Court Opinion

ID: 6233999
Source: CourtListenerOpinion
Date Created: 2022-02-17 20:28:18.401658+00
Date Added: 2024-06-11T08:57:58.832385
License: Public Domain

The opinion of the court was delivered,
by Read, J.
By articles of agreement, dated 8th March 1867, the Ardesco Oil Company leased to Joseph Fleming and others, partners under the firm of Fleming & Co., their oil refinery property, containing about eight acres, situate in McClure township, Allegheny county, until the 1st .of March 1870. The said Fleming & Co. were to operate the said works and to furnish and procure sufficient crude oil, men and material to run the said works to their full capacity, with the proviso, however, that they were not to be run unless the said Fleming & Co. shall deem it profitable to do so.
It was further agreed that the said Fleming & Co. were to pay said Ardesco Oil ..Company the one-third of the net profits and gains arising from the business of said Ardesco Oil Works after deducting all expenses, outlays and losses. “ 4. And the said Fleming & Co. agree to keep full and correct books of accounts *23of the business of the said firm, and the results of the business is to be made out on the 1st day of January A. D. 1868, and semiannually thereafter, and distribution of the net profits, viz.: one-third to said Ardesco Oil Company and two-thirds to Fleming & Co. shall be made at such time as the parties hereto may determine.”
Fleming & Co. were to have entire control and management of the business and works. A privilege was given to Fleming & Co. to construct a large iron tank for crude oil, which said company were to pay for in cash, or, if company desires it, it may be deducted out of their one-third of the net profits, or will execute a mortgage on said oil company’s property, payable on 1st March 1870.
At the termination of the lease, or any renewal thereof, said company were to purchase from Fleming k Co. all barrels, chemicals, &c., with a provision for a reference in case of disagreement, Fleming & Co. not to be responsible for any injury or damage to the work by fire or other accidents.
Then there is a provision for termination of lease on 1st March 1870, and for renewals thereof.
The bill was filed on 18th February 1868, and states since 1st January 1868 plaintiffs had demanded accounts of business and profits and payments, both of which were refused. 6th and 7th paragraphs admit that defendants .had furnished to plaintiffs a balance sheet or trial balance up to 1st January 1868, which is appended as exhibit B, but that it was not such an account as plaintiffs were entitled to, and was incorrect and untrue, and they pray the 'court to order a full and correct account of the business and profits up to 1st January 1868, and that defendants be decreed to pay plaintiffs one-third part of said net profits.
The answer denies that defendants were to render any other account than a statement of the “ results of the business” which they have done by furnishing a statement truly made up from their books, but have declined to pay Mr. O’Hara, as demanded, because there is no provision for any distribution or payment prior to the end of the term, and it is provided distribution shall be made at such time as the parties thereto may determine, and averring that no such determination has yet been made. After reciting the 7th paragraph of the lease, defendants aver that the parties, having agreed to erect an iron tank, and its erection begun, which would cost from $80,000 to '$40,000, plaintiff had mortgaged the property leased to its value and had refused to pay the expense otherwise than by his share of the profits, of which, at the end of the term,'there might be none. That “ Exhibit B” is a correct and true statement of the “ results of the business” up to January 1st 1868.
The want of a replication was cured by the subsequent order of the court, by which it was filed nunc pro tunc (2 Dan. Ch. *24Pr. 1st Am. ed. 1846, p. 971; 1 Dan. Pr., 4th ed., by Field and Dunn 776). On the 8th August 1868 the court referred it to Thomas Ewing, Esq., as master, to take a general account of the business of'the, defendants in operating the Ardesco Oil Works and of 'the net profits thereof to the 1st -day of January 1868. The master made a report, to which exceptions were filed by the plaintiff and also by the defendant. The 2d, 3d and 4th exceptions of the plaintiffs were sustained, and the exceptions of the defendants were dismissed, and the account was referred back to the master for correction, which was done in accordance with the decree of the court.
On the 30th September 1869 the court made a final decree, by which the defendants were ordered to pay to the plaintiff the sum of $10,762.50, being the one-third part of the balance to credit of profit and loss, including intérest from 1st July 1868, together with the costs of the cause.
It is perfectly clear, from the nature of the lease and its provisions, that the proper period for an account was at the close of the lease, and not on the 1st January 1868, and that the exhibit B was not an account, but the results of the business up to that period, and distribution was to be made at such time as the parties thereto may determine. No such determination was arrived at or made, and, of course, no distribution was to be made or was made, and, consequently, no money was due and payable by the defendants to the plaintiff.
The error on the part of the court was their assumption that on the 1st January 1868 the period of distribution and payment had arrived, and this error pervaded all their proceedings to the final decree, which was palpably wrong and must be reversed. The error commenced with the reference.to the master to take a general account. This makes it unnecessary to consider the errors assigned, but, as it may promote a settlement between the parties, we would say that, having read the master’s report, we believe him to be entirely correct in all .his decisions in relation to the tank, the insurance and interest; and for the reasons assigned by him,
Decree reversed.