57 N.J. Eq. 199 | New York Court of Chancery | 1899
It is to be noted that the bill of complaint, though all the’ prayers seek relief by dissolution account and receivership which presupposes a partnership, nowhere alleges that any agreement of partnership was ever entered into by the parties, nor does it contain any averment that the narrated facts brought the parties into the relation of partners.
Nor is there anywhere in the bill any statement defining what constituted the supposed partnership property. The lots whereon the “ Marine Villa ” and “Albert Cottage ” properties are situate are described, and the prayer of the bill refers to them in asking that a receiver may take possession of the partnership property, “ including said ‘ Marine Villa ’ and ‘Albert Cottage/ ” but the bill nowhere specifically alleges that these pieces of real estate or their equipment and furnishings, part of which it is alleged were supplied by complainant, are, in fact, partnership property. The whole ground of relief sought by the complainant is based upon this supposed existence of a partnership between the complainant and the defendants, and on the ownership of partnership property not specifically defined, but which it is assumed included the “Marine Villa” and the “Albert Cottage,” the two boarding-houses at Cape May.
The defendants deny that there is or ever was any partnership, and all the testimony taken has been directed to the establishment or refutation of the existence of that relation between the parties. The arguments presented and eases cited by both sides have sought to maintain or refute the claims of the complainant that there is a partnership which she prays may be dissolved and that its assets consist, in part at least, of the “ Marine Villa ” and .the “Albert Cottage,” the titles to which' stand in the name of the defendant Arabella Rogers. Whatever claims the complainant makes that there are other partnership assets than those two properties, are set forth with so little certainty of statement in the bill that it is difficult to know of
In the happening of the events narrated in the testimony, those attending upon the purchase of the lots on which the “ Marine Villa” and its extensions were erected, and the conduct of the business in that house up to 1894, will be first examined, for, in my view, the relations of the parties touching the “Marine Villa” were changed in 1894.
The “Albert Cottage” and its furnishings were not purchased until 1895, and the matters relating to these involve a different series of facts and will be separately considered.
The original purchase was the first lot on which the “Marine Villa” now stands, and was made from. Mr. Bullitt. At that time the complainant was keeping a boarding-house in Cape May. Her business, in which she had been engaged there for two years, had been profitable, but it is quite evident that she was then a person of extremely limited means,-as it is uncontradicted that she was financially embarrassed two years before, while in Philadelphia, where there were several judgments unpaid, outstanding against her; and her property in Philadelphia has been sold away from her except a portion which was surreptitiously brought to Cape May. She appears to have opened with Mr. Bullitt the negotiations for the purchase, but no progress had been made to conclude them before Mr. Rogers the defendant, who had been boarding with her for several years before, and was at that time engaged to be married to her daughter, was brought into the dealings. Mrs. Hallenback her
On the other hand, Mr. Rogers swears that none of Mrs. Hallenback’s money was used in this first payment; He states Mrs. Hallenback did deposit with him some five or six hundred dollars in checks to be cashed, yet she afterwards drew out all the money to pay her outstanding bills and her daughter’s wedding outfit, and this Mrs. Hallenback does not contradict. He further testifies that he had at one time some $13,000 in cash in bank, and that he paid out of his own money the whole first payment of $1,000 by a check which he produces for that sum, drawn to the order of Miss Hallenback, whom he was about to marry. He says he made this payment for his intended wife because he wished the property to stand in her name.
Mrs. Rogers corroborates this testimony of Mr. Rogers that he paid this first $1,000. She identifies the check and states that the title to the property was taken in her name because Mr. Rogers was to give her the property.
This is the only payment of the purchase-money of any of the laud which Mrs. Hallenback in any way identifies (save as to the “Albert Cottage” hereinafter discussed) and which she claims to have made, and on this, while the burden of the proof is upon her to prove her allegations in the bill that she “ paid of her own money, on account of said purchase, to John M. Rogers for John C. Bullitt, about $1,000,” the weight of the evidence is against her.
All the deeds were, with Mrs.' Hallenback’s knowledge and agreement, made to her daughter. ■ All of the mortgages were made and paid by the latter and her husband.
During the whole period from 1874 up to 1894, Mr. and Mrs. Rogers and their children, and, at times, Mr. Rogers’ mother — in short, the whole family — lived in this property during the season in entire harmony. Mrs. Hallenback and Mrs. Rogers were mother and daughter to each other.
