Reybold v. Dodd's Adm'r

1 Del. 401

• Court: Supreme Court of Delaware
• Decided: June 5, 1834
• Status: Published

Opinion

Harrington, J.

delivered the opinion of the court.

“The bill was filed in this case on the 6 July 1826, for an account of a partnership concern between the complainant, Job S. Dodd and Philip Reybold in the business of buying and butchering cattle, sheep and other stock for sale. It alledged the formation of the partnership in September 1824, and prayed a discovery and account of all the cattle, sheep and other stock bought and butchered by the deft, since that time; and of the meat, hides, tallow and other articles sold by him; and a full account of all the partnership dealings and transactions from the time of the commencement thereof; and that proper directions might be given for the conduct and management of the said joint-partnership business in future for the joint and equal benefit of the complainant and respondent.

The answer of the deft, positively denied the existence of the partnership; or that any contract of partnership between him and the complainant had ever been formed or entered into.

On the hearing of the cause the chancellor decreed (on the 7 July 1828) that Reybold should account with Dodd “for all the property, effects, rights and credits of the said concern, and of all the profits made by or on account or in behalf of the said concern, and of all transactions since the commencement of the same as afsd.” and that he should on or before the 15th of October next “file an account of all the business and transactions of the said concern of Philip Reybold a.nd Job S. Dodd, from its establishment up to the 7th day of this present month of July”—and should exhibit the true balance due to the said complainant from the said concern.”

An appeal was taken from this decree; and, on hearing in the High Court of Errors and Appeals, at the June term, 1829, the decree was in all things affirmed.

It is contended on the part of complainant that this decree of the chancellor as affirmed in the court of appeals was conclusive, both as to the existence of the partnership and its duration: and consequently, that the issue afterwards sent by the chancellor to a court of law to try if the partnership had been dissolved, and when, was irregular.

It cannot be denied that an interlocutory decree to account is decisive of something. Though it has been considered by the deft.’s counsel as of very little binding importance as to the final result of the cause, it must nevertheless be admitted that as a judgment of the court upon some matter arising in the cause, it is decisive of that matter unless reversed by a superior jurisdiction or reviewed and changed by the chancellor himself. Whether it is competent to him to change or vary such an-interlocutory decree without the formality of a re-hearing it is not important here to inquire, because the complainant in this cause sought relief from this decree before another tribunal whose judgment upon it was conclusive. After affirmance in the court of appeals the interlocutory decree, whether conclusive on the chancellor before, or. subject to his revision either on the general hearing of the cause or on a special petition to re-hear the matter adjudged, was certainly conclusive and binding on him.

The important inquiry therefore is, what was decided by this interlocutory decree? It decided whatever was directly in issue between the parties; whatever was necessary to be decided at that stage of the cause. Here was a controversy about a partnership;—a bill filed for an account of partnership transactions, and for payment of the complainant’s share of profits. The suit embraced many and intricate questions growing out of the details of the partnership, but which it was not necessary to look into until the fact of the existence of a partnership had been established. It was denied in the answer that any contract of partnership had ever been entered into between the parties. They were at issue on this point, and this was the matter to be settled by an interlocutory decree. And this was all that was necessarily embraced in such a decree. The complainant was not entitled to an account until he established the fact of a partnership; and any contract of partnership being established a decree to account must follow whatever may have been its terms, duration or result. It was no more necessary at this stage of the cause to determine its duration than to establish its terms, or results or any other details belonging to the general consideration of the cause. Nor could the parties be supposed to be at issue on a question of duration of partnership when its existence was denied and was the matter directly in issue. On this issue the chancellor decreed an account of the partnership transactions; thereby establishing that a partnership had been entered into as alledged by the complainant and denied by the deft, but leaving all questions growing out of the account as well as all other matters not necessarily embraced in that decree, open for further and final decree. He directed that the account should commence with the origin of the partnership and be brought down to the day of making that decree; giving the widest possible range to the deft.’s accountability, but, as we apprehend, no more fixing the extent of that liability by determining the duration of the partnership, than by fixing its terms. At that time he could know nothing about either. He had been trying whether any partnership had been formed between the parties; he decided that it had. The partnership being thus established, prima facie it was still in existence; and, prima facie also, it was one of equal interests and equal liabilities. It was therefore proper to direct the accounts to be brought down to the date of the decree, subject however to be modified either as to the extent of the partnership or the interest of the partners, as the subsequent proof in the cause should make it necessary.

