98 N.Y.S. 321 | N.Y. App. Div. | 1906
Lead Opinion
The complaint alleges that in the month of September, 1898, the plaintiff’s intestate and the defendant entered into an agreement, terminable by either on' sixty days’ notice to' the other, whereby it was agreed between them that the plaintiff’s intestate should perform and render certain work, labor and services for the defendant' in his business known as Fifth Avenue Art Gallery in New York city, from and after October 1, 1898, and until May 1, 1903, unless sooner terminated by either, at an agreed compensation to be paid by defendant to plaintiff’s intestate of one-sixth of the net profits of said business; that the plaintiff’s intestate did perform and render to said Silo certain work, labor and services from October 1, 1898, until on or about March 9, 1900, the date of his decease; that one-sixth of the net profits of the said business during the said period of time were at least the sum of $4,418.57, of which there was a balance due and payable from the defendant to the plaintiff of at- least the sum of $2,140.50; and the complaint demands judgment for that amount. .
The defendant admitted the death of the plaintiff’s intestate, denied the other allegations of the complaint, and set up a counter
. The court dismissed-this counterclaim and held that the plaintiff was entitled to recover, leaving it to the jury to determine the amount. To prove the cause of action alleged in the complaint the plaintiff called one O’Brien, who testified that-he took part in an interview between himself, the defendant and the plaintiff’s intestate some time in October, 1899; that .an arrangement was then made by which each- of the parties should draw S$2,.000 a year, which should be an expense of the business, and that two-thirds of the profits was to go tó the defendant, and the other óne-third was to be divided between the plaintiff’s 'intestate and the witness; that this agreement'was not reduced to writing; that prior to this time-the plaintiff’s intestate had been an employee of the .defendant at 43 Liberty street, and that this arrangement contemplated the leasing of an uptown, store; that the plaintiff’s intestate and the witness were to do the work incident to the gathering together and cataloguing and general details of the business, and the defend^ ant was to do the selling; that this business Would be started immediately on the securing of the lease, and it. was started shortly-after ■that. The witness' was- then asked : “ When Hr. Silo said that he Would take two-thirds and the other one-third to be divided between you two, was anything said-by either of you or Mr. Lefevre in regard- to that?” to whifeli the witness answered, “It was understood that we were to get each one-sixth, divide that one-third equally between us. That was agreed upon by all three, yes. The words were the one-third was to be divided between you two boys. Tes,, one-third of the profits: The $2,000 annually was an expense of the business which we were to draw for our living expenses and was to be considered as an expense, charged to salary account.” He further testified that he was subsequently present at a conversation in the uptown store between the. plaintiff’s, in testate and the defendant ; that “ Mr. Silo came in one morning and said that A- this was after the books had been balanced and the amount of. profit, for the preceding year determined.. This was in either the latter part of September or the first part of October, 1899-, Mr. Silo came into the office and said that the amount - of the profits that would be
The first question arising' is whether this was a copartnership, in which case an action at law could not be .maintained for the amount due to either of those interested until an accounting had been had. This point was raised by the defendant when he made his motion to dismiss upon the ground that the action was a common-law action to recover for money due to the plaintiff’s intestate as an employee. Just what is sufficient to constitute a copartnership is a question about which there has been considerable confusion; but the prevailing opinion now is that any contract by which the parties to the contract are entitled to share in the profits or business as owners thereof is a copartnership, rather than an employment. Thus it is said in American and English Encyelopsedia of Law (Yol. 22 [2d ed.], p. 14): There are two essential elements “ present in every partnership. These are first, a contract between the partners; and, second, this contract must be for the sharing as common owners of the profits of a business.” On page 27 it is said that the ultimate and conclusive test of partnership is simply co-ownership" of the
In Leggett v. Hyde (58 N. Y. 272) it was held that the contribution by a party of a sum of money to a firm to be employed as capital in its business, by reason of which he was, entitled to- have and demand from it one-third of the profits of its business every half year, constituted him a ‘ partner. (Citing with approval what was said in Everett v. Coe, 5 Den. 182: If he is to be paid “out of profits actually made,lie then had a direct interest in such profits.”) And. the rule would be the same where the parties were to contribute those services to the joint enterprise.
Tlie evidence of the agreement in this'cáse is-cónfinfed entirely to the statement" of O’Brien of what he understood the arrangement to be. He nowhere gives the' words- that, were used, the proposition made by the defendant, the answer of the plaintiff's intestate or the witness. He says : “ I understand that the arrangement' then to be all three will- draw $2,000 a year each and that' two-thirds of the profits will go to me and the other one-third Will bé divided between both of .you.” Again, when asked a'bont the agreement, he said : “ It was understood that we Were to, get each. one-sixth, divide that one-third equally between us. That was agreed upon by all three, yes. The-words were, the one-third was to be divided between you two boys. Yes, one-third of the profits.” Upon cross-examination he testified : “ To repeat what was said in.
I also think that there was error committed in rulings upon evidence to which exceptions were taken which requires a reversal of the judgment. The evidence of the agreement which was made between the plaintiff’s intestate, O’Brien and the defendant, was given by O’Brien, one of the parties, who was present at the interviews, After O’Brien had testified the defendant was called as a witness, and was asked: “ Did you enter into a contract with Mr. Lefevre on or about — in 1898, about September?” That was objected to, .the objection was sustained and an exception taken. He was then asked: “ Did you enter into a contract with Mr. O’Brien on or about September 1, 1898?” That was objected to, “ as Mr. Lefevre was present at it, and the proof already shows i that, and if he took part in it, consequently he cannot testify to it at all, and it calls for a,v conclusion besides.” That objection was sustained, and the defendant excepted.
