Wilhelm v. Caylor

• Decision Date: 25 February 1870
• Citation: 32 Md. 151
• Parties: SAMUEL WILHELM, Surviving Partner of HENRY WILHELM, v. LEVI CAYLOR, Exec'r of HENRY RIAEL, dec'd.
• Court: Maryland Court of Appeals

32 Md. 151

SAMUEL WILHELM, Surviving Partner of HENRY WILHELM, v. LEVI CAYLOR, Exec'r of HENRY RIAEL, dec'd.

Court of Appeals of Maryland

February 25, 1870

APPEAL from the Circuit Court for Carroll County, in Equity.

The facts of the case are sufficiently detailed in the opinion of the Court.

The cause was argued before BARTOL, C.J., STEWART, BRENT, GRASON ALVEY and ROBINSON, J.

Wm. P. Maulsby and C. B. Roberts, for the appellants, on a printed brief prepared previous to the appointment of the former as Judge.

Wm. M. Merrick and J. J. Baumgartner, for the appellee.

ALVEY J., delivered the opinion of the Court.

The bill of complaint in this case was filed on the 28th of November, 1848, and it alleges that the partnership, of which it prays an account as between the partners, was dissolved by mutual consent on the 28th of March, 1841. It also alleges that, at the time of dissolution, an account was taken between the partners of the funds and moneys belonging to the firm, when it appeared that a large sum was then standing to the credit of the firm in the Bank of Westminster, and of such money in bank the sum of $3,350 was the share or proportion admitted by the appellee's testator to belong to the appellant and his brother, since deceased.

The bill further alleges that, of the sum thus admitted to belong to the appellant and his brother, subsequently and up to the 12th of June, 1841, inclusive, the sum of about $2,200 was drawn out of bank by the appellee's testator, by cheques in the name of the firm; the balance of the $3,350 having been drawn out by the appellant, and part of it applied to the discharge of partnership liabilities before the 12th of June, 1841, and the residue to the use of himself and his brother. It is also alleged that the appellant had frequently, before filing his bill, requested of the appellee's testator an account, and that it had been always refused. The bill discloses nothing on its face to show that there was any dealing or transaction between the partners themselves after dissolution, or as between the partners, or either of them, and third persons, on account of the partnership, after the 12th of June, 1841; nor does the bill allege anything to show why so much time was allowed to elapse before it was filed.

The appellee's testator, by his answer, denied that he was ever unwilling or refused to account with his co-partners of and concerning the business and profits of the firm, but averred and insisted that the appellant and his brother Henry had received more than their full and just proportion of the funds, moneys and effects of the partnership; and he utterly denied that he ever drew any money out of the bank that was not his own, or to which the appellant and his brother could make any just claim. He also, in his answer, pleaded and relied on the Statute of Limitations as a complete bar to the relief prayed.

On the answer being filed, and without proof, the Court, on the 6th of September, 1849, passed an order referring the cause to the Auditor, with directions to take proof and to state an account of what was actually due to the appellant on his claim as one of the partners, and as surviving partner of his brother Henry, and to report the same to the Court for its future action, "to be either ratified and confirmed or rejected." And the Auditor, accordingly took proof stated an account, and reported the same, as directed; and, on final hearing, without going into the merits of the account stated by the Auditor, the Court below, sustaining the defence of the Statute of Limitations, dismissed the bill, with costs.

The first and leading question in the case as presented to to this Court is, whether, as between the original parties to the bill, the defence of limitations taken in the answer be available to defeat the right to an account?

The defence set up here is not that which is peculiar to Courts of Equity, founded merely upon the lapse of time and the staleness of the claim, and in reference to which the Court acts upon its own inherent doctrine of discouraging, for the peace of society, stale demands, by refusing to interfere in favor of a party guilty of laches, or unreasonable acquiescence in the assertion of an adverse claim; but it is in the nature of a positive bar, created by statute, to the right asserted in the bill.

