Wilcox v. Pratt — 5 N.Y.S. 361

Majority

p. 361

Wilcox et al. v. Pratt.

(Supreme Court, General Term, Fourth Department.

May 10, 1889.)

Headnote

1. Partnership—Riohts of Partner—Receiver.

Defendant, owning a tract of land, entered into a contract with plaintiff W. for the purpose of cutting timber thereon and making sales, both parties undertaking to contribute money towards the enterprise. All expenses and interest on advances were to be paid from the proceeds of sales,—and when so paid, together with §25,-000 to be paid to defendant from the proceeds of sales, defendant was to convey to W. an undivided one-half interest in the tract. While the business contemplated by the contract was being carried on, and while W. was devoting his entire services and attention thereto, defendant notified him that “the copartnership heretofore existing ” between them was dissolved, and that she would carry on the business alone, which she proceeded to do, excluding W. from possession and control of the personal assets, and from all connection with the business. Held, that such conduct warranted W. in seeking relief from a court of equity, whether the relation of the parties was that of partners or not, and that the cáse was a proper one for the appointment of a permanent receiver to complete the contract and close up the business.

2. Same—Transfer of Partner’s Interest.

The transfer by W. of a part of his ultimate interest in the business to plaintiff M.,* and the pledging of the remaining part to him as collateral security, did not warrant defendant in excluding W. from all connection with or control over the partnership property or business.

3. Same—Costs.

The court was warranted, in view of defendant’s conduct, in awarding the costs of the action to plaintiffs.

Appeal from special term, Lewis county.

Action by Joseph H. Wilcox and Warner Miller against Harriet Pratt, for the specific performance of a contract, and the appointment of a receiver. The issues were decided in favor of plaintiffs, and judgment was entered appointing a permanent receiver of the partnership of Pratt & Wilcox, and directing that “said copartnership, and the individual members thereof, turn over and deliver up to the said receiver all the property and assets belonging to their copartnership. (5) Said receiver will proceed, under the directions of the court, to close up the business of said copartnership, and distribute the net proceeds thereof among the individual members of said firm, as their respective interests shall appear. (6) Said receiver will from time to time apply to this court for instructions in the performance of his duties as such. (7) On application made, a referee will be appointed to take and state the partnership accounts of the business done, and moneys received and disbursed in the conduct of said business, down to the time of the appointment of the

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temporary receiver, and report the same to this court. On the coming in of said report either party may apply for the confirmation thereof, and for such other or further relief to which either may be entitled.”

Argued before Hardin, P. J., and Martin and Merwin, JJ.

Walter Ballou, for appellant. C. B. Adams, for respondents.

1. Upon the evidence produced before the trial court it is very evident that the case was one for equitable cognizance. Whiton v. Spring, 74 N. Y. 169 . Defendant, owning 15,225 acres of land in the county of Herkimer, entered into a contract with the plaintiff Wilcox for the purpose of cutting the timber thereon, and making sales, with a mutual agreement that the respective parties should contribute money and carry forward the contemplated enterprise with the respective sums of money mentioned in the contract. Wilcox was to advance $5,000 and the defendant was to advance $20,-000 in money or credit, for the purpose of carrying on said business. It was provided in the contract, viz.: “That all expenses incurred in cutting, removing, selling, and disposing of such timber, bark, and spars and spiles, together with interest on all moneys received as advances, and all indebtedness incurred connected with or growing out of said business, including all taxes assessed, or which may hereafter be assessed, thereon, shall be paid in full from the proceeds of such sales; and so soon as said several sums shall be paid in full from the proceeds of such sales, and so soon as said several sums shall be paid in full, together with the sum of $26,000, with interest thereon from the date hereof, from the proceeds of such sales as aforesaid, shall be paid to the said Harriet Pratt, then, and in that case, said Harriet Pratt agrees to convey to said Joseph H. Wilcox, by good and sufficient deed, an undivided one-half-part of said tract of land.” The plaintiff Wilcox and the defendant entered upon the execution of the business contemplated by their agreement, and carried it forward until in January, 1888, the plaintiff giving “his services and attention to the detail thereof,” and it “was so conducted and carried on by the parties jointly.” On the 12th of January the defendant served upon Wilcox a notice “that the copartnership heretofore existing between Harriet Pratt and Joseph H. Wilcox has been dissolved, and the business will hereafter be carried on by” her. It is found as a fact that the defendant “has had the exclusive possession and control of all the personal property and assets of said firm of Pratt & Wilcox down to the commencement of this action, * * * ánd has excluded the plaintiff from all connection with or control over said partnership property or business, and absolutely refused to allow him to participate in said business, or in conducting and carrying on the same in-any manner whatever.” It appears that about one-half of the timber growing on the lands at the time the contract was entered into has been cut off, and the remainder is standing thereon.

We are of the opinion that the conduct of the defendant warranted the plaintiff in seeking relief from a court of equity, and we think the language used by Ruger, C. J., in King v. Barnes, 109 N. Y. 285 , 16 N. E. Rep. 332 , is pertinent to the case in hand. He said: “It is entirely immaterial whether this agreement constituted a partnership in a technical, legal sense, or whether it was a joint enterprise, to be conducted by the parties for their mutual benefit. So far as their rights and liabilities are concerned in this case, the result is the same, and rests upon the express terms of the agreement, and they are now to be enforced upon the principles applying to partnership transactions. Dyckman v. Valiente, 42 N. Y. 551 .” We think a proper case was made for the appointment of a receiver, and the proper directions were given to him in the premises. Heatherton v. Hastings, 5 Hun, 460 . In Hubbell v. Buhler, 43 Hun, 84 , it was said that, where there was an agreement for a joint adventure, “it must necessarily be implied that the understanding was that the partnership or joint adventure was not determinable at the will of any one of

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the partners, but that it was to continue until the single enterprise undertaken should be concluded. ” That case differs very essentially from the one before us.

2. We are of the opinion that the transfer by Wilcox of a part of his interest to the plaintiff Miller, and the pledging of the other part thereof to him as collateral security, did not warrant the defendant in.excluding the plaintiff Wilcox “from all connection with or control over said partnership property or business,” as found in the fourteenth finding of the trial Court. In partnership cases, a disagreement among partners has often been the occasion for the appointment of a receiver, with directions to carry on the business, or to close it out according to the best interests of the parties concerned. Marten v. Van Schaick, 4 Paige, 479; Jackson v. De Forest, 14 How. Pr. 81 ; Smith v. Stage Co., 18 Abb. Pr. 433 .

3. We are of the opinion that the facts appearing upon the trial warranted the exercise of the judicial discretion of the court in the direction which it took in_ awarding the costs of the action to the plaintiffs. Judgment affirmed, with co'sts. All concur.

Cases cited

Whiton v. Spring 74 N. Y. 169 N.Y. 1878-06-18 p. 362
Jackson v. De Forest 14 How. Pr. 81 N.Y. Sup. Ct. p. 363