Mrs. Hallenback, during these twenty years from 1874 to 1894, conducted the boarding-house business in the “Marine Villa” in its original and its enlarged condition. She alone was recognized as the proprietor of it, not only by the public but also by Mr. Rogers and his wife. It was in fact as well as in name Mrs. Hallenback’s boarding-house. Nowhere in the
Mrs. Hallenback also states that she used the money received from the boarders to pay for improvements on the house and for running it, but she gives few statements of payments for real estate repairs or improvements which are of substantial character, which were shown to have actually been made by her before 1894. What happened after that date is to be judged from the
Mrs. Hallenback never furnished a statement or an account of the business from its beginning until the filing of the bill in this case, to either Mr. Rogers or Mrs. Rogers, who are asked to-be decreed to be partners with her, nor is there any testimony showing that she felt that she was so related to them that such a statement was due them. Nor do they appear to have asked any such statement, or to have supposed they had any right to it. They kept no account in respect to their transactions with her. No profits were ever ascertained, none were ever divided. After she had for many years been engaged in this boardinghouse business, Mrs. Hallenback admits or is shown to have made the following purchases in her individual name :
Cottage in Cape May................................................ $1,800 '
Lot in Cape May..................................................... 1,400
$3,200
And it is testified by Mrs. Bogers, without contradiction, that Mrs. Hallenback’s bank-book showed a single deposit of over.................................................. 7,000
$10,200
Mrs. Hallenback had no other means of gathering these moneys than her boarding-house business, carried on in the “ Marine Villa,” save back pension money which she received from the United States government and a small monthly pension. The back pension money she testifies was about $3,300
Whichever account is true, it remains quite clear that Mrs. Hallenback had, during a series of years, received in her boarding-house business a very respectable sum of profits which she kept as her own individual property. She had no consciousness that either her daughter or son-in-law, now sought to be decreed her partners, had any right to share in these profits, and I think her feeling was justified by the actual truth of their relations. They were not partners and had no right to share in these profits.
In addition to these holdings of large assets in her individual name by Mrs. Hallenback, the entire absence of any attempt to keep or furnish accounts as between partners makes it difficult to believe that she understood she was acting as a partner of Mr. and Mrs. Rogers in earning these values.
In the matter of keeping accounts there were none kept of any partnership character. No partnership bank account was ever opened, nor were any bills rendered as due to any partnership. From 1874 until 1891, seventeen years, the books opened were simply a cash-book and a hotel register. This is Mrs. Hallenback’s own testimony. She further swears that as to the moneys she says she paid Mr. and Mrs. Rogers during the earlier years she has no account — “we never took any account between us.”
She admits that she has no means of ascertaining what moneys were expended by her between 1874 and 1892. When it is remembered that during all this time she had the sole management of the business, how can it be believed she understood she was acting as a partner in charge when she took no steps to show to her copartners what there might or might not be in the way of profits in the business, or even to preserve the means for-such a showing if it should be at any time demanded ? Several books, which were stated to be all that Mrs. Hallenback had, were
It was testified by Mrs. Hallenback that the books of the “Marine Villa” had been left in the house in the spring of 1897, and that they were in the possession of Mrs. Rogers. But the latter explicitly denies that she has them or any knowledge of them except the register-book of the hotel.
As to any actual agreement or contract between the parties, Mrs. Hallenback herself first testifies that she never had any conversation with Mr. or Mrs. Rogers about what business should be carried on in the proposed boarding-house (the “ Marine Villa ”) after it was built, then she states that her daughter and her husband knew the purpose for -which the house was to be built, and that they all talked about it, but not at any special conversation. She -was then asked not what she and the other parties agreed to do, or whether there was any agreement for a partnership or joint business, but “for what purpose was this house to be built?” and she replied, “for me to continue my boarding-house there.” Not a partnership boarding-house, but “my boarding-house.” Not to start a new business as a partnership, but for her to continue her old one. She subsequently testified that Mr. and Mrs. Rogers and she talked of what should be done with the money that should come in from the boarders, and that this talk was that this money should be used in the house for improvements on the house, and things that were necessary to buy, and the running of the house.
