Case Name: Danville, Hazleton and Wilkesbarre Railroad Company's Appeal
Court: Supreme Court of Pennsylvania
Jurisdiction: Pennsylvania
Decision Date: 1876-03-13
Citations: 81 1/2 Pa. 326
Docket Number: 
Parties: Danville, Hazleton and Wilkesbarre Railroad Company’s Appeal.
Judges: Before Sharswood, Mercur, (Jordon, Paxson, and Woodward, JJ.
Reporter: Pennsylvania State Reports
Volume: 81 1/2
Pages: 326–330

Head Matter:
Danville, Hazleton and Wilkesbarre Railroad Company’s Appeal.
1. In a proceeding in equity the parties agreed in writing “to refer the matters in controversy to T. Bell, Esq., as referee, his award to be final and conclusivehe to “report the facts and his conclusions, and a decree may be entered in accordance with such conclusions.” This was not a reference under act of June 16th, 1836, but was an amicable reference to a master, and was to be treated as such.
2. The contract on which the proceedings was based was in the name of Ease individually; the plaintifls averred in the bill that it was made on their account and for their use. Ease was not made a party ; the decree below directed the plaintiff “ or Ease ” to pay defendants a sum of money. Held, that this was error.
3. The decree was corrected in the Supreme Court by striking out “ or Ease ” as surplusage, and so modified was affirmed.
4. Colton v. Babcock, 14 P. E. Smith, 462, followed.
February 29th, 1876.
Before Sharswood, Mercur, (Jordon, Paxson, and Woodward, JJ.
Appeal from the decree at Nisi Prius, No. 53, to January Term] 1872.
The bill in this case was filed March 20th, 1872, by the Danville, Wilkesbarre and Hazleton Kailroad Company against Samuel K. Ashton.
The bill averred that on the 16th of August, 1870, S. P. Kase, for the account and use of the plaintiffs, contracted with the defendant to purchase from Kase $30,000 of the notes of Thomas Wood, indorsed by Kase, at a discount of 12 per cent.; part of the purchase-money for the notes to be in mortgages to the amount of $11,700,Kase to give as collateral security $60,000 of the mortgage bonds of plaintiff's; that as defendant would have to sell 800 shares of Allegheny Valley Kailroad stock, Kase, if requii’ed by defendant, should buy that amount of stock and deliver to defendant at the price for which defendant should have sold it; the Wood notes with the collaterals were delivered to defendant; that the whole amount óf money paid to Kase in fulfilment of the contract was $22,894.75 ; that at the maturity of the notes the parties agreed that they should be renewed for six months; that if defendant should elect, Kase should deliver to him the amount of the stock sold by defendant at the sum of $16,697.32, the amount realized by the sale, and that defendant would deliver to the plaintiffs the collaterals on the payment of the notes.
The bill further averred, that the plaintiffs offered to pay defendant what might be due on the notes, and demanded them and the collaterals from the defendant, but that he refused to deliver them.
The prayer was for a decree that defendant should deliver to the plaintiffs, the notes and bonds upon payment of what might be found to be due him on account of the notes, and for general relief.
The defendant admitted the contract and other averments in the bill. He averred that he had paid to plaintiffs the amount he had agreed to pay; that he elected that Kase should repurchase and return to him 800 shares of the stock of the Allegheny Valley Kailroad Company; that he had always been ready to return to Kase the $60,000 of the mortgage bonds of the plaintiff's, upon the return of the 800 shares of stock and the remainder of the loan in cash, until October 1st, 1872, at which time, and subsequently, and after notice to Kase, the $60,000 of bonds were sold at public sale ; that he was ready and willing to make a settlement -with Kase upon a proper and just statement of their account.
He denied that the contract was made on behalf of the plaintiffs, but that it had been made for the individual use and account of Ease ; but if the plaintiffs should be entitled to sustain the bill, he averred that tbe plaintiffs were largely indebted to him, and on this account he would claim from them an account and a decree.
After various interlocutory proceedings, the parties, on the 24th of April, 1873, entered into the following agreement of reference:
“ It is hereby agreed to refer the matters in controversy in the above-entitled suit to Thompson Bell, Esq., of Pittsburgh, as referee, and his award shall be final and conclusive upon the parties hereto. It is expressly understood and agreed that the said referee shall report the facts and his conclusions thereon, and a decree may be entered therein in accoi’dance with such conclusions.
“S. P. Ease,
“Presd’t D., II. & W. B. B.
“Samuel E. Ashton.”
