Court Opinion

ID: 6666753
Source: CourtListenerOpinion
Date Created: 2022-07-20 21:06:40.345605+00
Date Added: 2024-06-11T16:00:21.758497
License: Public Domain

Buchanan, J.
delivered the opinion of the court. The case appears to be this — George Churchman, Peter Dicks and dlbraham Hare, having possessed themselves of a *51lease of certain iron works in the state of Pennsylvania, called Cornwall Furnace and Hopewell Forge, to continue until the year 1765, on the 13th of November 1750, took Jacob Giles, John Hall and Amos Garrett, into an equal partnership and interest with them in the works, in consideration of the sum of £1000 furnished by Giles, Hull and Garrett, to be repaid by Churchman, Hare and Dicks, with interest, at the end of five years, out of their proportions of the profits of the works, for which they passed their bonds.
In 1751 Giles and Garrett bought out Hare. In 1752 they purchased a moiety of another forge in Pennsylvania called 7’alphahaken Forge, and in the spring of 1753 they bought out Hall and Churchman, and thus became jointly possessed of one undivided moiety of Talphahaken Forge, and of five sixths of Cornwall Furnace, and Hope« well Forge.
On the 12th of Jane 1753, Giles and Garrett entered into new articles of copartnership tor carrying on the business at the furnace and two forges, leaving oat Dicks,
On the 13th of November 1753, another partnership was formed for carrying on the furnace and two forges, with several other branches of business, and John Giles and Nathaniel Giles, sons of Jacob, were taken into the concern on equal terms.
On the 12th of March 1756, the last partnership was dissolved, and a final settlement made between Jacob Giles and Garrett, in the presence and with the assistance of David Caldwell, when there appeared to be a balance against Garrett of £1106 14 1 current money, for which sum he passed his bond to Giles on the day of settlement, and also gave his bond to Giles, conditioned to quit claim to the iron works, and all stock and profits accrued or accruing therefrom; and Giles, mx the same day, passed his bond to Garrett, conditioned ta correct ail errors in the settlement, if any should be discovered, to indemnify him against all partnership demands, and to pay him one half of all the debts that might be collected, which in the settlement had been considered dubious or desperate. The three bonds are all in the handwriting of Garrett, and attested by David Caldwell and John Rigby. From which time, until a short period before the filing the bill by Garrett, in 1772, he continued to officiate as clerk *52and book-keeper to Giles i made at different tiroes considerable payments on his bond for £1106 14 l-¿; and in February 1763, acknowledged in writing the account and settlement of 1756, reserving only the right to correct errors, if any.
By an act of the legislature this cause is placed in the same situation for decision in which it stood on the appeal from the decree of. the chancellor of the 22d of December 1797, and presents two questions for the consideration of the court.
First. Whether the settlement of the 12th of June 1756, and the bonds passed by Garrett to Giles, shall be opened and set aside, and Benedict Edward Ilall, as executor of Garrett, be entitled to an account of all the profits of ilia works from the year 1751 to 1705, and be let in for any and what proportion of the profits? And
Second. Whether as administrator de bonis non of Peter Dicks, he shall be let in for one sixth .of the profits of the works for the same period?
With respect to the claim in right of Garrett, it is contended that the settlement and bonds of the 12th of March 1756, ought to be set aside on two grounds:
First. That they were procured by fraud, artifice, misrepresentation and threats; and.
Second. That there' are errors and mistakes in the settlement.
On the first ground of relief, it is alleged in the bill that Giles, becoming impatient of the rising fortune of Garrett, formed the fraudulent design of working him out of the cop.cern, and of getting into his own hands the sole management and property of the works, and with that view artfully brought about the partnership of the 13th of November 1-753, into which his two sons are stated to have " been admitted as equal partners, without any considera-, tion; and that in furtherance of the same project, Garrett was turned out of the management of the works, on the 1st of January 1754, and sent to England on a frivolous pretext, and Havid Caldwell, who is represented as the tool of Giles, and wholly devoted to- his interest, appointed manager in his -place.
But the fraud inferred from these transactions does not appear, and the intent ascribed to Giles, to embarrass and injure Garrett, seems to be an unfounded conjecture. The *53articles of ilie 13th «if November 1753, afford no evidence of it, and it does not appear that Garrett was thereby injured. The allegation that. Nathaniel and John Giles were taken into the partnership without any consideration, and with a view to overbear Garrt.it, is not supported. On the contrary, the articles refer to an annexed list of stock stated to have been put in by each of the parties, and contain an express stipulation that Nathaniel Giles, who was an infant, should have no vote in the affairs of the com* panv until he arrived at age.
The clmige that David Caldwell was the tool of Giles* and that Giles, in the year 1754, fell upon the expedient; of appointing him manager at the works, for che purpose of ruining Garrett, is equally unsupported.
By the articles of the 12th of June 1753, it was stipulated that Giles should be at liberty to employ another book-; keeper at the end of the year, and by the articles of the 13th of November 1753, it was provided that a new clerk should be appointed on the 1st of January 1754.
