Moss v. Jerome — 23 N.Y. Super. Ct. 220

Majority

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Theodore Moss, Plaintiff and Respondent, v. Leonard W. Jerome, (who was impleaded with William Stuart et al.,) Defendant and Appellant.

Headnote

1. Where several persons engage in an enterprise, one of them agreeing to assist by advancing money, and to share in the losses, if any, but not to receive any part of the profits, which are to be divided among the others exclusively, although such one is not to be deemed a partner as between the others and himself, nevertheless, if he holds himself out or allows himself to be held out as a partner, to a third person, who, under the belief that he is such, enters into a contract with them, he is liable ' upon such contract.

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2. Upon such a contract, notwithstanding that it was joint, a recovery may be had against one alone; and this although another of the debtors has been released by the plaintiff upon a compromise under the Joint Debtor Act.

(Before Moncrief and Monell, J. J.)

Heard, January 15, 1863;

decided, January 31, 1863.

Appeal by the defendant, Jerome, from a judgment in favor of the plaintiff, entered upon the report of James Maurice, Esq., Referee, to whom the issues in the action were referred.

The complaint in this case alleged as the cause of action, that in July, 1857, the defendants, who were Leonard W. Jerome, William Stuart and Dion Bourcicault, were jointly engaged as copartners or otherwise in the management and conducting of a place of public amusement called the “ Academy of Music,” in the City of Hew York. That the plaintiff was in the employment of the defendants, and while so employed, was engaged in receiving and disbursing moneys on their behalf and at their request in said business. That the plaintiff in the course of such employment, paid out divers sums of money upon the request of the defendants, and upon their promise to refund and pay the same to him ; that upon such request and promise, the plaintiff paid out and expended on behalf of the defendants, the sum of $1,464.17 which they refused to pay. .

The plaintiff demanded judgment against the defendants Jerome and Stuart only.

The defendant Jerome, only, answered, and denied all the allegations in the complaint.

Upon the trial, it appeared that the defendant, Bourcicault, had been discharged by the plaintiff upon a compromise under the Joint Debtors’ Act.

The Referee found as facts, that in July, 1857, the defendants determined upon introducing a novel kind of public amusement, called promenade concerts, at the Academy of Music; that Bourcicault was to have the general management and direction of the enterprise;

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Stuart was to have the management of the finances, and Jerome encouraged them to go on, agreed to back them up, so far as to share, in case of failure, all the losses, but the profits were to be divided exclusively between Bourcicault and Stuart, Jerome refusing to participate in them. That the plaintiff was employed by the defendants to receive the money taken by the house, and to pay the current expenses; that he expended for various purposes connected with the enterprise, the sum of $5,223.17, and received (in receipts from the house and two sums of $1,000 and $500 respectively paid to him by Stuart) the sum of $3,759, leaving $1,484.17 due.

Upon these facts, the Beferee adjudged that the plaintiff -was entitled to judgment. The defendant excepted.

Jasper W. Gilber, for defendant Jerome, appellant.

I. The action being joint against three, upon an alleged joint obligation, the recovery against two was erroneous. (Bovill v. Wood, 2 M. & S., 23; Hawkins v. Ramsbottom, 6 Taunt., 179.)

II. No relation, or quasi relation of partnership, subsisted between Mr. Jerome and the other defendants, for there was no community of profits. (3 Kent’s Com., 25; Story on Part., § 46, n. 1; §§ 54, 59, 60, 61; Pars. Mer. Law, 164; 1 Pars. on Cont., 133, 134; Wilson v. Whitehead, 10 Mees. & Wels., 503.) The declarations of Bourr cicault or Stuart do not bind Jerome.

III. Eor can the judgment be sustained on the ground that Jerome held himself out as a partner, or quasi partner. There is no such finding, and no evidence to warrant it. (1 Lindley on Part., 34 to 53; Story on Part., § 64, 65; 1 Pars, on Cont., 166, 167, 146-151.) And the plaintiff had constructive notice that Mr. Jerome was not a partner. (Pringle v. Phillips, 5 Sandf., 171 ; Williamson v. Brown, 15 N. Y. R., 362; Bromley v. Elliott, 38 N. H. R., 287 .)

IV. If the Referee intended to find that, in fact,- the employment of the plaintiff was by the three defendants, his finding is not only unsupported by, but is manifestly

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against the evidence. See Wood v. Duke of Argyle, (6 Man. & Gr., 928,) and Lake v. Same, (6 Ad. & El., N. S., 477,) where opposite verdicts were sustained upon precisely the same facts.

O. D. Sivan, for plaintiff, respondent:

As to the question of liability, cited Beach v. Raymond, (2 E. D. Smith, 496.)

As to the recovery against one of several joint defendants, cited 1 Sandf., 207 , a, n. 2; 3 Esp., 77; 2 M. & S., 23, 444; 1 Chitty on Pleading, [Perkins ed.,] 45, tit. Misjoinder; Code, §§ 169, 170, 171, 176, 274; 2 Rev. Stat., 424, § 7; Claflin v. Butterfly, ( 5 Duer, 327 ;) Brumskill v. James, (1 Kern., 294.)

I think it is clear that the defendants, inter sese, were not partners. The arrangement between them lacked the communion of “ profits ” without which a partnership inter sese cannot exist. (Collyer on Part., § 19; Story on Part., §§ 46, 54, 59, 60, 61; 1 Pars, on Cont., 133, 134.) Jerome had no right to the profits, having agreed at the outset of the enterprise that they should be divided exclusively between Bourcicault and Stuart; nor could he be made liable, as between himself and Bourcicault and Stuart, for the losses, his promise to share them being without consideration and void.

