Case Name: TAYLOR and others against CORYELL and others
Court: Supreme Court of Pennsylvania
Jurisdiction: Pennsylvania
Decision Date: 1825-01-10
Citations: 12 Serg. & Rawle 243
Docket Number: 
Parties: TAYLOR and others against CORYELL and others.
Judges: 
Reporter: Reports of cases adjudged in the Supreme Court of Pennsylvania (Sergeant & Rawle)
Volume: 12
Pages: 243–251

Head Matter:
[Philadelphia,
January 10, 1825.]
TAYLOR and others against CORYELL and others.
IN ERROR.
One partner may bind his co-partners, by an agreement not under seal, to refer any partnership matter.
On the plea of non assumpsit, to an action founded upon an award of arbitrators, without notice of special matter, the defendant cannot give mistake of the arbitrators in evidence.
A writ of capias ad respondendum, issued out of the District Court, at the suit of Lewis 8. Coryell, William Maris, and Daniel Barry, trading under the firm of Lewis S. Coryell and Co., against William Taylor, Chauncey Belknap, Daniel Belknap, and Stephen Belknap, trading under the firm of Taylor and Belknaps, on which writ William Taylor was arrested, and gave bail to the sheriff. As to the other defendants, the sheriff returned non esv inventus. The declaration in the case, after reciting the arrest of Taylor, and that the other defendants were not found, stated, that certain differences had arisen between the plaintiffs, Lewis S. Co-ryell, William Maris, and Daniel Parry, trading under the firm of Lewis S. Corryell and Co., and the defendants, William Taylor, Chauncey Belkhap, Daniel Belknap, and Stephen Belknap, trading under the firm of Taylor and Belknaps, touching and relating to existing accounts between them, and thereupon, for the putting an end to the said differences, the said Lewis S. Coryell, William Maris, and Daniel Parry, and the said William Taylor, Chauncey Belknap, Daniel Belknap, and Stephen Belknap, heretofore, to wit, on the 16th of January, 1818, at the county aforesaid, respectively submitted themselves to the award and decision of John Naglee, William Britton, and Stephen Simmons, or any two of them, of and concerning the said differences and' accounts. The declaration then stated a promise of the parties to perform the award — that an award was made in favour of Lewis S. Coryell and Co., which award had not been performed by Taylor and Belknaps. The declaration also contained a count upon an insimul computassent, and the money counts. To the declaration the defendant, William Taylor, pleaded non assumpsit, payment, and set-off, &c.
To support the allegations in the declaration, the plaintiffs offered in evidence an agreement, signed by Lewis S. Coryell, in the name of Lewis S. Coryell and Co., and by William Taylor, in the name of Taylor and Belknaps, in the following words:
“ Differences having arisen between L. S. Coryell and Co. and Taylor and Belknaps, relating to existing accounts between them, it is agreed that all matters in variance between them be referred to the decision of John Naglee, William Britton, and Stephen Simmons, or any two of them, and it is further agreed, that such award shall be considered as made under a rule of court; for which purpose an amicable action shall be considered as entered, and the parties to have the same right to take out execution on the award, as if a rule of court had been entered. The report of said referees to be final and conclusive, and no exception to be filed or-appeal entered by either party.
Philada. Jan. 16, 1818, (Signed) L. S. Coryell, &Co.
Taylor & BelknapsP
The plaintiffs also offered in evidence an award, in the following words:
“We, the auditors named in the above agreement, to settle all the matters at variance between Lewis S. Coryll and Co. and Taylor and Belknaps, and to adjust the same, report, that having heard the parties, their allegations and proofs, find a balance due L. S. Coryell and Co. of eight hundred and forty-seven dollars, and eighty-seven cents. (Signed) Stephen Simmons,
Philada. Feb. 7th. 1818. William Brittonr
John Naglee,’*
On the trial of the cause, in the court below, the defendants objected to the admission of the submission and award in evidence, but the court overruled the objection, and the defendants tendered a bill of exceptions to the opinion of the court. On the part of the defendants, one of the arbitrators was then offered as a witness to prove, that in making up their award the arbitrators had made a mistake, which would reduce the amount they had awarded to the plaintiff. The plaintiffs, however, resisted the introduction of his testimony for the purpose for which it was offered, and the court rejected it, and the defendants tendered another bill of exceptions to their opinion. There was no evidence to show that the signing of the agreement to refer, by Lewis S, Coryell, in the name and on behalf of L. S. Coryell and Co., was with the knowledge and consent of his co-partners, nor was there any to show that it was without such consent and knowledge. As to the signing by William, Taylor, in the name and in behalf of Taylor and Belknaps, there was no evidence to show that it was with or without the consent of his co partners, except that it was proved that a person of the name of Belknap attended with Taylor before the referees, but took no part in the discussion.
