Reading Industrial Manufacturing Co. v. Graeff

The opinion of the court was delivered, by Sharswood, J.

— It is necessary to determine as preliminary to the consideration of the principal questions which arise upon this record, whether the court below had power to enter judgment upon the report of the commissioner. He was appointed “to take testimony in this cause, to ascertain and report facts, and to *400 state the account between Moses K. Graeff, the plaintiff, and the Reading Industrial Manufacturing Company. The whole evidence submitted to the commissioner to be by him reported to the court. This reference, in the judgment of the court, is rendered necessary by the nature and circumstances of the cause, and is expressly assented to by the counsel for the parties.” It is not easy to comprehend why the parties to a cause pending in court by their attorneys, instead of agreeing to a case stated in the nature of a special verdict, may not consent that the facts shall be found and reported by some third person mutually chosen or selected by the court with their approbation. Verba illata inesse videntur. The facts found may well be considered as incorporated with the agreement as if they had been originally inserted. It is true, there was here no express consent that the court should enter judgment on the report, but it was necessarily implied. The whole proceeding would have been nugatory without it. What is added confirms this necessary implication: “ And by express agreement of the parties, the right of either and any party to a review of the record by writ of error from the Supreme Court, for any cause of error which could be alleged, if the trial of the facts were had before a jury, is fully reserved.” The gentlemen who made this agreement certainly knew that nothing but a final judgment was the subject of a writ of error from the Supreme Court.

But if there was any doubt of the power of the court under such agreement, it is removed by the 3d section of the Act of Assembly relating to reference and arbitration, passed June 16th 1836, Pamph. L. 715. That act makes it' lawful for the parties to consent to a rule of court for referring all matters of fact in controversy to referees, “reserving all matters of law arising thereupon for the decision of the court; and the report of such referees, setting forth the facts found by them, shall have the same effect'as a special verdict, and the court shall and may proceed thereupon in like manner as upon a special verdict, and either party may have a writ of error to the judgment entered thereupon, as in the case of a judgment entered upon special verdict.” Here was clearly a consent to a rule of court, and such a rule actually made and entered of record, which satisfies all the formal requisitions of the act: Benjamin v. Benjamin, 5 W. & S. 562 ; Millar v. Criswell, 3 Barr 449. But in truth it is not necessary in the case of a pending suit that there should be-an agreement to make it a rule. Such consent will be implied whenever the intent of the parties is apparent, and a simple reference to the pending action will make it so in the absence of a contradictory provision: McAdams’s Ex’rs. v. Stilwell, 1 Harris 90; Buckman v. Davis, 4 Casey 211. It cannot be pretended that a reference to one is not as good as a reference to several, though the word is used in the section in the plural, but it is “ referees *401 as aforesaid,” and the 1st section to which only “ aforesaid” relates, provides expressly for a submission “to the award or umpirage of any person or persons.” Considering the commissioner as a referee, there was therefore full power in the court to enter such a judgment upon it as the case warranted.

The merits of the controversy, upon the facts as reported by the commissioner or referees, depend upon two questions only, and those fortunately of simple and easy solution, requiring neither argument nor research.

The first is, whether the claim of the plaintiff below is within the provisions of the 2d section of the Act of Assembly of March 27th 1854, Pamph. L. 215. That section declares “ that the stockholders in all companies incorporated in pursuance of the provisions of the act to which this is a supplement, and the .several supplements thereto, including this act, shall hereafter be jointly and severally liable in their individual capacities, only for debts due to miners, quarrymen and other laborers employed by such companies, and for machinery, provisions, merchandise, country produce and materials furnished for said companies respectively, to be enforced and collected in the manner provided for in the act to which this is a supplement.”

It is contended that this provision applies only to a sale in the course of the ordinary business of the corporation, and not to a special contract or arrangement such as the commissioner reports to have existed in this case. In Weiss v. The Mauch Chunk Iron Company, 8 P. F. Smith 295, a firm agreed to transfer all their effects at an appraised valuation to compose the capital stock of a manufacturing company, when it should be formed, and to subscribe for its stock to the amount of the appraisement, the company issuing the stock therefor. Upon the allegation that the company had refused to issue the stock, the firm brought an action against the corporation for the appraisement, claiming to make the stockholders individually liable under this section. It was held that the act evidently contemplated an ordinary sale and delivery to the company in the course of its usual business, and had no application to such a contract as was the foundation of the suit in that case. The contract here, however, was entirely different. On the facts reported by the commissioner, we think that the claim of the plaintiff below was for provisions and country produce sold and delivered by him to the company in the usual course of their business. The mode adopted for transacting it was for the convenience of the company and did not change the nature of the contract. By a special arrangement with the plaintiff they paid their workmen and employees with orders drawn upon him for such goods, which he delivered to the workmen. Had it been reversed, and the plaintiff sold and delivered directly to the com *402 pany, and they then paid their workmen with the goods it would evidently have been the same thing.

But the most serious contention has been that this arrangement between Graeff and the corporation was in violation of the provisions of the Act of Assembly, passed April 21st 1849, Pamph. L. 678, entitled “An Act to restrain corporations from issuing obligations redeemable otherwise than in gold and silver or in current bank notes.” It declares that it shall not be lawful for any corporation to issue “ any certificate, check, order or due-bill or acknowledgment of indebtedness of any description for any purpose whatsoever, payable or redeemable in any goods, property or effects, or payable or redeemable in anything except in gold and silver:” — with a proviso that the section “shall not be construed so as to prevent any corporation from drawing orders in the ordinary course of business, not intended for circulation or in payment of interest, and that such orders shall not be negotiable.” It may be conceded as a general and well established rule of law that a party to a contract in violation of a statute, even if the prohibition only be under a penalty, cannot recover against the other party though in pari delicto, and though such party may have received the full consideration — however ungracious and abhorrent to our sense of justice such a defence may be. The rule is one of policy and only to be vindicated on that ground. It is unnecessary to inquire whether it is applicable under this Act of Assembly, as we are clearly of opinion that the orders issued in this case were “ in the ordinary course of business, not intended for circulation,” and therefore within the saving of the proviso. The act declares that such orders shall not be negotiable —an unnecessary provision; for an order, payable in goods, is clearly not so on general principles: Fahnestock v. Schoyer, 9 Watts 102 . The orders issued or to be issued under the arrangement between Graeff and the corporation were of this character. “They arranged with him,” says the commissioner, “to give to their hands such of the necessaries of life as they should require upon the presentation of the company’s orders, which was accordingly done.” This disposes of all the errors assigned.

Judgment affirmed.