Lead Opinion
delivered the Opinion of the Court.
This is an action of debt upon an award, brought by one firm, or copartnership in merchandize, a gainst another. The writ was served on one of the .defendants, and returned as to the other no inhabitant. The one on which the writ was served, appeared and defended the sub, and afterwards the other appeared also, and the cause was tried on the issues of nil debet, and no award. The defendant who last appeared gave proof, shewing that his co-partner who had departed this life, pending the suit, hqd. in the partnership name, executed the instrument of wi-iting submitting the matters in controversy to an umpire, while ho was not in tiio state, and then moved the court to instruct the jury—
That if they believed that he had not executed the writing, his partner had no power to submit the matters in controversy to an umpire, so as to bind him by the award, and therefore they ought to find for the defendant.
The court, with the assent of the parties, reserved this question, and a verdict was rendered subject to the opinion of the court on the point reserved,
The court ultimately gave judgment for the. defendant, and from that judgment the plaintiffs below have appealed.
The instrument of writing on which the award was founded and which refered the accounts in controversy is formal and explicit in its terms, and is. signed with the partnership name but not sealed. The award of the umpire appears completely on its face responsive to the submission, and determines that a large balance is duo to the plaintiffs below.
And the question is simply whether one co-partner can submit matters in controversy between the firm and strangers in this mode, so as to bind the co-partners.
This question has never been the subject of at!-* jtuliralion in this court, ho far as we are informed.
If filis submission batí been by deed or sealed instrument wo would readily concede that the partner who did notpcrsonally join therein would not bcboup.d thereby according to the law-merchant. We admit. that the reason for this distinction between scaled am! unsealed instruments is and always has been somewhat technical, and more especially so under our state of law. Bu! ciiii it has been so long sanctioned, and has been followed by this court, in accordance with ancient precedents, (see Trimble vs. Coons,
But it is equally true as an universal principle, that tuve partner can bird another to strangers by a writing not sealed, in all matters pertaining to the partnership concerns. Watson in his treatise on partnership, pa. 44 4.
Kytl on awards makes the case of submission to arbitration an exception from tho general pinciple? and lays down the doctrine that one partner cannot thus bind another in this matter. As was well observed in argument, both of these elementary writers found lliis (loci ripe on the solitary case of Strangford vs. 2 Mod. 228. This; case does nof seem to he clearly reported, and took place at an|age when the law merchant had not progressed to that defined extent, to yybich it has since arrived in the courts of Gnat Britain or those of tho United States, and—
it Mill be seen by examining a more modern and lucid author. Go'.y on partnership, commencing M'itk his 56tli page and combining to the 102(1, that he makes hut a single exception, from the power of one parincr to hind another in ail matters touching die. parliicrship concerns, and that iq the case by deed, and he summarily and lucidly lays down, anil by indubitable aulhoriiy, supports principles which fully sustain the doctrine that one partner can hind anolher in a reference to arbitration by an instrument, not sealed, and what is more remarkable in his 95th page he draws a different principle from the case o|‘
It is clear, according to the position of Watson that one partner may not only bind bis co-partner in all unsealed instruments touching partnership concerns, but ho can sell the stock in trade, transfer the company debts, ami even by a release under seal, may release a debt dujrtlie firm without the express assent of his co-partner, Wat. on part. 225. And it is laid down as a general rule that any one who is capable of making a disposition of his property ór a release of his right, may make a submission to an award, Kyd on awards, 20, It is difficult ami perhaps imposible to give a satisfactory reason for prohibiting one partner to bind Hie other by submission to an award, and allow him at the same time equal or greater powers in every other respect. The power given to one partner to bind his fellow, is a matter of great convenience to the partners themselves and enables them to transact business wit!» equal facility without a special au - thority for every act, when they reside in different countries and it redounds greatly to their benefit; because they thereby enhaneo their credit by binding the funds of each, to strangers, who in their turn are benefited by a security without the signa-; ture of each. Why then should they be prohibited from submitting their differences with strangers to this peaceable and often times convenient mode of adjustment?
Indeed it is said that one partner may enter an appearance for another in court, and thus bind .him by a legal proceeding, could he not by the same rule take every step in a suit for his co-partner and assent to a rule or order of court submitting the suit
But we are not left to reason alone to guide us in this conclusion. The learned counsel who argued this cause have directed us to a late case in the supreme court of Pennsylvania, Gow on part. 483, expressly in point, whore the question is fully considered and the case ably reviewed, and conclusive reasons advanced in favor of the exercise of such a power. Although this case is not obligatory upon us, yet it is entitled to respect, and we have no hesitation in adopting it, in preference to the obscure case of Strangford vs„ Green, and conclude that by the law merchant one. partner can bind another by submission to an award.
