Court Opinion

ID: 7892950
Source: CourtListenerOpinion
Date Created: 2022-09-08 21:50:45.310656+00
Date Added: 2024-06-11T16:31:58.361196
License: Public Domain

Stewart, J.,
delivered the following dissenting opinion :
The bill of complaint in this case was filed in the Court below by the complainant, surviving partner of his brother and himself, against the defendant, as executor of the other partner, for an account and settlement of the partnership alleged to have existed, and to have been dissolved by the mutual consent of the partners. It averred, substantially, that the dealings between the partners had never been settled, and that upon a final accounting there would be found a considerable amount due and owing to the complainant from the defendant. The defendant admits by his pleadings the partnership and its dissolution, that there had been no final settlement of its affairs, asserts that he was always ready to account, but denies any indebtedness, and insists upon limitation. In brief, the complainant insists upon an account and settlement of the partnership; the defendant confesses his readiness always to account, denies any indebtedness, and relies upon limitation.
The cause was submitted upon this state of the pleadings, on the 6th of September, 1849, and the Court, on that day, decreed that the case be referred to the auditor, with directions to state an account between the parties, of what is actually due to the complainant on his claims as one of the partners, and the surviving partner of Henry Wilhelm, against the defendant, debt, interest and costs. But as the Court could not from the bill and answer, without evidence, settle the conflicting claims of the parties and decree relief to the complainant, by *163the allowance of any distinct amount as due him, the auditor by the decree was authorized and directed to state the account between the parties, upon testimony to be produced before him, and make his report thereon, subject to the ratification or rejection by the Court- Upon being ratified, such ratification is a decretal order equivalent to a final decree. 2 Bland, 264; 1 H. & J., 743; 12 G. & J., 323. After this decree, the matter open for the future action of the Court was the report of the auditor, the decree having settled the complainant’s right to an account of the partnership. “ The language of the decree when its meaning and intention are the subject of investigation, must be construed in reference to the issue which is put forward by the prayer for relief, and the other pleadings. From them it will be shown what the Court meant to decide, where from the language of the decree itself there is doubt on this point.” 3 Wallace, 704.
If the Court, upon the bill and answer, had sustained the defence, the bill would have been dismissed, but having decreed that the account should be taken the defence was overruled, the prayer of the bill granted, and the complainant entitled to an account, reserving however the right to review and correct, if necessary, the report of the auditor, upon any question pertinent thereto, and of course not inconsistent with the issues adjudicated by the decree. Whatever indebtedness that account showed, upon the final disposition of the report, the complainant was entitled to by virtue of the decree. The question submitted under the pleadings having been adjudicated in favor of the complainant, was no longer an open one, except by petition for the review of the decree before its enrolment, or by bill of review, or by appeal, after the enrolment. Bolgiano vs. Cooke, 19 Md., 375; Alex. Chan. Prac., 177. It would be a very loose practice to permit parties at their pleasure to dispute questions which have been settled by the Court. “The decree assumed the liability of the defendant to account, hence that question cannot be agitated on exceptions to the report.” Alex. Chan. Prac., 309. Such we understand to be *164the effect of the decree of 6th of September, 1849. The defendant acquiesced in this decree, filed a petition on the 3d of December, 1849, asking to have the testimony of the complainant taken, which was granted. The parties proceeded to take testimony before the auditor, who submitted his report on the 14th of November, 1868, finding the defendant was indebted to the complainant, either in the sum of $98.29, or $1,982.29, as it might be determined the partnership between the parties terminated on the 13th of March, 1841, as claimed by the defendant, or on the 28th of March, 1841, as insisted upon by the complainant, but in either alternative of the report, that the defendant was indebted to the complainant. No exceptions were filed by the defendant to the report of the auditor, which had found him thus indebted.
Conceding that the decree of the 6th of September, 1849, directing the auditor to take the account between the parties, did reserve all rights under the original defence to be determined after the auditor had made his report, when that report was made, and no objections were made thereto by the defendant, that decree by the waiver and acquiescence of the defendant operated to conclude him. This report of the auditor, unexcepted to, if it was an available and effective act, under the authority of the decree of the Court, must be taken as admitted evidence of the indebtedness of the defendant to the complainant.