I am unable to find from Mrs. Hallenback’s testimony that there was any agreement or contract between this lády and her daughter and son-in-law, touching the purchase of the lots and the erection of the “Marine Villa” boarding-house or-the conduct of the business there. She originally intended to buy the lot herself; on Mr. Rogers’ offer to pay for the property, if the title were put in the name of his fiancée, she assented, and the weight of the testimony shows.that he paid the whole of the purchase and mortgage moneys and for all improvements, save trifling sums expended by Mrs. Hallenback.' These latter she does not appear to have laid out as owner of the property, but
The testimony of Mr. and Mrs. Rogers is explicit in denial of any agreement or contract of partnership whatever. They say that Mr. Rogers bought and paid for the first and succeeding purchases, and for the house and its improvements for his fiancée and wife. Mr. Rogers testifies it was his intention when he went into it to make a home for all of them. He carried out his intention subsequently, and Mr. and Mrs. Rogers and their children and his mother used the house during the season, and without charge. Mr. Rogers denies that Mrs. Hallenbaek paid to him any moneys in assistance of the raising of the purchase or mortgage moneys. He states that there was no agreement of any kind in relation to the property, and that there never was any up to the year 1894, and that he never conducted a partnership business with Mrs. Hallenbaek.
Mrs. Rogers states that the title to the property was taken in her name as a gift from Mr. Rogers, to whom she was then engaged to be married and whom she subsequently married ; that no arrangement was ever made between Mrs. Hallenbaek and herself or Mr. Rogers in relation to the conduct of the business and that no agreement of partnership was by her intended to be made.
The complainant insists that the testimony óf Mrs. Rogers that there was no agreement was shown to be inconsistent with a previous statement made by her under oath in a suit in the supreme court of New Jersey, on February 18th, 1885. That suit does not appear to have involved the questions here mooted. In the course of an affidavit taken by her in that matter, Mrs. Rogers used these words in speaking of the “ Marine Villa: ”
“ The house here has always been owned by me, and has been kept by my mother and me, on a joint account, as a boarding-house; the house at 2051 Walnut street, Philadelphia, was kept by my mother ; I had nothing whatever to do with the house at Philadelphia, but the house here I always did have something to do with.”
The testimony of Mrs. Hallenback herself in this case is wholly incompatible with the view that in 1885 and before, Mrs. Rogers and Mrs. Hallenback kept the boarding-house in the “Marine Villa” on joint account. At that time Mrs. Rogers was assisting Mrs. Hallenback in keeping the house perhaps more actively than at any other period. The house had been let during the season of 1883 to Mrs. Wylie, and was run in 1884 by Mrs. Hallenback. Miss Harrison rented it in 1885, but not until July of that year. So that Mrs. Rogers, in February, 1885, was speaking as of the season of 1884, and it may be that her reference to the matter was based upon her position as her mother’s assistant. The deposition in question was taken in narrative form and not by question and answer, and may not have expressed the precise words of the witness herself. Giving to it, however, the full force of an admission in the very words noted, it is entirely overborne by the weight of the evidence, as shown in the testimony of Mrs. Hallenback herself, in that of Mr. Rogers and by the whole narrative of events in this case. These all go to show that so far as ownership of the boardinghouse business was concerned Mrs. Hallenback herself, individually, disassociated from both her daughter and Mr. Rogers, was the owner of the boarding-house business conducted in the “Marine Villa” from 1874 up to the spring of 1897 (except during the three years it was rented to other parties), and that during a portion of that time Mrs. Rogers was her assistant.
“Q. Was that check not paid by you to Mrs. Rogers in pursuance of an agreement entered into between you and Mrs. Rogers that you should pay her §3,000 a year for the ‘Marine Villa/ and should pay in addition thereto insurance and taxes on the ‘Marine Villa?’
“A. No.
“Q. You state you did not make such an agreement?
“A. Didn’t.
“Q. What agreement did you make ?
“A. That if I made money that summer I would give her ?3,000 — -if I made enough money that summer to do it.”
It may be noticed in passing that Mrs. Hallenback’s own statement of this agreement negatives the possibility that she was a partner of Mrs. Rogers or that the latter had any interest in the boarding-house business. The payment was to be made if Mrs. Hallenback made enough money, not if any partnership made it, and the occasion for the agreement was Mrs. Rogers’ demand for payment to her for the use of the “Marine Villa,” not for a share of profits of the boarding-house business.
