Case ID: ad_91/html/0364-01.html
Source: Caselaw Access Project
Author: {"author": "Patterson, J. :", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Edward Fox, as Administrator, etc., of Patrick Fox, Deceased, Appellant, v. John J. Mahony, Respondent.
    (No. 2.)
    
      Agreement to share in the profit or loss resulting from a purchase and sale of real property — liability of the contracting party, who has taken title in 7iis individual name, and has built upon the land, to the other pa/rty to the agreement.
    
    Patrick Fox and John J. Mahony entered into an agreement in December, 1892, providing that Mahony was to acquire and take title to certain real estate and that on a resale thereof the profits or loss arising out of the transaction should be shared by Mahony and Fox in the proportion of ninety per cent and ten per cent respectively. Mahony took title to the premises. Fox died in 189® before the premises were sold. In 1900 Mahony built several apartment houses upon the premises.
    In an action brought by Fox’s executor against Mahony, it was Held, that the foregoing facts entitled Fox’s executor to some relief and that it was improper to dismiss his complaint.
    
      Semble, that he was entitled to charge upon the land an amount, not to exceed ten per cent of the difference between the original cost and the expenses of carrying the lots and their value when Mahony put them in such a situation that they could not be sold under the terms of the agreement, or their value at any other appropriate time.
    Appeal by the plaintiff, Edward Fox, as administrator, etc., of Patrick Fox, deceased, from a judgment of the Supreme Court in favor of the defendant, entered in the office of the clerk of the county of New York on the 29th day of December, 1903, upon the decision of the court, rendered after a trial at the New York Special Term, dismissing the plaintiff’s complaint.
    
      Louis O. Van Doren, for the appellant.
    
      Michael H. Cardozo, for the respondent.
   Patterson, J. :

It appeared by the allegations of the complaint and by the proofs in this action that Patrick Fox and the defendant John J. Mahony made an agreement in December, 1892, whereby Mahony was to acquire and take title to certain real estate in Ninety-seventh street in the city of New York, and that on a resale of such premises Fox should be entitled to receive out of the proceeds of such sale ten per centum of the profits accruing therefrom and Mahony ninety per centum of such profits, or, in the event of a loss, Fox should suffer and bear ten per centum of the loss and Mahony ninety per centum thereof. Mahony took title to the premises. Fox died in 1896. The premises were not then sold. After the death of Fox, and in or about October, 1900, Mahony, still holding the title to the premises, built and constructed thereon several apartme'nt houses, which have been rented to various tenants. This action is brought by the personal representative of Fox, seeking not merely an accounting of the sale of the premises, but also relief based upon the failure and neglect of Mahony to sell the premises, and upon his taking them to his own account and erecting upon them buildings of which he is ostensibly the absolute owner, and by doing which he is prevented from selling the lots independently of the buildings, thus making it impossible for him to account to the plaintiff for the proceeds of a sale thereof. The plaintiff seeks also to have either his right to profits or his liability for losses on the transaction judicially determined. At the trial the complaint was dismissed on the ground that the plaintiff had not established facts sufficient to constitute a cause of action. That ruling of the court was made upon the assumption that there was nothing in controversy between the parties except the right of the plaintiff’s intestate to receive profits upon an absolute sale of the lots when actually made by the defendant Mahony. ■

It is true that, under the form of the agreement (the evidence of which is made by the defendant himself), up to the time of the death of the plaintiff’s intestate, either Mahony or the plaintiff’s intestate might have sold the lots, as was held by the referee on the trial of action No. 1, which involved this same contract, but related to a different piece of real estate. When the plaintiff’s intestate died the obligation of the defendant remained. In action No. 1 the referee held, that while a strict copartnership relation as to the real estate was not established between the defendant and the plaintiff’s intestate, yet their rights were to be determined by the law applicable to the relation of partners, and we affirmed the judgment entered upon the referee’s report. (87 App. Div. 617.)

The court below in the present case seems to have regarded the plaintiff’s intestate’s right as consisting only in his being entitled to profit, if any, when a sale were actually made, ignoring altogether the alternative duty of the defendant to sell the lots or to maintain them in such a shape that they might be sold, and the rights of ihe respective parties be determined and adjusted. The plaintiff in the complaint states facts showing that the defendant has made it, by his own act, impossible to sell the lots. He has taken them over, to himself and built upon them expensive houses. Thus having rendered it impossible to sell the lots independently, the defendant seems to claim that the representative of Fox is not entitled to . any relief at all. In other words, by his own act the defendant has confiscated and appropriated to himself the interest which the plaintiff’s intestate had in and to whatever, if anything, might have been the profits of a sale of these lots.

It seems to be clear that the plaintiff, as the personal representative of his intestate, has no action a.t law, and that the allegations of the complaint and the proofs are sufficient to entitle him to some relief which, although it does not consist in an account of profits of the sale of the lots, does consist in the right to charge upon the land such an amount, if any, hot exceeding ten per centum of. the difference. between the original cost and the expenses of carrying the lots and their value when the defendant put them in such a situation that they could not be sold under the terms of the arrangement, which the defendant shows was made between the plaintiff’s intestate and himself, or their value at any other appropriate period.

■ Without now determining to what extent that relief may be afforded, it is sufficient to say that the complaint was- improperly dismissed, and -that the judgment should be reversed and a new trial should be ordered, with costs to appellant to abide the event.

Van Bbunt, P. J., O’Bbien, McLaughlin and Laughlin, Jj., concurred.

Judgment reversed, new trial ordered, costs to appellant to abide event..