability therefore. The entries there made are made by himself, and his failure to make any entry does not account for what has been shown into his hands, nor for interest, which he should, and the law presumes he does, receive on interest-bearing securities. In short, an agent receiving money is to account for it as money without interest, unless he is shown to be legally in default in regard to its payment, and receiving interestbearing securities, is to account for the principal and interest without further showing; and his failure to account for either is not an accounting; nor when he has once charged himself with interest-bearing securities, is the writing against such charge at some indefinite time in the future, "taken back," such an accounting. The moment the principal's funds were invested in such securities, they became the property of the principal, and the principal was entitled to the avails of such investments, principal and interest. The agent or attorney could not divert such investments to his own use, without liability for interest on the investments so diverted. By taking such investments, once vested in the principal, to his own use, without something further shown, the agent converts them to his own use, and should be charged with interest on their value, at least, until he replaces them with other interest-bearing securities. We do not mean to say the agent could not be allowed to explain such action in a manner that would relieve him from payment or allowance of interest, but that without explanation, he is chargeable with interest. IV. The plaintiff contends that Mr. Converse is to be treated as an executor de son tort of his wife's estate, and that this would render him liable as for the conversion of the estate. But if under our system of settling estates this common law doctrine is applicable, of which there may be a doubt, Shaw, administrator, v. Hallihan, 46 Vt. 389,-we do not think it applies to Mr. Converse in this case. His wife died testate. The executrix died within less than a month thereafter. No steps were taken for some time to have the will proved. He is not found to have been in fault for the delay. In the meantime he had the estate in his hands. It needed caring for. We think that he should be held to exercise the care of a faithful agent or attorney for whomsoever should thereafter be appointed administrator with the will annexed. This contention of the plaintiff is not sustained. The referee has not stated, with sufficient particularity, the facts and dates to enable this court to ascertain the exact sums for which judgments should be rendered in each of these cases. But the holdings on points one and three reverses the judgment of the County Court in the three cases and the matter is referred to the clerk to make on notice the necessary computa tions of interest upon the facts found by the referee, in accordance with the views herein expressed, and judgment is rendered for each plaintiff for the sum so ascertained with costs, and the costs of the suit abated by the death of Mr. Converse; the judgments to be certified to the Probate Court. 8417 B. IN PARTNERSHIP. KARRICK v. HANNAMAN. United States Supreme Court, 1897. [168 U. S. 328.] This was a suit brought April 17, 1890, in the third judicial district court of the Territory of Utah, by Hannaman against Karrick for the dissolution of a partnership, formed February 3, 1886, by an agreement in writing, by which they agreed to become partners in a mercantile and laundry business for the term of five years from that date, with a capital stock of $25,000, of which the plaintiff was to furnish $5,000, and the defendant $20,000; the defendant lent the plaintiff the sum of $5,000 for five years, for which the plaintiff gave a promissory note, payable at the end of that time, and secured by mortgage upon his interest in the partnership property; the plaintiff was to give his entire time and attention to the partnership business, and the defendant was to devote to it only such time as he should see fit; the plaintiff to have the control and management of the business generally and entirely, except as the defendant might designate, and such matters to be subject to mutual agreement; one-half of the net profits of the business to go to the defendant in repayment of $15,000 of the capital stock furnished by him, and the other half to be allowed to remain in the business, except that each partner might draw out not exceeding $125 a month for personal expenses; the profits and losses to be shared equally, and neither party to have any other salary or compensation for services; and the title and interest of the partners in the partnership property to be proportionate to their respective contributions to the capital. The complaint alleged the following facts: The parties carried on business in conformity with the agreement until February 1, 1888, when the defendant took exclusive possession of all partnership business, stock, books and accounts, and of the premises where the business was carried on, and ever afterwards prevented the plaintiff from participating in any manner in the business or deriving any benefits therefrom. The plaintiff until that date performed his part of the agreement, and was ever after ready and willing to perform it, and so informed the defendant. From that date, the defendant wrongfully, and in fraud of the plaintiff's rights, carried on and controlled the partnership business for his own exclusive benefit, and applied to his own use from the proceeds and profits of the same large sums of money, exceeding the proportion to which he was entitled. On January 1, 1890, the defendant, without the plaintiff's knowledge or assent, sold and delivered to the BastMarshall Mercantile Company all the assets and property of the partnership. The complaint prayed for a dissolution of the partnership, the appointment of a receiver, an injunction against interfering with the property, its application to the payment of the partnership debts and a division of the remainder between the partners, the setting aside and cancellation of any transfer or assignment to the Bast-Marshall Mercantile Company, and an account. The defendant Karrick, in his answer, admitted the partnership, and his own taking possession on February 1, 1888; but denied the other allegations of the complaint; and alleged that the plaintiff mismanaged the business in various particulars specified, and that when the defendant took possession the partnership was insolvent and heavily in debt, and the plaintiff was owing to it a large sum of money, and was insolvent, and the partnership was then dissolved by mutual consent. The Bast-Marshall Mercantile Company was originally made a defendant, and filed a separate answer. But the plaintiff afterwards dismissed his suit as against that company; the case was referred by consent of the remaining parties to a referee to report his findings of fact and conclusions of law to the court; and at the hearing before the referee much evidence was introduced by either party in support of his allegations and denials. On October 5, 1891, the referee made his report, in which he set forth all the evidence; and by which he found that the facts were as alleged in the complaint, and were not as alleged in the answer of Karrick; and stated an account, resulting as follows: Unadjusted and undivided profits January 1, Profits realized after January 1, 1890. $22,858.18 99.90 379.50 $23,337.58 Unavoidable losses after January 1, 1890.... 2,005.12 Net profits 21,332.46 |