We are therefore of the opinion that the issue directed by the chancellor on the 5th of April, 1832, to try “whether or not the partnership in the business of slaughtering cattle, sheep and hogs between the said Job S. Dodd and the said Philip Reybold has been dissolved; and, if dissolved, when was the said partnership dissolved?” did not impugn the interlocutory decree of the 7 July, 1828, and was a legal and proper exercise of his power; and we are further of opinion that the form of the issue in this case is not objectionable as it submits to the jury the fací of the dissolution of partnership and the period of that dissolution which were matters proper to be tried by a jury.

We are next to inquire whether the chancellor erred in treating Reybold and Dodd as equal partners, and decreeing that, the deft, should pay to the complt. one half of the profits of the concern with interest from the period of its termination. We have already expressed the opinion that the interlocutory decree of the 7th July, 1828, directing Reybold to account did establish the existence of a partnership; and, in the absence of proof to the contrary, a partnership of equal interests. If a partnership exist without express agreement regulating its terms, or none such be proved, it is governed by the contract which the law implies from the relation of the parties. The law implies that they are equally interested in the joint concern; and with respect to profits, that they are entitled to an equal division unless the contrary be made to appear. (Goto, on partnership 10.) It is true the case of Peacock and Peacock, (Camh. 45) is different; but that was a nisi prius decision and has been overruled. In this case there is no proof whatever in relation to the interest of the partners; nor was the equality of interest denied in any stage of the cause previous to the argument on appeal. The chancellor therefore rightly treated the complt. and deft, as equal partners and decreed a division of profits accordingly. If the complainant was entitled to one half the profits at the dissolution of the concern he was also entitled to interest for its detention from such time as it. ought to have been paid over. The chancellor has taken the period of dissolution; and, as the evidence shows it was a cash business, or business transacted on a very short credit, with prompt payments at stated periods, a division of profits might have been made at the close of the concern. And we regard the rate of interest as a better rule of compensation for the use of complainant’s capital after the dissolution than a subsequent division of profits. It is true that in certain cases where a trade or business is continued after dissolution with the joint stock and on the joint capital, the court has decreed a division of subsequent profits. In this case the capital was created In the course of the business; the deft, originally advanced the whole capital on which the chancellor has allowed him interest until, according to the testimony, it was realized by the profits; on the dissolution of the partnership therefore, though the deft, did continue the same business on his separate account, it was not upon the joint stock or capital any further than that he may have had the use of so much money as he was indebted to the complainant as his share of the profits of their late partnership. Stock in trade there was none, further than this, and we are of opinion that the complainant is not entitled, on the authority of the cases referred to, to treat this partnership as subsisting and being carried on by Reybold after its dissolution for the equal benefit of them both merely because his share of the profits was not promptly paid over. We think the more equitable rule is that adopted by the chancellor of giving him interest for the use of his money from the time Reybold ought to have paid it.

It is also objected against the decree of the chancellor that he re-refused to allow Reybold any compensation for his attention to the business of the concern though it is in proof that the whole was transacted by him without any interference or attention on the part of Dodd. The chancellor has but followed the rule of law on this subject: though the management of the business might reasonably entitle Mr. Reybold to compensation, such management is deemed to be voluntary, without a special agreement, and gives no legal claim to compensation. Each joint owner in managing a joint concern is taking care of his own interests, and the law never undertakes to settle between partners their various and unequal services bestowed on the joint business. This must be left to contract (1 Johns. Ch’y. Rep. 165. Franklin vs. Robinson.) In the case of joint- partners the general rule is, that one is not entitled to charge against another a compensation for his more valuable or unequal services bestowed on the common concern without a special agreement. (3 Johns. Ch’y. Rep. 434. Bradford vs. Kimberly, and the cases there cited.) It is true that where the other partners constitute one the agent of the whole to transact the whole business he is entitled to compensation, either stipulated or on a quantum meruit; but this is on the ground of contract. Without express agreement for compensation to a joint owner or partner, or the positive employment of one of the partners by the others for the transaction of the concerns of the whole and as the agent of the whole, no compensation can be allowed on the authority of adjudged cases. In this ease there does not exist any proof of such contract for compensation, nor of the employment of Mr. Reybold as the agent of the concern for the transaction of the whole business; and though it may have been conducted chiefly or entirely under his supervision and care, the attention thus bestowed' was voluntary on his part and given to the concern. For the use of his buildings, slaughter houses, pastures, &c. and for actual expenses incurred by him in managing and conducting the affairszof the partnership allowance has been made.

We have yet to consider what we regard as the most important question in this cause. On this question the court is divided, and the opinion now to be expressed is that of a majority of the court only.

