McAndrew v. Walsh , 31 N.J. Eq. 331 ( 1879 )

The opinion of the court was delivered by

Dodd, J.

John McAndrew, the defendant below, contracted, in 1873, with the Delaware and Lackawanna Railroad Company, to construct a tunnel through Bergen Hill. The tunnel was completed about May, 1877. In the following July, Peter Walsh filed the bill in this suit for an accounting against McAndrew, and the recovery of an equal share with him in the profits of the work. The bill does not allege, in express terms, nor in necessary effect, the existence of a partnership between them, but sets forth a verbal agreement under which Walsh (who, at that time, was doing business in Scranton, where McAndrew also resided) was to become security on McAndrew’s bond for the performance of the contract, to give up his business in Scranton, remove to Jersey City, assist in the prosecution of the work by his personal services and by advances of money, and, upon the completion of the job, to be repaid his advances, and, in addition, an equal share of the profits. The bill alleges that the complainant carried out this agreement on his part; that large profits resulted, and that the company (which is also a defendant) has not yet paid to McAndrew the balance remaining due. The relief prayed for includes an accounting and an injunction restraining, meanwhile, the payment of such balance.

The answer denies the making of any agreement whatever, by which Walsh was to be employed or was to share in the profits, and denies that he, in fact, rendered any services or made any advances of money, as stated in the bill. It says, in substance, that after Walsh had become surety for McAndrew, the latter represented to him that he could do a good business on the tunnel premises, by McAndrew’s aid, in selling groceries and other articles to his workmen; that McAndrew permitted him to set up a store near the works, and agreed to use his influence among the workmen to induce them to deal at the store, and also agreed that the amount of the bills of the workmen should be sent to his office, to be deducted from the amounts due them respectively, on pay-days; that this arrangement was carried out; that Walsh gave his time and attention to the business of the store, and made from it large profits, down to about January, 1876, when he gave up the business and returned to Scranton.

A large volume of testimony was taken upon these issues of fact, and, a hearing having been had before an advisory master, a decree was made adjudging that the complainant was entitled to an account, and, if any profits should be found to have resulted, to be paid out of them, not the one-half part claimed by the bill, but such amount as, upon a reference, the services rendered by the complainant should be found to be reasonably worth. The moneys advanced by "Walsh, and the moneys collected, or which ought to have been collected, by McAndrew, for complainant’s use, for goods sold the laborers, were decreed to be repaid, irrespective of the profits, out of what might be due from the company on the contract, and also an injunction granted restraining in their hands $10,000 of such moneys pending the suit.

In the judgment of the advisory master, the proofs did not admit the conclusion that there was an agreement of partnership, or an agreement for an equal, or for any specific, definite division of the profits, and the manifest correctness of this judgment was not disputed on the argument of the appeal. But the master inferred, from the evidence, an agreement between the parties that Walsh was to be employed to aid McAndrew in the work, and was to be paid, out of the profits, whatever his services were worth—if no profits, no compensation for services; but, in any event, a repayment of moneys advanced and of moneys collected or due from workmen, as stated above. There is, I think, a clear failure of proof to warrant the inference of any agreement or understanding between the parties for a compensation out of the profits, and, for this reason, without reference to the question whether any agreement existed for the rendering of services, or whether services were, in fact, rendered, or moneys advanced by the complainant, there is no ground for equitable relief, and the decree must, consequently, fall.

Eo review of the testimony of the numerous witnesses in the cause is deemed to be requisite. "Whether, if an agreement had been shown entitling the complainant to a share of the profits, not as a partner, but by way of compensation for services as, an employe, the bill would be good for an accounting in the first instance, without bringing an action at law to recover the stipulated moneys, is a question which was not discussed at the argument, and upon which no opinion is meant to be intimated. Reference was made to the cases of Nutting v. Colt, 3 Hal. Ch. 539, and Hargrave v. Conroy, 4 C. E. Gr. 281, but the rulings therein adopted on this point were not drawn under review in the argument here.

The decree must be reversed, and the bill dismissed, with C0S^S‘

Decree unanimously reversed.