Case Name: Edward F. Leber et al., Respondents, v. Charles Henry Dietz, Appellant
Court: New York City Court
Jurisdiction: New York
Decision Date: 1898-02
Citations: 22 Misc. 524
Docket Number: 
Parties: Edward F. Leber et al., Respondents, v. Charles Henry Dietz, Appellant.
Judges: 
Reporter: New York Miscellaneous Reports
Volume: 22
Pages: 524–526

Head Matter:
Edward F. Leber et al., Respondents, v. Charles Henry Dietz, Appellant.
(City Court of New York, General Term,
February, 1898.)
Partnership — Partners cannot sue each other at law — Fraud.
A firm cannot maintain an action against one, who is a partner in its drug department, to recover damages which may result to the firm from the purchase by ithe defendant from a third party of a single consignment of orange peel for delivery to a customer, a company which subsequently denied the order; and as a partner has authority to purchase, an order for his; arrest, based upon the ground of fraud and false and fraudulent representations, must be vacated.
Appeal from an order denying a motion by the appellant to vacate an order of arrest granted herein.
David F. Tourney, for appellant.
Maurice J. Katz, for respondents.

Opinion:
O'Dwyer, J.
There was no complaint; and the affidavits must show ground for one of the statutory cases provided for in sections 549-550 of the Code of Civil Procedure, and the nature of the case made out must be stated in the order as the ground of the arrest.
The grounds of the arrest stated in the order are, " Fraud, false and fraudulent representations."
Fraud is a deception practiced in jorder to induce another to part with property or to surrender some legal right, and the affi- davits found in tins record do not make out a cause of action for fraud.
It does not appear that defendant, or anyone else through his acts, has obtained either money, goods or credit, and we are not satisfied from the proofs that the money, paid by the plaintiffs for the orange peel, will not be recovered when the merchandise is sold.
The other ground stated in the order of arrest — " false and fraudulent representations " — is not' a cause of action in tort, known to the law.
Plaintiffs' exhibit " C " shows that the defendant did receive a verbal order from the Cheney Medicine C'o., through Opitz, its manager, for gentian and gentian root, which was filled without comment; it also appears that the defendant was in Toledo and did have a consultation with Opitz concerning orange peel, and the case resolves itself into a contest of veracity between, defendant and Opitz. That defendant wrote, "that he was in a hole," because Opitz denied the order, is true, but that language is not proof of fraud. Any one of the "thousands engaged in selling goods can be placed in the same position at any moment by the buyer denying the order.
Furthermore, the agreement entered into between the plaintiffs and defendant conferred on defendant authority and discretion to order the orange peel, whether he had an order therefor or not.
The defendant is not a partner in the firm of Leber & Mayer, the plaintiffs, but his interest in the drug department under the agreement is such that they and he are copartners in that enterprise.
All the essential conditions for the creation of a copartnership are found therein. The agreement is between Edward F. Leber, Louis Mayer and the defendant, as individuals. It is executed by them individually under separate seals.
Plaintiffs agree " to furnish the capital "— the said department is to. be charged interest — defendant is " to manage the purchases and sales." Defendant receives no salary — plaintiffs agree " to perform the financial duties of said department " and to " assist the defendant to the best of their ability." All three agree " to work the department between themselves in conformity with the ideas of each of them."
The department is charged with expenses, office rent, wages, etc. Annual accountings are to be had and the profits and losses ascertained. Met profits are to be divided, one-half to the plaintiffs and-one-half to the defendant. Losses are to be borne in the same proportion, one-half by each. Defendant's accumulated profits are to remain in the business at interest. " In case the share of profits which may be credited to said defendant be not sufficient to cover the advances to be made to him, he shall be and remain responsible to the said Leber & Mayer for any such difference."
For aught that appears, the plaintiffs may have in their hands earned profits belonging to defendant more than sufficient to cover any loss that may arise from the purchase of the orange peel.
Plaintiffs have brought an action to recover damages, which are . the possible losses that may be made upon one transaction in the business of the drug department. As the defendant had authority to make the purchase and the partnership exists, the action cannot be maintained. -
It follows that the order appealed from should be reversed, with costs, and the motion to vacate the order of arrest granted, with $10 costs. •
Fitzsimons, Oh. J., concurs.
Order reversed, with costs, and motion granted, with $10 costs.