White v. White , 5 Gill 359 ( 1847 )

Magruder, J.,

delivered the opinion of this court.

The very many points, which it is supposed arise on this appeal, have been argued by the counsel with great ability. If, however, one of the objections urged by the appellant to the relief which is sought, be well founded, it will be unnecessary for us to intimate an opinion on other questions.

To the bill of complaint which was filed in the Court of Chancery by the appellee, some of the appellants demurred upon the ground that it is multifarious; and this court has said, (2 G. & J. 29) if the bill be liable to be dismissed for multifariousness, it ought to be dismissed in toto, and not made the foundation of partial relief.

We at once then come to the examination of this question, and in deciding it, our attention is to be confined to tbe bill itself, the demurrer admitting every thing therein to be true, which is properly introduced into it.

One and the leading object of this bill is to obtain a settlement of certain partnership concerns spoken of in it. What then do we learn from the complainant himself of them, and his connection with them ?

In 1814, there existed (how long it had been in existence we are not told) a partnership, consisting of the defendants, John C. White, Robert White, John White, and Campbell P. White. In the course of that year the complainant became a partner, and associated with the defendants just named, in the same business, and in the same places—-Jfew York and Baltimore.

The enquiry here presents itself, did the complainant thereby become a member of the previously existing firm, or of one just formed ? Story, in his commentary on the law of partnerships, 438, sec. 307, says, “every partnership being founded in the voluntary consent of all the parties thereto, and that consent being founded on a delectus personarum, no partner has any right whatsoever to introduce a new partner into the firm, without the consent of ail the other partners; and if such consent be given, then it becomes to all intents and purposes, the substitution of a new partnership for the old one, and this is equally the doctrine of our law, and of the Roman law, and of the modern foreign law.” Of course, the complainant, until he was admitted into the concern in 1814, was no partner, and was not at all responsible for the debts of any previous partnership. The partnership thenceforth, and until it was dissolved, consisted of five, to wit, the four partners just named, and the complainant; so long as that partnership existed, each was entitled to an account of its concerns, its profits, it effects, and its liabilities. How long did the partnership formed in 1814 continue? No change took place until the year 1825 or 1826, when one of the defendants (John White) withdrew; and what was the effect of that withdrawal? The complainant in his bill tells us, that in 1825 or 1826, the defendant, John White, withdrew, whether with or without just cause— with or against the consent of the other partners, he does not explicitly state—but he charges that subsequently to his withdrawal, the business was carried on by a firm consisting of the other partners and himself. John, it is admitted, did withdraw, his right to withdraw is not questioned, and it would be difficult to maintain that a member of a partnership cannot withdraw from it, without a dissolution of it. A dissolution of a partnership may be brought about in various ways, and among others, “ by a withdrawal of a partner from the business of the partnership.” The business was afterwards carried on by the other partners: of course, John was excluded from all participation in it. So things continued until March, 1835, when Robert withdrew, and thenceforth it was carried on by John C., Campbell P. and the complainant, until 1843, when, as he himself informs us, the complainant retired from the partnership, and his retirement from it, he charges dissolved it.

Now no one can doubt, that either of these parties could demand a settlement of the partnership concerns during the whole time that he was a partner, provided, he demand that settlement from those, who, during the time were his co-partners. The defendant, John White, was entitled to demand a settlement, as well of the partnership which had existed before, as of that which was formed in 1814, but must take care to demand it of the proper persons. The complainant was a proper person to be made a party to the settlement of the concerns of the partnership formed in 1814, and which continued until 1825 or 1826. He was not a proper person to be made a party, and might have demurred to a bill, asking a settlement of the accounts of the firm, which was dissolved in 1814, because, says Mitford, “ it would put him to the trouble and expense of a litigated question, with which he has nothing to do;” yet it would be very difficult to prove that he had not as much to do with the partnership which existed before he associated himself with its members, as the defendant, John, had with a partnership carried on by men who had been indeed, but had ceased to be, connected with him in business.

Some of the cases which have been cited, and as illustrative of the doctrine of multifariousness, are rather exceptions to the general rule, which forbids multifariousness in a bill. Mention of those exceptions will be found in Story on Equity Pleading, 285th, and following sections. It is true that there are such exceptions, as there are to the rule which requires all persons interested to be made parties to a bill in Chancery. It can scarcely be pretended that this case can be brought within any of the exceptions.

The defendant, John White, may with great truth affirm, that this bill is to burthen him with expenses which he is not bound to incur, to swell the pleadings with the state of the several claims with which he cannot be considered to have any sort of connection, and by uniting in one suit a partnership, of which he was a member, with partnerships in which he had no interest, would delay the settlement of his own accounts. These, we are told by all the writers who treat of the subject, are valid objections. Cooper, in his Equity Pleadings, 183, stales one other reason why multifariousness is discountenanced in equity. “ It is also to prevent confusion, and to preserve some analogy to the comprehensive simplicity of declarations at common law, that this ground of demurrer has obtained.” Is any thing like this tolerated in common law courts ?

