117 N.Y.S. 585 | N.Y. App. Div. | 1909
Lead Opinion
These are cross-appeals from a decree entered upon the report of a referee in an action for a. partnership accounting. The plaintiffs in the year 1897 were custom house brokers. The defendant had been employed for a number off years in the Custom House and in the office of the United States attorney for this district, and had acquired an especial knowledge of custom house business, of the revenue laws and of the treasury practice and regulations affecting importations and ■ the levying and imposition of duties. A new tariff bill was enacted in 1897, and in contemplation of its passage and of the many difficult and disputed questions which would probably arise under it, plaintiffs and defendant, on April 23, 1897, entered into a copartnership agreement. It was agreed that the partnership should be for five years and should be conducted under the firm name of Frederick W. Brooks. The firm was to “ carry on the business of what is commonly known as Revenue Attorneys, that is to say in acting for merchants who claim or from whom it is claimed that the Government of the United States, or those representing it illegally exact duties from said merchants or importers, or who are overcharged by the Government or those. representing it for alleged duties on importations.” The plaintiffs are designated in the articles as parties of the first part and defendan t is designated as party of the second part. The work for which the partnership was formed was quasi professional in its nature, involving on the part of the person carrying it on not only personal labor, but especial skill and tech
A question has been raised as to what business the defendant is called upon to account for. The 3d clause of the copartnership agreement, which has already been quoted, gave to plaintiffs a onelialf interest in all contracts made between the firm and merchants, importers or other persons. This, of course, referred to contracts made during the continuance of the copartnership. As to such contracts, either partner' who carried them out to completion and realized the profits was a liquidating partner, and bound to account to his copartners. (King v. Leighton, 100 N. Y. 386.) The question is what constituted such contracts. The manner in which business was brought to the firm has already been explained, and all parties are agreed that as„to cases in which the protests were filed during the lifetime of the partnership, that is, prior to May 1,1902, but which were brought to a conclusion afterwards, either partner who received the fees arising therefrom is bound to account. During the continuance of the copartnership the firm obtained from certain merchants and importers documents in the form of powers of attorney which recited that the signers thereof had been informed that, the collector of customs had exacted and would continue to exact excessive and illegal duties. Thereupon the signers constituted and appointed Frederick W. Brooks (meaning the firm) to act as attorney and agent for such signers and do such to recover by suit or otherwise the amount of duties illegally exacted, stipulating that in case of failure no costs or expenses should be incurred by the signer, but that in case of success the firm should receive fifty per cent of the amount collected. These instruments are so drawn as to apply to future as well as present employments, are revocable at
' The copartnership during its continuance acquired by assignment the business existent and prospective of a- deceased revenue attorney named Wright. Some of this business was begun by the filing of protests, work done and fees realized therefrom by defendant after the dissolution. Without going into a careful analysis Of the contract it is sufficient to say that-wé are agreed that the contract was a copartnership, asset, and, that defendant has been properly charged with one-half of the profits derived from- and traceable to this source, irrespective of when the protests were actually filed. There are other disputed questions which may be briefly disposed of. The referee has allowed to defendant nine hundred, and forty-five teii-thousandths per cent of the net fees for which- he holds him accountable as the fair proportion" of' his office expenses properly chargeable to the plaintiff. ■ To this plaintiffs object.. The defendant was bound to account to plaintiffs only for the net fees received, and .to ascertain these not fees the expenses of earning them , must
Our conclusions, briefly stated, are as follows :
First. That the plaintiffs and defendant are called upon to account for fees received in all cases in which protests .were filed prior to May 21,1903.
Second. That they are called upon to account for all fees received incases covered by the so-called. Wright contract whenever the protests were filed.
Third. That defendant is not called upon to account for fees received in cases in which protests were filed after the dissolution of the partnership and the expiration of the subsequent agreement, whether such cases were intrusted to him by new clients, or by those who had been clients of the copartnership during its continuance.
Fourth. That the defendant-is entitled to charge as a copartner ship expense the gratuities paid to brokers through whom business was obtained, which seems to be justified by the custom of the trade and by the former acquiescence of the plaintiffs.
Fifth. That defendant is entitled'to charge, as a copartnership expense, a fair proportion of his office expenses, based upon a comparison between his total business during the accounting period and the business for which he is required to account.