As to the abjection that this was a conclusion, in view of the form
Nor do I think that this testimony was incompetent under section 829 of the Code of Civil Procedure.- O’Brien had not testified to anything that the plaintiff’s intestate had Said at that interview, except that he had acquiesced in the proposal made by the defendant. O’Brien had testified that he had also acquiesced' in such an agreement and that under -that agreement the business had been carried on. If it was competent for the plaintiff to prove that’O’Brien had acquiesced in that agreement and the agreement had become thus complete, under which the business was to be carried on, it was certainly competent for the defendant tó .deny that such an arrangement had been made between himself and O’Brien. Whether the plaintiff’s intestate took part in the conversation seems to me immaterial. What the Code makes iiicompetent-is a personal transaction between the witness and a deceased person, and this question did not purport to ask the. result of any personal transactions between the defendant" and' the plaintiff’s intestate. What the defendant had á ■ right to do was to deny O’Brien’s testimony as to the- arrangement that he had made with O’Brien, and it was for the jury to say. whether the defendant’s or O’Brien’s testimony was to be believed.
As to this refusal to allow the defendant to contradict O’Brien’s
There is one ojher question as to which I think-the learned trial judge fell into errdr. The answer set up a counterclaim for money loaned by the defendant to the plaintiff’s intestate. In support of this counterclaim lie offered in-evidence certain Writings- which it was conceded were ■ in the handwriting of the plaintiffs intestate. These-consisted of -103-sepárate instruments,, which were dated in the years 1896 and 1897. They were for varying amounts, fifteen Of which were as. follows ■:
“July 24/97.
“I. O. U.
“ Thirteen dollars.
“ A. M. LEFEVRE.”
The court seems to have at first admitted these in evidence, and afterwards, upon reconsideration,, excluded them and then- dismissed the counterclaim. The papers Were produced by the, defendant, were conceded to be in the handwriting, of the plaintiff’s intestate, and I think they were competent' evidence of .an admission by the intestate that he- had received the sums of money mentioned and had promised to -repay the same. In, .the absence of some evidence as to whom they-were delivered, or by whom' they, were received from the plaintiff’s intestate, it may - be that, standing alone, they were not competent' evidence to prove the counterclaim, but I think they Were admissible evidence. But, as the judgment must
It follows that the judgment and order appealed from should be reversed and a new trial ordered, with costs to, the appellant to abide the event.
O’Brien, P. J., and McLaughlin, J.. concurred; Houghton, J., dissented.
Dissenting Opinion
I cannot concur in the reasons advanced for reversing this judgment. I do not interpret the evidence as showing that O’Brien and defendant and the plaintiff’s intestate, as between themselves, entered into a copartnership agreement.
The defendant called as a witness, his own bookkeeper, Anthony, and he testified that the defendant told him that plaintiff’s intestate and O’Brien were coming to work for him, and that they were to" receive a salary of forty dollars per week and a portion of the profits at "the end of the year. The 'defendant was sworn as a witness in his own behalf, and while it was perfectly competent for him to say that his bookkeeper was mistaken and that he made no such declaration to him, he did not so testify and "said nothing upon the subject. The controversy on the trial was, whether O’Brien and plaintiff’s intestate were to have one-sixth each of the profits, as claimed by plaintiff, or only one-eighth each, as claimed and admitted by defendant.
There is a wide difference between a partnership as against third persons and one inter sese. The case of Leggett v. Hyde (58 N. Y. 272), cited as authority in the prevailing opinion, deals with the question as to whether the parties had made themselves partners as to third persons only, and expressly recognizes the rule that a part
Hor do I think there was any error in excluding the testimony of defendant as to whether he made any such contract with O’Brien as had been testified' to by him. Assuming the question to be proper in form, and not plainly calling for a conclusion as to what the arrangement was, the defendant could not testify, because, If it was material at all, it manifestly called for a.personal transaction between the defendant himself and plaintiff’s intestate. O’Brien testified that at one time and in one conversation the defendant made a bargain with himself and the deceased to pay each of them forty dollars per week for their services, and, in addition, one-sixth of the net profits of the business., -The bargain between defendant and O’Brien was not material, except as- it involved one made in the same conversation in behalf of the' deceased. Surely, the defendant could not testify against the plaintiff administratrix if the question was properly objected to as calling for a personal transaction between ■himself and the dead man —that he made no such bargain, or what the bargain actually was. -That a living "witness, who was present and'heard the bargain, had given his version of what took place,, did not open the door for the defendant to testify on the same-sub
With respect to the so-called “ I. O. U.’s,” I do not think any error was committed in excluding. them. The ground upon which the defendant’s counsel claimed they were admissible, and that they proved his counterclaim, was that they were "negotiable instruments. They were clearly not of such a character, and he should be held to the ground he took upon the trial with respect to them.
I think the judgment was right and that no reversible error was committed.
Judgment and order reversed, new trial ordered, costs to appellant to abide event.
Concurrence Opinion
I concur with Mr. Justice Ingeaham in all excepting that I am of opinion that the court properly precluded defendant from testifying concerning the contract alleged to have been made at an interview between the decedent, the witness O’Brien and the defendant, but I think defendant should have been permitted to deny the subsequent settlement with O’Brien on the basis thereof.