Spiegelberg v. Schoenberg , 107 N.Y.S. 718 ( 1907 )

FORD, J.

This is an appeal from a judgment dismissing a complaint at the close of the case. Plaintiffs (appellants) sued upon a contract made between the defendant (respondent) and a third party, a Mrs. Herzog, whereby defendant agreed to pay for certain goods purchased on credit from the plaintiffs. Mrs. Herzog testifies in effect that she and the defendant commenced business as a partnership, and as such purchased the goods from the plaintiffs for the purchase price of which this suit was brought. She admits that they had in contemplation the formation of a corporation to take over their co-partnership business, and that steps preliminary to that end had been taken. Differences arose between them, which led to an agreement to dissolve the embryonic corporation and for a distribution of their assets. Under it the defendant was to take, and by his own admission did take, certain of the assets and accounts receivable. He also undertook to pay certain obligations, among which the bill owing to the plaintiffs was specifically mentioned. This agreement was in writing and is in evidence. Its recitals and general tenor bear out to some extent the contention of plaintiffs that in fact the business was regarded and treated as that of a partnership by both the defendant and Mrs. Herzog, and that the formation of the corporation was something outside of and apart from their business as actually conducted. The credit man of the plaintiffs testified that the first goods were ordered from his firm about February 9th, a month before the certificate of incorporation was filed in the office of the Secretary of State. He said that the defendant came to him and represented that he and Mrs. Herzog were about to organize a firm, with himself and her as the only partners; that subsequently, about the end of March, defendant and Mrs. "Herzog came to him and represented that they were about to “dissolve and go out of business,” and that the defendant was to pay all the debts. They offered to return so much of the merchandise as was in a salable condition to apply on the account. He swears positively that he never knew of the organization of the corporation until the effort was made to collect the bill by suit.

Upon the whole case, I think the foregoing evidence would support a finding by the trial justice that, so far as these plaintiffs are concerned, they could hold both the defendant and Mrs. Herzog liable as partners for the debt contracted by the defendant for their joint benefit. Such a finding would be sufficient to sustain the suit brought by plaintiffs to. enforce a contract made for their benefit between the defendant and Mrs. Herzog, under the familiar rule laid down in Lawrence v. Fox, 20 N. Y. 268. It was, therefore, error to dismiss the complaint.

The judgment should be reversed, and a. new trial ordered, with costs to appellants to abide the event.

GILDERSLEEVE, P. J., concurs.