Eaton's Appeal , 1871 Pa. LEXIS 64 ( 1870 )

The opinion of the court was delivered, January 3d 1871, by

Sharswood, J.

— These are appeals by different parties from the same decree. It was a bill in equity for an account of the transactions of a partnership in which there were three members. The plaintiff alleged that each partner had an equal interest. The answer of one of the defendants denied this positively, and averred that the interest of the plaintiff was only two-ninths, the other partner three-ninths, and his own interest four-ninths. The first and most important question in the cause is, whether this answer is responsive to the bill, and entitled therefore to the weight assigned to it by the well-settled rule of evidence in equity, that an answer responsive to the bill can only be overcome by the testimony of two witnesses, or of one witness corroborated by circumstances elsewhere in evidence. We must lay aside the answer of the other defendant, because, as to this point, he does not speak of his own knowledge, but from information and belief only. Such an answer is not evidence even; it is pleading merely, and puts in issue the fact in dispute.

We agree with the master in the opinion that the answer of Eaton is responsive. The question is one often very nicely balanced, and the decisions upon the subject are numerous and not harmonious. I will not undertake here an exhaustive examination of them all or even the greater number. But after considerable research and comparison, there are some principles and rules to be deduced from them sufficient to decide satisfactorily the matter now in dispute.

When the plaintiff calls upon the defendant to answer the allegations contained in the bill, he makes him his witness for that purpose only, but for no other. Whatever constitutes in truth a part of the facts stated in the bill, the defendant has a right, and indeed is bound to set out. But he cannot make himself a witness for himself generally, and introduce other facts either in avoidance or defence. It is considered indeed as a test whether, as a witness on examination, he could be cross-examined as to the matter which he states in anticipation of his defence on a trial at law: Dunham v. Gates, 1 Hoffman’s Ch. Rep. 185. Thus if a plaintiff state an act, transaction or contract as the foundation of his* equity, the defendant has a right to state the whole of such act, transaction or contract as in truth it was. Otherwise a plaintiff by giving only part of a contract, if the defendant must admit that part, and cannot go on to describe truly all the parts of it, the grossest injustice might be done. The defendant must answer every material allegation in the bill, whether specially interrogated thereto or not, and unless he states the act' or contract fully, as it truly was, how can he conscientiously swear that the facts in his answer are true ? Half a fact or half a contract is not the truth. Neither is it true if in truth the terms of a contract are different. But another subsequent, independent and distinct fact, not stated in the bill, is not responsive, and therefore not within the rule.'

A few of the many decisions may he referred to in support of these views. One of the earliest is Kirkpatrick v. Love, Ambler 589. There was a decree for a general account, both sides to be examined on interrogatories. Plaintiff admitted the receipt of a parcel of satins, and in the same sentence swore that he had paid for them : in other words, that it was a cash transaction. *' It was held that.the master was right in refusing to charge the plaintiff with the satins. The court put it upon the ground that the charge and discharge was in the same sentence; otherwise it had been if the discharge or avoidance had been in a distinct sentence. In Blount v. Burrow, 4 Bro. Ch. Rep. 75, Lord Hardwicke said: “ If a man admits by his answer that he received several sums at particular times, and in the same answer swears he paid away those sums at other times in discharge, he must prove his discharge, otherwise it would be to allow a man to swear for himself and to be his own witness.” Lord Chancellor Eldon, in Ridgeway v. Darwin, 7 Ves. 404, said, that “if a man admitted he had received certain sums, which sums he had paid, the discharge following immediately in the same sentence, that would do.” And afterwards, more distinctly in Thompson v. Lambe, Id. 588, “ A person charged by his answer cannot by his answer discharge himself; nor even by his examination, unless it is in this way: if the answer or examination states that upon a particular day he received a sum of money and paid it over, that may discharge him; but if he says, that upon a particular day he received a sum of money, and upon a subsequent day he paid it over, that cannot be used in his discharge; for it isa different transaction.” These cases certainly cannot mean that if the defendant includes the fact of payment in the same sentence with the admission of the receipt, that alone will avail unless from the inference to be made — that they were both parts of one and the same transaction. Sir 'William Grant so states it in Robinson v. Scotney, 19 Ves. 582: “ The instance usually put is that he received a sum of money and immediately handed it over.” In Bellows v. Stone, 48 N. Hamp. 435, there is an able and exhaustive opinion by Chief Justice Parker. He declares the true distinction to be between allegations upon those subjects upon which the bill requires an answer, and allegations of new matter not stated or ^inquired of in the bill-, but introduced by the defendant in his defence. Whether the plaintiff calls upon the defendant to make an answer which must directly deny or affirm some statement, or whether he requires him to make a- statement of the facts upon the particular subject-matter, the principle is the same. If the answer which is required involve some statement favorable to the defendant other than matter merely in denial of the plaintiff’s allegation, the defendant, being required to furnish that matter, is entitled to the benefit of it. An answer does not set up a fact “by way of avoidance merely” when it is only a response which the defendant is obliged to make to the bill of the plaintiff. He proceeds to lay down this as a test of the responsiveness of an answer. “If the whole subject-matter of the statement or aliegation in the answer might have been left out, then the allegation in the answer upon that subject is in no way responsive to the bill — the bill requiring no statement upon that point. But if the omission of some statement upon that subject would furnish just ground of exception to the answer, then the statement to the extent to which it is required, and whatever its character, whether affirmative or negative, is but a response to the requisition of the plaintiff.” The same principles will be found further illustrated in Schwarz v. Wendell, Walker’s Chanc. (Mich.) Rep. 267, and Cooper v. Tappan, 9 Wisconsin 361. In Ringgold v. Ringgold, 1 Harris & Gill 11, it is said that if the answer admit liability, there can be no escape from it but by proof, but everything it says with regard to the creation of the liability must be taken together; and in Allen v. Mower, 17 Vermont 61, “it is readily perceived that everything in the answer responsive to the bill as to the creation of the original liability charged must be taken together as part and parcel of one entire transaction.” Accordingly, in Dunham v. Jackson, 6 Wend. 22, where a bill was filed to redeem stock, and it alleged the stock to have been pledged for a certain sum, and the answer stated that it was pledged at the same time for an additional sum, the answer was held to be responsive. Mr. Justice Marcy said: “ Whether he has gone beyond what he was required to do may be tested, I think, by supposing an interrogatory inserted in the bill pointing to the very matter which he has answered,- and he had refused to answer. Would the court have compelled an, answer ? Interrogatories are not a necessary part of the bill, nor are they to be answered unless they are such as are warranted by the premises and allegations of the bill. ' If the respondent had stopped after denying that the stock was pledged for the loan of $500, and refused to answer an interrogatory as to the amount for which it was pledged, because such interrogatory was not warranted by the bill, there would have been, it appears to me, very little difficulty in showing the answer to be insufficient. The defendant is bound to admit or deny the facts stated in the bill with all their material circumstances, without special interrogatories for that purpose.”