There is no proof whatever to show that this payment of $3,000 was in any way profits of a partnership. It was, on Airs. Hallenback’s own showing, a payment made by her out of the profits which she had realized in her own business and on a demand made that she pay for the use of the “ Marine Villa.” The amount was so large that it cannot be classed with the previous occasional payments made by Mrs. Hallenback, and its relation to the demand for a rent of precisely that sum certainly goes far to support the claim that it was by way of rent. Mrs. Rogers states that the same arrangement was to have been observed in the next year also, and that in that year, 1895, Mrs. Hallenback paid her by check $500, $2,000 and a smaller amount, about $150, and also paid the taxes on the “ Marine Villa,” $360.50. The parties are in contradiction as to these payments, not on the point whether they were made, but as to what they were made for, Mrs. Rogers insisting that they were made for the rent or use of the “ Alarine Villa ” and Mrs. Hallenback that she paid $500 and $2,000 on account of the purchase of the “Albert Cottage.” I will discuss these variant claims in connection with the purchase of the “Albert Cottage.”'
The purchase of the “Albert Cottage” is another point.of variance in the testimony of Mrs. Hallenback and her daughter. Mrs. Hallenback, by her bill, claims to have purchased this property herself, and on that bases her claim that it is partnership property. She states that she assented that the title should be in Mrs. Rogers’ name, and she claims that all the payments for this “Albert Cottage” have been made partly out of the business of the “Marine Villa” and partly from pension money received by her, Mrs. Hallenback.
Mrs. Rogers denies this and explains that she purchased the “Albert Cottage ” herself, and that the rent which Mrs. Hallenback paid her for the use of the “Marine Villa” for 1895 was used to make the first payments on this “Albert Cottage.”
In examining these contradictory statements, light is afforded by the letters of Miss Albert, with whom the negotiations were conducted. These letters were all addressed to Mrs. Rogers and evidently considered her to be the intending purchaser, and do not recognize Mrs. Hallenback as having any interest as owner. Furthermore, this transaction took place in 1895. During the previous year, in 1894, Mrs. Hallenback had been in dispute with Mrs. Rogers as to paying rent to the latter for the “ Marine Villa.” In the purchase of the “Albert Cottage ” the deed was, with Mrs. Hallenback’s knowledge and consent, made to Mrs. Rogers, and the bo.nd and mortgage-for $17,500, securing the payment of the residue of the purchase-money, was
It is insisted that Mrs. Eogers admits that all the money for this first payment on the “Albert Cottage ” purchase came from Mrs. Hallenback. This is true, but Mrs. Eogers also explains that this money, when it came from Mrs. Hallenback, was by her paid for her use of the “ Marine Villa ” during the year 1895, and Mrs. Eogers further states that the payment to Miss Albert was in fact her own, having been made to the Alberts by her arrangement; that is, the money being due from Mrs. Hallenback to Mrs. Eogers was by the latter’s order paid to her creditor, Miss Albert.
The deed conveying the “Albert Cottage ” was, by Mrs. Hallenback’s assent, made to Mrs. Eogers individually, and the. latter at once assumed the absolute ownership. In 1896 she (Mrs. Eogers) rented this “Albert Cottage ” and its furniture to. the French ambassador, M. Paternotre, for $1,500, and took all the rent, and it does not appear that Mrs. Hallenback ever complained that this was in any way an injustice to her rights.
I think the weight of the evidence on this point is against Mrs. Hallenback’s claim that she made these payments of the purchase-money of the “Albert Cottage.”
I cannot reconcile such a showing with established principles in this branch of the law of contracts. In Wild v. Davenport, 19 Vr. 131, Mr. Justice Depue, speaking for the court of errors, thus states the law: “Inter sese, the fact of partnership, as well as the rights, duties and obligations of partners, arise wholly from the terms of the contract.” In the case in hand there is no agreement or contract shown even by the testimony of the complainant herself. Robbins v. McKnight, 1 Halst. Ch. 645, came up oil appeal from this court, and the question of the existence of a partnership inter sese in the property in dispute was raised. Chief-Justice Green, delivering the judgment of that court, declared that “ to Constitute a partnership as between the parties themselves there must be a joint ownership of partnership funds.” The joint ownership of property is thus made an essential requisite of the relation of partnership when asserted inter sese. Where the question presented turns upon the ownership of property by the partners, it is difficult to conceive how there could be a partnership when it appears that the property is owned in severalty and that the supposed partnership has no interest either by way of title or use which is common to all its supposed members.