“The fourth exception or cause of appeal in this cause assigns as matter of error in the decree.” That it appears that the said decree was based on the report made in this cause by a certain William P. Brobson, esquire, whereas the defendant does insist that judicial power cannot be delegated but by express law, and that the most important rights and privileges of the deft, in the cause were by order of the chancellor examined and adjudicated out of court by the said William P. Brobson, esquire. It is at once seen that this exception involves a very important question, and that is, whether the chancellor has the power to appoint a person by the name of a master in chancery, auditor or referee to state an account and to take, depositions in support of the account which may be so stated. It is admitted that no such power has been delegated to him by any statute law of this state, although the legislature has deemed it proper to confer upon him full power to hear and decree all such matters and causes of equity as shall come before him, where the proceedings shall be as heretofore, by bill and answer; and with power to issue forth all manner of subpoenas and all other process as may be needful to oblige and force defts. to answer suits; and also to award commissions for taking answers and examining witnesses, and to grant injunctions for staying suits at law and stopping wastes, as there may be occasion; with power to make orders and do all other things necessary for bringing causes to hearing; and that when matters of fact shall happen to arise upon the examination or hearing of the matters and causes to be heard and determined in the said court, then and in every such case to order the matter of fact to issue and trial at law before decree. As there is no such power to be found in our acts of assembly then can it be sustained by the ancient practice of the court of chancery in England, adopted there previous to the settlement of this country, or by any uniform and settled practice in this state. In England there are what are called masters in chancery. They are in number twelve including the master of the rolls, all of whom so late as the reign of queen Elizabeth were commonly doctors of the civil law; and Blackstone 3 vol. 442 calls them “officers of the court.” And it is said that some sit in court every day during term, and have referred to them interlocutory orders for stating accounts, computing damages and the like, and they also administer oaths, take affidavits and acknowledgments of deeds and recognizances. They are appointed by the lord chancellor and hold their office for life, and they have a fixed salary paid them from the public treasury. No stress can be laid on their being appointed by the lord chancellor, for he has the appointment of various other officers unconnected with his court. Here no such power is given to the chancellor, either by ihe constitution or by statute. It cannot have been derived from practice for it is believed not to have been before exercised except by the consent of the parties to the suit. During the long period in which chancellors Killen and Ridgely performed the duties of that office it does not appear that either of them ever made such an appointment. It is true that the record in one case does not show that the consent of the parties was obtained, but the recollection of the counsel in that case is that the parties expressly consented to the appointment. Whether the chancellor has such a power or not is highly important to suitors. The policy of the state has been to administer justice at its own expense, by persons appointed by the state, and acting under the sanction of an oath and amenable to the state for corruption and mal practices; whereas if it be permitted the chancellor to appoint a master ad litem the whole expense necessarily falls upon the parties to the suit; you have not the security of an oath, nor is he responsible to any one for misconduct. Should the business of the court of chancery become too laborious for one man to perform, the remedy is plain;—authorize by law the appointment of a master in each county who shall act in all cases coming within his province; let him receive a salary from the state, and be bound by an oath to discharge the duties of his office with fidelity, and be liable to indictment, or impeachment for misbehavior. Had the chancellor attempted to appoint a master for each county and with all the powers incident to the office every one would have been startled at this stretch of power, and no one would have hesitated to deny it to him. If he cannot do this, and no one is hardy enough to say he can, whence does he derive the power to appoint one ad litem? Not by the constitution, not by any statute, nor by long established usage. It would be better, infinitely better, that he should have the general power of appointing an officer to act in all cases, than that he should have the power of appointing him in the particular suit; for in the latter instance, if he were a corrupt man, he might appoint one to do the work of which he might be ashamed.