If, however, the defendants held themselves out to the plaintiff as partners, and he entered upon his employment under the belief that they were such, then, although in fact as between themselves, they were not partners, still the defendant Jerome would be liable upon all the contracts of the firm made with the plaintiff.

The Referee has not found that there was a partnership, but that there was a joint entering upon the enterprise by the defendants and a joint employment of the plaintiff; and, as I understand his conclusion, he rests his decision upon these facts and not upon any supposed or quasi partnership between the defendants.

If the evidence warrants the conclusion that the defend

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ants jointly employed the plaintiff, then the defendant Jerome is liable, whether a partner with them or not, provided the claim be such as is embraced within the promise, express or implied, of the defendants. It becomes necessary, therefore, to look at the evidence to see whether the Referee’s conclusion is supported by the proofs.

The plaintiff testified that he was engaged as treasurer for three partners, Stuart, Jerome and Bourcicault, and that he was employed by the defendants. Again, he says that he was requested by all three to act as treasurer; that they were to go in equal, to share the losses and profits, and that Mr. Jerome was in the habit of going to the treasurer’s office. He testified to .several interviews between the defendants, when the subject of the concerts was discussed, and in which Mr. Jerome participated, and that he distinctly recollected that it was agreed that they all should share the profits and losses.

Robert Stoepel testified, that he was the musical director of the concerts; that he was at Mr. Bourcicault’s house, before the concerts commenced, when Mr. Jerome was present; that Bourcicault asked witness to act as musical director; that witness asked Mr. Bourcicault if it was his own undertaking, and he replied that it was a partnership between Stuart, Jerome, and himself; that Jerome was within hearing of the conversation, which was loud enough to be heard by all.

William Stuart, one of the defendants, called by the plaintiff, testified that Mr. Jerome, Mr. Bourcicault and himself, were supposed to furnish the means of carrying the concerts on; that Mr. Jerome was not to share in the profits, but was to share in the losses; that he backed the enterprise up in a spirit of friendship toward Mr. Bourcicault and himself. In answer to the question “were there any other partners in the undertaking ?” the witness said “no, none except us three." He further testified: that the plaintiff was employed to receive the money at the door, and to make disbursements of current expenses. He said “Jerome did actually bear his share of the losses;

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they were divided into three parts and he gave his cheek for one ” of the parts.

The evidence, on the part of the defendant, Jerome, was intended to, and, as I think, did clearly establish that Jerome was not a partner, inter sese; that he was not to share in the profits, and that he agreed to bear a third of the losses merely in a spirit of friendship to help along the enterprise. Mr. Bourcicault says, in his testimony, that himself and Mr. Stuart were the parties to the arrangement under which the concerts were to be given. And the defendant, Jerome, testified that there was not any agreement or understanding between him and Stuart and Bourcicault, or either of them, or any other person, at any time or in any form, by which he was to participate to any extent, in any profits which might result from the enterprise; that he simply told Mr. Bourcicault and Mr. Stuart to go ahead, and that he would assist them, back them, and stand by them; that it was purely a matter of friendship.

The testimony of Bourcicault and Jerome, that Jerome was not to share in the profits, is sustained by Stuart, and not contradicted, except by the plaintiff, whose testimony, on that subject, is inferential merely, and not positive.

The evidence, therefore, that a partnership, inter sese, did not exist, is satisfactory, and must be deemed conclusive.

It is to be observed, however, that here the defendant seems to have stopped; for I do not find any evidence to contradict the plaintiff’s employment, nor the plaintiff’s claim that the defendant, by his acts, declarations and admissions, held himself out to the plaintiff as a partner. The plaintiff testified that he was employed by Stuart, Jerome and Bourcicault, to act as treasurer; he also testified to interviews between the three parties, in which the subject of the concerts was discussed. Mr. Stoepel testifies to the declaration of Mr. Bourcicault, which he says was within the hearing of Jerome, that it was a “partnership” with Stuart, Jerome and himself. None of this

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testimony is any where contradicted. Mr. Jerome, who was examined on his own behalf, was not asked whether these statements were true, nor did he give any testimony on the subject; and Mr. Bourcicault’s evidence, although taken conditionally before the trial, is equally silent.

It must, therefore, be deemed to be conceded that there was some evidence that the defendant, Jerome, held himself out to the plaintiff as a partner; and I think there was sufficient evidence, on that branch of the case, to sustain the conclusion of the Referee that the plaintiff was entitled to judgment against the defendant Jerome. If it was untrue, Jerome, who had the opportunity, could have contradicted it, and not having done so, he is bound by the effect which the law gives to his silence.

The objection that a recovery could not be had against two of several defendants where the suit and cause of action was upon an alleged joint contract of three, was not well taken. Under the Code such a recovery and a judgment thereupon is proper. (Brumskill v. James, 1 Kern., 294; Claflin v. Butterly, 5 Duer, 327 ; M’Kensie v. Farrell, 4 Bosw., 192 ; Pruyn v. Black, 21 N. Y. R., 300.) Besides, the release under the joint debtors’ act, (Laws of 1838, ch. 257,) discharged Bourcicault only, and not the other joint debtors, whose liability continued notwithstanding such discharge.

The judgment must be affirmed.