The bill is filed by one partner against another for an account and settlement of partnership affairs. At law an action of account will lie by one partner against his copartner. Co. Litt., 171, a; Bac. Abr. Account; Chitty's Plead., 39; Duncan vs. Lyon, 3 John. Ch. Rep., 351. And the proceeding in an action of account is very much like that had on bill in equity. The first judgment is that the defendant account with the plaintiff, which is called a judgment quod computet, answering to the preliminary decrce to account in equity; after which the Court assigns Auditors to take and declare the account between the parties, and, upon that being done, the final judgment is, that the plaintiff recover against the defendant so much as may be found due. And, as observed by CHANCELLOR KENT, in Duncan vs. Lyon, it is difficult to perceive any good reason why the action of account has fallen into disuse, unless it is, as we suppose, because Courts of Equity, having concurrent jurisdiction with Courts of Law in matters of account, afford some facilities that cannot be obtained at law.

By the statute law of this State, (Act 1715, ch. 23; 1 Code, Art. 57, sec. 1,) the common law action of account is not only recognized as an existing remedy, but is required to be brought, by express limitation, within three years from the time the cause of action accrued. This being the limitation to the right to have an account taken in an action at law, the question is, whether the same or a different period applies to the analogous proceeding for the same thing in equity; or, in other words, whether it be in the power of the party seeking an account, to avoid the operation of the statute by simply electing to proceed in one forum rather than another. We think the statute cannot be so evaded, and that it is equally a bar to a bill for an account in equity as it is to an action of account at law.

One of the earliest cases in which the Statute of Limitations was distinctly recognized as applicable to proceedings in equity, was that of Lockey vs. Lockey, Prec. in Chan., 518. That was a case of a bill filed for an account of an infant's estate, but was not filed until six years after the plaintiff had come of age; and LORD CHANCELLOR MACCLESFIELD declared his opinion to be, that "if the infant lies by for six years after he comes of age, as he is barred of his action of account at law, so shall he be of his remedy in this Court; and there is no sort of difference in reason between the two cases," and he decreed accordingly. And, according to the same principle, the subsequent case of Prince vs. Heylin, 1 Atk., 493, was decided by LORD HARDWICKE. There was, in that case, a demand of an account by one tenant in common against another, and the LORD CHANCELLOR, holding that the statute was a bar to the demand further back than six years, said: "An action of account lies for one tenant in common against another, and such action is expressly mentioned in the Statute of Limitations, and as there is no remedy at law, (after six years,) there can be no reason for any in equity." These two cases were not between partners, it is true, but they were bills for account, and where the Statute of Limitations was strictly applied, because the remedies at law and in equity were concurrent.

But the doctrine was still more comprehensively expounded by LORD CAMDEN, in Smith vs. Clay, 3 Bro. Ch. Cas., 639, note, not more, however, in reference to a bill in equity for an account than to the subject matter of all other cases in that Court falling within the reason and policy of the Statute of Limitations. His Lordship asserted that the maxim, expedit reipublicæ ut sit finis litium, had prevailed in that Court in all times without the help of an act of Parliament; but, as the Court had no legislative authority, it could not properly define the time of bar, by a positive rule, to the hour, or the year; it was, therefore, governed by circumstances. But, as often as Parliament had limited the time of actions and remedies to a certain period, in legal proceedings, the Court of Chancery adopted that rule, and applied it to similar cases in equity. For, said he, when the legislature had fixed the time at law, it would have been preposterous for equity, (which, by its own proper authority, always maintained a limitation,) to countenance laches beyond the period that law had been confined to by Parliament; and therefore, in all cases where the legal right has been barred by Parliament, the equitable right to the same thing has been concluded by the same bar. And in no less clear and decided terms has the same doctrine been stated by LORD REDESDALE, in Hovenden vs. Lord Annesley, 2 Sch. & Lefr., 607, a case which has been repeatedly sanctioned by the decisions of this Court. That learned Chancellor, in the course of his examination of the subject, said: "But it is said, that Courts of Equity are not within the Statute of Limitations. This is true in one respect. They are not within the words of the statute, because the words apply to particular legal remedies; but they are within the spirit and meaning of the statute, and have been always so considered. I think it is a mistake, in point of language, to say that Courts of Equity act merely by analogy to the statute; they act in obedience to it. The Statute of Limitations, applying itself to certain legal remedies for recovering the possession of lands, for...