Case Name: Herman Schiffer and Alfred Schiffer, Appellants, v. Edward Lauterbach, Louis Lowenstein, Aubrey E. Meyer, as Executors, and Ida Meyer, as Executrix, of the Last Will and Testament of Isaias Meyer, Deceased, Respondents
Court: New York Supreme Court, Appellate Division
Jurisdiction: New York
Decision Date: 1896
Citations: 7 A.D. 223
Docket Number: 
Parties: Herman Schiffer and Alfred Schiffer, Appellants, v. Edward Lauterbach, Louis Lowenstein, Aubrey E. Meyer, as Executors, and Ida Meyer, as Executrix, of the Last Will and Testament of Isaias Meyer, Deceased, Respondents.
Judges: 
Reporter: Appellate Division Reports
Volume: 7
Pages: 223–232

Head Matter:
Herman Schiffer and Alfred Schiffer, Appellants, v. Edward Lauterbach, Louis Lowenstein, Aubrey E. Meyer, as Executors, and Ida Meyer, as Executrix, of the Last Will and Testament of Isaias Meyer, Deceased, Respondents.
Contract — in a complaint, based upon a right under a pa/i'tnership agreement to terminate a partnership, the continuing partners haring aright to buy the interest of the retiring partner, the plaintiff may Set up an alleged adjustment and, failing to establish it, recover under the partnership agreement.
In an action brought to compel the specific performance of a contract, it appeared that in Hay, 1888, the plaintiffs and Isaias Meyer, the testator of the four defendants, made a partnership agreement for five years from June 1, 1888, which was described in the complaint as Schedule “ A.” By subdivision 14 of this Schedule “A” it was provided that if it was desired to end the partnership at the close of the term, notice must be given six months before its expiration, and, by subdivision 15, that if any of the parties died before the termination of the co-partnership as created or extended, and the representatives of the deceased partner elected to close the co-partnership, the survivors should have a right to purchase the interest of the deceased partner upon certain terms of valuation and payment. Isaias Meyer died on August 34,1888, and the defendants were appointed his executors, the business being continued until the end of the first term of five years.
On November 38, 1893, the executors of Isaias Meyer gave, notice, under subdivision 14 of Schedule “ A,” that they intended to terminate the co-partnership at the end of the first five years. On May 39, 1893, the plaintiffs gave' notice that they would purchase the rights of Isaias Meyer under subdivision 15 of the same instrument.. In January, 1894, the parties drew up, but never all of them executed (nor was it delivered iat all), a third instrument relating to the terms of settlement of the firm’s affairs between the parties, which was described in the complaint as Schedule • “0.”
In the present action the plaintiffs sought to compel a specific, performance of this agreement, Schedule “ 0,” or to compel the specific performance of a parol agreement to the same effect, or, in the alternative, that the defendants be compelled to carry out the provisions of subdivision 15 of Schedule “A.” The defendants alleged their willingness to carry out the terms of subdivision 15.
The complaint alleged that notice had been given by ;the defendants under subr division 14 of Schedule " A,” and that notice had been given by the plaintiffs under its subdivision 15, 'and it further alleged that an attempt was made to ascertain the amount to be paid the defendants for the interest of their testator; that the parties could not agree as to the amount or as to the terms of payment, and that, in this situation, negotiations had followed, which, as the plaintiffs claimed, matured in the agreement Schedule “0;” that the defendants refused to carry out the terms either iof Schedule “ 0 ” or of subdivision 15 of Schedule "A,” and the complaint asked as relief for the enforcement of Schedule “0,” or of subdivision 15 of Schedule “A.”
The court held that Schedule “0” was never made, executed or delivered, and . that no parol agreement, having the .same effect, was ever entered into by the parties, .and also held that the only cause of action alleged was one to'compel the specific performance of the agreement contained in Schedule “ C;” and that the plaintiffs failing to establish Schedule "0,” could obtain no relief in this .action under the provision of subdivision 15 of the agreement contained in Schedule “ A,”
Held, that the conclusion reached by the: court as to the validity of Schedule “ 0 ” and of any parol agreement having the same effect was correct;
That in view of the allegations of the complaint and of the prayer for relief, . the court was not justified in holding that the plaintiffs could obtain no relief under subdivision 15 of Schedule “A;”
That. as the plaintiffs had a right to buy the interest of the testator, and as the: defendants, were bound to sell it, and as the parties could not agree upon the price, it was proper for the plaintiffs to apply to the court to settle the rights, of the respective parties.
