Niebuhr v. Schreyer

This is an appeal from a final and also from an interlocutory judgment in an action brought for an accounting of a co-partnership alleged to have been entered into between the parties prior to November, 1883, for the purchase of lots and -erection of buildings thereon in the city of New York, the defendant to advance all the money needed for such purchase and build

The property acquired by the co-partnership was averred to be five lots on Forty-fifth street, three lots on Tenth avenue, one lot on Ninth avenue, and three lots on Bank street, on which buildings were erected, and it was alleged that defendant had sold the first eight lots. mentioned, and had received the purchase price therefor, which exceeded his advances and his proportion of the profits.

In the original complaint it was also claimed that the premises 424 West Fortieth street were also purchased and built upon under said co-partnership agreement, but by the amendment this allegation was struck out, and. it was alleged that those premises belonged solely to the plaintiff, and that the defendant had received the whole proceeds of the sale thereof in part payment of his co-partnership advances, and the plaintiff claimed a credit therefor.

The answer of the defendant denied the; co-partnership and the other allegations of the complaint connected therewith, and set up as the actual arrangement that he had agreed with the plaintiff’s husband that the latter should purchase the five lots on Forty-fifth street and the three lots on Tenth avenue and erect buildings thereon, for which purpose the defendant was to advance the necessary moneys which were to be returned to him when the property was sold, with interest, and that he was to superintend the carpenter work of the buildings and receive for his services one-third of the net profits; that be had advanced upwards of $80,000 and had been repaid only $60,000 and had received no part of the profits, which were $8,000; that the only connection Mrs. Niebuhr, the plaintiff, had with the transaction. was that the title to the lots was taken in her name by the direction of her husband.

As to the premises 424 West Fortieth street, the answer set up that neither the plaintiff nor her husband had any interest therein, but that they were at one time conveyed by the defendant as executor of his deceased wife to the plaintiff, for the purpose of having a mortgage executed thereon, and thereafter they were re-conveyed by her to him, acting as executor aforesaid. As to the lots on Ninth avenue and Bank street, the answer alleged that they were at all times the defendant’s property and denied that, plaintiff or her husband evér had any interest therein.

A counterclaim was set up arising, as alleged, upon the plaintiff’s taking part of the funds of the joint enterprise and investing them in premises oh Ninety-third street,and asking that the property be decreed liable for his advances and profits, and that he should be decreed owner thereof to an amount sufficient to satisfy his claim. It was' also alleged that an accounting had been had between plaintiff and defendant in which it was agreed that by reason of the aforesaid transactions there was justly due the defendant $28,000. The plaintiff, by reply, denied the counterclaim and averred that she became the owner of the Ninety-third street premises by taking the same in exchange for premises in

' The issues were referred to a referee, who made a report upon which an interlocutory judgment was entered, and who then took and stated the accounts of the parties and made a report, upon which the final judgment was entered. The findings upon the interlocutory judgment were substantially: First, that there was no copartnership between the plaintiff and the defendant, but that her husband at first made an agreement with the defendant by which the latter was to advance means to excavate the five lots on Forty-fifth street, and was to receive his advances and interest and $500 per lot, and that he did make advances of $7,500 therefor; that afterwards her husband, as her attorney, made a further agreement with defendant, by which the latter was to advance, in addition, the money needed to erect buildings on said five lots, and upon the sale thereof to be repaid his advances with interest, and that he should receive one-third of the profits; that a subsequent like agreement was made between the plaintiff and defendant with respect to the three lots on Tenth avenue; that on November -23, 1883, the plaintiff executed a writing to the defendant declaring that she held the title to said property, subject to the repayment of defendant’s advances and the payment of one-third of the profits; that plaintiff had no real interest in the premises 424 West Fortieth street, but received the deed thereof from the defendant as executor, and at his request and for the sole purpose of executing a "mortgage thereon negotiated by him, and that she immediately conveyed the property to him by a deed not recorded; and that she subsequently conveyed the property to a third party, to whom defendant had sold it, and that she had no interest in or right to the money realized on such mortgage or sale; also, that the plaintiff had no interest in the property on Ninth avenue or Bank street; and, as conclusion of law, that the plaintiff and defendant had a joint interest in the Forty-fifth street and Tenth avenue properties not amounting to a copartnership, which entitled the plaintiff to maintain the action. The disposition of the counterclaim was reserved for the accounting.

Upon the final accounting, the referee found that the defendant had advanced and was entitled to credit for $65,014.36, which embraced interest to January, 1885, and that he was entitled to $8,00.0 as his share of the profits, and to $819.11 on his counterclaim, amounting altogether to $73,833.47, and that he had received of the proceeds of the sale of the eight lots first mentioned, $73,627, including interest, which left due him on January 1, 1885, $206.47, and for this sum, with interest, judgment was entered in his favor. «

The questions raised by the appeal of the plaintiff are, first, that the ■ defendant ought not to be allowed $8,000 as the share

Rone of the evidence taken before the referee is printed in the case, and the appellant relies for a reversal upon the ground that the findings of fact are insufficient and inconsistent with each other and do not sustain the conclusions of law and the judgment.