These two agreements were entered into by Garrett with Ins eyes open, and the first of them at a time when ml fraud is pretended to have been practised upon him. The appointment, therefore, of Caldwell as manager, who, it is-in proof, was a man of unblemished character, will not bear the construction which is attempted to be given it. He was moreover, from the time of his appointment, on the most friendly and confidential terms with Garrett, as appears from their numerous letters of correspondence; and with respect to Garrett’s mission to England, it appears to have been connected with their general scheme- of trade; and the bill does not even state that there were any foul dealings in his absence.
The allegations in the bill that Garrett, on his return from England, wished to know the state of (he works, but was put off with some trifling excuse, and that every transaction during his absence was concealed — that when he proposed to go to the works to examine the books, Giles alarmed him with fears that he would be arrested and it»» prisoned — that Giles peremptorily insisted on taking hi* son Jacob Giles, and son-in-law Nathaniel Rigby, into the partnership, and on his refusal took possession of some of the books, and ordered Caldwell to lock up the rest — that when he inquired of Giles to know the profits of the works *54for the years 1754 and 1755, he was informed, they were sunk by the debts, and that the lands and works were in» volved beyond their value — that at the time of the settlement in 1756, Giles had in his possession a memorandum boot, showing the clear profits of the works for the years •1754 and 1755, to exceed ¿64000 — that on his objecting to 'enter into a settlement on an account produced by Giles for that purpose, Giles abused him, and threatened him with a gaol, and that he was obliged to throw himself upon bis mercy, and without examining the books or accounts, and ignorant of the state of .the concern, he entered into the settlement and bonds of 1756- — ar.e all positively de-, nied in the answer, and wholly unsupported by any proof exhibited in the cause. Nor is it probable that Garrelt% who was a sensible discerning man, would under such circumstances of suspicion have entered into, a settlement without an inspection of the books, which he was .entitled to, when he could not suffer by delay, and it was not in the power of Giles to coerce him. Moreover, the circumstances that Caldwell was present and assisted at the settlement; that Giles offered to refer the whole business, to arbitrators, who he knew would only act upon an inspection of the books; that after the settlement, he passed his bond to.rectify mistakes, "and continued Garrett in his employment as a clerk, until the year 1769, and thus put it in his power to discover the frauds and errors if any existed; that all the instruments of the 12th of March 1756, are in the handwriting of Garrett himself, and that he made frequent payments on his bond, irresistibly force the presumption that no fraud, violence or imposition, was practised.
. The .settlement then of the 12th of March 1756, must be taken to be fair, and if liable to any exceptions, it can only be on the ground of error or mistake; and the complainant can now only be permitted to surcharge and falsify, and that no further than the specifications in the bill. The onus probandi is on him- — and after a voluntary settlement by the parties themselves, of long and intricate transactions, which cannot now be fully known or unravelled, the lapse of nearly sixteen years from the time of the settlement tp the filing of the bill, the frequent payment of money upon the bond passed on the settlement, and the death of Caldwell, the only material witness, the *55surcharge or falsification must be clearly demonstrated and ¡proved before it can be allowed.
In this case there are but three specifications. The bill states that Garrett was charged in the settlement with. £313 11 1§, as his proportion of desperate debts, which Giles has since collected or. received satisfaction for; that he was charged with £19-9 10 3 J as his proportion of the Talphahaken balance — whereas there was no such balance —and with ¿’150 as his proportion of a debt on account of the Talphahaken works due Price & Brenner, which he had before settled and paid.
These items are contained in certain general charges in the account on which the settlement was made, but are not falsified by any evidence in the cause; besides, they are more than covered by the relief decreed by the chancellor against the bond on which an injunction has been granted by consent of counsel.
The bond to correct errors makes no difference — it ©rdy contains what the law provides without it — and unless errors are clearly designated and proven, the settlement must stand; and from a strict examination oí all the proofs ill the cause, it does not appear that there were any errot s or mistakes in the settlement, or that Garrett was in any manner injured.
With respect to Dicks, it appears that he was left out of the copartnership of the 12th of June 1753 — that on the same day an account was opened against him, in which be was charged with his proportion of the £1000, advanced by Giles, Hal'llk Garrett, with interest thereon.
On the 4th of August 1754, he made considerable payments in money on that account, and passed his note for the balance to Giles and Garrett, which ivas carried as a debit into his general account on their books. That on the 5th of November, 1754, he was credited by the amount of that note paid to the order of Garrett, and his account closed. From which time his name does not appear on the books. He died in the year 1780, and never claimed anv interest in the partnership after the 12th of June 3753, ana there is no evidence that he considered himself, or was considered by others, as a partner. After which acquiescence and lapse of time, connected with the circumstance ofhis paying offhis proportion of the £1000 advanced \v Gilesj Hall and Garrett? a year before it became due, and *56when, if he continued a partner, he would have been entitled, under the contract, when it did become due, to set off against it his proportion of the profits of the works, a court of equity will presume that his interest was relinquished.
Upon the whole, therefore, I am of opinion, that Benedict Edward Ball onght not to have an account of the profits of the works either in right of Garrett or Dicks; and that the decree of the chancellor of the 28th of November 1808, ought to be reversed, and his decree of the 22d of December 1797 affirmed; and that the respective parties in this appeal, and in the appeal before the late court of appeals, pay their own costs by them incurred and expended in the court of chancery, in the late court of appeals,, and in this court.