Hill v. Curtis

we may-consider■ the rights- of .the parties-ns -defined by the latter. ‘By way of defense defendant contefids that the cause of action was ndf .cognizable in eqiiify, that there was a. failure of performance by plaintiff, and that the agreement was ¡ subsequently abrogated. Although.-.considerable testimony was taken bearing upon the latter issues, the learned court at Special Term declined to determine' these, and rendered judgment fór defendan-t-'and" dismissed the complaint upon the merits, .on the ground that the parties were not .“joint Venturers,” but' that plaintiff wás án'emplo'yé of defendant, and that his remedy, if any,, was by an action at law and not by á suit in equity. Upon the correctness of this determination this judgment must, stand qr fall-.: - ■. - ' ., -. - -

. While participation in profits-is an important-factor.-in' determining whether an agreement' constitutes the parties thereto- joint venturers, this of' itself' does; not afford an infallible test. Rather-where a share in profits is contracted to be paid, the question seems to be: Is it aS a measure of compensation to employés for services rendered in the business, or for.-the use of moneys loaned in aid of the enterprise,-or does' the' agreement extend beyond this and provide for a proprietary interest in the subject-matter but of which' the profits arise, and - an ownership in ’ the profits themselves ás coinpensátion for money advanced or time and services bestowed as a principal in the prosecution of the enterprise? Hackett v. Stanley, 115 N. Y. 625 , 22 N. E. 745 ; Boice.v. Jones, 106 App. Div. 547 , 94 N. Y. Supp. 896 ; Marston v. Gould, 69. N. Y. 220; Weldon v. Brown, 84 App. Div. 482 , 82 N. Y. Supp. 1051 ; s. c. 89 App. Div. 586 , 85 N. Y. Supp. 599 ; Moscowitz v. Sassulsky, 141 App. Div. 763 , 126 N. Y. Supp. 513 . The contract contains a recital to the effect that it is'the desire of both parties “that they shall together undertake .the'prosecution of said claims.” A mere recital in an instrument, however, particularly if it is an incorrect repital, is.-not conclusive upon-the rights of the parties-. It also appears from said instrument and from the evidence in the case that the retainers in the' various claims to rbe prosecuted_ fan to' the defendant personally, so that in the first instance he may be. said to have been the -sole owner of -the subject-matter of the agreement.;- The contract-provided that defendant was to act as - attorney of record in all of the proceedings which might be taken, arid that plaintiff should “act as counsel whenever required so to do.” Defendarit contends that this is to be construed as meaning that plaintiff should only so act when required by defendant so to do; and that this indicates-that the character of the relation between the parties was simply that, of employer and employe. It seems to us that it may be urged with at least equal force- that the requirement -referred to was that arising- out of the exigencies of the case rather than the will of the defendant. ' But if the contract is ambiguous in character, so that parol testimony of contemporaneous facts and conversations was competent to aid in its interpretation, it is sufficient to say that, if plaintiff was not precluded from offering such testimony, he may have refrained from so doing at the suggestion of the learned trial court. . He was frequently reminded through the progress of the - trial- that such testimony was immaterial,

and the court repeatedly stated, contrary to the opinion expressed in the decision of; the casp,'that the agreement did, .constitute the parties joint .venturers,- and that the only question' involved was that of performance on plaintiff’s- part. The agreement clearly provided for participation in profits. In effect,- it provided also for participation in losses. By its terms each of the parties agreed to pay “one-half- of the expenses that may be incurred in the prosecution of the said claims;’;’;; As -the claims were taken upon a contingent: basis, the only losses that could result to the parties thereto from -a prosecution-of the enterprise would arise from the-time and labor expended* and the disbursement of money made by them in connection therewith. The agreement demanded both. • It.is- not necessary.for Us now to decide whether this clause of the agreement is illegal in character within the law ag'airist chaniperty, but it is indicative of the purpose which the parties-sought to accomplish.' We have called attention to the fact that by the terms of said contract each party, was required to devote to the enterprise so much of his time as should be necessár'y. This, may be fairly .¿aid to represent á portion of the capital employed in the prosecution of the undertaking. The final clause of the agreement seems to Us entirely inconsistent with the contention that the contract was one of employment merely. A contract of employment necessarily terminates with the.death of .the etóployé. Under this agreement, if plaintiff had died while the agreement was in forcé and before the. final determination of the actions referred to therein, it would have been defendant’s duty to continue the proceedings, and plaintiff’s, personal representatives (referred to in the agreement -as his heirs) would have been entitled to share equally with' defendant in the ultimate profits thereof. When, therefore, we find as -here a joint contribution to the capital of the enterprise, a participation in profits, an equal liability for losses, a continuance of the contract beyond the death .of eithér of the parties thereto by the survivor, and a provision that' subsequent services shall be rendered- for the-¡joint benefit of the- survivor and the representatives of the deceased, it seems to us that every element appears which is necessary to make the venture a joint one: It is difficult to think of . anything short-of -an actual assignment of an interest in the retainers themselves which would have more completely expressed an intention to give to plaintiff' a'n interest 'in the subject-matter of the enterprise in' which h¿ and defendant were engaged, and a proprietary interest in the profits ¡thereof., Defendant' contends that the clause providing for a continuance, of the proceedings: by the survivor, would have been ineffective provided defendant, who was the attorney of record, had died, since:plaintiff ‘could not, without making new contracts with the parties to such actions, have continued the. proceedings. That may be so. But in such case it would have been his -duty to attempt to secure such contracts, and, if successful, to proceed for the benefit of defendant’s representatives as' well as his own. But, if this portion of the agreement might become inoperative in case of defendant’s death, it would not if, plaintiff had died. If the agreement had been limited in its provisions for continuance to the conditions arising upon the death, of plaintiff only, it. would have, been efr

fective to give him an interest in the subject-matter of the enterprise. It cannot be less so if it is the fact that, coupled with this, is a provision which may be unenforceable. We think, therefore, that the learned court at Special Term erred, and that the judgment must be reversed and a new trial granted, costs to abide the final award of costs.

JENKS, P. J„ and THOMAS and CARR, JJ„ concur. HIRSCHBERG, J., dissents.