Grubb's Appeal , 1870 Pa. LEXIS 286 ( 1870 )

The opinion of the court was delivered, July 7th 1870, by

Agnew, J.

— This case has been so fully and ably examined and reported upon by Mr. Robb, the master appointed by this court, and his positions so well stated, a few comments only will be necessary in noticing the points of controversy, rather than the exceptions in detail.

His conclusion that the real estate was held in common by Edward B. Grubb and Clement B. Grubb, and not in partnership, is correct. This is not inconsistent with its use for partnership purposes, and its appearance in the partnership books to the extent made necessary for the use of the partnership in the iron business. The partnership was related to it very much as in a case w'here partners lease land to carry on their business. The pai’ties being equal as tenants in common as well as equal partners, the use of the land would, in the settlement of their partnership account, be the same in its results to them, as if as partners, they had leased the land of themselves as tenants in common. Hence the payments by the partnership for the owelty in the partition has no weight in the argument, for the result would be the same as if each partner had drawn from the firm an equal sum and applied it to his share of the owelty as a tenant in common. It is evident the payments in owelty did not change the character of the title vesting in them as tenants in common, and especially the title of so much as each held primarily as an heir, for which no owelty was paid. For the same reasons the Arms contract has no particular bearing on the question. The partnership had been operating in mining ore, and was still in debt, — as the agreement shows, to Parker, who was to receive the proceeds of the contract, — and was in possession of the tools and other facilities for mining, so that the Arms contract was really nothing more than a prolongation of the partnership for the mere purpose of mining as a means of paying the firm-debt. As to the price of ore-leave, a majority of the court think that both masters having fixed upon the same prices for Chestnut Hill and Cornwall ore, it is not sufficiently evident they have made a plain mistake, and therefore, according to our rule, the report must be confirmed. To myself it has appeared differently. I cannot see the weight of evidence which led Mr. Kline to fix the prices so far below those the parties were actually selling at; and it seems to me Mr. Robb followed Mr. Kline for the reason, that in differing from him he foresaw much perplexity in settling upon a satisfactory price. But the price of ore-leave, as shown by the Arms contract, and the defendant’s own account as rendered in 1859, by his admissions to witnesses, his contracts with third parties, and prices at neighboring mines, are not satisfactorily reasoned away by the master. Nor can I see how the contracts for ore-leave in iron can be rejected as corroborative evidence, especially in view of the rise of prices from $16 or $18 per ton for iron up to $34 and $35.

We concur with the master as to the interest with a single exception to be noticed. It is argued that this being a case of tenancy in common and not of partnership, the rule for interest should be as between tenants in common. But in a court of equity each case rests on its own circumstances, and cannot be made to fit a single unbending rule. Both parties were using the ore at pleasure, and without requiring each other to account. Annual balances were therefore uncertain. There was no known, excess to be paid for as the business progressed. It was not a case of a wilful detention of the profits of the land, but a mutual and voluntary delay in settlement. We must look at their mutual course of dealing. Until called upon to account neither could complain of the'other, and neither could claim a balance till the accounts of both were settled. There were strong reasons for this mutual indulgence. Much of the ore was taken to pay partnership-debts while the partnership was also taking its means to pay off encumbrances on their common estate. The whole case is therefore to be likened in its results to the settlement of a partnership account, in which interest has no place until a balance is struck. But there is an error in the interest charged on the Arms contract. In that contract Clement B. Grubb became a debtor to the firm, and was to pay the prices fixed in the contract at stipulated times. The master settled this account as for an individual debt, and therefore charges interest on the ore from the time it should have been paid for. But the account also shows that Clement B. Grubb advanced on the Arms contract, cash $3378.72, to mine ore under it. This sum should be credited in the calculation, as there is no principle which can make Clement B. Grubb liable for interest on the money advanced to carry out the contract. We see nothing to correct in regard to the liquidation of the Parker and Ogilvie judgments. The master has taken an equitable view of the matter. We apply the same remarks to the claim of the plaintiff for the expenses of his removal to New Jersey.

In the debits and credits for working Chestnut Hill ore there is one matter to be corrected.