If the case before us had already been fully stated, there is abundant reason for saying that in the multifariousness of this bill, ample ground for the demurrer, which has been filed by the defendant, John White, may be found, seeking to enforce different demands against persons liable respectively, but not as connected with each other. “ Even this (says Lord Eldon, in Saxton vs. Davis, 18 Ves. 72) is clearly multifarious.”

A very large portion of the objectionable matter which the bill contains is yet to be noticed.

Henry White is also made a defendant, and is required to answer all the matters charged in the bill, although it is expressly stated that he was no partner, but only an agent during the several partnerships. He is required also to give an account of his agency. Why shall he not exempt himself from the expense of answering in extenso, all the matters which the bill requires all the defendants to answer ?

• It is true that he is said to have been the financier and agent for many purposes of those various firms. Because of this, he may be a very important witness in the case. But why make him a defendant, when of his answer no possible use can be made by any of the other defendants ?

It would seem that for his services as agent, he was to receive a salary, as all the persons in their service it may well be supposed were. It appears further, that he had made some efforts to secure the balance claimed by him to be due to him, and had obtained some security for it, without the consent or knowledge of the complainant, though it is admitted that he, the complainant, with the other partners, executed the mortgage, which is that security. It is not necessary here to enquire whether, as the other partners seem to have been able to settle with their agents, and to give him satisfactory security for the eventual payment of the balance admitted by them to be due to him, there was a contract between the parties, which was violated by such an adjustment as was made of the claim of Henry. It is also unnecessary for us in disposing of this defence, to say that the judgment or mortgage given to the defendant, Henry, could be set aside, if impeached in a proper way. If the judgment or mortgage is to be impeached, such a case is not to be blended with this suit with the partners about the partnership concerns, all the other parties to which have the same interest that the complainant has in reducing or defeating his claim; and if thus blended, the connection of them might greatly delay the settlement of both, and have the effect of extending the credit which the defendant, Henry, agreed to give to his debtors.

No doubt it ought to be the wish of courts to prevent a multiplicity of suits, and to lessen, as much as possible, the expense of litigation. This, however, is not to be accomplished by a denial to any man of his just rights; and if Henry White is to be compelled to blend his claim with any controversy between the several members of these several partnerships, and to await the end of this controversy, oyer which he has no control, he may not only be loaded with enormous costs, which he is not bound to incur, but subjected to a delay, which is often more injurious than a prompt denial of justice. This must be be pronounced to be “confounding distinct matters: this is a blending of several matters perfectly distinct and unconnected: this is to demand several matters of distinct natures, against several defendants.” Surely the claims united in this bill are of “so different a character, that the court will not permit them to he liquidated in one record; a record with a large portion of which, and of the case made by which, he (the defendant, Henry) has no connection whatever.” Surely, the defendant, Henry, has a right to insist, that even if the judgment and mortgage may be impeached, and his claim contested; yet this “ is a perfectly distinct case” from that between the other parties to this bill, and he “ has a right to have that case discussed and decided by itself, without being mixed up in a suit,” for a settlement of all the partnership concerns.

The bill asks, among other things, a settlement of the concerns of three distinct partnerships, to compel the agent of these several partnerships to come to a settlement with each of them; to set aside the settlement which it is charged that the agent has made with some of the partners. It also asks a decree, declaring that the judgment and mortgage shall stand as a security, for such sum only as it shall he ascertained is due to the agent, and to direct a sale forthwith of the mortgaged premises. This certainly is “a demand of several matters of a distinct and independent nature, against several defendants in the same bill,” and in the language of Justice Story, (Equity Pleading, sec. 271) would he oppressive, because it would tend to load each defendant with an unnecessary burthen of costs, by swelling the pleadings with the statement of the several claims of the other defendants, with which he has no connection. Of this case also it may be said, “ the proofs applicable to each are apt to be confounded with each other, and great delays would be occasioned by waiting for the proof, respecting one of the matters, when the others might be fully ripe for hearing. Such proceedings are not to be permitted in courts of equity, which, in cases of this sort are apt to preserve some analogy to the comparative simplicity of proceedings at common law, and thus to prevent confusion in their own pleadings, as well as in their own decrees.” Story's Equity Pleading, 3d edit., p. 296.

There are in this bill, charges, that some of the defendants confederated together for some purposes, and in 2d Vernon, 416, there is a case in which a demurrer for multifariousness was overruled, because the charge that the defendants had combined together was not expressly denied. The charges in this bill are not such, as it would seem the case in Vernon would require. But of the case in Vernon, Cooper, in his Treatise on Equity Pleadings, says, “is denied, and is contrary to the modern practice in settling demurrers.” Indeed, it cannot be the law of England, as it appears by some recent decisions there; that although multifariousness cannot be objected to by the defendant at the hearing, unless he has demurred, yet the court may take the objection at the hearing sua sponte. See cases, Story, p. 295, note. Indeed, we are told by Lord Cottenham, in Campbell vs. Mackay, (13 Condensed Ch'y Reports, 543) “ the court in deciding cases of this description, seem to have considered what was convenient in particular circumstances, rather than to have attempted to lay down any absolute rule.”

The act of 1841, ch. 11, authorizes an appeal in this case, and the case being before us, all orders and decrees passed therein are to be reviewed.

DECREE REVERSED AND BIDE DISMISSED.