Case ID: ny-st-rep_72/html/0432-01.html
Source: Caselaw Access Project
Author: {"author": "WARD, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Susan Magennis, as Administratrix, etc., Resp’t, v. Nicholas A. Scheid, App’lt.
    
      (Supreme Court, General Term, Fifth Department,
    
    
      Filed December 28, 1895.)
    
    1. Reference -—Compulsory—Partnership.
    
      ¡ A reference cannot "be ordered to take and state the interest of partners r in firm assets.
    2. Same.
    After the court has ascertained the exact interest of the partners in the • firm property, and determined that interest, a reference to state the partnership account is proper and is authorized by the Code.
    Appeal from an order establishing a partnership, and referring the question of the partners’ interests in the firm assets.
    Frederick Haller, for app’lt; Edward L. Jellineck, for resp’t.
   WARD, J.

—Plaintiff, in her complaint, alleges that her intestate, Edward Magennis, and the defendant had been carrying on the business of rendering grease, tallow, bones, and fertilizers at Oheelctowaga, in Brie county; that alter the death of the intestate the defendant had carried on the business, and had possession of the plant and property connected therewith, claiming to be the surviving partner of the intestate, and had refused to let the plaintiff have access to the business and property in question, — and demands that an accounting be taken of all the dealings and trans■actions between the defendant and the intestate, and to determine whether a partnership existed, and for other relief. The defendant, answering, alleged the existence of a copartnership between, the deceased and the defendant in the said business, and that they were jointly interested therein, and as such copartners were the -owners of the plant and appliances and assets connected therewith, ■and as survivor was entitled to close up the business of the firm, and distribute its assets. The trial court found the facts, showing that a copartnership existed between the deceased and the defendant, and that they had carried on, as such, the rendering business, and in the third finding of fact appears this statement :

“That the precise interest of each of said partners in said business, and as to what property it related, was left uncertain.”

The court found as conclusions of law—First, that the deceased and defendant were copartners in the business, and carried on such business as copartners; and, second, as follows:

“I direct that a referee be appointed to take and state the condition of the copartnership accounts, the interests of each of said copartners in the firm assets, and the property to which such co-partnership related, and the liabilities against said company. Said judgment will direct said referee to take proof of all of said facts, and report the same with all convenient speed to this court, with his opinion thereon.”

The defendant filed exceptions to the conclusions of law, and -appealed from the interlocutory judgment rendered upon the findings of the court, and he insists here—First, that the facts found do not sustain the conclusion of the court that a partnership existed between the plaintiff’s intestate and the defendant; and, second, that the court had no power to direct a reference to take and state the interest of the plaintiff and of the defendant in the firm assets or in the property (that being one of the questions raised by the pleadings in the case), nor did the court have the power to direct a reference to take proof of said facts, and require the referee to report such proofs to the court with his opinion thereon.

The evidence taken before the court as to. the existence of the copartnership does not appear in the appeal books, and is not be'fore us. We have simply the facts found by the court, and its legal conclusions. As to the first point,we ean, therefore, only inquire whether the.facts found were sufficient to justify the legal conclusions reached. Taking the findings of fact all together, there is enough to justify the conclusion as to the copartnership between the intestate and the defendants, but not to determine the exact position of each party in that copartnership, or' his interest in the property. Indeed, the court finds that that question is left uncertain. It is manifest, therefore, that before the accounts can be taken and stated, as between the former partners, the interest of each or the share of each in the business and property must be ascertained. The trial court, instead of ascertaining that as one of the questions at issue in the case, makes a reference for that purpose, and that is the other point of error alleged by the appellant. The only authority that can be claimed for this reference is section 1015 of'the Code of Civil Procedure, which is as follows:

“The court may likewise, of its own motion, or upon the application of either party, without the consent of the other, direct a reference to take an account and report to the court thereon, either with or without the testimony, after interlocutory or-final judgment, or where it is necessary to do so for the information of the court, and also to determine and report upon a question of fact arising at any stage of the action; upon a motion or otherwise, except upon the pleadings.”

That part of the order of reference referring to the referee to take and state the interests of the partners in the firm assets and the property to which such copartnership related cannot be sustained. That question arose upon the pleadings, and was at issue in the action, and it was the duty of the court to decide that question upon testimony taken before it; where the court could have -the benefit of seeing the witnesses, observing their appearance and manner of testifying. This was a right that the parties could insist' upon, and the duty of taking this testimony could not be relegated to a referee. Had the court ascertained the exact interests of the' partners in the firm property, and determined that interest, then a reference to state the partnership account would have been proper, and is authorized by the Code. In Doyle v. Met. E. Railway Co., 136 N. Y. 505 ; 49 St. Rep. 746, the court, against the defendant’s objection, appointed a referee to take testimony as to the value of any easement or property taken or interfered with by the defendant, and as to the amount of the rental loss that the plaintiff had sustained, and to report the same, with his opinion thereon". It was held that the court had no power to direct such a reference. That case is controlling here.

The interlocutory judgment should be reversed, and a new trial-ordered, with costs to abide the final award of costs.

All concur.