128 N.Y.S. 918 | N.Y. App. Div. | 1911
The plaintiff and one Ezra W. Buck were copartners in the trucking business in the city of New York. In August, 1897, while
“Wheeeas, they desire to enter into some further agreement whereby in the event of the death of either, the business and assets of the said copartnership may become the sole property of the other, subject only to the debts of said copartnership;
“ Now, therefore, in consideration of the premises and one dollar to each in hand paid by the other, the receipt whereof is hereby acknowledged by the parties hereto, it is hereby agreed that in the event of the death of either of the said parties during the continu' anee of said copartnership, the property and assets of same shall become the sole property of the survivor, free and clear of any and all claims of any kind whatever of the executors or administrators of the deceased party, but subject to all the debts and liabilities of said copartnership to other parties, provided the said surviving partner shall within ninety days after the death of said party pay to the executors or administrators of said deceased party the sum of five thousand dollars.”
Buck died in October, 1908, and the plaintiff, as surviving partner on December 30, 1908, paid to Buck’s executrix, the defendant herein, the sum of $5,000, and became the sole owner of all “ the property and assets” of the partnership, as provided in the agreement aforesaid. In August, 1909, he brought this action in equity against the defendant as the executrix of the will of the deceased partner, Buck, to procure an accounting of the partnership transactions from its inception to the date of Buck’s death. The complaint alleges the existence of the copartnership, the death of Buck, the equal interest of each partner in the firm assets and profits. It then sets forth that during the existence of the partnership Buck had wrongfully diverted to his own use large sums of money belonging to the partnership in excess of his lawful share thereof, and was, at the time of his death, largely indebted to the partnership by reason of such diversion. There was a further allegation that no partnership accounting had ever been had. The prayer for relief was for an accounting of all moneys paid and received by both partners, “ and that any and all moneys found to be due by either of the parties hereto to the said
In Lesure v. Norris (supra) the court said: “ The sale to the defendant, under the circumstances stated, was a dissolution of the copartnership. (Taft v. Buffum, 14 Pick. 322.) It was also in effect an adjustment by the partners, as between themselves, of all its concerns and a division and appropriation of everything belonging to it. Nothing further remained to be done to effect a complete settlement between themselves.” In Clark v. Carr (supra) the court said: “ It is not upon any theory or release of liability of a retiring partner or release of right of action against him, that the debts due from him to the firm may be presumed to be settled.and it is not so claimed. No presumption of that kind could arise from the mere fact of a sale, but the presumption that arises in the absence of anything to show the contrary is that in the valuation upon which the sale is based the debt of the selling partner is taken into account and charged to him and the value of his interest is thereby reduced to that extent, so that the debt is actually paid in that way.” It is true that in the case at bar the transaction of sale was not between living partners, and that the amount of the consideration was fixed by agreement some eleven years before the dissolution of the partnership, but on the death of Buck the plaintiff, as surviving partner, had full control of all the partnership books and assets, and had an option to exercise the privilege of purchase in ninety days, with his eyes reasonably . open, and in the absence of fraudulent statement or concealment, he.must be presumed to have taken into consideration the various elements which would enable him to determine whether he would or not exercise the option of purchase with all its legal effect. If the trial court intended to find that there was any
The only question passed upon, therefore, was as to the admissibility of evidence. The transaction between the parties resulting
On the record now before this court, the judgment should be reversed and a new trial granted, costs to abide the final award of costs.
Jenks, P. J., Burr and Woodward, JJ., concurred; Hirschberg, P. J., concurred upon the ground that there is no finding of misappropriation, notwithstanding the statement • to that effect in the Special Term opinion.
Interlocutory judgment reversed and new trial granted, costs to abide the final award of costs.