Pearl v. Harris

, An agreement to submit to arbitration, the effect of which is to oust the courts of jurisdiction, is invalid. A bill in equity for an account of a copartnership, one of the articles of which provided for the submission of disputed matters to arbitration, need not allege a refusal to refer by the defendants; and the defendants cannot defeat the jurisdiction of the court by alleging that they are and have been willing to refer under -the articles of copartnership.

Bill in equity alleging that the plaintiffs and defendants had been members of a copartnership, which was afterwards dissolved ; that the defendant Harris was intrusted with the full settlement of the partnership affairs upon the dissolution thereof, and the whole property of the copartnership was placed in his hands, and that, in addition to the amount of property received by Harris upon the dissolution of the copartnership, he had collected and received large sums of money due the said partnership, and had distributed and paid over to the plaintiffs some portion of the moneys realized and collected by him from the assets of the partnership, but had also appropriated to his own use considerable portions thereof, of the amount of which the plaintiffs were ignorant, to satisfy certain pretended claims of his own against the partnership. The bill further alleged “ that they have from time to time requested the said John F. Harris to refer any matters of dispute between him and them, and any claims made by him upon the assets of said partnership, to the arbitrament provided in the tenth article of said copartnership agreement, [a copy of which is printed in the margin,*] they having offered to join in. said arbitration, and now being ready so to do, and they have also from time to time requested said John F. Harris to come to a full account of the said copartnership transactions, as in justice and equity he should have done.” The bill then alleged the refusal of Harris to account; and “ that, by the refusal of Harris to account, they are unable to state his claims upon said partnership assets, so that they can proceed to submit them to arbitration without said Harris joining in the same as provided in said tenth article,” to the great loss and injury of the plaintiffs and of the defendants John F. Harris, Jr., and Wesley Archer, who refused to join with them as plaintiffs in this suit. The bill prayed that an account might be taken of all the partnership dealings and transactions between the plaintiffs and the defendants, and that what should appear to be due thereon from Harris might be decreed to be paid by him, and for such other decrees as justice might require. The answer admitted the entering into tne partnership, the dissolution thereof, and that Harris was intrusted with the settlement of its affairs; denied that Harris had appropriated to his own use any of the assets of the partnership; and alleged that Harris had always been ready to account with the plaintiffs, and proceeded as follows : “ These defendants also deny that they or either of them have ever refused to refer the matters in dispute between the plaintiffs and the defendants, and the claims of said John F. Harris against said copartnership, to the arbitrament provided in the tenth article of said articles of copartnership, and say that they have been at all times ready and willing so to refer them, and they deny that they or either of them have been requested by the complainants or either of them so to refer any matters in dispute as aforesaid. “ These defendants also say, that, in accordance with the provisions of said tenth of the articles of copartnership, they do insist that the matters and things alleged in said bill of complaint should be referred to arbitrators, as provided in said tenth article, and these defendants do appoint Jonas Fitch, of Boston, Massachusetts, as the arbitrator to be appointed by them pursuant to said article, and they are willing and ready, and hereby offer to refer all said matters and things in dispute as aforesaid to said arbitrators, to be appointed pursuant to said tenth article ; and they say that this court ought not to take jurisdiction over this bill of complaint, but that all said matters and things in dispute should be determined by said arbitrators.” A replication was filed, and the case was referred by an order of court to a master, to take' an account of the partnership dealings between the plaintiffs and the defendants. The defendants appealed to the full court, and assigned the following reasons therefor: “1. A master ought not to be appointed under the pleadings in the cause. 2. The parties ought to be left to proceed with the arbitration provided for in the articles of co-partnership, as both in their pleadings allege a willingness to refer, and proceedings in this cause should be stayed un til an award is had pursuant to said provision.”