Under this decree, and the report of the auditor in pursuance thereof, the complainant was entitled to a decretal order ratifying the report allowing to the complainant the sum found due by the defendant, to wit, $1,982.29, with interest from the 28th of March, 1841.
Exceptions having been filed by the complainant to the auditor’s report, not allowing to him this sum, upon the hypothesis that the partnership was dissolved on the 13th of March, 1841, from a careful examination of the testimony, without going into the particulars here, we think the decided preponderance shows that the dissolution took place on or about *165the 28th of March, 1841, and therefore the report based upon that day is the proper one to be finally ratified and confirmed. But assuming that the decree and the auditor’s report in pursuance thereof, unexcepted to by the defendant, did not conclude the defendant, and that notwithstanding his waiver and acquiescence, he was still entitled to set up his original defence of limitation, the circumstances of this case do not show such laches on the part of the complainant, as ought in a Court of Equity to deprive him of his right of recovery.
There has been much conflict, not only in Courts of Common Law but in the Courts of Equity, where they have concurrent jurisdiction, and where the Statute of Limitations strictly applies in both Courts. Also, in cases where the remedy is alone to be sought in a Court of Equity, there has been a good deal of difficulty in applying the policy of the Statute. This Statute, in all cases of concurrent jurisdiction, at law and in equity, is equally obligatory in each Court. In .such case, Courts of Equity do not act so much in analogy to the Statute as in obedience to it. They apply the Statute as it would have been applied at law. Dugan vs. Gittings, 3 Gill, 161; Hertle and Wife vs. Schwartze & McDonald, 3 Md., 383; Teackle vs. Gibson, 8 Md., 87; Knight and Wife vs. Brawner, 14 Md., 7.
Where the jurisdiction is not so concurrent, but existing alone in Courts of Equity, the Statute is applied by analogy, and whether the defendant is entitled to have it so applied, depends upon the circumstances of the case, and whether a party has been guilty of laches in the pursuit of his rights. It is the general rule in both Courts, but in the Court of Equity, subject to the exception, when it would be against conscience to enforce it.
In Glenn, Adm’r, vs. Hebb, 12 G. & J., 273, the Court say: “the partnership is stated in the bill and is confessed by the answer, and in such case the general rule is that an account is, of course, unless the party has slept upon his rights. It is objected that lapse of time bars an account — we *166do not believe that such a defence would be legitimately made under the circumstances — we are therefore of opinion that the case should have been sent to the auditor, that an account should be taken of the co-partnership transactions.” The same view was taken by the Court in another stage of the same case, 17 Md., 282. In Hanson and Wife vs. Worthington, 12 Md., 418, the same doctrine was held: “what will constiute such a lapse of time and laches as will bar the right of parties to recover on a claim purely equitable, all the authorities say, must depend upon the particular facts and circumstances of each case.”
“Under peculiar circumstances, however, excusing or justifying the delay, Courts of Equity will not refuse their aid in furtherance of the rights of the party; since, in such cases there is no pretence to insist upon laches or negligence as a ground for dismissal of the suit.” 1 Story’s Equity Jurisprudence, section 529, refers to Lopdell vs. Creagh, 1 Bligh., (N. S.,) 255.
Although limitation may be relied upon as a general rule, it is subject to exception; and whilst a Court of Chancery respects the general rule, it must, in the exercise of its discretion, regard the peculiar circumstances of every case. Milford’s Eq. Plead., 318, and references. There is no fixed rule as to laches and lapse of time. Farnam vs. Brooks, 9 Pickering, 242.
“But as pleas of the Statute are admitted in Courts of Equity by analogy only, it follows that where the circumstances of a case are such as to make it against conscience to apply the rule founded upon analogy, the Court will not enforce it.” Collyer on Partnership, sec. 375, referring to Sterndale vs. Hankinson, in 1 Simons, 398, where Sir Anthony PIart says, “the Statute does not bar the debt, but the remedy only. Pleas of the Statute are admitted in Courts of Equity by analogy only, and-where the circumstances of the case are such as to make it against conscience to apply the rule founded upon this analogy, the Court will not enforce it.”
