Case Name: GRAY'S EXECUTORS' APPEAL
Court: Supreme Court of Pennsylvania
Jurisdiction: Pennsylvania
Decision Date: 1884-05-05
Citations: 4 Walk. 151
Docket Number: No. 144
Parties: GRAY’S EXECUTORS’ APPEAL.
Judges: Woodward, J.
Reporter: Reports of cases decided by the supreme court of pennsylvania which have been omitted from the regular reports
Volume: 4
Pages: 151–157

Head Matter:
GRAY’S EXECUTORS’ APPEAL.
Where a complainant has made an assignment for benefit of creditors, after bib in equity filed, the defendant cannot, after decree entered, set the proceedings aside, because the assignee was not made a party.
Where the answer admitted the fact of the partnership and the master stated an account without an order so to do, the Court may, upon the final hearing, make an order nunc pro tunc to state an account.
A final hearing in an equity case may be held at Chambers.
Appeal from Common Pleas of Luzerne County. In Equity. No. 144 July Term, 1882.
Joseph Brown and Alexander Gray, entered into partnership in the banking business, in Wilkesbarre, on May ist, 1869, for five years with equal division of profits and losses, and in case of death to continue the full five years. Gray died on April 6th, 1873, and his executors agreed upon a dissolution of the partnership on May ist, 1874, and empowered Joseph Brown to settle up the partnership affairs. The concern lost heavily in the panic of 1873, and a large amount of assets could not be collected, whereupon Brown at various times advanced his own money to pay debts of the firm, until the monies so advanced amounted to about $35,000. Brown thereupon brought a bill in equity against Gray’s executors, setting forth the above stated facts, and asking for a decree for account and distribution. The answer admitted different allegations, averred that respondents had no knowledge of other allegations, but did not deny them. A receiver was afterwards appointed, who sold the remainder of the notes and property of Brown and Gray at a loss of over $65,000,. as compared with its cost upon the books. An examiner and master was appointed and made a report finding a balance of $19,949.86 due Joseph Brown. Various exceptions were filed, among which were that the master had no authority to state an account without a previous order of Court. Another was that the master before making his report had become counsel for A. H. Reynolds, assignee of Joseph Brown, and was not competent. The Court held a meeting at chambers, and made a decree ordering an account nunc pro tunc, and ordering J. Gray’s executors to pay $19,949.86 to Brown or his assigns. Respondent afterwards moved to have the bill dismissed unless the assignee of Brown was made a party. This the Court refused in the following opinion, per:
Woodward, J.
The original bill in this case was filed on 31 March, 1877. The answer of defendants was filed on 1 November, 1877, and the replication thereto on 12 November, 1877. On 4 December, 1877, George R. Bedford, Esq., was appointed by the Court examiner and master, and in 19 February, 1878, in the presence of the counsel for the plaintiff, and of John Gray, one of the defendants, the examiner proceeded to take the testimony of witnesses. The taking of testimony was adjourned from time to time until finally, on the day of October, 1881, Joseph Brown was re-called for cross-examination by the defendants. This seems to have concluded the testimony, which was filed in Court on i February, 1882.
On the 17 May, 1878, Joseph Brown, the plaintiff, made a deed of assignment for the benefit of creditors, to Abram H. Reynolds, as assignee. No motion was made to place the assignee upon the record, as a party to the proceedings then pending, which went forward in the usual manner. The master having on 1, December, 1881, completed his report, gave notice to counsel that the same would be filed the 27th December, 1881. Exceptions were filed to the report by the counsel for the defendants. These exceptions were seven in number, but in none of them is there any claim that the bill is defective for want of proper parties. On the 20th January, 1882, the master overruled the exceptions, and his report, together with the exceptions and his opinion thereon, were filed of record'on 1 February, 1882. On the 8 February, 1882, the Court made an order fixing 4 March, 1882, at 10 a. m., for hearing the argument upon the report of the master and the exceptions thereto. On the 13th March, 1882, the Court filed an opinion concluding as follows: “The exceptions to the report of the master are dismissed, and the report is confirmed. Counsel will prepare and submit to the Court a decree in pursuance of this order.” On the 18 March, 1882, counsel for plaintiff submitted to the Court the form of a decree in pursuance of the order of 13 March, 1882, to which the defendants’ counsel objected. The objections were overruled and the decree was signed, whereupon the counsel for defendants filed his exceptions. Subsequently, on 30 March, 1882, the counsel for defendants filed the following motion: “To dismiss all proceedings in this case since the time of said assignment, by reason of the suit having thus become abated or defective for want of the- proper parties, and further, that the bill shall stand dismissed unless the prop er parties are brought upon the record, within thirty days of this date.”
This motion has been argued by counsel, and is the matter now before us for disposition.
We have considered the question presented to us by this motion, as well as the authorities referred to by the learned counsel, and have reached the conclusion that it must de denied for several reasons, which we proceed to state.
First. The rule in equity practice is that a defect of parties to the bill, must be taken advantage of either by demurrer, plea, answer or at the hearing, Daniels C. P., Ch. V., Sec. 3, P. 287. When, however, it is manifest that a decree will have the effect of depriving third parties of their legal rights, the Court may order the case to stand over to enable the plaintiff to bring such necessary party before the Court, Sharer vs. Brainerd, 29 Barb., 23. In the present case the objection to the bill was not made until after the final hearing, nor is there any evidence before us, that injury will result to third parties.
