139 N.Y.S. 6 | N.Y. App. Div. | 1912
Lead Opinion
In my opinion the judgment should be affirmed.
It makes little matter, as it seems to me, whether the members of the pool are to be regarded as partners or as joint adven
I think that he did close it out when he caused the account to be transferred to his own account or, what is the same thing, to the Silver Syndicate account. That ended his agency so far as Hamilton was concerned, and there is nothing to show that he ever received authority from Hamilton to re-embark in the speculation. Óf course, as Hamilton’s agent, he could not- sell to himself without Hamilton’s consent, but the latter, when he had discovered that his agent had undertaken to sell out to himself, was entitled to adopt and acquiesce in his act. It will not do, as it seems to me, to say that the transfer of the account to the Silver Syndicate account and its retransfer a week afterwards was a mere bookkeeping transaction.- It is true that the transaction was effected by entries on the books of Post and Thomas, but so far as Hamilton was concerned it was a closing out of the pool account. If I am .right in this, Thomas was the sole person liable on the “K K Syndicate account ” when the paper relied upon as a release was executed, and if he was so liable that release was without consideration. Plaintiff was not bound to know then that Thomas was the sole debtor. He may well have believed from Thomas’ statements and actions that Hamilton had consented to the transfer and retransfer of the “KE Syndicate account” and remained jointly or partly liable therefor. Indeed it is probable that he did so believe, for -he testified that a part of the consideration upon which the release was given was the promise that he should be furnished with evidence that Hamilton was liable for one-third of the balance remaining unpaid upon the account.
The judgment should be affirmed, with costs. .
Clarke and Miller, JJ., concurred; Ingraham, P. J., and Laughlin, J., dissented.
Dissenting Opinion
The plaintiffs were the general partners of the stock brokerage firm of Post & Co., and they brought this action to recover
The pool was originally formed by the defendants and one Carlton, and the account was originally opened in September, 1901, with the stock brokerage firm of Thomas & Post, composed of the plaintiff Edwin M. Post and the defendants Edward R. and Orlando F. Thomas. The referee found that by mutual consent Carlton severed his connection with the pool about a week or ten days after the time it started, and that finding has been acquiesced in, and, therefore, it is not necessary to consider whether it is supported by the evidence. In September, 1902, the firm of Thomas & Post was dissolved, and two new firms were formed, one the firm of Thomas & Thomas, composed of the defendants Edward R. and Orlando F. Thomas and one Beekman, and the other the firm of Post & Co., composed of the plaintiffs as general partners, and two others as special partners. At that time this pool account was transferred to the firm of Thomas & Thomas, and was carried by it until April 1, 1903, when that firm was dissolved and this and all other accounts and business were transferred to Post & Co. At the start the plaintiff Post was invited to become a member of the pool, but he declined, and he took part in an interview by which the agreement for the formation of the pool which rested in parol was made. According to his testimony each of the members of the pool was to contribute one-third of the amount required to margin the account — he apparently did not know that Carlton was to become a member of the pool at that time — and an
‘ ‘ In transferring accounts to you from Thomas & Thomas, all accounts are to stand on their own merits; that is, a statement of the exact condition of each account is to be rendered, showing the exact amount of money necessary to take up the account and the securities therein.
The “ K. K. Pool is to be kept intact, orders being given by Mr. O. F. Thomas, or Mr. E. B. Thomas. However, Mr. E. B. Thomas is to deposit $25,000 on his part, and Mr. O. F. Thomas $25,000 in cash, and suitable arrangement will be made with Mr. Hamilton for a protection of his one-third interest. ”
Thereafter, and before the transfer of the account to plaintiffs’ firm, each of the Thomases contributed $25,000, and shortly after the transfer of the account the plaintiffs’ firm wrote to Hamilton asking him to contribute $25,000 as margins to strengthen his interest in the syndicate. He neither answered this letter nor complied with the request, and he has made no further contribution to the pool account. Concerning the original agreement, Hamilton testified that the contributions which he made were made on the distinct understanding that that was the extent of his liability, and the Thomases both testified in substance that there was to be no j oint liability, and each member i of the pool was to he liable merely for his proportionate share. The plaintiff Post testified that there was no express agreement, so far as he knew, with respect to whether the members of the pool were to be jointly and severally liable, or only severally liable, but it clearly appears that he understood that as .between themselves they were to contribute in equal shares. It further appears by his testimony and his attitude toward the various transactions that he and his firm considered that any member of
On or about the 13th day of April, 1903, the appellant purchased the interest of Orlando F. Thomas in the pool account, and wrote the plaintiffs’ firm relating to other matters and with reference to this account as follows:
“ I also wish to inform you that I have purchased from Mr. O. F. Thomas his one-third interest in the account on your books known as the £ Keokuk & Des Moines Pool,’ and that I hereby assume all his liability and credit in the same. I wish it clearly understood that my present interest in this pool is a two-thirds interest, and that I am responsible for two-thirds of its losses, and am entitled to two-thirds of its profits after I am credited with the $50,000 margin which I now have on my two-thirds share in excess of Mr. Hamilton’s proportionate margin; the other one-third being owned by Mr. 0. A. Hamilton; and that this account is in no sense a joint account. In other words, myself and Mr. Hamilton are each liable for our share, and not for the share of the other.