P. A. Browne (Hopkins was with him) for the plaintiffs in error.
The question upon the first bill of exceptions is, can Coryell support this suit in the name of his partners, or Taylor bind his partners without their consent? The narr. states, that all the partners on each side signed the agreement. The result of all the English authorities is, that one partner cannot bind the others by any agreement to refer to arbitration, but would be himself bound, if he signed it in the partnership name, and would be liable to be separately sued on any award made under it. Kyd on ¿hoards, 42. Strangford v. Green, 2 Mod. 228. Wats. Partn. 445. 1 Roll. Mr. 344. Mbit. 244. 1. 15, 25. Moody v. Osam. Lilt. Rep. 30, Kyd on Awards, 45. 1 Lord Raym. 246. The action is therefore not to be supported by the evidence against all the parties, Taylor being charged in the declaration as on & joint undertaking with his partners. In .this country there has been an express decision, in principle settling this case, upon the ground that in legal proceedings, it is not within the scope of the general authority of a partner to bind his co-partners. Haslet et al. v. Street et al. 2 M‘Cord, 310. (South Carolina.) It was decided in that case expressly, that one partner cannot enter an appearance for the others; it is true the court, in deciding that case, referred to 1 Binn. 214. 2 Binn. 145. 6 Johns. 296, as establishing a contrary doctrine; but those cases, when examined, will be found to involve a very different question. The ease of Tom v. Goodrich, 2 Johns. 213, is an instance of the limited authority of a single partner, in transactions not strictly of a partnership nature. The ease in 2 Mod. 22S, must have been a submission not render seal, because the action wais an action on tire casi?.
2. There was error in rejecting the testimony of one of the arbitrators, to prove a mistake in the award, which would reduce its amount. If the agreement had been pursued, an amicable action would have been entered, as the parties intended, and the court would have inquired into the mistake; for that part of the agreement which provides, that neither party should file exceptions, is void. The plaintiffs having brought an action on the ease, on. the award, the defendants may be let in to show, as he might in equity, a mistake; and it is well settled, that the courts in this state sustain defences purely equitable. A plain mistake of law or fact in an award, is ground for relief in equity. Comforth v. Green, 2 Vern. 705, cited and relied upon by the Lord Chancellor, in 3 Jltk. 494.
J. S. Smith, for the defendants in error.
There are two questions to be considered. , 1. Can one partner bind the others by a submission to arbitration ? 2. Can evidence be given of a mistake, on these pleadings ? As to the first question, one partner may bind-the others by a submission not by deed, in matters relating to partnership concerns. There is not one case to the contrary; the cases have all been of arbitration bonds, and were decided upon a principle applicable to such cases alone. The power to bind his co-partners, in a case of this kind, results from the general authority of a partner to transact all matters of partnership business; much inconvenience would ensue, if it were otherwise. It is by virtue of this general authority, that one partner may appoint a clerk to draw, endorse, and accept bills of exchange, without the knowledge of his co-partner, Tillier v. Whitehead, 1 Sail. 269; may admit a debt to be due so as to bind the others, who are not in court, having stood out the process to outlawry, Sangstcr v. Mazzaredo, 1 Stark. 161; or release, by writing under seal, a debt due to the partnership, Salmon v. Davis, 4 Sinn. 375; or assign, by instrument not under seal, the partnership effects, in trust to pay creditors, Harrison v. Sterry, 5 Cranch, 289; though this power has been doubted, under the peculiar circumstances of one case, Pierpont v. Graham, Whart. Dig. 453. Partnership, pi. 12; may institute a suit, or petition for a commission of bankruptcy against another person, per Ship-peist, President. 1 Dali. 389; or compound a debt, 17 Johns. Rep. 58.