If the chancellor can rightfully appoint a master, he must necessarily have all the powers incident to the office. It seemed to be the opinion of the counsel for the deft, in this appeal, that the powers of a master were very limited; that it was a mere ministerial office, and that he could not decide any question of law. Ntwland, in his Chancery Practice, enumerates many of the various functions of a master. He says, pp. 6 and 7—“It would be impossible to specify every head of reference, because they are almost as numerous as the matters subject to the jurisdiction of the court; but the following is a statement of such as usually occur: To examine into any alledged impertinence or scandal in any bill or answer, or into the sufficiency of any answer or examination; to examine into the regularity of proceedings had in court; into all alledged contempts of the court; to settle interrogatories for the examination of the parties; to take the accounts of executors, administrators, trustees and guardians, and between parties of every description; to inquire into and decide upon claims of creditors and legatees and next of kin; to appoint receivers of personal estates and of the rents of real estates, fix their salaries, and examine their accounts; to inquire as to repairs to be done, and into the propriety of felling timber and granting leases; to sell estates, and to approve of the investment of trust money in the purchase of estates, and for this purpose to inquire into their value, to investigate the title to them, and settle the conveyances; to inquire for the heirs and next of kin of persons dying intestate; to appoint committees of the persons and estates of lunatics, and to examine the accounts of such committees. Jlnd in general there is no question of law or equity, or disputed fact, which a master may not have occasion to decide, or respecting which he may not be called upon to report his opinion to the court.” If the chancellor can appoint a master, and refer one of these matters to him for decision, what is to prevent him from referring all or any of them? Do the necessities of the state require that the chancellor should be authorized to delegate so many of his powers? It is a maxim, that judicial powers cannot be delegated unless by express warrant of law; and we would ask, where is this express warrant? We find it neither in the constitution nor statutes of the state, nor is it even warranted by the practice and usages of the court. The reason assigned in 2 Vez. 388 why matters of account and other matters are referred to a master is this— “that whenever an account is to be taken, the court, by its ancient constitution, is to be aided in taking it by some proper officer, (as masters now are,) because it is impossible to take accounts originally, as that would so take up the time of the court that justice could hot be administered in other causes.” Surely our court of chancery has not this latter excuse for delegating its authority to a master. The terms rarely exceed a week, and are held but twice a year.

It was said at the bar, that if the chancellor had not the general power of appointing a master, yet in any special case of intricacy he might refer the matters to an auditor, with authority to take the account between the parties. The chancellor has in this case expressly designated him master; but we are willing to overlook that, and consider whether he can appoint an auditor without the consent of the parties. It is laid down in Cases in Chancery 86, that such a reference cannot be made but by the express consent of all the parties; and that even the solicitor cannot bind bis client by such a reference; the client himself must consent; nor is it sufficient that the party attends on such reference unless he does actually consent. (Ib. 87. See also 2 Com. Dig. 315.) It is said in 2 dltle. 144, “that the house of lords very often in matters of account which are extremely perplexed and intricate, refer it to two merchants named by the parties, to consider the case and report their opinions upon it.”

A majority of the court is therefore of opinion that there was error in the appointment of Mr. Brobson as a master in chancery in this cause, and the reference made to him under such appointment, and that the decree founded on his report is consequently errroneous, and must be reversed. I take the liberty—perhaps it is my duty—to state with deference that my own views of the subject do not accord with this opinion.

I readily assent to the proposition that judicial power cannot be delegated without express warrant of law. It was the province of the chancellor, and of the chancellor only, to adjudge and decide every matter in controversy between these parties; and it was not competent to him to transfer this power or devolve this duty upon another. But in the exercise of this power may he not employ others in the collection of facts, in the statement of accounts, or otherwise, so as to enlighten his judgment or facilitate the decision of the cause? He is authorized by law “to make all such rules and orders as may be necessary for the better regulating the practice of the court,” “and all other regulations necessary for the bringing forward and expediting the hearing of causes,” &c. The statement of partnership accounts may be and frequently is a matter of great labor, requiring investigation and time which a chancellor may not have it in his power, consistently with his other public duties, to bestow upon it; and yet to a proper decision of the cause such an investigation may be necessary. Shall he not avail himself of the assistance of others in obtaining the very materials for his own judgment? And is not an order directing a clerk to state accounts and report results in such a case authorized by the act of assembly as “necessary for the bringing forward and expediting the hearing of causes?” Every such reference must to a certain extent involve the judgment of the referee; and what if it does, so that he reports to the chancellor the grounds upon which that judgment is formed. If the chancellor on such report agrees with him in opinion, he adopts his conclusions and makes them his own. I admit that the practice of thus employing the aid of others in the investigation of causes is liable to abuse; it is a power that ought to be used sparingly and with great discretion; but the power may be necessary for expediting the hearing of causes, and is in my opinion given by the act of assembly, if not inherent in the court. Let us see to what extent the aid of Mr. Brobson was employed on this occasion? Reybold had been directed to account with the complainant for all the transactions of the partnership. He had filed sundry accounts, which were excepted to, and he was directed to file other accounts, which were also excepted to. Depositions were taken and in part read, when the chancellor, finding it impossible for him to go into a detailed investigation of the accounts, made an order., on the 9th March, 1831, that the accounts and exceptions, together with the depositions, should be referred to William P, Brobson, “to take and state, settle and adjust an account between the parties, complainant and defendant, touching and concerning the concerns and business of the partnership heretofore subsisting between them;” setting forth a particular account of all the partnership transactions, engagements, debts and property, and of .all profits; a specific account of all cattle, &c. bought, and of the prices; and of all beef, &c. sold; showing the profits of the concern, and the balance due complainant. And that either party should be ■at liberty to except to the said account, and to prove any matter in relation thereto by depositions taken in the usual form.

