Swoope v. Wakefield , 10 Pa. Super. 342 ( 1899 )

Opinion by

Beaver, J.,

An important question of practice is raised by the preliminary motion to quash this appeal. Appellant failed to comply with the equity rules of the Supreme Court by filing “ in the court below, with his notice of appeal, a brief statement of the errors he alleges to have been made by the order or decree appealed from or the findings on which it rests: ” 159 Pa. xxviii. His reply is that he filed in this court the specifications of error required by our own rules and that, having complied with our rule in this regard, he has discharged his full duty, It is to be remarked, however, that the equity rules published by the Supreme Court are prescribed under authority of the statute and have the force of law. They govern in all equity proceedings in any of the courts of the commonwealth, and are to be complied with in this court as fully as in the Supreme Court. As was said in Barlott v. Forney, 187 Pa. 301, “ They are not abrogated by the subsequent Act of May 19,1897, P. L. 67. It is true that act repeals all prior acts intended to be changed or supplied by it, so that, as is provided in section 22, it ‘ shall furnish a complete and exclusive system in itself on all appeals,’ but it was not thereby intended to interfere with the rules of equity practice, either in the courts of first instance or here.” It was held in the case just cited : “ This default, however, is not necessarily fatal and in a case of mere oversight of counsel and where no special hardship would be imposed on the other party, we should be disposed to permit the filing of the statement nunc pro tunc.” We therefore • permit the statement required in the section on appeals in the equity rules to be filed nunc pro tunc, and consider the appeal upon the other questions involved therein.

In the hearing of the case before the referee, the plaintiff objected to the defendants’ offer of the constitution and bylaws of the association, under which they conducted business, and the minutes from the date of the association. The objection was overruled and an exception allowed to the plaintiff and duly noted, but no exception to this ruling was filed after the report of the referee was made, in accordance with the requirements of the 69th rule of the Supreme Court rules of equity practice. We cannot, therefore, consider the first specification of error for the reason that the question involved in it was not raised in the court below. The same is true as to the second, third and fifth specifications.

The question of fact involved in the fourth specification was raised in the court below by a distinct exception to the finding of the referee and is, therefore, properly before us; but, inasmuch as the number of shares in the co-operative association at the date of the assignment of H. W. Swoope to Myton can only be of practical importance, in case it can be held that Swoope’s assignment worked a dissolution of the firm or association as among the partners or shareholders themselves, so that the entire assets of the association must be marshaled and distributed; and, inasmuch as we hold for reasons which will be presently stated that the assignment of Myton was equivalent to a withdrawal from the association and did not thereby work its dissolution, so far as the members thereof were concerned, it is not necessary for us to consider whether the finding of the court in this respect is correct or not, for the reason that the value of Myton’s shares, the number of which is undisputed, must be determined in the way pointed out by the by-laws of the association, and not by a division of all of its assets among the shareholders in proportion to the number held by each respectively.

The practical question for our consideration and the controlling one in the case, is as to the legal effect of the assignment of H. W. Swoope. As preliminary to this is the question of the status of the plaintiff, who became the purchaser of the shares of H. W. Swoope at assignee’s sale. It is conceded that he was not eligible to membership in the association, not being a member of the order known as Patrons of Husbandry. He is, therefore, entitled to all the rights of H. W. Swoope at the time of his assignment and no greater. He stands in the place of a partner or shareholder who has voluntarily deprived himself of membership in the association. He is in no sense a creditor of the partnership or association, and his rights are not those of a creditor. Nor is he a creditor of H. W. Swoope. His rights can certainly rise no higher than those of the assignor. The referee finds, as one of his conclusions of law, “ That the ‘ Patrons Co-operative Association of Petersburg ’ was a partnership which, under its constitution and by-laws, contemplated the withdrawal of old members and the reception of new members, and that, therefore, the withdrawal of the old or reception of the new members under the method provided by the constitution and by-laws did not dissolve the partnership,” and in this he was undoubtedly correct. Whilst it is true, as a general proposition, as held in Horton’s Appeal, 13 Pa. 66, that an assignment by one of two partners of his interest in the partnership works a dissolution of the partnership, for obvious reasons stated in the opinion of Coulter, J., it is, nevertheless, clearly recognized that the articles of copartnership may provide otherwise. The referee’s final conclusion was based upon his finding “ that C. T. Swoope did not become a member of the association and was not governed by its constitution and by-laws.” In a sense this is true, that is, he was not governed as a member by the constitution and by-laws, but he was subject to them in that he could not become a member, because not eligible under their provisions, and also in seeking his rights as an assignee of a former member, which were to be determined under the constitution and by-laws as they affected his interest in the partnership. He was bound to know their provisions, for they practically constituted the articles of copartnership, and by them his rights were to be determined: Logan v. McNaugher, 88 Pa. 103. What were those rights? In other words, what effect did the general assignment of H. W. Swoope for the benefit of creditors have upon his interest in the partnership ? It was voluntary. It was not induced or compelled in any sense by his partners in the association. He was not forced out of the partnership, nor is there any allegation of any kind that he was wronged while a member of the association. He was unfortunate, but there is no allegation that his fellow-members were in any sense responsible for his financial condition. How can his assignment, therefore, be regarded in any other light than as a voluntary withdrawal, subject to the provisions of the constitution and by-laws of the association relating thereto ?

The surrender value of shares of stock, as found by the referee at the date of the assignment, was thirteen dollars per share, and this was the amount allowed by the court below in deter mining the interest of the plaintiff. We cannot see that any wrong was done him by the court’s computation and the decree based thereon.

Decree affirmed and appeal dismissed.