Holmes's Appeal , 79 Pa. 279 ( 1875 )

Mr. Justice Sharswood

delivered the opinion of the court October 25 th 1875.

It is not necessary that we should discuss the question which has been raised on the jurisdiction of the court to entertain the bill and to make the decree which they did in this case. We are of opinion that the plaintiffs have failed to make out their equity to any relief.

It is an undisputed fact that Margaret Arbuckle, in July 1851, by an agreement under seal, with the surviving members of the firm of Thomas Arbuckle & Co., did make a final arrangement and settlement of his claims upon that firm. She was his widow and administratrix, and, therefore, in law authorized to make such a settlement. Nor is it denied that if the recital of facts contained in that was true, the settlement was a perfectly fair and equitable one, and would be binding on the estate. Those facts are endorsed as true, not only by the administratrix, but by the surviving members of the firm, including John Arbuckle, the father of Thomas Arbuckle, and who by the terms of the articles of copartnership, was jointly interested with his son in one-fourth of the capital stock, having paid his share of the said one-fourth in cash, and having the right under the articles, upon the death of' Thomas, to take the interest of the deceased in the share at the value thereof, as ascertained, and who actually did elect to take the share in trust for the family of his deceased son.

The master, however, found and reported that this agreement of the administratrix was collusive and fraudulent — that is, if the words have any meaning that she conspired with the surviving partners to defraud the estate of her deceased husband — to defraud her children, the plaintiffs in this case, and deprive them of their legal rights. Where is the evidence of this ? That any fraud was practised upon her to induce her to sign the agreement, there is not a spark of evidence. It was read to her, and there is no evidence that she did not understand it. The presumption is, from her relation to the deceased, that she knew that the principal fact recited in the agreement was true, to wit, that the bonus of fifteen thousand dollars was bestowed on her husband, Thomas Arbuckle, in order to secure his services, skill and co-operation for the five years the partnership was to continue. It is not shown that she was personally to derive any benefit or profit from the agreement. She was not only absolutely without any motive to commit such a fraud, but her interest was altogether in the opposite direction.

The master grounds his finding of fraud and collusion — not upon any evidence — but upon an inference drawn from the articles of co-partnership, that the fifteen thousand dollars allowed to Thomas Arbuckle was to be for his name, not his services; and his name the firm used and had the advantage of during the whole five years of its agreed duration. But this is so clear that it cannot be explained by evidence aliunde? Thomas R. Holmes and Nathaniel Holmes convey to the firm all the real estate, engines and machinery, and in consideration thereof the firm contracts to pay of the debts of the firm of Blaekstock, Bell & Co., the sum of eighty-five thousand dollars: “ and also to pay the said Holmes the sum of fifteen thousand dollars in cash. The said sum of fifteen thousand dollars to be paid by the said Thomas and John Arbuckle and to form part of their share of the capital stock of said co-partnership, of which payment the receipt of the said Holmes therefor shall be sufiicient evidence and voucher for them, the said Holmes and John, that they have paid said sum and part of their capital stock.” There is certainly nothing in this to indicate what consideration moved the other partners to make this grant to Thomas and John Arbuckle; and that John Arbuckle paid his full share of $12,500; and the full amount of $15,000 was credited to Thomas, was evidently an arrangement between the father and son with which the other partners had nothing to do. John Arbuckle probably gave to his son Thomas his half of the bonus. Nor is the provision that Thomas was to be paid a salary of $1000 for his services as managing partner, entitled to conclusive weight. Skill and knowledge in the art or mystery of cotton spinning were different things from labor and responsibility as managing partner, and might well he separately compensated. Why Thomas Arbuckle ordered his salary to be credited to the Holmes has not been explained. It may have been a mere gratuity, but it is more probable that it was the result of a private understanding between the parties.

Nothing is better settled than that the consideration of an agreement may be proved aliunde by- parol if necessary, and even shown to be different from that expressed. Here, then, we have the solemn declaration of Margaret Arbuckle, under her hand and seal, together with the other members of the firm as to what was in truth the consideration of the bonus, made at a time when all the circumstances were recent and fresh in memory. This is confirmed by the testimony of William Neille, who was the confidential clerk of the firm and cognisant of all their transactions as to his understanding. Nor is it conclusive against that testimony that, after so long a lapse of time, he cannot state with particularity the sources of his knowledge. At the time the proofs were taken, Margaret Arbuckle was a competent witness for her husband’s estate, and so was Charles Arbuckle, one of the plaintiffs, who was sixteen years old at the time of the settlement, and present at the execution of the agreement by his mother. Yet neither of these persons are offered as witnesses to show any fraud or collusion. The master reports that John Arbuckle did not concur in the arrangement between the other partners by which the estate of Thomas Arbuckle was debited with the sum of ten thousand dollars, but says: “John Arbuckle repudiated the entry.” We see nothing in the evidence to maintain this finding. John Arbuckle’s name and seal are to the agreement of July 1851. That the amount credited to him was charged back by his order was entirely of a piece with his generous conduct throughout towards his son and his son’s family. No doubt he intended to do this when he executed the agreement, and it is one of the facts necessary to sustain the plaintiff’s case hardest to believe, that with no contemplated advantage to himself, he should have conspired with the other partners in an act of spoliation of his own grandchildren.

This -is a very stale claim, and as such not regarded with favor in a court of equity. There was no concealment of the transaction. Charles Arbuckle, one of the plaintiffs, was present when the agreement was read to his mother and executed by her, in July 1851. Yet no proceedings are instituted until April 1863, nearly twelve years after it. The case drew its slow length along eleven years before the master’s report was made and the decree entered. We are of the opinion that the plaintiffs have failed to show any equity to support the decree.

Decree reversed, and now it is ordered that the bill be dismissed; the appellees to pay the costs below and of this appeal.