Witz v. Tregallas

Boyd, J., delivered the opinion of the Court. On the first day of January, 1881, Isaac Witz, Levi Witz, Wm. T. Biedler and Samuel R. Tregallas entered into articles of copartnership, by which it was agreed what each partner was to contribute to the capital, what interest thereon was to be paid, what share of merchandise on hand each was to receive in the event of dissolution of the firm, and that the copartnership should continue for the term of three years. It was further agreed that after paying all expenses and losses the appellee was to receive one-tenth of the profits, and that the remainder should be divided equally between the other three, but if the appellee furnished additional capital from two to fifteen thousand dollars, within ³⁶⁰ six months from the expiration of each year, his profits should be increased at the rate of one per cent, per thousand.

A supplemental agreement was entered into by which the copartnership was continued until December 3 ist, 1886, on the terms mentioned in the original agreement,, excepting with reference to the division of profits, which was changed so that Levi Witz and W. T. Biedler were each to receive thirty-one and a-quarterper cent., S. R. Tregallas twenty-five per cent., and Isaac Witz twelve and one-half per cent. On December 31st, 1887, another change was made, by which it was agreed that for two years from January ist, 1888, Isaac Witz was to receive ten per cent, of the net profits, up to forty thousand dollars, as his special and full interest, and then the profits were to be divided as follows: To Levi Witz and W. T. Biedler each thirty-six and one-fourth per cent., and to S. R. Tregallas twenty-seven and one-half per cent. The partnership continued until December 31st, 1889, when it was finally dissolved, and the assets were turned over to the appellants and W. T. Biedler, as liquidating partners, who proceeded to realize on them. After a large part of them had been collected and distributed, differences arose between the members of the firm, and on February 18th, 1893, an agreement was entered into "to submit said differences to arbitration.” It was therein stated that Christian Devries was satisfactory as an arbitrator to three of the partners, and if Mr. Tregallas desired two, he was authorized to name one, and in case he did, and the two could not agree upon a conclusion, they could select an associate, and “ the majority decision shall be the unanimous decision.” The arbitrators were required to write their names on the agreement as evidence of their acceptance.

It was further provided that either party could present his views in writing or orally and offer such evidence as he deemed advisable. Mr. Tregallas exercised the right to name an arbitrator and selected J. Frank Supplee. Messrs. Devries and Sup ³⁶¹ plee accepted the appointment and entered upon their duties.

Being unable to agree, they selected Daniel E. Conklin as their associate. Messrs. Supplee and Conklin signed an award which Mr. Devries declined to concur in, by which it was determined that the assets of the late firm of Witz, Biedler and Company should be divided between the respective partners in the proportions of 32.41 per cent, to Levi Witz ; 27.34 per cent, to Isaac Witz ; 24.06 per cent, to W. T. Biedler, and 22.19 Per cent. to S. R. Tregallas, and the following provisions were also made in said award : “ Each of the partners who has received more than his share, as above determined, of the assets thus far distributed, shall return the same, and in the future all assets received shall be distributed in the proportion above set forth. “ The Bridener defalcation made before the dissolution of the firm, and any and all other items charged off or to be charged off shall be charged to the respective partners on their accounts in the same proportion as above declared. “All expenses of liquidation shall also be divided or charged to each partner in the proportion above set forth. “ The three liquidating partners, Levi Witz, Isaac Witz and William T. Biedler, shall repay to the firm the sum of $4,636.61, the amount of the defalcation of the bookkeeper, Bridener, made after the dissolution of the firm.” The award was acceptable to Messrs. Biedler and Tregallas, but not to the Messrs.

Witz, who declined to abide by it. Mr. Tregallas filed the bill in this case against the other three members of the firm, praying (1), that the defendants should be. required to account with him for all the assets which they had received, as liquidating partners of the late copartnership, including the sum of $4,636.61, specially mentioned in the award ; (2), that there might be an accounting and a distribution of the assets in the manner prescribed by said award, and (3), for general relief. William T. Biedler admitted the allegations of the bill, but the Messrs. Witz filed an answer in which they set up a number of objections to the enforcement of the award. ³⁶² The Court below passed a decree referring the case to one of its auditors and masters to state an account in accordance with the terms of the award.

From that decree this appeal was taken by the Messrs. Witz. Before considering the main reasons relied on by the appellants for setting aside the award, it may be well for us to pass upon what might be termed the preliminary and technical questions that have been urged in this Court. It is said that there is no jurisdiction in a Court of Equity in this State to enforce an award.