Appeal by the plaintiffs, Herman Scliiffer and another, from a. judgment of the Supreme Court, in favor of the defendants,, entered in the office of the clerk of the county of Hew York on 19th day of May, 1896, upon the decision of the court, rendered after a trial at the Hew York Special Term, dismissing the complaint: upon the merits.
The action was brought to compel the specific performance of. contracts....
May 18, 1888, the plaintiffs and the defendants’ testator entered into a co-partnership under a written agreement,. a copy of which is annexed to the complaint, and known as Schedule “ A.” The firm name was Pelgram & Meyer, and the business to be carried on was the manufacture and sale of silk goods, ribbons and similar merchandise. The term of the co-partnership was five years, commencing June 1, 1888. The defendants’ testator contributed as capital to the common stock, so called, $175,000, and the plaintiffs contributed a like sum. The defendants’ testator also conveyed to the co-partnership the real property formerly owned by himself or by the firm of Pelgram & Meyer, at the agreed valuation of $181,047.34; the machinery, fixtures and appliances and leasehold interest, at the agreed valuation of $315,000; the raw material, stock on hand and manufactured goods, the value to be ascertained by inventory at actual cost; and also all other assets on hand, cash, book accounts, etc.
The conveyance of the property was subject to existing indebtedness by mortgage or otherwise. The amount of the net value of such property and assets, over and above all the indebtedness, was to be ascertained June 1, 1888, and to be considered as surplus capital contributed by defendants’ testator. The parties were to be equal partners, the plaintiffs having one-half interest, and the defendants’ testator one-half, and they were to receive six per cent interest on the amount of common and surplus capital contributed by them respectively, to be charged as an expense of the business. It was further agreed that when Aubrey E. Meyer, a son of the defendants’ testator, became twenty-one years of age he should be admitted as a partner in the business, with such interest as his father should give him out of the capital contributed by the father to the co-partnership ; that the son should have a salary of $1,500 per year, to be charged to expense account; and that in case the defendants’ testator died before the son Aubrey became a member of the firm, the son should have the same rights in the firm as though he had been a member, and had become at his father’s death a surviving partner.
There were other provisions of the agreement which it is unnecessary to refer to here, and then, by subdivision 14, it was provided in brief that if any of the parties should require the co-partnership to terminate at the end of five years, they should, not less than six months before the expiration of the five years,' serve upon all the parties a notice in writing subscribed by them, to that effect, and if nó such notice should be served the term should be continued for another five years,, and if no notice should be served at the end of the ten years, the term should be again continued for .'another five years — and by subdivision 15 it was providéd in brief that if any of the parties should die before the termination of the co-partnership as created or extended, and the representatives of the deceased partner should elect to terminate the co-partnership as provided in the agreement, the surviving-partners should have the right to purchase all the interest of the deceased partner in the property and business, at' a valuation shown by the books, deducting twenty-five per cent upon the values of machinery, arid should pay for the same'in yearly installments of $50,000, with interest on the unpaid balance at four and a half per cent, and secure such payment by a. mortgage on the property.