Secondly. The defendants have waived their right to have the amendment to the bill now in question, both by failure to make the motion therefor at the proper time, and also by resting their objections to the bill and the proceedings before the master, on other grounds than the alleged failure of proper parties. “It is well settled that estoppels of record may grow out of the express or implied admission made by the parties in pleading. Not only will an express allegation or confession be conclusive on the party who makes it, but the traverse of one averment is a tacit admission of every other which is material and traversable in the same pleading.” Dutchess of Kingston’s case, to Sm. L. C., 687. In equity, when a man has been silent when in conscience he ought to have spoken, he shall be debarred from speaking when conscience requires him to be silent.
Thirdly. The law does not require an assignee for the benefit of creditors, under a voluntary assignment, to be made a party to a bill pending at the time of the making the assign ment. The assignee is at liberty to make himself a party by filing a supplemental bill, and this is as far as the Law goes. i Dan, C. P., Ch. v., Sec. 2, p. 281.
The motion is denied.
Gray’s executor then appealed, assigning the 'following-errors :
The Court erred in the following particulars, to wit.:
1. In ruling that the case presented by complainant was one within the jurisdiction of the Court sitting in Equity.
2. In ruling that the examiner could proceed and state an account, without a preliminary decree to account, and a reference to him as master to state an account.
3. In ruling that the complainant could carry on and maintain his suit after having made a general assignment for the benefit of creditors.
4. In ruling that complainant after having transferred tlu assets of Brown & Gray to his own private account, and used them as his private capital for a period of years, could then as-surviving partner charge back to the account of Brown & Gray, such losses as had befallen him in his said private business.
5. In entering a decree for an account nunc pro tunc.
6. In proceeding to hold, a final hearing at chambers, against the objection of defendants, contrary to the rules adopted and prescribed for the regulation of Equity Practice, and without due and regular notice to the defendants.
7. In proceeding with such hearing when it appeared that the files of the case had been taken from the Prothonotary’s office by the complainant’s counsel, contrary, to the rules of Court, and kept away during all the time from the date of the filing the master’s report to the time of said hearing, so that defendants and their counsel had not opportunity to examine the same, or prepare for a hearing.
8. In proceeding with such hearing when it was brought to' the attention of the learned judge, that the draft of the master’s report, marked and presented for consideration, was not the ■draft which had been submitted to defendant’s counsel for examination and exceptions. Also when the draft thus presented was incomplete.
9. In appointing a receiver, and ordering and confirming sales by him.
E. G. Butler and A. Ricketts, Esqs., for appellant,
argued, that there is a full remedy at law which ousts the jurisdiction in equity; Grubb’s Appeal, 90 Pa., 228; Gloninger vs. Hazard, 42 Pa. 389; Passyunk Building Association’s Appeal, 83 Pa. 441. Besides there was only one witness, the complainant himself; Nulton’s Appeal, 13 W. N. C., 430. The liability to account was a preliminary question to be decided before an account could be stated; Collyer vs. Collyer, 38 Pa. 257. The assignee should have been made a party; Young vs. Willing, 2 Dall. 276; Power vs. Hollman, 2 Watts 218; Adams Equity *409; Daniels Chancery Practice, 77; Williams vs. Kinder, 4 Vesey 387; Randall vs. Mamford, 18 Vesey 424; Deas vs. Thorne, 1 John’s R. 551; Sedgewick vs. Cleveland, 7 Paige 287. Rule XII, Sect. 4, of Court, provides: “No paper filed in any equity cases in this Court shall at any time be taken from the office of the Prothonotary by any persons, except upon the special order or allowance of the Court or the President Judge thereof.” Disregard of this rule is manifest error; Brennan’s Estate, 65 Pa. 16.
Messrs. Palmer, Dewitt and Fuller, contra,
argued that Brown paid firm debts with his own money while the partnership accounts were unsettled; and in such case assumpsit will not lie; Brown vs. Agnew, 6 W. & S. 235; Sadler vs. Nixon, 5 B. & Ad. 936. Equity is the proper remedy; Christy’s Appeal, 92 Penna. 157. The second assignment is to merely a formal irregularity; Pritchett vs. Schafer, 2 W. N. C. 317; Hedge’s Appeal, 63 Pa. 276. But defendant in this case has not denied a single material allegation of the bill. The assignee was not a necessary party; Railroad Co. vs. Wilcox, 48 Pa. 168; Armstrong vs. Lancaster, 5 Watts, 68; School District vs. Levan, 86 Pa. 360. The fourth assignment raises a question of fact upon which a decision of the master was adverse to the plaintiff in error.

Opinion:
The Supreme Court affirmed the decree of the Common. Pleas on May 5, 1884, in the following opinion:
Per Curiam.
While in minor matters the proceedings in the Court below were a little irregular; yet we see no irregularity sufficient to-call for a reversal. Under the facts of the case it was not error for the Court to make of record an order for an account, nunc pro tunc. A careful examination of the whole record, satisfies us that the Court arrived at a correct conclusion.
Decree affirmed and appeal dismissed at the costs of the appellant.