Our own cases, as far as they have gone, conform to these principles. In Eberly v. Groff, 9 Harris 251, the bill charged that an assignment was without consideration. The answer denied that it was without consideration, and proceeded to set forth what the consideration was, and it was held to be responsive. There was indeed an interrogatory asking for the consideration, but that, as we have seen, did not make it responsive if in point of fact it was not so. So in Pusey v. Wright, 7 Casey 387, the present Chief Justice said : “ If a contract be set forth, and the defendant be called on to answer it, a denial that it exists, modo et forma, would not be good, according to chancery practice; for this is subject to the implication that it existed in some other form. To avoid this the defendant should state how it existed, and wherein it had no existence.” And, again : “ It is not doubted but that if a different contract had been set up by defendants, which was alleged to have superseded the one charged by plaintiffs, they would have had the affirmative of the issue. The answer there would not have been responsive to the bill — it would have been by way of confession and avoidance, and have required proof. But the answer here admitted the contract and stated its terms, but denied the existence of stipulations in it alleged by the plaintiffs as the foudation of their claim for relief. This did not require the defendants to make proof, if the plaintiffs did not.”

These principles and authorities amply sustain the conclusion of the master. In stating the terms of the contract of partnership the defendants were called on not merely to admit or deny it modo et forma, but to set out what were the terms agreed upon. They could have been asked specially upon an interrogatory based upon the statement of the bill to answer what the terms were, and this shows that the answer, though there was no interrogatory, was strictly responsive.

We are of opinion that the master was also clearly right upon the facts as found and reported by him in charging the defendants with the profits of the leasehold possessed by the firm at the time of the dissolution. It was, undoubtedly a part of their assets. The defendants did not dispose of it for what could then have been obtained for it, as they might have done. They kept and used it, and like any other article of property — a bale of merchandise, for example, if it afterwards increased in value and productiveness, the plaintiff, as joint owner, was entitled to his fair share of all the income and advantage derived therefrom — and the defendants were chargeable with a fair rent for the part used and occupied by them in their business.

But the report of the master is defective, as indeed he in part admits, in not stating the account as between each of the members of the firm. The decree might perhaps be amended from his report in ascertaining the sum due to the plaintiff by each of the defendants. But then it would not be complete. There is no account reported as between the two defendants. Without that it is necessarily incomplete — leaving them to a subsequent suit or proceeding. Between them there may be no dispute or difficulty, and they may, to save further costs, agree upon the amount. The decree on a bill for the settlement of a partnership account ought to make an end of the whole matter. For this reason the decree below must be reversed, and the record remitted for a further reference to the master and other proceedings thereon.

Decree reversed and record remitted.