But it may be insiwtc.^tliat an act of assembly, 1 Dig. L. K. 264, has altered the law merchant hr this respect. That act provides that “All writings’ hereafter executed, without a seal or seals, stipulating for the payment of money or property, or for the performance of any art or acts, duty or duties, shall be placed upon the same footing with sealed writings containing the like stipulations^ receiving the, same consideration in ait courts of justice, and la, all intent:; ami purposes having the same force and eiicct, and upon which the same species of action, may be founded as if sealed.” It may be contended that as this act places unsealed instruments on the same fooling with sealed, and as it is conceded that if this instrument was sealed, the co-partner would not have been bound, therefore he cannot be bound by an instrument entitled to the same consideration. This argument is plausible but not conclusive.
At the passage of this act the mode of making and executing sealed and unsealed instruments were different. Some formalities, such for instance, as delivery, necessary in the former, were not necessary in the latter. These requisites by the act were not changed. Each instrument was left to bo made or executed as theretofore, and, to be done by the same parties and in the same manner. Tho force of the statute then consists in the weight oí
As tiie judgment must be reversed, another question presents itself, 'flic appellee filed several pleas which were demurred to and overruled, and he tendered evidence which was rejected on the trial; and upon the reversal of a judgment it is both the. practice and duty of this court to go back to the first error.
The object of all these pleas, and of the evidence offered, was to impeach the award for mistake, partiality in the umpire, and unfairness in obtaining the award, and the facts offered, if true, might affect the award. The court below resisted every such attempt, in doing so, in an action at law, that court was correct. For it is a well settled rule tiiat an award cannot be impeached in an action at law, but the party attacking it must be left to his suit in equity, 1 Saun. 326. Wills vs. McCormack, 2 Wil. 148, Gow on part. 491. The circuit court therefore did not err in excluding from the action at law the defence set up.
Tiie judgment must be reversed with costs, and the cause be remanded, with directions to enter judgment for the plaintiffs, on the verdict in the court below.
MOTION TO CORRECT THE JUDGMENT AS TO THE TARTY AiPEIfLEE.
The counsel of" Robert M. Steele moves the court to correct the judgment rendered by this court, by striking his name out of the caption of the orders, and inserting William, the appellee, againstwhoi»s lie insists the judgment was rendered in the circuit court.
The declaration is against William Steele ami Robert M. Steele, and process issued against boil), which was executed on William, and returned as to Robert, no inhabitant. William, on whom the writ ty&s executed,, appeared and defended the suit. V.
If Robert could be supposed, to be again brought up into the cause by the use of the. plural defendants, then it is insisted that by the saíne prbeess of reasoning, he would be afterwards extricated from the cause, by the subsequent use of the singular.
II docs appear in the bill of exceptions, that William had died, and it would seem to be implied that Robert had been defending the suit at the trial, hut it is relied that William’s death bad never been suggested on the record and that he could not be patent of the world and the cause, by a bill of exceptions; and much less could Robert, who had newt- been summoned, be made by that means, (he only defendant and the subject of the judgment, to meet ¡Í ¡¡lone.
As to the circumstance of the appeal bond having been made pay aide, to Robes t, (bar car have no effect; it was bul the mistake of the clerk.
In the event of the court overruling these motions then the attention of the court is called to'the folio wing:
Rehearing
PETITION I?on 1 REHEARING ON THE MERITS, BY F. W. S. GRAYSON ESQ.
Cdn ode partner bind another Tnj submission of their accounts to arbitration? t
The defendant roost respectfully prays a rehearing of this case. His counsel, with great deference would urge, that the court erred in adopting the principle upon which the judgment of the'- inferior court has been reversed^ namely, that one partner may, for his co-partner as well as himself, submit matters of controversy to arbitration:- a principié which has, perhaps, the support of nq previous decision and only one dictum, that, which is to lie found in the case of Taylor vs. Coyell & Co. in the Supreme court of Pennsylvania, Gow, 585. There the only defendant upon whom process'was served, by whom defence was made, and against whom Judgment was rendered, was William Taylor, the partner, who made the submission: the other partners were not before the court, and what Judge Dun cart said in that case, as tending to charge partners who do not concur in the submission, was extrajudicial, aiul.no authority even in Pennsylvania. The case of Strangford vs. Green, 2 Mod. 228, contains a contrary’dictum., There, too, the partner who wrs sued had, for himself and co-partner, made a parol
A guardian represents the Ward for whom he acts, and is his general agent; yet if he submits to a' reference, as he may do, for the infant, lie binds himself thereby and not the Infant: 3 Vin. 110, Kyd 39, Com. 319, Roberts vs. Newbold. A court of chancery will not decree an award to bind, the infant. 1 Eq. Ca. ab. 50, pl. 1.