After the commencement of the co-partnérship, and on August 24, 1888, the defendants’ testator died,' leaving a will, wherein he appointed defendants his execiitors, and they qualified and have since acted as such. • The business was- continued until the end of the first five years. After the death of the defendants’ testator, his son Aubrey asserted his right to become' a member of the firm under Agreement “ A.” Differences arose between him and the plaintiffs and the defendants other than Aubrey E. Meyer as to their respective rights. Litigation resulted, and finally, on June 30, 1890, an agreement was entered into, a copy of which is annexed to the complaint, and is known as Schedule B.” By this agreement it was provided that the plaintiffs should be regarded as the sole surviving partners of the firm, and Aubrey/ the son of defendants’ testator, relinquished all his right to be a surviving partner, and to any interest in the firm as a partner; and it was agreed that the plaintiffs should continue the business aS sole surviving partners Until the .end of the term, and that the plaintiffs should pay the son Aubrey every year after July 1, 1889, during the term of the co-partnership, the sum of $3,000 in installments .of $1,500 each, payable January and July, so long as he lived; under certain conditions; that the son Aubrey might enter into the same kind of business, but should not use the firm name of Pelgram & Meyer during the term of this co-partnership, except that he should have the sole right to the use of such firm name after May 31, 1893, the end of the first five years, in case he should commence business and use such firm name within nine months thereafter, and should give six months’ notice of his intention to use such firm name. There were other provisions in this agreement which it is not necessary to refer to here. November 28, 1892, the defendants, pursuant to subdivision 14 of Agreement “ A,” gave notice in writing to the plaintiffs that they intended to terminate the co-partnership at the end of the first five years.
May 29, 1893, the plaintiffs gave notice to the defendants in writing that they would purchase the rights of the defendants’ testator in the business and property, pursuant to subdivision 15 of Agreement “A.”
The defendants seem to have acquiesced in the right to so purchase, and thereupon the parties proceeded to ascertain the amount to be paid for such interest. An inventory was made, but there was. disagreement as to whether the amount arrived at, as the sum to be paid by the plaintiffs, was correct, and as to other details in perfecting the sale and. securing the purchase money. Negotiations were then entered upon between the plaintiffs and some of the defendants as to an agreement for the settlement of their differences, and such negotiations were continued for some time.
An agreement in writing was finally formulated, a copy of which is annexed to the complaint, and is known as Schedule “ 0.” This written agreement bears date in January, 1894. It was never signed by defendant Ida Meyer, or defendant Aubrey E. Meyer. It was signed by defendants Lauterbach and Lowenstein, who were satisfied with its terms, but it was never delivered at all by any of the defendants. The plaintiffs alleged in their complaint that the agreement was made about March 21, 1894. The defendants denied that it was ever made, executed or delivered at all, or that it ever became a binding agreement upon the defendants. The plaintiffs sought to compel specific performance of this agreement, or a parol agreement to the same effect, or that defendants be compelled to carry out the provisions of subdivision 15 of the original Agreement “ A.” The defendants alleged their willingness at all times to carry out the terms of subdivision 15 of tlie original Agreement “ A,” but that the plaintiffs had entirely failed to comply with süch terms themselves.
The court held that the Agreement “ C ” was never made, executed or delivered, and . that no agreement by parol to the effect therein stated .was entered into between the parties, and the same,, therefore, could not be.ordered to be specifically performed.
- The court held that there was but . one cause of action alleged, and that was one to compel specific performance of an agreement, the provisions of which were contained in Agreement “ C; ” and that no relief could be afforded based upon the provisions of subdivision 15 of Agreement “ A,” the plaintiffs failing as to Agreement “ C.”
The court dismissed the complaint upon the merits, with costs, and from the judgment' entered upon such decision this appeal is taken.
Samuel Untermeyer and Louis Marshall, for the appellants.
John E. Parsons, for the respondents.