But at all events, Taylor, who signed the submission, is bound, and cannot, in this suit, where he only was arrested, and to which therefore his co-partners are not parties, avail himself of matter of defence, which being personal, as regards his co-partners, they only are entitled to urge. He could not, if sued in the Circuit Court, together with his partners, have availed himself of a want of jurisdiction as to them, if he alone had been taken upon the process, though if all were arrested, the defect of jurisdiction would have concluded the plaintiff, Craig y. Cummins, X Peters’ Rep. 431, n.. While bound himself, Taylor cannot allege that his co-partners are not bound, Sangster v. Mazzaredo, 1 Stark. 161. The cases where relief has been afforded, are cases of sealed instruments, and the partner who did not seal applied for relief, which was afforded at his instance, and to him alone. Girard v. Basse and Soyer, 1 Ball. Ilf). Green v. Beal, 2 Caines’ Eep. 254; and, therefore, though one partner cannot bind another, by sealed in • strument to submit a matter to arbitration, yet he who signs is personally liable. Buchanan v. Curry, Skinner v. Dayton, 19 Johns. Rep. 137, 513. The question, however, in the court below, was, not as to the operation and effect of this paper, but whether it was evidence to go to the jury, who are judges of the course and customs of trade. .Besides, when it was proved that a person named Belknap attended before the arbitrators, it was a fair inference, that he and the other Belknap had assented to the arbitration; and it is well settled, that even in the case of sealed instruments executed by one partner in the name of the firm, the actual or constructive presence of those who do not seal the instrument, will render it available against all. Ball v. Dun-sterville, 4 Term Rep. 313. Mackay v. Bloodgood, 9 Johns. Rep, 285. The narr. also contains a count upon an account stated; and on such a count, an award may be given in evidence as an admission of a balance. 2 Phil. Evid. 72, 73. Kenjp Bat shore? 1 Esp. Rep. 194. úqpfM'f'--'
As to the second question: The evidence of mistake, having regard always to the pleadings in this case, was properly rejected by the court below. No evidence at law can be admitted against an award, unless to prove partiality, corruption, or misbehaviour in the arbitrators. Lucas v. Wilson, 2 Burr. 701. Wittes v. M‘Cbrmick, 2 Wils. Rep. 148. Newland v. Douglass, 2 Johns, Rep. 62. Barlow v. Todd, 3 Johns. Rep. 367. 9 Johns. Rep. 212. 10 Johns. Rep. 143. If the defendant under our practice tended to avail himself of an equitable defence, i. e. mistake, he should have pleaded it specially, or have given notice; the authorities are express, that under- the plea of non assumpsit, the defendant cannot avail himself of an equitable defence. Dunlap v. Miles, 4 Yeates, 366. If the mistake be pleaded, the plea must point out a plain error in point of law, or fact, specifically set forth; and, if it do not, it may be demurred to, as in Williams v. Paschall, 4 Dali. 284, where a demurrer to such a plea was sustained, on the ground that it did not set forth the mistake, alleged to exist, with sufficient certainty; the law being settled, that unless a plain mistake be pointed out, the court will not notice it, 1 Binn. 59. If notice of special matter be the course adopted by the defendant, he must give ten days’ notice of it, otherwise nothing will be received but what is strictly admissible, under the plea of the generál issue. Rule of the District Court, Wharf. Dig. Practice, No. 44.
The reporters are indebted, for the report of this case, to Edward D. In-graham, Esq.

Opinion:
The opinion of the court was delivered by
DuNCAIí, J.