■ “Will you kindly confirm the receipt of this letter.”
On the same day Orlando F. Thomas wrote the plaintiffs’ firm, stating, among other things, as follows:
“ Furthermore, that I have sold to Mr. E. R. Thomas my one-third interest in the £ Keokuk & Des Moines Syndicate,’ including whatever margin I may have against it, and no further liability attaches to me.”
The plaintiffs’ firm, on the receipt of these letters, wrote the appellant under date of April 14, 1903, as follows:
“Concerning the ‘Keokuk & Des Moines Syndicate’ we now understand that you are sole owner and liable for % of the same, and that Mr. O. F. Thomas has no further interest in said syndicate, the remaining % being the property of 0. A. Hamilton,” and also wrote Orlando F. Thomas on the same day as follows: “ As we understand it, * * * That you have disposed of, to Mr. E. R. Thomas, your % interest in the £ Keokuk & Des Moines Syndicate,’ including all margin thereon.”
This correspondence further shows that Orlando F. Thomas at the same time purchased the appellant’s interest in two
At the time the pool account was transferred to the plaintiffs’ firm it showed a debit balance of $169,994.66, consisting of advances made for the purchase of the stock over and above the amounts received, together with interest thereon and commissions, and as security therefor the plaintiffs’ firm received 5,450 . shares of the capital stock of the Keokuk and Des Moines Bail-road Company. The market value of the stock at that time was not definitely shown; but it appears that thirteen days later, when the "plaintiffs’ firm was notified that Edward B. Thomas had purchased the interest of Orlando F. Thomas, and when the debit balance in favor of the firm was $170,244.66 for which it held the same number of shares of the stock as security, the referee found, and the finding has not been questioned, that its market value was in excess of $200,000. It thus appears that at the time the plaintiffs’ firm received the letters notifying it that Orlando F. Thomas’ interest had been acquired by Edward B. Thomas, and that the liability of the latter was several and only for two-thirds, the firm held securities upon which about $30,000 in excess of the amount owing to it could have been realized, if the account had then been closed out. It will be observed that neither of the letters notifying the plaintiffs’ firm of the transfer of. the interest of Orlando F. Thomas to Edward B. Thomas contained any representation that such transfer was made with the knowledge or consent of Hamilton; and it appears by the testimony of the plaintiff Post that he did not communicate with Hamilton on the subject, or deem it necessary to communicate with him with reference to such transfer, for he apparently recognized that any member of the pool was at liberty to transfer his interest. If there was no special agreement by the members of the pool by which they were not to be jointly liable, doubtless they became partners. (See Quincey v. Young, 5 Daly, 327; affd., sub nom. Quincey v. White, 63 N. Y. 370; Orvis v. Curtiss, 157 id. 657; Franklin v. Hoadley, 115 App. Div. 538; 126 id. 687; 145 id. 228.) Evidence was received upon the trial from which it is claimed that there was a well-recognized custom by which
“ For one dollar and other valuable considerations, and by virtue of the powers vested, in me as sole liquidator for the firm of Post & Company and as their attorney in fact, I hereby' release and absolve you from any liability on account of what was carried on the books of Post & Company and known as the £ K. K. Syndicate Account; ’ and will execute any further paper which you may require to carry this out.”
The plaintiff Post testified that the “other valuable consideration ” referred to in the release consisted of an agreement by the appellant that he would furnish evidence that the amount unpaid by Hamilton for his one-third interest in the pool account, owing to the fact that he had not contributed his proportionate share, equalled or exceeded the balance then owing to Post & Co. on account of the pool account. According to the testimony of Post there was no representation on the part of the appellant with respect to the legal liability of Hamilton as a partner or otherwise; and the only theory upon which he required an agreement on the part of the appellant
These views differ with the determination of the referee on the facts in some respects, and require the reversal of the
It follows that the judgment in favor of the plaintiffs against the appellant should be reversed, with costs, and the complaint dismissed, with costs.
Ingraham, P. J., concurred.
Judgment affirmed, with costs.