Ferguson v. Bruckman — 18 A.D. 358

Majority

p. 358

Terrence F. Ferguson, Respondent, v. Julius F. Bruckman, Appellant, Impleaded with Others.

Headnote

Partnership accounting — reference opened to admit proof inadvertently omitted.

Where,- in an action brought to procure an accounting between partners, the defendant, through inadvertence, fails to prove before the referee thé amount collected by the plaintiff on outstanding firm accounts, and the latter, availing himself of the provisions of the judgment entered therein, subsequently pays but a small part of such collections to the receiver of the firm property, the court has power, in the interests of justice, to vacate the judgment as entered, and, allowing the testimony already taken to stand, to permit either party to-the action to give further testimony before the referee.

Appeal by the defendant, Julius F. Bruckman, from an order of the Supreme Court, made at the Kings County Special Term and' entered in the office of the clerk of the county of Kings 'on the 6th day of May, 1897, except that- part of the order vacating the judg-i ment heretofore granted in the action and ordering a new trial;

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with a statement that “ the details as to how and before whom the trial should be had, and the terms and conditions imposed and all other matters contained in said order are appealed from.”

The action was brought to obtain an accounting between the plaintiff and the defendant Bruckman, who were copartners. Upon the coming in of the report of a referee appointed to take and state the account, a judgment was entered directing that the plaintiff pay to the copartnership a certain sum by which he had overdrawn his account, and “that thereupon said sum and all other assets of said firm be equally divided between the said plaintiff and the said defendant Julius F. Bruckman.”

Thereafter, upon the plaintiff’s ’ refusal to pay the defendant Bruckman his share of certain accounts collected by the plaintiff, the defendant Bruckman procured the appointment of a receiver in aid of the judgment; and the plaintiff, failing to account to the receiver-for all the assets he had collected, the defendant Bruckman procured an order directing a further hearing before the referee to determine the amount of such collections, and providing for the amendment of the judgment upon the coming in of the report.

Upon an appeal by the plaintiff, this order was held to be erroneous, the Appellate Division stating that the proper course was for the Special Term to vacate the judgment and send the case back for a new trial.

Thereupon the defendant Bruckman moved for an order vacating the judgment and directing a new trial. The court vacated the judgment and granted a new trial before another referee, upon condition that the defendant pay the plaintiff “ the sum of §459.35 paid him by the plaintiff pursuant to- said judgment; also the sum of §119.90 expended by the plaintiff for stenographer’s fees on the former trial; also the plaintiff’s costs of the action for all proceedings to date; and that the defendant stipulate that no costs shall be awarded him herein, except for the proceedings to be hereafter had.”

From this order, except that part which vacates the judgment and directs a new trial, the defendant Bruckman takes this appeal..

Sidney V. Lowell, for the appellant.

Josiah T. Marean, for the respondent.

When this case was before tis upon an. appeal from the. order which permitted the judgment herein ■ to stand, and directed "a-, rehearing before the referee and an application for ah amendment of the judgment, on the coming in of such report, we held that such order was beyond the power of the court to make and reversed the same. But we then said : “ The Special Term should have vacated. the judgment and ordered the case back to the referee for. a further hearing and new trial, and on the report, of the referee a new judgment, settling the rights of the parties should be entered.” (Ferguson v. Bruckman, 16 App. Div, 67 .) The present order vacates the judgment and the order appointing a receiver thereunder, and •orders a new trial before another referee, upon certain conditions. The report of the referee -shows the condition of the property and "accounts and the, rights of the-parties ..therein, so-far as the property ' and rights are considered. ' Such- finding is not attacked by thé plaintiff, and nothing appears in .his affidavit or in those of his attorney ’making any complaint 'in respect thereto.

The only matter which remains at issue between tlie parties, so far as the status -is disclosed'by the record, relates to tile money collected by. the plaintiff on outstanding accounts due the firm."Through inadvertence this sum was not proved- before the referee, and the matter was "not presented to him for adjXidication. While there is much contradiction in-respect, of; conversations between the" "counsel for the plaintiff, the defendant and his representative, there is no dispute regarding the .essential fact. "The counsel , for the plaintiff does not controvert the fact that the plaintiff -collected -from the outstanding accounts due the firm, about, the'sum of $1,100, and" of that sum he has only paid to the receiver .$119.12. The plaintiff ■ is undoubtedly correct in- his position- that this, stun is all that he was compelled to pay over by virtue of the provisions of the judgment. But-it by ho means follows that he ought not-to pay over more in good conscience and morals. .Unless he have valid offsets, he holds moneys belonging to "the- defendant equal to one-half of the sum collected, and the defendant-should not have inflicted upon him in the form, of conditions, before he can .have relief, a sum which practically eats up -tíre whole amount, and against which he may not-reimburse himself if lie finally succeeds. He should be compelled

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to pay what the inadvertence of counsel has fairly cost the plaintiff and no more. It is within the power of the court to grant relief and protect the rights of both parties in their present condition, without imposing excessive burdens upon either. (Ladd v. Stevenson, 112 N. Y. 325 ; Day v. Allaire, 31 N. J. Eq. 303 ; Millspaugh v. McBride, 7 Paige, 509.)

We think that the rights of each party will be secured by vacating the judgment and continuing the trial before the referee heretofore appointed, allowing the testimony already taken to stand, with liberty to each party to offer such further testimony as he may be advised, upon the conditions stated in our decision.

All concurred.

Order appealed from, modified as to read as follows:

Ordered: That the motion of the defendant be granted; that the report of the referee and the judgment entered thereon in this action be vacated and set aside, and that the trial of the action be continued before the referee hitherto appointed herein, the testimony already taken to stand, and either party to be at liberty to offer such additional evidence as he may elect; the defendant, as a condition of this relief, to repay to the plaintiff within twenty days the amount paid on said judgment, $459.35, and pay $50 costs, and pay the costs of the receiver to him. In case the defendant fails to make the payments within said time, then the motion to open said judgment be, and the same is hereby denied- Order to be settled before Justice Hatch on two days’ notice.

Cases cited

Ladd v. Stevenson 112 N. Y. 325 N.Y. 1889-01-29 p. 361