Case ID: ad_221/html/0793-01.html
Source: Caselaw Access Project
Author: {"author": "Per Curiam.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

First Department,
    July, 1927.
    Edward M. Kahn, Appellant, v. Johnson-Cowdin-Emmerich, Inc., Respondent.
    
      Contracts — action to recover stipulated share of profits of specified department of business — certain charges against department disapproved.
    
    Appeal from a judgment of the Supreme Court, entered in the Bronx county clerk’s office on March 24, 1924, upon the report of a referee, dismissing the complaint on the merits.
   Per Curiam.

We agree with the careful and painstaking report of the referee in all respects save one. The referee has allowed as expenses of the business four items included in subdivision J of his recapitulation, as follows: Interest on indebtedness, $25,180.56; interest S. K. Jacobs, $2,929.50; bond discount, $11,700.60; organization expenses, $1,374.91. Making a total for these items of $41,185.57. These expenses were incurred not in the conduct of the Emmerich department, but in the formation and financing of the defendant corporation. The proceeds of the bond issue were used for the purpose, not of conducting the business, but of purchasing the assets of the firms or corporations which were consolidated into the defendant corporation. The moneys were thus not expended in any sense in the conduct of the Emmerich department or for its benefit. It could not have been in the contemplation of the parties that in estimating the profits of a department, to a share of which the plaintiff 'was entitled, there should be charged against the gross profits expenses not incurred in or for the benefit of that department. It was error, therefore, to deduct these items. The judgment should, therefore, be reversed, with costs, and judgment directed for the plaintiff in accordance with this opinion, with costs. In the other two cases covered by the stipulation herein judgments should be directed for the plaintiffs in accordance with this opinion. Settle orders containing findings of fact and conclusions of law, in accordance with the stipulation and this opinion, on notice. Present — Finch, Merrell, MeAvoy, Martin and Proskauer, JJ. Judgment reversed, with costs, and judgment directed for plaintiff in accordance with opinion, -with costs. In the other two cases covered by the stipulation judgments directed for the plaintiffs in accordance with opinion. Settle orders containing findings of fact and conclusions of law, in accordance with the stipulation and opinion, on notice. 
      
       The appeal herein was taken under a stipulation that the same should be likewise binding in the actions of Manne v. Johnson-Cowdin-Emmerich, Inc., and Marienhoff v. Johnson-Cowdin-Emmerich, Inc.— [Rep.