As to the profits: Plaintiff contends that the referee found that there was no copartnership between the parties; that the defendant was merely a loaner and the plaintiff a borrower of moneys, and, therefore, that the stipulation for one-third of the profits was a bonus in excess of the lawful interest and was usurious and void. This is not a correct statement of the findings. The referee found that an agreement was entered into for advances by defendant, and that on the sale of the house he should be repaid with interest and should be entitled to receive in addition thereto one-third of the profits that should be realized on such sale; but there was no finding that this profit was to be paid for the loan and forbearance of the money advanced.

The plaintiff made no request for any such finding. She requested the referee to find, and he did find, “that the relationship existing between the plaintiff and defendant, in respect to the premises in West Forty-fifth street and Tenth avenue, mentioned in the pleadings, was that shown by the paper writing signed by the plaintiff, dated Rovember, 23, 1883, which writing was read in evidence on the trial of this action as defendant’s exhibit Ro. 1.” But this paper is not in the record. The referee, in his conclusion of law, states that the plaintiff and defendant had a joint interest in the Forty-fifth street and Tenth avenue property, not amounting to a copartnership, sufficient to entitle the plaintiff to maintain the action for an accounting, and the plaintiff herself entered the interlocutory judgment upon his findings, adjudging that the plaintiff had such a joint interest in the premises. We must assume, in the absence of all the evidence, if indeed plaintiff is not concluded by her own judgment, that there was evidence of a joint interest of the parties and a lawful consideration for the agreement found by the referee that the defendant was to receive a share of the profits as well as the repayment of his advances and interest.

As to the counterclaim: The objection made by plaintiff is that the counterclaim as found was different from that pleaded. The pleading was substantially that the plaintiff had taken part of the joint funds and invested them in property on Rinety-third street, which property should be applied to the payment of the balance of his advances. The plaintiff’s reply was that said property was acquired by the exchange of property on Forty-third street known as the Rarragansett Flat, which was purchased out of her own funds and was her private estate, and no money was ever advanced by defendant in connection therewith. The finding of the referee is that the defendant advanced $3.527.64 to be devoted to the Rarragansett Flat, upon the agreement that he should have a lien

There is a variance between the pleading and the proof in this matter, in this respect, that the proof shows that the advances made by the defendant were from his own funds, while the pleading is that the plaintiff took the joint funds to acquire the property, and that, instead of the plaintiff’s acquiring the Ninety-third street property by moneys taken from the joint fund, she acquired it by exchanging for the Narragansett Flat, upon which defendant had made the advances. The defendant established, however, a right to a lien upon the Ninety-third street property, and this was the only substantial issue between the parties. The only way in which the plaintiff could take advantage of this variance between the pleading and the proof was by objection at the trial, but as the record of the trial is not before -us, it does not appear that such objection was made, and there is, therefore, nothing to review. Objection of variance between the pleading and proof is not available upon appeal unless raised at the trial. See Tallman v. Earle, 37 N. Y. State Rep., 271, and cases cited therein.

As to the property 424 West Fortieth street: This claim of the plaintiff is wholly without merit. It rests upon the assumption that because the defendant, in violation of his duty as trustee, conveyed the premises in question, a part of the trust estate, to the plaintiff for the sole purpose, as she knew, to enable him to raise money by mortgage thereon, and subsequently effected a sale thereof to a purchaser to whom the plaintiff, at his request, conveyed it, the defendant receiving the proceeds of the mortgage in the first place, and of the sale in the second place; that this transaction gave the plaintiff, the agent, or intermediary, by whom these negotiations were effected, the right in a court of equity to the application of such proceeds to the satisfaction of her private and personal indebtedness to the defendant arising out of matters wholly unconnected with the transaction or the trust. It does not require any argument to dispose of such a pretension. It is claimed, however, that as the defendant, as executor, pretending to act under a power of sale, made a conveyance to the plaintiff, that he cannot dispute the validity of his deed or the plaintiff’s title thereunder. No such dispute is attempted, for it appears that, upon his executing such deed to the plaintiff, she immediately re-conveyed the property back to him by a deed which he continued to hold when she made the mortgage, and also when she subsequently conveyed the property to a third person named by him. He is, therefore, not disputing his deed, but she is attacking her own.

It does not appear that any objection was made to the proof of

All other exceptions of the plaintiff relied upon on this appeal are disposed of by the foregoing considerations, and do not call for a reversal of the judgment. There is nothing inconsistent "with the findings, and they abundantly support the judgment rendered, which must be affirmed.

Bisciioff and Pryor, JJ., concur.