Secor v. Tradesmen's National Bank

133 N.Y.S. 197 | N.Y. App. Div. | 1911

Dowling, J.:

The firm of Burgess & Secor, composed of Phineas Burgess, Charles A. Secor and James F. Secor, was interested prior to the year 1884 in a contract made with the government of the United States for the construction of a monitor. The firm had a claim for damages against the government arising out of certain delays, acts and omissions on the part of the latter. ■ Phineas Burgess and Charles A. Secor both died in December, 1884, leaving James F. Secor as the sole surviving partner of the firm. The interests of the various partners in the firm had been as follows: Phineas Burgess one-quarter; Charles A. Secor, three-eighths; James F. Secor, three-eighths.

To secure an indebtedness to the Tradesmen’s National Bank, the firm and its individual members - assigned to it all .of the claim against the government. Thereafter, in 1886, David Myerle, as executor of Phineas Burgess, brought an action in the Court of Claims of the United States to recover the .aforesaid damages. In 1890 an agreement was made between'Myerle, as executor, Secor, as the surviving partner of Burgess & Secor, and the Tradesmen’s National Bank, by which it was agreed that the claim in question should be prosecuted by Myerle, through counsel, not only in the Court of Claims but by means of congressional action, and that the expense of prosecution should be first paid out of any recovery, and the balance be divided, three-fourths to the Tradesmen’s National Bank and one-fourth to Myerle, as executor, and Secor, as surviving partner; when said three-fourths should he sufficient to discharge all the claims of the bank, then one-fourth of the remainder should be paid to it, and three-fourths thereof to Burgess & Secor. Acting under this agreement Walter S. Logan prosecuted the claim until January, 1897, when judgment was recovered in favor of Myerle, as executor, for the sum of $129,811.45, which was subsequently paid by the government by its draft, indorsed by Myerle and retained either by him or by Logan. In July, 1897, the Continental National Bank commenced an action in the Supreme Court, New York county, against the Tradesmen’s National Bank, Logan, Myerle, as executor, and Secor, as surviving partner, claiming that it was entitled to a part of said fund; a receiver having been appointed, the • draft or its proceeds were turned over to him, and upon the reversal of the order of receivership the same were deposited into court. Thereafter, in April, 1899, a final decree was entered in the Continental Bank suit by which it was decreed that it should receive $11,000 from the fund and that the balance, then amounting with interest to $119,291.99, should be paid over to the firm of Logan, Demond & Harby as attorneys for the defendants in the action. Thereafter said sum was paid by check to the order of Logan, Demond & Harby and deposited by Walter S. Logan in an account in his name as attorney.

Differences arose between the parties, in the course of which a claim was made by James F. Secor, Jr., against the Tradesmen’s Bank for services rendered in connection with the prosecution of the claim, and he brought suit in the Supreme Court, Westchester county, to recover the sum of $25,000 for such services. In the same month (October, 1900) James Secor, individually and as sole surviving partner of the firm of Burgess & Secor, brought.suit in the Supreme Court, Westchester county, against the Tradesmen’s Bank, Myerle, as executor, and Logan for an accounting of the funds. Thereafter, in March, 1901, a settlement was made with Secor, Jr., by which he received $13,000 from Logan and delivered a release to the Tradesmen’s Bank of all his claims. At the same time Secor, Sr., executed a release to the Tradesmen’s Bank in his individual name by which he released the said bank, its successors and assigns from all claims that he might have and specially from all claims that he .might have on account of moneys received by said bank or others from the United States government on account of the ironclad Monaclnock. Secor, Sr., consented to the discontinuance of his action then pending, and an order was made to that effect without costs. At the time the attorneys for the bank wrote to his. attorney requesting that he furnish them with a release frbm Secor, Sr., not only individually, but as sole surviving partner, and stating at the same time that they were entitled to the same under the terms of the settlement. In reply thereto, Secor’s attorney wrote them calling their attention to the fact that only the individual claims of the Secors, father and son, had been settled, and he expressly stated that Secor, Sr., did not undertake to settle any claim of Burgess & Secor beyond his individual interest in the firm; The attorney further wrote that the bank was not entitled to any release from Secor, as the surviving partner, because he had been paid nothing as such. Despite this refusal the attorneys for the bank signed the consent to the discontinuance of the father’s action, and it never received the release requested. No accounting has ever been, made by the firm of Logan, Demond' & Harby, who, as attorneys for the defendants, received the fund in question; nor by Logan, in whose special account it was deposited.

It is apparent, therefore, that the plaintiffs, as representatives of the deceased surviving partner, during whose lifetime the present action was brought, are entitled to an accounting unless they are barred by the release given to the Tradesmen’s National Bank.

This release, while the individual act of Secor, Sr., operated to discharge the bank" and is an effective bar to any demand for an accounting by it. At the time it was given as surviving partner he was the Sole owner of the assests of the firm, could deal with them as his own and held the legal title thereto. (Bush Co., Ltd., v. Gibbons, 87 App. Div. 576; Williams v. Whedon, 109 N. Y. 333; Russell v. McCall, 141 id. 437.) But this release did not run to any one save the Tradesmen’s National Bank 'which alone is named therein. While'it is true that he released the bank “ frojn all claims on account of monies received by said bank or others from the United States government on account of the ironclad,” thus referring specifically to the fund in question, it did not purport to- discharge any one save the bank and under no possible theory that has been suggested can a release rmming specifically in favor of it be extended to cover other persons, neither named nor referred to therein. While, therefore, all the parties have individually released the bank and Secor, Sr.’s, release discharges it as well, from any claim he may have had as surviving partner, there is no escape from the conclusion that the personal representative of the defendant Logan is bound to account to the surviving partner of the firm of Burgess & Secor for the fund belonging primarily to that firm. It was received by him as one of the attorneys, and no accounting was made by him to the surviving partner, who is entitled to the firm assets. As to the defendants Demond and Harby the question of their liability to account must be determined upon the trial.

Under these conditions it follows that the judgment appealed from must be reversed as to the defendants except the Tradesmen’s National Bank, and a new trial ordered, with costs to the appellants to abide the event.

Ingraham, P. J., McLaughlin, Clarke and Scott, JJ., concurred..

Judgment reversed as to all defendants except Tradesmen’s National Bank, and new trial ordered, costs to appellants to abide event. Order to be settled on notice.