*167Whether the accounts of partnership, partaking, somewhat, of the nature of trusts, inter se, are strictly within the provisions of the Statute of Limitations, or within the exception, as to such accounts as concern the trade between merchant and merchant, and whether it applies to partnership accounts during the existence of the partnership, or after its dissolution, in the absence of any final settlement of the concerns of the partnership, and ascertainment of the respective and individual rights of each partner, are questions about which the authorities are in conflict.
The only remedy at the common law for the final adjustment of partnership transactions was the action of account, which was found to be utterly impracticable, even wdien the subject matter of partnership, from the character of the pursuits of the times, had a much narrower range; and much more so after the subsequent extension of commercial operations, with the multiplied agencies of corporative and other mercantile associations, had extended the affairs of human life.
Besides this difficulty, “ the death of either partner put an end, at the common law, to any means of enforcing this remedy by account; for, it being founded in privity between the parties, no suit lay by, or against the personal representative of the deceased partner, to compel an account. There has been a struggle in cases, where one partner has been compelled to advance or pay money on the partnership account out of his own private funds to give him a remedy at law for a contribution from the other partners.” 1 Story’s Equity Jurisprudence, secs. 663, 664.
“ At one time the Court would not entertain a suit in relation to partnership transactions, except upon a bill to wind up the partnership.” Richardson vs. Hastings, 7 Beav., 307; 1 Story’s Equity Jur., sec. 671.
There can be no question that much of the confusion in the authorities has grown out of the peculiar character of the dealings and relations of partners in trade, and whether their *168accounts are within. the Statute or within the exceptions thereto.
The case of Barber vs. Barber, 18 Vesey, 285, where the bill Avas dismissed by Sir Willam Grant, the Master of the Rolls, under the plea of limitations, was a suit between partners, and the authority of that case was disavowed by the House of Lords, in Robinson vs. Alexander, 8 Bligh, 372, and, after a careful examination, the defense of limitation Avas disallowed.
Child vs. Frederick, 1 Peere Williams, 266; Hollingshead’s Case, Ibid, 743, are not in conflict with the views Ave entertain.
The Master of the Rolls, in Hercy vs. Dinwoody, 2 Vesey, 87, and also to be found in 4 Brown, Chan. Cases, 258, in his review of the authorities, says there is no established rule, and every case must depend upon its own circumstances.
Chancellor Kent, in Coster vs. Murray, 5 Johns. Chan. R., 522, reviewing the authorities in regard to the exception in the Statute of merchants’ accounts, disposes of that case upon other grounds, without expressing any decided opinion on the question, because the case did not require it, as it was not a case of mutual accounts, and not within the exception. His opinion, although not an authority in this case, is referred to as entitled to very high respect.
The defence of limitation relied upon in this case is not strictissimi juris, and governed absolutely by the Statute, because the remedy here sought can be only had in a Court of Equity, (Riarl vs. Wilhelm, 3 Gill, 356,) and the Statute can only operate by analogy. The defendant, under the circumstances of this case, should not be permitted to claim the benefit of the Statute, because there has not been that laches on the part of the complainant as to deprive him of his remedy in this Court. The partnership having been dissolved in March, 1841, and suit at law brought before limitations could apply, verdict recoAmred and judgment thereon, and that judgment reversed in December, 1845, by the Court *169of Appeals, because the complainant had no remedy at law, and this bill filed in November, 1848, (see Mitchell vs. Mitchell, 4 Md., 377,) we think the complainant has not slept upon his rights, but has made diligent and reasonable efforts to recover them.
In my judgment, the complainant is entitled to a reversal of the decree below, of the 25th of February, 1849, and to an order for the final ratification of the auditor’s report, allowing to the complainant the sum of $1,982.29, with interest from the 28th of March, 1841, by virtue of the decree in the cause of the 6th of September, 1849.
Differing with a majority of the Court upon the important questions involved, I have deemed it my duty to file this dissenting opinion.