Sixth. That the costs and expenses of , the reference on the accounting were properly charged against the copartnership assets.
All the facts and figures relating to the business have been so
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The judgment appealed from will be modified accordingly and as modified affirmed, with costs and disbursements to the appellant to be paid out of the. partnership funds in his hands and deducted in equal proportions from the shares of the plaintiffs and defendant. The order will be settled on notice when any error that may have been made in the foregoing calculations can be corrected.
Ingraham, McLaughlin and Houghton, JJ., concurred; Clarke, J., dissented, in part.
For opinion, see N. Y. Supr. Ct. Cases & Briefs of Counsel (State Law Library), Vol.—, No. -—, Deft’s. Brief, p. 94.— [Hep.
Dissenting Opinion
The business which the partnership was formed to conduct was peculiar and technical. All the parties were thoroughly conversant therewith. The plaintiffs were experienced custom house brokers. The defendant had been long connected with the customs service and knew the intricacies of revenue litigation thoroughly. When these parties got together to make their agreement they knew what they were talking about and the language used must be interpreted in the light of the nature of the business it was intended to cover and their acquaintance therewith. The 3d clause of the partnership agreement provides: “ Said party of the second part further agrees that all contracts made with merchants or importers or any other persons in the name of Frederick W. Brooks belong to said copartnership, and that said parties of the first part have an undi-. vided one-half interest in said [contracts] as soon as the same are respectively executed in the same manner and form as if one-half interest in said [contracts]: when respectively made are and each of them is assigned to said parties of the first part.”
I.disagree with the majority of the court in the interpretation of
“ Now, therefore, we, -the. undersigned, both on account of our- - ■selves, as consignees and whom it may concern as consignors,, do make, constitute and appoint Frederick W. .Brooks of 27 William Street,. New York City, our true and lawful attorney and agent for . us, and in our names, places and .stead to recover by suit or other- ' wise the amount or amounts of duties so exacted from'us contrary to said existing laws, and for which information and services he shall receive a fee of fifty per cent, or one-lialf of any and all 'amounts, recovered ;■ hut, in case nothing is so recovered we .shall be liable for no costs or expenses whatever in the matter, hereby grant. . to our said attorney full power and authority to collect and receive all moneys due us in connection therewith* to give for us and in our names all requisite receipts and dischai’ges,-and -tó do and
Legally as between the importers and the partnership these papers were powers of attorney revocable at will. 'But we are not concerned with their interpretation as between the importers and the partnership. Inter sese they were in my opinion the “ contracts ” alluded to in the 3d clause of the agreement! The pajDer states that the collector has exacted and will continue to exact duties on a specified line of goods, that such assessment is without warrant of law, and the partnership is made the true and lawful attorney and agent of the importer to recover the amount of duties so exacted contrary to law, and for its information and services it shall receive a fee of fifty per cent of all amounts recovered. The partnership agreement provides that “ all contracts made with merchants or importers or any other persons in the name of Frederick W. Brooks belong to said copartnership, and that said parties of the first part have an undivided one-half interest in said [contracts] as soon as the same are respectively executed.” These are the papers made with merchants or importers in the name of Frederick W. Brooks, and they have been executed. They are the only papers which could by any stretch of construction come within the description, and are the only papers executed by such merchants and importers.
As goods covered by these papers came in, the partnership received the protest slips set forth in the opinion of Mr. Justice Scott containing the information necessary to enable the partnership to make out thé proper protests to be filed. These slips were in two forms — one was “ In pursuance of contract with you, please file protest against the action of the Collector of the Port on the following importation,” giving details. The other: “ In pursuance of contract with you, please take the necessary proceedings for the recovery of duties exacted in excess on merchandise hereinafter described.”
In pursuance of what contract ? Obviously the power of attorney containing the agreement for compensation. The majority of the court think that these protest slips were the contracts — that is,
In other respects I concur in the opinion of Mr. Justice Scott.
Judgment modified as directed in opinion, and as modified affirmed, with costs and disbursements to defendant, to be. paid out of the partnership- funds in his hands and deducted in equal proportions from the shares of the plaintiffs and defendant. Settle order on notice.
See 80 U. S. Stat. at Large, IM, chap.. 11. — [REP.