aside the same. taken as to the meaning or full import of the of which one-fourth was due from each partner, agreement under the law is no reason for setting or the sum of $429.34.] "2 [And now, October 19, 1896. This cause "Mistake of law, as is well settled, is no ground came on to be heard and was fully argued by for the interposition of a chancellor for the pur-counsel, and thereupon, upon consideration therepose of reforming a contract. If a party mistak- of, it is ordered, adjudged and decreed as follows, ing the law, could get rid of the contract which he viz: That Jacob Forney, one of the defendants, made under the influence of a mistake, not only account for and pay unto John Krall, the plaintiff, would there be very few losing contracts that the sum of $429.34; that Atkins & Bro. account would not be got rid of, but a mad spirit of spec- for and pay unto said John Krall, the sum of ulation would be generated by the assurance that $429.34; and that Samuel E. Fox account for and no venture, no matter how desperate, would bring pay unto said John Krall the sum of $429.34. It personal loss. Hence it is that the Courts have is further ordered, adjudged and decreed that each united in accepting the principle, that a contract of the defendants pay one-fourth of the costs of cannot be reformed because it was entered into these proceedings and that John Krall, the plaintunder a mistake of law: Wharton's Evidence, 2 iff, pay the other one-fourth of the costs of these ed., sec. 1029. proceedings.]" "It is the duty of every one, executing a con- From the above decree this appeal was taken, tract in writing to be aware of its contents before and the assignments of error specified, inter alia, signing. It is against the policy of the law to the findings as contained in brackets above and permit those neglecting this duty to benefit by their neglect: Wharton's Evidence, 2 ed., sec. 1028. "5 [That under the said agreement the plaintiff and defendants were partners in the butchering business carried on by Brubacher, their agent, needs little discussion.] the decree. Thomas H. Capp, (George B. Schock with him), for appellants. Howard C. Shirk, (J. M. Funck with him), for appellee. July 15, 1897. DEAN, J. On November 15, 1889, "The defendants were bound to know, under Jacob Forney, Samuel E. Fox, Atkins & Brother, this contract, that the business which they initi- and John Krall, this plaintiff, as parties of the ated, was carried on for them and the plaintiff, first part, the other three of them, being these by their agent, and not under the name and on defendants, and Aaron Brubacher, as party of the the credit of Aaron Brubacher. second part, entered into an agreement, as follows: "An execution creditor of Brubacher, for a debt not contracted in the business, could not, by a levy upon the goods in his possession as agent, have acquired a lien prior to the equitable lien of the plaintiff and defendants. "4 [Under the contract the plaintiff and defendants had a proprietary interest in the business, and consequently its profits, and are equally fiable for the amount due to the creditors, of which the plaintiff is one.] "The said parties of the first part agree to employ the said Brubacher to carry on the butchering business at his shop in Cornwall township, Lebanon county, Pa., hereby constituting and appointing him as their agent, and agree to advance him money for the said purpose as may be required, not exceeding two thousand dollars. "That the parties of the first part shall and are to be the exclusive owners of the property pur chased, or its transformation into bolognas, or in whatever shape it may be made, including the cattle or steers purchased by said Brubacher. "The note paid by plaintiff was bearing interest, at the time he paid the same, and he ought to be allowed interest on the amount paid by him from July 24, 1893. We are of opinion that no interest should be allowed on the balance due on the book a statement, take an inventory of what stock he "That the said Brubacher shall pay the money so advanced from time to time, shall render us has whenever required. That said Brubacher is to be paid out of the profits solely, and shall be responsible for any and all losses on the sales he makes, hereby giving our agent power and authority to do what may be necessary to carry on said business as our agent, and hereby ratifying what he must necessarily do in the premises to 142 55 carry on said business, and continue until this $1,717 36 agreement is revoked and annulled." The parties of the first part raised the $2000 by the parties; that his idea was, to make them seendorsing for Brubacher a note to that amount, cure to the extent of the $2000 advanced, by givwhich was discounted by a bank, the money paid ing them a title to the property and business of to him, and he commenced the business of butch- Brubacher. He declined to say, when on the ering, which he continued for a period of nearly stand, just what construction should be given to three years. In this