The referee found, amongst other things, that the defendant assigned the mortgages and sold the Allegheny Valley Railroad stock for $16,697.33 to carry out his agreement with Ease, and had paid Ease on and before the 14th of October, 1870, $16,575.12 in cash in full of the purchase-money for the $30,000 of the Wood notes, and that Ease and the defendant, on the 16th of August, 1870, entered into a supplemental agreement authorizing the defendant to sell at market price, without any notice, and at any time to take to himself, at market price, the bonds on account of his claims, and to lend or exchange any of the bonds. The defendant notified Ease of his election to take the 800 shares of Allegheny Valley Railroad stock. Ease availed himself of the privilege to renew the loan for six months. Defendant, on the 19th of August, 1871, notified Ease that he elected to take the 800 shares of stock at the maturity of the Wood notes.
The referee further found that defendant at various times sold $54,000 of the collateral bonds at different prices, which were set out in the report, all less than the par. He also reported that there were other pecuniary transactions between Ease and the defendant, not necessary to set out, and stated accounts which showed that there was due to defendant on the 1st of December, 1873, the sum of $1272.35.
The referee reported the following as the form of the decree: '
“That Samuel E. Ashton shall deliver to the Danville, Hazleton and Wilkesbarre Railroad Company (the plaintiff) the coupons of the bonds of said company, amounting to $6258, according to the account as stated, and that at the same time the said railroad company (plaintiff) or Simon P. Ease shall pay to Samuel E. Ashton f1272.35 in cash, with interest from December 1st, 1873.”
The plaintiffs filed eight exceptions to the report; seven were as to the findings of the facts by the referee.
The eighth was that he erred in reporting the decree contained in his report.
The exceptions were dismissed by the Court and the decree reported by the referee confirmed.
The plaintiffs appealed to the Court in banc. They assigned for error,. — dismissing the exceptions to the report, and affirming the decree reported by the referee.
S. 6?. Thompson and J. B. Snowden, for appellants.
The report is not final and conclusive; it is as the report of a Master with exceptions: Cotton v. Babcock, 14 P. F. Smith, 462. An agreement that an award shall be final and conclusive does not preclude exception: Mussina v. Hertzog, 5 Binney, 389 ; McCracken v. Clark, 7 Casey, 500. The agreement is between one plaintiff and defendant, and the finding as to two plaintiffs : Studebacker v. Moore, 3 Binney, 124; Erdman v. Stahlnecker, 12 S. & R., 325. A suit in equity cannot be arbitrated: Taggart v. Fox, 1 Grant, 190.
M. H. Todd (with whom was N. B. Thompson), for appel-/ lees.
Parties to a suit in equity may refer a case to persons mutually chosen, whether as referees or masters : Cotton v. Babcock, 14 P. F. Smith, 461; Stephens’s Nisi Prius, 54; Bacon’s Abridg., title Arbitration; Dick v. Milligan, 2 Ves. Jr., 24. Such agreements should be liberally construed as tending to discourage litigation, and are as binding in any form of proceeding: Manufacturing Company v. Graeff, 14 P. F. Smith, 395; Reynolds v. Caldwell, 1 Id., 298; Speer v. Bidwell, 8 Wright, 23 ; Wall’s Admin. v. Fife, 1 Id., 399 ; Benjamin v. Benjamin, 5 W. & S., 562 ; Speer v. McChesney, 2 Id., 234; Gallup v. Reynolds, 8 Watts, 427; McManus v. McCulloch, 6 Id., 360; Kline v. Guthart, 2 Penna. R., 496.

Opinion:
Judgment was entered in the Supreme Court, March 13th, 1876.
Per, Curiam :
The parties to this proceeding in equity chose to take the unusual course of referring by agreement. in writing all " matters in controversy to Thompson Bell, Esq., of Pittsburgh, as referee, and his award to he final and conclusive." He was to report the facts and his conclusion thereon, and a- decree to be entered therein in accordance with such conclusion'. The referee made such a report, and a decree was entered accordingly, from which this appeal has been taken. It is certainly true that this was not a reference under any of the provisions of the act of June 16th, 1838, (Pamph. L., 717), but it was undoubtedly an amicable reference to a Master, and must be treated, as such: Cotton v. Babcock, 14 P. F. Smith, 462. The exceptions below are to alleged errors of fact, and without stopping to inquire whether the appellants are not precluded by their agreement from taking such exceptions, it is enough to say that we have not been furnished with the proof. There is, undoubtedly, an error on the face of the decree as reported by the referee and entered below, in directing the railroad company, or Simon P. Ease, to pay the defendant the sum of money. Ease was no party to the suit. But no reason exists why this, as well as any other decree, may not be corrected by striking out what is palpably erroneous and mere surplusage.
Ordered that the decree below be modified by striking therefrom the words " or Simon P. Ease," and that so modified the decree be affirmed and the appeal dismissed at the costs of the appellants.