This order left the whole subject still under the control of the chancellor, subject to his revision and final decision: The referee, ■or master, as he has been called, reported the account taken by him with remarks explanatory of the principles he had adopted in stating it, and references to the testimony in support of the several items of charge or credit. Exceptions on both sides were filed, the whole subject again examined by the chancellor, with all the aid he could derive from the master’s report, and he finally adopted, varied or rejected that report as in his own judgment he considered just and equitable. The decision was that of the chancellor;—influenced, it may be, we cannot tell to what extent nor how properly, by the report of the master; but still the decision of a chancellor and not of a delegated agent. It is not the ease of a delegation of judicial power; nor, in my judgment, of the delegation of any authority which the law does not authorize the chancellor to devolve on another in aid of his own judicial functions.

The practice of the several chancellors in this state of employing the aid of others in stating accounts, &c. so far as there has been any such practice, is supposed not to aid the argument in favor of their authority to do so, because such practice is said to have been exercised only with the consent of parties. No case has before occurred where it has been necessary to decide upon the power of the chancellor of his own motion to make such a reference. For though th6 appointment of a master was one of the errors assigned to the decree of the chancellor in the case of Ridgeway and Newbold vs. Newbold, (ante 385) the point was not insisted on in the argument on appeal and did not enter into the final consideration of the case. That case, moreover, is a very recent one, and could not establish any thing like a practice; and, according to the recollection of those who have the best as well as the most extensive knowledge of the practice, it is believed to have rested on the consent of parties. Either by consent or otherwise the records of the court of chancery show that such a power has frequently been exercised, never objected to until the case of Ridgeway and Newbold, nor controverted until the present case. In the case of Dick vs. Doughten, which was a bill for dower and arrears of dower, (ante p. 388) after a reference made by the consent of parties to three persons to ascertain the value of the arrears of dower, and after their report was set aside and the reference Stricken out, when the cause came on to be heard, the chancellor, (Ridgely,) “after considering the same,” made a decree that it be referred to James R. Black, Esq. who for that picrpose was appointed a master in chancery, to take an account of the rents and estimate the annual value of the third part of said rents. I have already remarked in reference to this case, while delivering the opinion of the majority on this point, that it was a reference by consent according to the recollection of the counsel, and I may add, of the master also; but I cannot see how the consent of parties could give the chancellor power to appoint a master, as he did in express terms; and if he regarded this as a mere reference by the parties themselves, it is strange that a judge of his known caution should have used language that at least implies the power of appointment without expressly founding that power on consent. The same case presented an instance of a reference by consent of parties, and shows a marked difference in language between that and the chancellor’s decree appointing a master. And it is further to be remarked in that case, that the deft, was ordered to produce before Mr. Black, on oath, all deeds and other writings in his power relating to the matters in question; and authority was given to the master to examine witnesses, and his report was finally adopted and confirmed by the chancellor.”

Decree.—And now to wit, &c. It is ordered, adjudged and decreed by the court here that the order or decree of the chancellor, made in this cause in the court below, on the 9th day of March, A. D. 1831, whereby the chancellor referred the said cause, accounts, exceptions and depositions to the said William P. Brobson, together with the report of the said William P. Brobson, and the examinations, depositions, proofs and accounts made, had or taken by or. before the said William P. Brobson, under and in pursuance of the said order or decree, shall be and the same is hereby reversed, annulled and held for nothing; and it is further ordered, adjudged and decreed by the court here, that the decree of the chancellor, made in this cause on the 15th of September, A. D. 1832, and also the final decree of the chancellor, made in this cause; and also all and every the orders and decrees made by the chancellor in this cause since the said 15th day of September, in the year last aforesaid, be and the same are hereby in all things reversed, annulled and held for nothing; and it is further ordered, adjudged and decreed" by the court here, that this cause and the record be remanded to the chancellor, to be proceeded in and heard before him upon the accounts, exceptions, verdict in the said feigned issue, and proofs taken and filed in this cause, save and except nevertheless that the said report, accounts, proofs and acts of the said William P. Brobson, or which were taken by or before him, the said William P. Brobson as afsd., under the afsd. order of the chancellor, referring the said cause to him as afsd. shall not be regarded and considered by the chancellor, but the same shall be taken and held for nothing; and it is further ordered and decreed by the court here, that the respondent pay costs, &c.

Gray, Bayard and Wales, for Dodd’s administrator. Frame and Rogers, for Reybold.