time, he had done, in the what he did write. Fox, one of the defendants, aggregate, a very considerable business, but it testifies: "When this paper was ready, I went up proved unsuccessful, he becoming embarrassed to the 'Squire's to sign the paper, got the paper financially; he then delivered his stock on hand up, and could not read it very well; looked over to defendants, who made sale of it, and applied it a little bit, in fact I hadn't time to read it. I the proceeds to payment of the $2000 note, on asked the 'Squire, what is this paper? He said, which Brubacher had paid part, and the balance for $2000, four of you men. I signed that paper." had been renewed from time to time, defendants Atkins, another of defendants, says, he read the continuing as endorsers. When his business was first part of the agreement, and if he had taken closed, Brubacher was largely in debt, not only time, he might have got the meaning, but the on the balance yet due on the $2000 note, but to 'Squire told him, "It was the paper to be signed other parties, among them this plaintiff, Krall, to secure the $2000," and then he signed it. Forto whom he owed $1574.81, a balance on the pur-ney testifies he signed it, supposing it was a colchase of a lot of cattle; also, $145.55, amount of a lateral security for the loan of $2000. These are note with interest. Krall's sale of cattle to Bru- all the parties who affixed their signatures, and bacher, during the three years, aggregated over the attorney who drew it. Not one of them pos$7000, all of which had been paid, except the two itively knew or understood the expressed pursums mentioned. Krall, alleging the agreement port of the paper; not one of them intended, to which he was a party constituted a partner- either in fact or by construction, to form a partship, brought this bill for an account against his nership, and appoint Brubacher their agent. Every alleged co-partners. The Court below determined one, Krall the plaintiff as well, testifies the inthe agreement created a partnership; that the tention was to aid Brubacher to start business partnership, consisting of the four partners, owed by raising for him $2000; as security for this Krall, with interest, $1717.36, and that each loan, they tried to retain a right of possession should pay to Krall $429.34, or one-fourth of the in the business property; the word "agent" was whole amount, and each pay one-fourth the costs. inserted at the suggestion of Lantz, the attorney, From that decree, defendants, the three other al- who thought that would protect the property leged partners, appeal. Several errors are as- from other creditors of Brubacher. If anything signed, the material ones being: (1) The Court is clear, from the testimony of the parties to the erred in deciding the agreement was a partner- writing, and those having any connection with or ship agreement; (2) In not deciding that equity knowledge of it, it was not intended to be a conhad no jurisdiction, because the transactions of tract of partnership, in fact. Nor can we agree Krall, even if there was a partnership, were be- with the learned Judge of the Court below, that tween him as an individual, and the partnership, it was one in law. Parties may so act, or hold constituting the mere relation of debtor and themselves out to the public, that the law will creditor, and involving no rights as partners. hold them answerable as partners, although as It is somewhat difficult to determine, from between themselves they are not partners. But what the parties have expressed in the agreement, this is where the rights of third parties are involvtheir legal relation; they, and the attorney who ed. As between the parties to the agreement, drew it, acknowledged that although they knew does the contract constitute a partnership? They what they intended to say, they did not know at agree to employ Brubacher to carry on the butchthe time the agreement was executed, what, by ering business, and appoint him agent; further, its terms, they had agreed to do. Krall, the agree to furnish him $2000; they are to be the plaintiff, testifies: "I signed without much mean- owners of the property purchased by him, and ing, and didn't know what it meant." Brubach- the prepared meats manufactured by him; he is er, the party of the second part, testified, when to be paid out of the profits solely, and to be reasked if the agreement had been read to him be- sponsible for all losses; his employers to have fore signing: "I can't say whether he read the power to annul the agreement at any time. The whole paper, but I did not understand the half plain implication is, Brubacher was to enjoy all he did read." Lantz, a member of the bar, who the profits, and it is expressly stipulated he is to drew the agreement, testifies in substance, he pay all the losses. There have been many defimade a mistake in expressing the intention of nitions of a partnership; this Court, in Hall stead's Appeal, 157 Pa. 59, opinion by our brother not allege, he advanced to the