I am unable to find any agreement in the case under considera
The essential test of the existence of a partnership is stated in the judgment of Lord Cranworth in Cox v. Hickman, 8 H. L. Cas. 268. His lordship declared that the real ground of liability is that the trade or business has been carried on by persons who acted in behalf of the person sought to be charged, with his knowledge or permission. When parties so associate themselves or so hold themselves out to others, they are liable to the trade obligations and are entitled to share in its profits. The principle stated in Cox v. Hickman has been accepted in our courts (Wild v. Davenport, ubi supra), and is of value in ascertaining the status of the parties in the case under consideration, for it established the rule that a person not actually engaged in the business as a partner and not holding himself out as such cannot be held even by creditors to be a partner because of sharing in the profits, unless by virtue of some contract expressed or implied creating that relationship. Seabury v. Bolles, 22 Vr. 107. In the present case there was no showing, nor indeed was any claim made even in argument, that there was any express agreement between the parties to enter into the relation of partnership, nor any sharing of profits, nor did any of the supposed partners ever act for the others touching any partnership or common business.
It is insisted that the payments by Mrs. Hallenback for the improvements, repair or purchase of the property standing in
I do not think the evidence of the various acts of the parties in interest justifies such a judgment. This would be to impose upon the parties a position not intended or contemplated by them, which, if it existed, must have arisen because of their express agreement or because their acts and representations to each other touching the premises necessarily lead to the conclusion that they had so agreed. In Wilson v. Cobb, 1 Stew. Eq. 177, Vice-Chancellor Van Fleet declared that “ there is no such thing as a partnership by implication or operation of law. The relation inter sese is founded in voluntary contract and cannot exist independent of it. As to third persons, the relation may exist in spite of an agreement that it shall not.” The decree in this case was reversed because the court of errors took a different view of the facts, but the vice-chancellor’s statement as to the law of partnership inter sese was not criticised. See 2 Stew. Eq. 361.
But if it be assumed that Mrs. Hallenback did, in fact, pay part of the purchase-money of the “Marine Villa” and of the “Albert Cottage,” as there is no proof that these payments were made under any agreement therefor between the parties, what effect would such payments have in view of the kinship of the parties? On this assumption Mrs. Hallenback paid her money and consented that the titles should be conveyed to Mrs. Rogers. They were mother and daughter, the latter being the only child of the former. Whatever money Mrs. Hallenback expended on
Between strangers, if a conveyance of the legal estate be made to one and the payment of the purchase-money by another, a presumption arises that the party receiving the legal estate holds it in trust for the person who pays the purchase-money, unless this presumption be overcome by proof that it was the intention of the party advancing the purchase-money that the grantee in the conveyance should take beneficially. Our courts have frequently enforced this rule, but it is just as well settled that where the parties hold to each other the relation of parent and child or husband and wife, a contrary rule prevails. Where a parent pays the consideration and has the conveyance made to the child, no such presumption arises from the payment of the consideration. “ In such cases,” the court of errors has declared, “ the presumption is that an advancement or settlement was intended, and a resulting trust will not arise unless the presumption that the transaction was intended to be a gift be overcome by proof.” Read v. Huff, 13 Stew. Eq. 234; Peer v. Peer, 3 Stock. 432.
In the case under consideration, far from overcoming this presumption, there is no evidence which antagonizes it. The sum of the proofs on the point is consistent with the legal presumption that Mrs. Hallenbaek in expending her moneys, knowing the titles were held in the name of her daughter, had neither belief that there was, nor intent that there should be, any contractual relation between them as to these payments. They were gifts.
I will advise a decree dismissing the complainant’s bill, with costs.
An order to show cause why a receiver should not be appointed and an injunction issue according to the prayer of the bill, is pending and unheard. The disposal of the case upon the final hearing makes it unnecessary to consider the questions raised by this order, and I will advise its dismissal.