The learned counsel for the appellants did not rely for this contention upon any decision in Maryland sustaining that position, but rather upon the absence of all precedents in this State to justify a Court of Equity intervening to enforce the specific performance of such an award. If that be conceded, it is not conclusive against the right to do so when a proper case is presented. If we assume that this award is valid, we can see no reason why a Court of Equity cannot require an accounting and a distribution of the assets of the firm between the partners on the terms established by it. The defendants were bound to account to the plaintiff, and the arbitrators having determined the proportion of assets that each partner was to receive, such accounting should be in accordance with the award.

It is conceded in the answer of the appellants that “ an accounting under the the supervision of this Court is necessary, in order to ascertain the respective rights of copartners.” Whether the distribution be made in the proportions fixed by the award, or otherwise, it is evident that a Court of Equity must take charge of the settlement to do full and substantial justice between all partners, as they cannot agree among themselves. It might well be questioned whether this is, strictly speaking, a bill for the enforcement of a specific performance of the award— whether it is not simply a bill to settle the affairs of the copartnership, using the award for the purpose of determining the proportions the partners are to receive, and such other matters as it disposes of. But there is no longer any ³⁶³ doubt about the right of a Court of Equity to exercise this power, when the thing ordered by the award to be done is such as a Court of Equity would specifically enforce, if it had been agreed upon by the parties themselves. Morse on Arbitration, 603; Russell on Arbitration, 563, and cases cited by them.

It is also contended that the award is void, because Mr. Conklin failed to sign his name on the agreement. It is true that there is a provision that “ The said arbitrators shall write their name or names on this article of agreement, as evidence of accepting the same,” but there is no doubt that Mr. Conklin was duly selected by the other two, and that in point of fact he did accept, with the knowledge and consent of the partners. He ought to have signed his name, but his omission to do so did not and could not possibly prejudice or injure the appellants. His signature was not the only evidence of his acceptance of the appointment, and to set aside an award for such an omission would be far more technical than is required or justified either by authority or reason.

The testimony of Mr. Conklin shows that his failure to sign his name was entirely an oversight, and not because there was any question of his acceptance. It is further alleged that the three arbitrators did not act together, and that it was in effect simply an award of the two who signed it, without their making a proper effort to have all three pass upon and agree to the matters submitted to them. The evidence shows that Messrs. Devries and Supplee had a number of meetings, during a period of time covering about two months, and heard considerable evidence and argument.

Being unable to agree, they finally selected Mr. Conklin. After his appointment all three met at different times and the partners were requested to come before them. All except Mr. Isaac Witz appeared and were interrogated by, or at least in the presence of the three arbitrators. Mr. Levi Witz informed them it would not be necessary to have his brother present, as he could answer all questions for him.

They were represented by the same counsel in the written ³⁶⁴ argument that was submitted on their behalf. The record discloses the fact that Messrs. Supplee and Conklin differed materially with Mr. Devries as to the settlement and this finally resulted in the announcement by Mr. Devries of his withdrawal. He thought the settlement should be made on a different theory from that adopted by the other two.

He, having been called on behalf of the defendants, testified that Messrs. Supplee and Conklin told him they were ready to make the award, but he requested a postponement until the following Monday or Tuesday, to which they assented, and they again met at the time agreed upon. They still differed and he then told them he would withdraw from the arbitration and “ did so.” He further said that on that occasion “ The gentlemen stated that they were prepared to make an award and I presume from the papers they had, that the award might have been made'up, but I declined to look at them to see what they contained.” Between the two meetings above spoken of, Mr. Devries had seen Mi-. Witz and his counsel, and told them he had determined to withdraw, unless his associates would either continue to recognize the articles of partnership in the distribution of the assets, or submit to a rewriting of the books.

The counsel for the Messrs. Witz told him he had a perfect right to withdraw. When the three met on the Monday or Tuesday previously spoken of, finding that his associates did not agree to either of the two propositions made by hiiq, he carried out his determination, announced his intention to withdraw and did so.' Mr. Supplee testified that “ a meeting was held at the bank, of which Mr. Devries was president,” and a full discussion entered into of all the points submitted to us. This was a prolonged meeting and the questions were viewed from every possible standpoint.

Mr. Devries remarked at this meeting that “ I have heard all I wish to hear of argument or further discussion or expert testimony, and a date was then fixed for a final meeting, and it was agreed at that meeting a conclusion should be reached.” The final meeting was held as above