45 N.J. Eq. 153 | N.J. | 1888
The opinion of the court was delivered by
This is a bill for discovery and account. The facts stated in •Bupport of this prayer are: That the appellants, being manufacturers of pottery, by an agreement in writing, dated the 7th of
In the light of the admissions of these pleadings, and the uncontested facts of the case, it would seem that the legal and equitable rights of these litigants are perfectly plain.
The contract in question rules the situation. The appellants have never even attempted to rescind it. They stood by and saw it executed, with ample knowledge of these failures in the con
It thus appears that the appellants were compellable to do the following acts : to pay to each of the respondents the annual sum of $2,000, provided ten per cent, of the net earnings of the business did not amount annually to the said aggregate sum of $4,000, and if such earnings exceeded such aggregate sum, then to pay them to the respondents; and, as an incident, existing by necessary implication, that they would, on reasonable demand, render an account of the business showing the net profits. This latter implied stipulation exists in the contract as plainly as do any of its terms that are defined in set phraseology, as, in its absence, the promise touching a percentage of the net profits would be well-nigh nugatory.
It follows, therefore, that the account thus owing being refused,, the respondents’ right to the assistance of a court of equity in that respect is indisputable. Indeed, so clear was the existence of such a right, that the respondents were entitled to an. account and a reference to a master on the mere face of the bill and answer.
Nor is there any force in the contention of counsel, that, inasmuch as an account has been now made, with the result that it manifests that the percentage of profits is so small that the respondents are not interested in them, therefore their bill must be dismissed. This is the result when the bill is purely for discovery, as where the proceeding is in aid of a suit at law. But the present bill is one for relief as well as for discovery, and it is properly such, as the amount due to the respondents cannot be. ascertained except by the intervention of an equitable tribunal.. In such a juncture the court will always decide the entire subject in litigation, having acquired its oognizance for the purpose of
In the present instance, instead of the respondents taking, in ■limine, a decree for an account, and at once going before a master, both sides have, on the hearing before the vice-chancellor, ■entered into a full examination of this manufacturing business with reference to its expenses and products; and the counsel of ■the respondents now admits that no profits appear which will give his clients an interest in them, that is to say, ten per cent, on the profits shown will not equal the amount guaranteed to them; he .also declares that his clients do not desire any further accounting, ■they being willing to accept the sum so guaranteed. The decree should, therefore, direct the payment to each of them at the rate ■of $2,000 per annum for the period embraced in the agreement, with interest from the time the several installments became due. They are also entitled to their costs in the court of chancery.
Such are the obligations of the appellants imposed by the contract in question, and such the result of the application to them ■of the rules of equity. And in this is comprehended everything that was triable in the case; and yet there was another subject taken into consideration and finally disposed of by the vice-■chancellor, that is, the question whether or not the respondents had broken, to the damage of the appellants, their side of this ■contract. It was an implied covenant of the respondents that they were possessed of that degree of knowledge and skill that is ■common to persons occupying such positions as the one they undertook to fill, and there was testimony tending to show the ■want of such knowledge and skill, and large resultant damages ■to the appellants from imperfect products and waste of materials. This inquiry was entertained in the court below, and the decision in it was in favor of the respondents; the appellants now claim, that the subject did not fall within the cognizance of the vice-chancellor, and that they have the right to the verdict of a jury ■on that controversy.
In this contention the appellants are plainly in the right. The position was this: the, complainants in chancery complained that the defendants in that proceeding had broken a certain stipula
We think, however, that, in view of the circumstances of the-present case, and of the fact that under the existing statute (Rev. p. 868 § 129) these damages, if any such have arisen, could have been recouped if the respondents had sued at law for their claim, the proper course will be to suspend the enforcement of the decree to which we have found the respondents to be entitled, until a reasonable opportunity shall have been afforded to the appellants to test, by an action at law, the validity of this counterclaim which they have set up.
Let the decree appealed from be reversed, without costs, for the purpose of these modifications.
Decree unanimously reversed.