Bushby v. Berkeley , 119 N.Y.S. 739 ( 1909 )

Ingraham, J.:

This is a dispute between partners who are attorneys at law, and the action is for an accounting as to copartnership transactions. The complaint alleges that on the 1st day of May, 1897, the parties entered , into a-copartnership in pursuance of certain articles of partnership, a . copy of which is annexed to the complaint; that by these articles certain ■ actions in relation to Park avenue were excluded from the copartnership ; that on the 30th day of September, 1897, the parties entered into supplementary articles of partnership, a copy of which is also annexed to the complaint, under which the defendant was admitted to share in these Park avenue cases; that the parties continued to practice law under these agreements down to the 10th of .December, 1906, when the copartnership was dissolved. The terms of the dissolution are stated in several letters between the parties, copies of which were, also annexed to the complaint, from which it appeared that the defendant undertook and agreed to continue the firm business at that time and to account t-o the plaintiff for the fees resulting therefrom, and it is alleged that under this dissolution agreement the plaintiff turned over to the defendánt all of his office furniture and récords specified in a letter annexed to- the complaint and vacated the office of the firm and has since that time remained.absent therefrom. It is further alleged that the defendant has received and collected moneys on account of certain business belonging to the firm and refused to make any accounting or settlement of the plaintiff’s sháré in such business, but that the defendant has conspired with one Kiely and others to defraud the plaintiff of liis just share of the assets of said firm to be divided, and that the defendant has ■prosecuted and is prosecuting in his own name for his sole benefit business belonging ‘to said firm to the damage and injury of the plaintiff. Certain specified actions are then set forth in which the defendant received fees belonging to' the plaintiff; and the complaint demands judgment that the defendant be compelled to account to the plaintiff in relation to the copartnership business.

The answer admits the original copartnership, and admits entering into supplementary articles of copartnership, but denies that a correct copy of such supplementary articles is attached to the complaint. It alleges that the parties continued in the active practice' of law under these articles and supplementary articles; that the partnership was dissolved on or about December 11, 1906. It admits that the parties entered into an agreement for the liquidation of the said partnership, which agreement was contained in correspondence commencing on or about February 20,1907, but denies that correct copies of the letters forming such correspondence were attached to the coin plaint. It admits that the defendant has received and collected certain moneys on account of the business formerly belonging to the firm, but denies the other allegations of the complaint in relation thereto. The defendant further answering, alleges that all the partnership agreements "set forth in the • complaint were dissolved prior to February 26, 1907, and all the agreements theretofore subsisting between the plaintiff and the defendant were merged in the dissolution agreement entered into on said day; that the plaintiff has failed to perform the terms and conditions of such dissolution agreement, and has wrongfully collected and retained moneys in said cases without authority from the defendant, and has hampered and impeded the defendant in the effort to collect the debts due the dissolved firm; and the answer demands judgment that the complaint be dismissed, with costs.

When the case came on for trial the defendant claimed that he had not admitted the dissolution of the copartnership, as claimed by the complaint, and that the plaintiff had not performed his part of the dissolution agreement, and could not come into a court of law or equity and aslc any relief without showing performance, but the court directed an interlocutory judgment for an accounting. It is quite true that the position taken by the plaintiff on the trial was • much confused, and he seemed to insist upon what was clearly untenable. The defendant, however, was entitled to have the question as to the particular instruments upon which the parties were to account determined. The plaintiff had alleged that the partnership had been dissolved by an agreement contained in certain letters, copies of which were annexed to the complaint. The defendant in his answer admitted that there had been a dissolution, but denied that the letters' annexed to the complaint were correct copies of the correspondence between the parties which constituted the dissolution agreement. The question that the court had to determine was the terms of the dissolution agreement, and the obligation of the parties to each other thereunder, and should then have directed. an accounting based upon what had been the actual agreement of dissolution. Instead of disposing of this question the court filed a decision finding the formation' of the partnership, the collection of money by the defendant on account of the business belonging to the partnership which had not been accounted for, and directed an interlocutory judgment requiring the defendant to file with the clerk of the court a true account' of the partnership business in which the defendant had received moneys, and had not fully accounted to the plaintiff therefor, and referring it to a referee to take and'state the accounts; and an interlocutory judgment was entered in accordance with this decision. It seems to me that this judgment necessarily required the referee to determine the terms and conditions of the dissolution agreement, the question which the court was bound to. determine upon the trial. If the cor- ■ respondence annexed to the complaint correctly set forth the dissolution agreement, the parties .seem to have specified the particular actions and proceedings in which they were interested, and an accounting should be confined to those actions and proceedings in which it appeared that the defendant had collected moneys that either belonged to the defendant or were to be divided by the partners. There could be no general accounting of the partnership . business because a large number of the accounts and proceedings had been taken over by.the several parties under the dissolution agreement. What the court was to do was to determine as to which actions and proceedings the defendant was bound to account and then order him to account for all moneys that he had received in such actions or proceedings, and not to order a general accounting as though no dissolution agreement liad been executed. It seems tome that a substantial right of the defendant was thus violated upon the trial which was not waived by him, and that for that reason a new trial was necessary.

The judgment appealed from must be reversed and a new trial ordered, with costs to the party finally successful in the action.

Patterson, P. J., McLaughlin, Laughlin and Clarke, JJ., concurred.

Judgment reversed, new trial ordered, costs to appellant to abide event. , ■