Burns v. Rosenstein/Opinion of the Court

by John Marshall Harlan

United States Supreme Court

135 U.S. 449

Burns  v.  Rosenstein

The special master reported that there was no sufficient evidence to establish misconduct or negligence upon the part either of the plaintiffs or of the defendants. This report having been confirmed, it is assigned for error that the court below did not dismiss the bill; and, that if a case was made for the dissolution of the partnership, it was error to proceed in the distribution of the assets without decreeing such dissolution. The consent of the defendants to a dissolution of the partnership, as shown by their answer, made it unnecessary for the plaintiffs to make proof of the special grounds set out in their bill for such dissolution, and authorized the court to proceed in the settlement of the accounts of the partners, and the distribution of the assets; and the fact that there was no formal decree of dissolution is immaterial, in view of the pleadings, and the assent of the parties to a decree winding up the affairs of the partnership, and distributing its property.

It is also assigned for error that the court below erred in acting upon the master's interpretation of certain articles of the partnership contract as a valid part of his report; in construing the partnership contract as requiring losses of capital to be borne by the partners in the same proportion in which the contract provided for the distribution of net profits; in decreeing that any part of the capital put in by the appellees, and not paid back by the assets, should be paid by the appellants, and that the appellants should be paid back, neither from the assets, nor by the appellees, for any part of the capital put in by them; and in not decreeing priority of payment, in respect of advances found by the master to have been made by J. J. Burns Co. to the Union Fish Company, next after payment of the debts and liabilities due from that company to outside creditors.

These questions are not open to appellants in this court. The decree below followed the report of the special master, and that report was based in part upon statements drawn from the books of the parties by the accountants selected by them. respectively. Those statements contained the undisputed and disputed items in separate columns. The defendants did not file with the master or in court any exceptions to the report. If the statements by the accountants, or the report of the special master, were based upon any particular interpretation of the articles of partnership that was prejudicial to the defendants, it was their right to file exceptions to the report. The master was directed to report all issues of fact made by the pleadings, and to take an account of the dealings and transactions between the parties, and all claims for damages arising out of said transactions. He could not intelligently discharge that duty without adopting some theory as to the scope and effect of the partnership agreement. If he went beyond the order of reference, or if the account taken by him involved a misconception of the provisions of that agreement, the defendants should have brought those matters to the attention of the court by exceptions to the report. Having failed to do this, they cannot, in this court for the first time, object that the master proceeded upon erroneous views as to the contract between the parties. Equity rule 83; Brockett v. Brockett, 3 How. 692; McMicken v. Perin, 18 How. 507; Story v. Livingston, 13 Pet. 359, 366; Medsker v. Bonebrake, 108 U.S. 66, 71, 2 Sup. Ct. Rep. 351.

After the decree below, there was a report by the clerk as to the a xation of costs. The parties having been heard in respect thereto, an order was made allowing costs to the plaintiffs to the amount of $973.34. The report shows that the plaintiffs claimed a certain amount for expenses connected with the preservation and keeping of the personal property, not including the vessels, attached on the writ. The court disallowed five-eighths of that sum. The only objection urged in this court to the taxation of costs was the allowance of any sum whatever to plaintiffs for the preservation of the attached property. This objection cannot be sustained. It was said in Trustees v. Greenough, 105 U.S. 527, that 'ordinarily a decree will not be reviewed by this court on a question of costs, merely, in a suit in equity, although the court has entire control of the matter of costs, as well as the merits, when it has possession of the cause on appeal from the final decree.' There is nothing in the record to take the present case out of the general rule. The allegations of the original bill justified the issuing of the attachment. It was right that the property taken under it should be cared for, and, as the court found that the plaintiffs were entitled to a decree against the defendants, a judgment for costs properly followed; and we perceive no reason why the plaintiffs should not have been allowed as part of their costs a reasonable amount for the expenses incurred in preserving the attached property, and for which they became primarily liable to the officer keeping it. We cannot say, upon the record before us, that the court below exceeded its discretion in apportioning the expenses thus incurred.

Decree affirmed.

Notes