partnership more WILLIAMS, adopts Story's definition: "A contract than his share of the capital, or has paid more relation between persons who have combined than his share of the debts, or that his partners their labor or skill in a joint enterprise or busi- have retained more than their share of the profits. ness for the purpose of joint profit." Every His averment, in substance, is, that he, John element of a partnership, embraced in this defini- Krall, an individual cattle dealer, sold to the parttion, is negatived by the agreement before us. nership a lot of cattle, at a certain price, and it In Walker v. Tupper, 152 Pa. 1, opinion by our the partnership, refuses to pay him. Wherein, brother MITCHELL, it is said, "No general defini- is his right as a partner affected by such a contion of partnership has yet been given which tention? It is a simple contract debt for a round applies without qualification to all the in- sum. No equities of the partners, as such, are finite variety of business arrangements in to be worked out, which require the interventhis commercial age, but an essential element, tion of a Court of equity. His bill does not even universally conceded, is, participation in profits expressly aver a partnership; is almost in form, as such. But, even this, does not necessarily a declaration of assumpsit. Equity has for that create a partnership." reason no jurisdiction. Both of appellants' assignments of error are sustained, and the decree of the Court below is W. M. S., Jr. Here, in no event, were the parties to share in profits, and they expressly stipulated against a liability for losses. They contemplated the possi- reversed, costs to be paid by appellee. ble loss of their $2000, and attempted to make some provision for this, by the assertion of title to the property purchased by Brubacher. But, the writing, as between themselves, did not create a partnership, whatever may be its construction as to creditors of Brubacher, who were April '97, 117. strangers to it. Taking the ambiguous writing, Superior Court. Superior Court. ciation. April 20, 1897. Corporations-Acts of April 29, 1874, and May 14, 1891-By-laws-Powers of directors-Quo-Ratification of contract. rum The by-laws of a corporation not in conformity with the provisions of the Act under which the company is organized are void. the surroundings of the parties, their vague testi- Curry v. Claysville Cemetery Assomony, we can glean from all pretty certainly this truth: Brubacher had failed shortly before; he was anxious to carry on business, but was wholly without means; they were friends of his, and at his solicitation, generously agreed to advance him $2000. As some sort of security, it was agreed, they should have title to the business property, and have the right to take possession when they thought proper. They were joint lenders of the The Act of May 29, 1874, and its several supplements $2000; Brubacher was their bailee of the prop-shall be necessary to constitute a quorum for the transacprovide that a majority of the whole number of directors erty. In no contingency, did either one of the tion of business. four intend to put in peril more than $500, the one-fourth of the $2000. This is shown by the manifest preponderance of the testimony. No one thought otherwise, until after the business was a failure. Brubacher probably expresses the truth exactly, as notice his testimony: "Q. Was it your idea, they would have to pay for everything you bought in this business? A. No, not Where the by-laws of a corporation organized under in the beginning, until after some people told me the above Acts provided for a board of six directors; that three should constitute a quorum, and that the president This plaintiff, one of the joint lenders or sure- (not a member of the board), should preside at the meetties, now, on the assumption, that they were part-ings, and have the right to vote in case of a tie, a meeting ners, seeks to recoup his individual loss from his president, has no power to bind the company by a contract at which there were present but three directors and the alleged co-partners. There was no partnership to employ a third person as superintendent in place of in law or in fact, and therefore the bill cannot be one whom they attempted to discharge at the same meeting. maintained by him as a partner for an account so." ing. In all matters involving legislative or judicial discretion, The independent action of several members of a board Appeal of the Claysville Cemetery Association, But, even assuming a partnership existed, his from the judgment of the Common Pleas of debt was not contracted as a partner. He does Washington County, in an action brought by T breach of contract. B. F. Curry, to recover damages for an alleged provides specifically-"Section 5. The by-laws of every corporation created under the provisions of this statute, or accepting the same, shall be deemed and taken to be its law subordinate to this statute, the charter of the same, the Constitution and laws of this