The authority'conferred by act of Assembly upon, Barnett’s Commissioners, to sell and convey lands and to collect, and pay. debts,did not.carry with it, the power to submit a matter to arbitration. Although it is a mode, cheap, convenient and despatched, to collect debts or settle controversies, it is at the same time, an extraordinary and dangerous mode. 2 Bibb. 270.
An Executor or Administrator represents, the creditors and legatees or distributees of the decedent.
He is their general agent and something more. He" possesses power coupled with interest. , He is a trustee with the most extensive powers. And although an executor or administrator, as such, may submit to arbitration, yet if the" arbitrators do not au’ard as rouchaslie would be entitled to at law, it will be a devastavit for the residue. Toll. 425. Bac. ab. 207, Kyd 40.
The reason is stronger in favor of guardians and. executors or administrators binding those they represent by submissions to reference than other agcuts: for unless they possess such power by virtue
It would he- difficult to imagine a reason in favor of one partner binding another by a submission, which would not apply to executors or administrators. Both'have power to make sales, to collect or release debts. The argument of convenience equally applies to each. Yet the former cannot submit to reference, but at their own peril, however expedient it may seem; whilst as to tho latter, if references he, desirable, special power to that effect may in al[ such cases, be conferred, and therefore not necessary that the power should be implied.
The reference made-in this case, was a common law reference, to an arbitrator, who was to act without oath and' without the power of summoning or swearing witnesses, and yet whose decision, however erroneous or oh]list, was to be conclusive on the parties. This is a-sort of reference, which, even an Attorney at law Ijas no authority to "make, though, employed for tito sole and special purpose of managing the controversy to be submitted. If he sain piits iiis client’s cause to reference, it must be with the approbation of the court, and to a sworn arbitrator, with competent power to summon ami swear tiie witnesses to he examined. And yet how much, more competent is he to exercise the delicate discro-tion of agreeing to a reference, than ordinary part iters in the country?
One partner may bind another, concerning partjjfrshipshatters, by parol contracts, but not by deed:
It is not denied, that one partner executing a deed for himself and co-partner submitting to a reference, cannot bind the co-partner to submit to the award, Gow 489. Decisions to that effect are sufficiently numerous, and if they are less so as to parol submissions, it is, perhaps, because parol submissions are of rare occurrence in the books, as said by Duncan J, in Gow 489; and which, as I take it, is because common law references in England, are almost always made by deed. But if an award is not binding upon all the partners, where the Submission is by the deed of one, executing for himself and co-partners, it follows that the award would not be obligatory upon them, though made upon a parol submission. The objection to the former, is not that one partner cannot bind another by deed, for it is not claimed that the co-partner is bound by the deed, but by the award; the deed is only used as evidence of the fact, that the one partner submitted for all; as to which, the seal can form no conceivable obstacle, any more than to a receipt for money, 'whipfa might happen to have a seal to it.
It has been said by an Attorney, Dampier, in argument, that one partner may enter an appearance for another to an action, 7 T. R. 207, which Judge Duncan in the case of Taylor vs. Coyell & Co. mistook for an authority, Gow 491. But the contrary had been held by Judges Iredell and Chase,
This-case was heard upon the argument of the Appellant’s counsel only, • Several points were decided by the inferior court, against appellee and as is believed all of them, not correctly,- to argue which also a rehearing is desired. "All which is respectfully submitted.
The court on consideration overruled both the motions, and stated the grounds in the following
Additional opinion of the Court, by Judge Mills.
As to the questions raised by the petition for a rehearing that the court below proceeded against a wrong defendant, or that the judgment below or proceedings hero have been had against one on whom, process is not served, the court returns the following answer.
The writ was executed on William Steele and returned as to Robert M. Steele, “not found and no inhabitant.”- The appearance is entered generally fortlie defendants. — It is true some of the first pleas in abatement (as the jileas are, numerous) are expressly in the name of William Steele alone. But others, as the cause progressed are filed expressly iii^the name of both and that which contests the execution of the writing is by Robert M, Steele, a
The petition for a rehearing is, therefore, overruled.