Court Opinion

ID: 6251530
Source: CourtListenerOpinion
Date Created: 2022-02-17 21:16:39.16786+00
Date Added: 2024-06-11T08:59:25.907188
License: Public Domain

Dissenting Opinion by
Mr. Justice Elkin,
January 13, 1913:
According to my view the conclusions reached in this *228case are erroneous in several particulars. The pleadings have been disregarded and appellant has been made to answer for the faults of individuals with whom it had no connection and from whose acts it derived no benefit whatever. The bill averred that the parties were tenants in common and the answer admits the averment; The bill prayed for partition and an accounting between tenants in common, while the master treated it as a bill for an accounting between partners and opened the door so wide as to require appellant to account for secret profits made by Rafferty and Donnelly, as partners between 1883 and 1888, many years before appellant had anything to do with the operation of the plant, and at a time when Rafferty and Donnelly had no partnership relation with the Frick Coke Company or with the McClure Coke Company. No one has undertaken to explain satisfactorily how this thing can be legally done..
There is not a single averment in the bill upon which to predicate a partnership relation, while on the other hand there are several distinct averments that the parties were tenants in common and that the accounting should be made upon this basis. Rainey himself answered that he was not a party to any agreement by Avhich the land involved in the partition proceeding was to be used and operated in a partnership relation in conjunction with other property. He also averred that he is entitled to one-fourth of the proceeds arising from the profits made in the manufacture of coke, and this upon the theory that he was a tenant in common. In other Avords, he averred in his answer that he was the owner as tenant in common of one-fourth of the land described in the bill and that there should be an accounting to him for the profits made upon this basis. The issue was thus made up by the parties themselves and it is difficult to see how the master and the courts can entirely ignore the pleadings and try the case upon another theory. The rule is that a party is not allowed to state one case in a bill or answer, and make out a different one by the *229proofs: Boone v. Chiles, 35 U. S. 177. The relief afforded by a decree in equity must conform to the case as made out by the pleadings as well as the proofs: Luther v. Luther, 216 Pa. 1. This is an elementary rule, recognized by all authorities, but entirely ignored in the case at bar.
A brief statement of the facts is a sufficient answer to the position taken by the master and approved by the court below and here on the question of secret profits. In the first place, if the parties were tenants in common at the time the bill was filed, and it is so averred in the bill and admitted in the answer, the question of secret profits as it related to a partnership transaction existing at a prior time between different parties, if such a relation ever did in fact exist, could not be considered in this proceeding. The Union Coke Works were managed by Braden Hurst until August 1, 1883, and no question arises in the present case relating to the business prior to that time. From August 1, 1883, to May 1, 1888, Rafferty and Donnelly operated the plant in the interest of the owners and during that entire period sold the coke to McClure & Company, a partnership consisting of themselves and one Rubie. The proofs show that McClure & Company made large profits by purchasing the coke manufactured by the Union Coke Works at one price and selling it in the market at a much higher price. It was contended that Rafferty and Donnelly were partners with the other owners and that they should account for the secret profits thus made. This would no doubt be true as between Rafferty and Donnelly and the then owners, but how these secret profits can be charged against the Frick Coke Company, appellant here, which had no connection with the business until 1895, no one has yet explained, and it is difficult to see how such a liability could arise in the absence of an express contract to account for such wrongdoing and no such contract was either averred or proved. The McClure Coke Company, a corporation created in 1888, took over these *230properties and conducted the business down to 1895, when it passed into the hands of the Frick Coke Company. It is nowhere charged, nor was there any attempt to prove, that the Frick Coke Company derived any secret profits from these transactions.- Rafferty and Donnelly were the sole beneficiaries of the alleged secret profits. The Frick Coke Company had no connection with the business during any of the periods when these secret profits were alleged to have been made, nor had it any responsibility for the management of the Union Coke Works at that time, nor did it occupy a partnership relation with the parties here interested ..at any time, and yet as it turns out in the course of the present proceeding, this company is required to bear the burden of the wrongful acts of those with whom it had no business connection, covering a period of twelve years, during all of which time it had no interest in the business, nor had it any responibility for the acts of the parties. And all this is done in the name of equity. I cannot bring myself to believe that this conclusion is warranted either in law or in equity, and certainly not in good conscience. There is nothing in this record to show that the Frick Coke Company became charged with such a burden by the merger of the McClure Coke Company with it, but even if it did assume such a burden as to the McClure Coke Company its responsibility in any event would be limited to the corporate acts of that company, and could not go farther back than the date of its incorporation in 1888. As to the acts of Rafferty and Donnelly during the period from 1883 to 1888 the statute of limitations clearly applies in favor of third parties, who had no connection with them at that time.