Commonwealth, and the The facts as they appeared on the trial, before Verdict for the plaintiff, for $250, and judgment Constitution of the United States," and under the thereon. Defendant appealed. Albert S. Sprowls, for appellant. title of "officers and their duties," it is explicit in limiting the power of the corporation through its 1. F. Birch, (Andrew M. Linn with him), for board of directors. ". . . . . The number of diappellee. rectors or trustees shall not be less than three; one of them shall be chosen president by the diJuly 23, 1897. ORLADY, J. The appellant is rectors, or by the members of the corporation. a corporation organized under the laws of this The members of said corporation may at a meetCommonwealth, the constitution and by-laws of ing to be called for that purpose, determine, fix which provide, inter alia, Article III., section 7: or change the number of the directors or trustees "The business of the association shall be con- that shall thereafter govern its affairs, and a maducted by a board of six directors, three of whom jority of the whole number of such directors or trusshall constitute a quorum. They shall select tees shall be necessary to constitute a quorum." The a chairman and secretary from their own num-language in this particular is the same in the ber, and shall report at least once a year at one original and amendatory statutes, and must be of the semi-annual meetings of the association, taken as mandatory. and oftener if required. In case of a vacancy In the fall of 1894, for some reason not fully occurring in the said board, occasioned by death, disclosed by the record, three members of the resignation or otherwise, it shall be the duty of board of directors did not attend the meeting of the secretary of the same to report such vacancy the board, and a dispute arose as to the adminto the president of the association, who shall istration of the affairs of the association. thereupon call a special meeting of the stock- One I. F. Seamon had been for several years holders to elect one of their number to fill the the superintendent of the cemetery grounds, and vacancy. Section 2 of the same Article provides: on December 29, 1894, he was notified by the "The president shall preside over all the meet-president and secretary, to remove from and deings of the stockholders, call for the reading of liver up the possession of the building and books the minutes, preserve order, put all motions, an- of the association; which notice was based on the nounce results, sign all contracts, accounts, or- action of a meeting, at which three of the direcders and papers of the association, and require tors, the president and secretary were present. the same to be attested by the secretary when Based on the same authority, similar notices necessary to be authenticated, call all special were served on Seamon, on December 31, 1894, meetings when required by a majority of the and March 29, 1895. The minutes of a meeting stockholders, the board of directors, or when in of the same persons on March 23, 1895, were his judgment the business of the association may admitted under objection as follows: "President require it, and perform all other acts and duties McLain in the chair, directors present, Dennison, required by the nature of his office, also to pre- McConehey, Campsey. Directors met at aboveside over all meetings of the board of directors, named time on motion E. H. Dennison; that and shall have the right to vote in case of a Frank Curry be elected to the office of supertie." intendent of the Claysville Cemetery AssociaSection 4, of the same article, is as follows: tion, . . . . . . which motion was carried and said "The secretary shall keep faithful and accurate Curry was elected to the office of superintendent minutes of the transactions of all meetings of the on motion of J. C. McConehy,-'whereas, I. association and the proceedings of each, the date F. Seamon, superintendent of the Claysville of the same, countersign and attest all official Cemetery Association, has since October, 1894, papers and documents and papers, and perform refused to recognize the president and secretary, all other duties required by the nature of his and board of directors of said association by position." The association was incorporated un- withholding from them all papers rightfully beder the Act of May 14, 1891, P. L. 61, which longing to said officers, although by direction of amends the Act of April 29, 1874, P. L. 73, en- a resolution of the board of directors, the secretitled, "An Act to provide for the incorporation tary made personal demand on said superintenand regulation of certain corporations," which dent, for such papers, and he has refused and therefore be it resolved that we hereby discharge | lence or non-participation of those directors who said Seamon from the employ of the association, withdrew from the meetings and have not been and authorize and direct the secretary to notify working, or were not actively with this board of Mr. Seamon to vacate