There are two questions: 1. lias one partner power to bind all, by an agreement to refer not by specialty? 2. Under the plea of non assumpsit, in an action on the award,, without notice of special matter, can the defendant give mistake of the arbitrators in evidence? It may be laid down, that partners are bound universally, by what is done by each other in the course of the partnership business. Their liability under contracts is commensurate with their rights, and the act of one is the act of all. The case of partnership contracts is difFerentdrom all other contracts, in which no one is liable except he is privy to it; but the liability of partners arises from this, — that they are, in contemplation of law, virtually present at, and sanctioning the proceedings of each other, and each is vested with a power enabling him to act as principal, and as the authorized agent of the co-partners. It certainly would be a great impediment to commercial dealings, if this were not the case, and particularly in the settlement of disputed accounts, by submitting them to mei chants to settle and adjust; but it holds universally, and is a general position, as to all simple contracts. Harrison v. Jackson, 7 Term Pap. 207. Ia fact, whatever be the nature of the contract, there is no doubt but that the acts of every single partner, in transactions relating to the partnership, bind the whole. In Hope v. Cust, cited in Sheriff v. Wilkes, I East, 53, Lord Mansfield, in summing up the case to the jury, said, there was no doubt but that it did, and puts the strongest of all cases: " If one gives a letter of credit or guarantee in the name of the parties, it binds all;" and so far has this principle been extended, that the act or assurance of one partner, made with reference to business transacted by the firm, will bind all the partners, even although it be out of the regular course, and contrary to an express arrangement among themselves, because it is within the scope of his authority. Gow on Partnership, 56. But this will not hold with regard to deeds, for reasons not only technical, but on the general policy of law. Such a power would have a most mischievous tendency, for it would extend to mortgages, and would enable a partner to give to a favourite creditor a real lien on the estate of his partner. Goto, in his treatise, considering the subject of arbitration, confines the exception from the general authority of each partner to bind the whole by arbitration bond; at least the subject is treated of under that head. In all other doings than those transacted by sealed instruments, the whole firm is considered as one person, and the act of one as the act of all. It would seem to me to be without any good reason to deny the authority in this particular instance; it would certainly be a great impediment to commercial dealing. How many commercial disputes are settled — well settled — by this domestic tribunal; and, what is of infinite importance in commercial adventures, speedily settled. And how many partnerships are there whose whole business is transacted by one managing partner, while the others scarcely ever put pen to paper in the course of the concerns. There are many in which the partners are frequently abroad, or engaged in out-door business; and others, in which some of the partners reside abroad. To deny to all these classes the authority to bind by fair arbitrament, would be an anomaly in the law-merchant. It is matter of surprise, that so little is to be found in the books, either of direct decision, or of general doctrine, as to submissions not under seal, {which, I take it, must be matters of constant occurrence,) and that the cases which have arisen have been all but one on bonds of submission. A matter of rare occurrence, the absence of all judicial decision, may be some evidence that the authority has never been questioned; and, in considering the spii'it of these cases, and that the reason why an arbitration bond by one did not bind all, is founded on the nature of the instrument, it is pretty strong evidence of the distinction between specialty and simple contract prevailing in this case. The last case is Steiglitz v. Egginton et al. Holt's Rep. 141. 8 Serg. & Lowb. 54. It was debt on así award, founded on an agreement to refer under hand and seal, executed by one defendant, "for self and partner" and was decided against the plaintiffs, because the authority to execute a deed must he by deed; .not because one partner could not bind another by his submission, but because he could not do it through the medium of a sealed instrument; and Gibes, Chief Justice, said, that "the authority to execute a deed must be by deed; one man cannot authorize another to execute a deed for him but by deed: no subsequent acknowledgments will do — the defendants have pleaded that it is not their deed." But in partnership transactions the contrary is the law; the authority is implied, and subsequent acknowledgment would certainly confer it. So long as the distinction remains between sealed and unsealed instruments, it is the plea of non est factum that decides. This plenary power of a partner, in all eases but binding by deed, was early acknowledged in our courts; and the only exception is in the case of a deed. In Gerard v. Basse, 1 Dall. 119, Shippen, President, states the law with great clearness: — " The act of one partner," he observes, "is the act of both — there is a virtual authority to that purpose, mutually given by entering into partnership, and in every thing relating to their usual dealings, each must be considered as the attorney of the other." But this does not hold in the case of a deed. There is one case, (29 Car. 11.) Strangford v. Green, 2 Mod. 227, an action of assumpsit for not performing an award; the submission, by which the defendant, in behalf of himself and partners, referred all differences between the plaintiff and the partners, not being under seal, and the award was, " that all suits which are prosecuted by the plaintiff against the defendant shall cease, and that he shall pay the plaintiff so much," &c. The