37 N.Y.S. 751 | N.Y. App. Div. | 1896
This action was brought by the executor of Alexander M. Lawrence against John C. Giles ahd Francis S. Marbury, as executor of George P. Lawrence, to obtain an accounting of the affairs of the firm of Lawrence & Giles. The executor of George P. Lawrence was made a party, but, as stated in the case, simply for the reason that without him the suit could not be maintained, and it was made to appear that George P. Lawrence had paid over to the estate of Alexander M. Lawrence all he owed, and for that reason no relief was asked against him. The executor of George P. Lawrence in his answer asked affirmative relief against Giles, but upon the dismissal of the complaint no notice was taken of his prayer, and as he
The action was begun against Giles in his lifetime. He died after his answer had been served, and his executors were substituted as the defendants in his place. The foundation of the action and the fact which lay at the bottom of the claim of relief on the part of the plaintiff was, that Alexander M. Lawrence had been since 1857 a partner in the several firms which had conducted the business under the name of Lawrence, Giles & Co., and of which it was conceded ■ on all hands that the sons of Alexander M. Lawrence from time to time, and the defendant John C. Giles all the time were members.
The complaint alleged that Alexander 1VI. Lawrence was a member of the firm through all the years during which it continued under various names; and'basing his cause of action upon that fact, the plaintiff demands as relief that the defendant Giles account for the partnership transactions so far as it was necessary to establish his liability, and pay over to the executor of Lawrence whatever sum should be found due to him from Giles'. ' It asks no judgment against the other members of the firm.
The action was referred to a referee, and after a large amount of testimony had been taken the referee directed that the complaint be dismissed. The decision was the usual short form of decision, and the grounds upon which the complaint was dismissed were,, that the plaintiff had failed to establish that' Alexander 1VI. Lawrence was a partner in the firm of Lawrence, Giles & Co., and that the accounts of that firm had been balanced and settled as of the date of the death of Alexander M. Lawre'nee, and the balance due from Giles was fixed and determined thereby, and any claim against the executors of Giles in respect thereto had been barred by the Statute of Limitations.
The right to an accounting in this case on the part of the plaintiff was claimed solely because of the existence of the partnership, and so to establish his cause of action it was necessary that he should prove in the first instance that Alexander M. Lawrence was a partner in the firm of Lawrence, Giles & Co., and if he did not succeed upon that point he failed in the essential fact which gave him 'a right to the accounting, and the referee was right in dismissing his complaint.
The question presented here is whether the plaintiff has shown that-these persons had formed a partnership inter sese. In considering that question it must be recollected that the same rules do-not apply which are invoked where a third person claims that those engaged in a joint adventure are liable as partners. Individuals may be charged as partners as to third persons, by voluntarily and knowingly sharing in the profits of the business, or holding themselves out as partners, and thus inducing a credit on the faith of the supposed partnership. Such a liability may be created, as to third persons by an equitable estoppel. But when it is sought to be established on a footing of contract of partnership between the parties, an agreement must be shown, and it will not be implied from the joint ownership of property, nor will the relation arise by operation of law. (Central City Sav. Bank v. Walker, 66 N. Y. 424, 428; Leggett v. Hyde, 58 id. 272, 278; Hazard v. Hazard, 1 Story C. C. 371, 373.) This distinction is well settled, and must be carefully borne in mind whenever the question arises as to the existence-of a partnership. Whenever in an action between two persons alleged
In this case the original parties to the transaction aré all dead. The contract, whatever it was, was never reduced to writing, and there is no direct evidence, so far as appears, as to the precise terms upon which they were in business together. ■ We can only look at their -acts and declarations, and from them come to a conclusion whether or not the plaintiff has established by a fair preponderance of evidence that Alexander M. Lawrence was a partner in these several firms. It appears from the evidence that about the 1st of October, 1857, a partnership was formed in Hew York, the firm name of which was Lawrence, Giles & Co. Everybody concedes that John S. Lawrence, George P. Lawrence and John 0. Giles were members of that firm. Alexander M. Lawrence was the father of the two Lawrences who were in the firm. He had been a shipping merchant and importer in Hew York, and owned considerable shipping, and the firm of Lawrence, Giles & Co., after its organization, acted ai ship’s husband for the vessels hi which Alexander M. Lawrence was .interested. Alexander hi. Lawrence contributed the capital of the firm. Accounts were opened on the books of the firm in the names of each of its members, and Alexander M. Lawrence also. At the end of each year the profits or losses for the year were- estimated, and a certain fixed proportion of them was credited or charged to each of the accounts. The ratio of the division of profits and losses was fixed by Alexander M. Lawrence, and was changed from time to time at his suggestion. In 1871 John S. Lawrence died and his interest in the firm was ascertained and paid. The survivors went on with the business at the same place and under the same name until the year 1878, when Henry S. Lawrence, another son of Alexander M. Lawrence, entered the firm. He continued a member until the end of the year 1880. After his withdrawal his interest was ascertained and paid over and the other persons carried on the business until the death of Alexander M. Lawrence in June, 1882. During all this period each of the parties, including Alexander M. Lawrence, was charged or credited with the interest on the balance of his account. This is substantially all the evidence in the case tending to establish that Alexander M. Lawrence was a partner in the firm.
Upon a careful,consideration of this testimony, it seems to us that
It is claimed, -however, by the plaintiff that, although no partnership relation was shown to exist, Alexander M. Lawrence was still entitled to an accounting as one who was engaged with the firm of' Lawrence, Giles & Co. in a joint adventure. It is to be noticed, that the plaintiff does not ask relief against the firm of Lawrence, Giles & Co., but only against one of the members of that firm. HA says that, having been a partner in that firm, he has, as to the result, of the transactions thereof,, become a creditor of Giles, and he. demands an accounting and the payment of that debt. Unless the relation of partner was established, he shows no right to an accounting from Giles, or to the payment of any sum by Giles to him. That fact, then, as we have said, lies at the basis of this cause of' action, and the cases above cited establish that when a claim to an accounting is based solely upon the existence of a partnership and. that fact is not made to appear, the complaint must be dismissed. The case of Arnold v. Angell is decisive on that point. In that, case the action was brought for an accounting upon an allegation that the plaintiff and the defendant were co-partners, and the relief' demanded was that the co-partnership be dissolved and that'there be. an accounting and a division of the proceeds. The judge at the trial' found that there was no partnership, but*that, in spite of that fact,; because there was a joint adventure, the plaintiff was entitled to an
For' these reasons, and without considering the other question passed upon by the referee, ■ we are of the opinion that' this case was properly decided and that the judgment must be affirmed, with costs.
Van Brunt, P. J., Barrett, O’Brien and Ingraham, JJ., ■concurred. ' "
Judgment affirmed, with costs.