the premises he now occy-directors at that time as cutting any figure in the pies, and give to his successor all papers, books, case, that is for the plaintiff or for anybody else. and maps, and any other property he has in his They are under the evidence here apparently nonpossession belonging to said association on April combatants. They have withdrawn from the as1, 1895,' which was adopted." It was not shown sociation, that is, perhaps, not in the legal way, that the three non-acting directors had notice but they do not meet with what has been deof this meeting and they denied the right of their clared by one branch of this Court to be a legally co-directors to act in this matter, because there constituted board of directors to run the corporawas not present a quorum for the transaction of tion under the circumstances including the three business, and acting under the advice of counsel, gentlemen, Mr. Dennison, Mr. McConehey and Seamon refused to recognize or to act upon the Mr. Campsey, with their president, Mr. McLain, action taken by the three directors and president, acting under a by-law of the association, which and continued to act as superintendent for the gives the president the right to vote with them year beginning April 1, 1895. At the end of and act with them in all matters that are not in that year Seamon surrendered all property in his conflict with the Act of Assembly under which possession to a successor, who was elected by a it is created." (Fourth assignment). board of directors composed of the whole numQuo warranto proceedings had been instituted ber. B. F. Curry, the plaintiff, brought this suit against the then non-acting directors, but no to recover, under a contract as claimed by him, decree was made therein, on which it could be made through Campsey, the secretary, and Mc- claimed that the right of the three named direcLain, the president, by his signing a written con-tors to act as a board for the association had been tract which he gave to Campsey; and also under established. a subsequent ratification of the contract by the The controverted action of the three directors board of directors. He did not render any ser- and the president was not in regard to or about vice to or for the association, and both Camp-an emergency matter, requiring the prompt assey and McLain denied the existence of the writ-sertion of authority to preserve from loss or deten contract, and the three directors, who as-struction any property of the association. sumed to act in the matter, testified that the em- It was merely the attempted substitution of ployment of Curry was conditional always on the one superintendent for another, the latter having fact that Seamon would vacate the premises in been employed and having been acting in similar obedience to the notice served upon him. work for a number of preceding years. The While there are seventeen assignments of error right of the president to vote is rightly denied, in the case, the second, third, twelfth and thir- as there was not a quorum of the whole board teenth, present the question as submitted in de- present at any of these meetings, hence, there fendant's first point; (twelfth assignment). "The could not be a tie vote, which under the by-laws uncontradicted testimony being that the contract, was a prerequisite to his right to vote. whatever its nature, on which plaintiff seeks to A quorum is necessary for the transaction of recover, was not accepted or ratified by a ma- business of this and like coporations. The Act jority of the directors of the defendant associa- of Assembly under which it has existence protion, at any meeting duly convened; said contract vides in plain language the necessary numberis accordingly illegal so far as the defendant is a majority of the whole number of such directors, concerned, and not binding upon it, and there and the action of the three directors, on which can be no recovery by the plaintiff in this case;" the plaintiff's claim is founded was unauthorized. which was answered by the Court below, viz.: Neither the president nor secretary of the as"This point is refused subject to what we have sociation was shown by the evidence to have had said to you in our general charge; that is to say, any authority to act as agent for the association, if it was not legally in force-was not a legally or in addition to the power conferred by the byconstituted board," and in the general charge the laws defining their respective duties. Court said, "Now, gentlemen of the jury, some- The three directors did not have authority to thing has been said about the other three direc- create a vacancy in the office of superintendent, tors consenting to or acquiring this claim, or nor to make a contract for the employment of to his alleged contract, that they are not here pro-another to fill his place. testing against the payment of damages. We The minutes of the meeting of March 23, 1895, instruct you that you are not to consider the si- show the meeting was unauthorized, for the rea ! |