award was held good, because he had promised to perform it, ancl tbc action was brought on that promise as his own personal engagement: it is said, however, in the report, that the award did not bind the other partners. Besides the particular feature of this case, which is not well reported, it is to be observed, that it was at an era when commercial law was little understood in England; for even in the time of Lord Holt, when decisions on the law-merchant were become more familiar, his steady attachment to the common law with difficulty bent to the doctrine of a rising system; and it certainly was not before the time of Lord Mansfield that it became a system, and a most wise system, matured by his master hand, and accommodated to the transactions of the mercantile world. It was formerly considered in our own courts, by very eminent judges, that one partner could not enter an appearance for another to an action, Hills v. Ross, 3 Dall. 331, (dicta of Iredell and Chase, Justices;) but this is not the law of the present day, and it would be most inconvenient, if it were. In England, if a firm consist of three partners, two of whom reside abroad, and a suit is brought against them, upon the appearance of the partner resident in England, and -bis refusal to appear for the others resident abroad, the plaintiff, under a distringas, against the two, may take partnership effects paid for by the partner in England alone, to whom the partnership is largely indebted; and the court refused to relieve against such distress, and turn the plaintiff round to outlawry of the absent partners; the effects, then, would be seized, and the crown become a trustee for the creditors. Morley et al. v. Strombom et al. 3 Bos. & Pull. 254. Distringas and outlawry to compel an appearance, are unknown here in civil cases; and therefore to deny to one partner the power to appear for all, would be a most intolerable grievance, and if he has such authority, then the question is settled; for he may do that directly, which he could do indirectly; and if he could appear, he might substitute an attorney, who would have power to enter a rule of reference under the act of 1705. 1 Dall. 164. It is now held, that in an action against several partners, one may enter an appearance for the others, which may, in Its consequences, lead to a judgment against all. Harrison v. Jackson, 7 Term Rep. 207, dictum of Dampier, arg.; and Gow, in his late treatise on Partnership, £195,J so lays down the law, and it is certainly most reasonable, convenient, and consistent with the general authority of partners. No mischief can arise from this doctrine; for if it is done by fraud, if it embrace other than partnership liabilities, that fraud would vitiate it. Courts would open a judgment, on proof of such fraud; and, in an action on the award, it would be a good defence. It is hard enough for one partner to bind the others, without their knowledge or consent; but one partner cannot do so, and oblige him to pay other than partnership debts; and if fraud be proved, as an attempt, by means of an appearance, to make him pay the private debt of another partner, would be, then, as in all other ca'ses, tbe act would be void. Sheriff v. Wilks et al. 1 East, 51. On mature reflection my opinion is, that one partner may fairly enter into an agreement to refer, by writing not under seal, any partnership matter, and this would bind the whole firm. I do not say, that one partner can bind the others, where there is an express dissent communicated to the party'litigant. This brings us la the second inquiry: Whether the defendant, on a plea of non assump-sit, can be permitted to give evidence, in an action founded on an award, of mistake in the the arbitrators? The evidence offered was too general in its nature, for the mistake was not pointed out. Now, to go to the utmost extent, it must be a clear and undisputed mistake, clearly pointed out. 3 Yeates, 584. An award cannot be impeached for erroneous judgment — it must be a mistake amounting to excess of authority, something very gross and palpable; and even that matter could not be gone into at law, for if it was given in evidence, the party would be wholly unprepared, as all that he has to do is to prove the submission and award. In Wills v. Maccarmik, 2 Wils. Rep. 148, the court said, "In a trial at law, the corruption and partiality of arbitrators cannot be got at; there is no precedent of any writ to set aside an award, and we must go by precedent, and there is no case where ever this matter hath been pleaded." As it could not be pleaded nor given in evidence, the party's remedy in England would be in chancery, and here he would be without relief, unless the Courts of Law would grant equitable relief, and then it raises a very important question of practice, whether, without a special plea, but under any general issue and without special notice, a defendant can in this state avail himself of a defence purely equitable; and I am am of opinion he cannot. Our administration of equity would be most iniquitous, if this were allowed; and they little understand our equity system, who would cast the reproach on it, that it is a matter without any rule; for, to ever)1- good purpose, the special matter contained in a notice is in lieu of a bill in equity, and must state the ground of relief. The plea of non assumpsit enables the party to show any thing which at law would defeat and destroy his cause of action, but. when the matter of defence is a pure equity, calling for the interposition, and requiring the aid of a court of chaneery, the defendant desirous of availing himself of it must give notice either by plea or notice — nothing but a common law defence can be received on the general issue. The mistake of the arbitrators was a matter only in equity, and under this plea could not be given in evidence; — the offer of the evidence was made too general, as it contained no allegation of special mistake. I am, therefore, of opinion, that there is no error in this record, and that the judgment must be affirmed.
Judgment affirmed.