#### Kate Rosenbaum, Appellant, v. The City of New York and Max Kobre, Defendants, Impleaded with Max Blecher, Respondent.

First Department,

December 11, 1908.

Eminent domain — condemnation of lands of partnership — effect of assignment by partner — equitable title of assignee — pleading — admission as to legal title.

Where on the dissolution of a partnership owning lands standing in the names of both partners as tenants in common, one partner assigned to the other all his right, title and interest in the partnership property and executed a general release, the assignee and his subsequent grantee obtained an equitable right to the undivided one-half owned by the assignor, although not vested with legal title.

Hence, although prior to said assignment a municipality had instituted condemnation proceedings to acquire said lands for public purposes, an award made after the assignment belongs in equity wholly to the assignee or his grantee.

Although the assignor suing the assignee’s grantee to recover one-half of such award alleges that she and the grantee are tenants in common of the premises and of the award, and that an undivided one-half thereof belongs to her, the plaintiff’s right is not admitted by a failure to deny such allegations, for at law, *352though, not in equity, they are still tenants in common and the allegation that by reason of such tenancy the plaintiff is entitled to half of the award is a mere legal conclusion, the failure to deny which does not prevent the defendant from showing his equitable rights under the assignment.

Appeal by tlie plaintiff, Kate Rosenbaum, from an interlocutory judgment of the Supreme Court in favor of the defendant Max Bleeher, entered in the office of the clerk of the county of New York on the 2d day of May, 1908, upon the decision of the court, rendered after a trial at the New York Special Term, overruling the plaintiff’s demurrer to a separate defense contained in the answer of the said defendant Bleeher.

*John H.*Regan, for the appellant.

*Augustine & Hopping,*for the respondent.

Laughlin, J.:

On the 22d day of March, 1899, certain premises were conveyed to the plaintiff and to one Abram Abelman, and in the month of May thereafter the city of New York duly instituted proceedings to acquire the premises for public purposes. On the 4th day of January, 1900, Abelman and wife conveyed all their right, title and interest in and to the premises to the defendant Bleeher. Thereafter an award of $3,600, representing the entire value of the title acquired by the city, was made to the defendant Bleeher. The action is brought to recover one-half of the award upon the ground that the plaintiff and Abelman were tenants in common of the premises, and by the conveyance to Bleeher the plaintiff and Bleeher became tenants in common, each entitled to an undivided half interest.

The plaintiff, in addition to alleging that she and Bleeher became tenants in common of the premises, alleges that they were tenants in common of the award, “and so continued, an undivided one-half (j-) thereof still belonging to the plaintiff and the other half to the defendant Bleeher,” and that Bleeher wrongfully claims to be the owner of the entire award, “ notwithstanding that his interest therein is only to the extent of one-half thereof.”' The defendant Bleeher put in issue the allegations of the complaint with respect to the plaintiff’s ownership and interest in the award. The separate *353defense pleaded contains no denial of any of the allegations of the complaint. It is alleged therein that the plaintiff and Abelman were copartners in the building business, and that the premises for which the award was made were acquired and held by them for copartnership purposes until the time of the dissolution of the firm, which occurred on the 30th day of December, 1899, at which time Abelman purchased from the plaintiff all of her right, title and interest in and to all of the copartnership property for the consideration of $1,500, which he paid, and his assumption of the partnership liabilities. It is then alleged, in effect, that the plaintiff executed a general release to Abelman. The demurrer was evidently intended to present the question as to whether Blecher could acquire the right to the entire award for land, the title to which stood in the name of the plaintiff and of his grantor without a conveyance from her. It would seem that Blecher will be entitled to make proof under the allegations contained in this separate defense, upon which he may become entitled to the award, either upon the theory of equitable conversion or upon the theory that his grantor acquired and paid for her interest in the land as real estate, and that he succeeded to such right by the conveyance. If, after the dissolution of the copartnership, and after Abelman purchased her entire interest, the plaintiff had brought an action asserting a right to the land before the city acquired title thereto, he or his grantee could have defended, and on the facts alleged, with a proper prayer for relief, could have compelled her to execute a conveyance of her interest to render effectual the dissolution agreement, or Abelman might have brought an action for a formal dissolution of the firm and a sale of the land, and on it appearing that he had purchased her interest, he would have been entitled to the surplus after the payment of the debts.- Neither of these remedies is now necessary' nor practicable, for title had passed to the city, and the fund represents the property. For the purpose of determining the rights as between the partners and their representatives the award stands precisely as if the land had been sold by the firm and it were the proceeds of the sale. By the conveyance Blecher obtained the legal title to an undivided half interest, and his grantor being equitably entitled to the other undivided half, he obtained the equitable right *354thereto as well. That equitable right attaches to the award, and Bleclier is entitled, on the facts pleaded, to the entire award.

The respondent, as has been seen, failed to deny in the special defense the allegations of the complaint to the effect that the plaintiff continued to be a tenant in common with him in the ownership of the land until it was taken by the city, and that by virtue thereof she became entitled to one-half of the award. The appellant claims that her right to one-half of the award stands admitted under the rule that where there is no denial in the separate defense the sufficiency thereof will be determined upon the theory that the allegations of the complaint are deemed admitted. We are of opinion that that rule does not apply here. The facts pleaded by Bleclier are not contradictory of the facts pleaded by the plaintiff. She and his grantor were tenants in common of the land, and at law they remained tenants in common, and he became a tenant in common with her. The allegation that by reason of her being a tenant in common, the plaintiff became entitled to half the award, is a legal conclusion, predicated upon the tenancy in common, which, being in a sense true, Bleclier was not required to deny it. His defense does not involve proof showing that they were not tenants in common, but it concedes that they were, and proceeds to show how her interest in the land passed to him, not in law, but in equity.

It follows that the interlocutory judgment should be affirmed, with costs, but with leave to appellant to withdraw her demurrer and interpose a reply, if she be so advised, upon payment of costs of the appeal and of the demurrer.

Patterson, P. J., McLaughlin, Houghton and Scott, JJ., concurred.

Judgment affirmed, with costs, with leave to appellant to withdraw demurrer and reply on payment of costs.