The master settled the account of each party,for ore on the basis of ore-leave, by deducting from the market value of the ore at the pit’s moutb the cost of working it, &c., and for this reason he rejects both debits and credits, R being found that neither party had paid the expenses of working ores used by the other. To this there is no objection, the price of ore-leave being an equi table mode of accounting to each other. But by inadvertence, no doubt, he in effect credits E. B. Grubb with $2500, paid to John McClure for raising ore. This happened by charging E. B. Grubb with the balance due on cash book to the firm. But in that cash account E. B. Grubb has been credited with $2500, paid J. McClure for raising ore, reducing the balance from him to $1707.83, the sum debited by the master to E. B. Grubb in settling the account. Having rejected all debits and credits for raising ore by taking ore-leave as the basis of the charges, it is evident the balance of the cash book should be increased by adding to it the $2500 credited in it for raising ore.

The last matter which needs a special notice is the Henry Clay Furnace contract with John Haldeman. We shall add nothing to what the master has said as to the difficulty of administering the equity, if the defendant be supposed to have any, against the plaintiff, as representing John Haldeman. It seems to us, however, that there is quite as much difficulty in sustaining the alleged equity. The defendant, in order to fulfil his contract with John Haldeman, endeavored to. effect an arrangement with the plaintiff for so doing, but failed to obtain from him a contract to furnish the ore to the Henry Clay Furnace beyond the 1st of April 1863, the period when the Arms contract was to end. This was notice, therefore, to the defendant, that the plaintiff would not furnish ore from their common property beyond that date. The plaintiff permitted the Arms contract to be carried out to the 1st of April 1853, and beyond until about the 1st of June. He then bought one-half of the Henry Clay Furnace from John Haldeman, in May 1853, and received the deed for it on the 7th of June 1853. This he had a right to do. The contract between the defendant and Haldeman was wholly personal and did not run with the land. The plaintiff’s purchase, therefore, after the expiration of the Arms contract, cast no liability on him; and his share of the ore-land was not bound for the performance of the Haldeman contract.

Peter Haldeman, who was the purchaser of the other half of the Henry Clay Furnace, recognised the contract of the defendant with John Haldeman, and offered to accept the ore on the terms of that contract for his half of the furnace, but the defendant refused to accept his offer, and insisted on its entire performance, the effect of which would be to- compel the plaintiff to extend the Arms contract beyond the period fixed by both for its determination. Down to this point there could be no claim against the plaintiff, in law or equity, to fulfil the Haldeman contract. How did the indemnity change the state of the case ? It was not given until the 3d of October 1853, and so far as the time or anything found as a fact, it constituted no part of the terms of the plaintiff’s purchase of the one-half of the Henry Clay Furnace. It has no connection, therefore, with the tenancy in common or the partnership transactions. John Haldeman had then no connection with the furnace. His liability to the defendant was purely personal. By the indemnity the plaintiff created no privity between himself and the defendant; he did not undertake to fulfil, but rather to defend against a contract already broken, and the consideration of his undertaking does not appear to be connected with the joint property of the parties. The defendant could have no right of action on the indemnity, and there would appear to be no ground on which it could be brought within the sphere of the settlement of the partnership accounts or their tenancy in common. We perceive no ground for correcting the report on this head, and on the whole case we leave the report of the master to answer any other matter not touched upon in this opinion.

The result of the corrections above mentioned will stand thus:—

G. B. Grubb Dr. to B. B. G. B. Grubb.

For balance per Master’s Report .... $64,755.72

Credit by interest on $3378.72, paid on Arms contract, say eight years ...... 1,621.78

$63,133.94

B. B. Grubb Dr. to B. B. $ G. B. Grubb.

For balance per Master’s Report $14,045.82

Add error in balance of cash book 2,500.00

Balance . $16,545.82

C. B. Grubb’s balance $63,133.96

E. B. Grubb’s balance 16,545.82

C. B. Grubb’s excess 46,588.12

Deduct his half 23,294.06

Balance due E. B. Grubb’s Administrator . . 23,294.06

Interest from Dec. 31st 1861, to July 6th 1870, eight years, six months and six days . 11,903.26

Balance due to E. B. Grubb’s Administrator, July

6th 1870 ........$35,197.32

And now, July 6th 1870, the court confirm the report of the master with the above modifications, and decree that C. B. Grubb do pay to the administrator of Edward B. Grubb the sum of $35,197.32, with interest from the 6th day of July 1870, and the costs of the suit.