Opinion:
Williams, J.:
We see no reason to disagree with the. learned trial judge as to the conclusion arrived at by him that the Agreement " C " was never made, executed or delivered, and that no agreement to the effect therein contained was actually made and perfected betwe'en the plaintiffs and any of the defendants. It is true that Agreement " 0 " was negotiated by two of the defendants, and as formulated was satisfactory to them, but it seems quite clear that these two defendants never intended to make " C " a binding agreement by themselves, and without the concurrence of the other defendants^ or to make any parol agreement to the same effect, or to make any parol agreement at all,, and the plaintiffs .did not suppose any such intention on the part of these two defendants ever existed. The intention of both the plaintiffs and these two defendants was that the agreer ment when made and perfected at all should be in writing, and they finally concurred in Agreement " 0 " as correctly expressing the agreement which the four parties desired should be made, executed and delivered. It could not be said fairly, under the evidence, that there was any understanding by any of the four parties that an agreement was to be regarded as made or perfected until all the four defendants should have concurred in signing and delivering the Agreement " C." It is quite apparent that the two defendants who negotiated and assisted in formulating Agreement " C " were unwilling to make any agreement by themselves which the other defendants would not concur in. These two defendants were careful not only to require the other two defendants to join in the agreement, but also to have the approval thereof of the beneficiaries under the will of their testator, and to this end application was made to the court in hehalf of one of the beneficiaries, who was of unsound mind, for leave to give such approval and ratify such agreement, which the court granted. An examination. of the evidence given by the several witnesses, and the correspondence relating to the matter which appears in the record, leaves no doubt in our minds as to the correctness of the decision by the trial court, that the negotiations between the two plaintiffs aiid the two defendants never ripened into a perfected agreement. . Certainly the other two defendants never concurred in any such agreement by parol or otherwise, and never signed the Agreement " C," and this agreement was concededly never delivered.
Upon this branch of the case we fully concur with the decision of the trial court. We cannot, however, agree with the conclusion arrived at by the trial court that the whole complaint should he dismissed upon the merits, upon the theory that the action was one to compel specific performance of the Agreement " C " alone, and that, failing to establish the right to that relief, the court could not consider, investigate or pass upon the other relief asked for by the plaintiffs, the settlement of the rights of the parties, under subdivision 15 of the original partnership Agreement "A," and the enforcement of the performance thereof by. the defendants.
This question was fairly presented on the trial, and it seems to us that the plaintiffs' position with reference to it is unanswerable. .
At the close of the plaintiffs' evidence the defendants asked the court to compel the plaintiffs to state whether they relied upon more than one cause of action, and if so that they be compelled to elect upon which one they relied and asked for judgment. The plaintiffs stated that they relied upon the facts alleged in the complaint, and claimed the right to either form of relief asked for in the complaint which the court should hold the facts proved entitled them to. They claimed the right to have specific performance of the Agreement " C," or, failing in that, then specific performance of subdivision 15 of Agreement " A." The court, however, held that but one cause of action was stated and that was to enforce the Agreer ment " C," and plaintiffs duly excepted. Thereupon the evidence on the part of the defendants was given, and the decision of the court was made which dismissed the complaint on the merits on the grounds solely that the Agreement " C " was never made, executed or delivered, and if so made would not be enforced in equity.'
The decision was' excepted to by the plaintiffs as a whole, and as to each part separately. The complaint, after setting forth Agreements " A " and " B," alleged the notice by defendants under subdivision 14. of Agreement " A " to terminate the co-partnership at the end of the first five years, and notice by plaintiffs that under subdivision 15 of Agreement "A" they claimed the right to purchase the interest of the defendants' testator in the business and assets of the firm; that thereupon an attempt was made to ascertain and agree upon the amount to be secured and paid by plaintiffs for such interest; that the plaintiffs claimed the amount as ascertained' pursuant to subdivision 15 of Agreement " A," was $609,000, and that the plaintiffs were ready and willing to pay this amount of money, and give the security therein provided for, but the defendants claimed that the amount to be so secured and paid should be much larger than $609,000. It was further alleged that the defendants expressed dissatisfaction as to the terms of payment, the rate, of. interest and the security provided for by subdivision 15 of Agreement " A," and desired to have such terms modified; and said that if such change could be made, they would consent to a reduction of the amount which they claimed the purchase price of the interest really' Was or should, be; and that thereupon the negotiations followed which the plaintiffs claimed! matured into the Agreement " O."
The complaint also alleged the refusal by defendants to carry out the terms of either Agreement " C," or of subdivision 15 of Agreement " A." The relief aslced for was the enforcement of Agree-. meiit "C," or of subdivision 15 of Agreement "A." We are. not called upon to determine whether, upon the evidence given at the trial, relief should have been afforded to the plaintiffs under sub division 15 of Agreement " A," because, while the case was being tried and before all the evidence was taken, the court held that under the pleadings no such relief could be had, and the only question, therefore, is whether the court was right in giving such effect to the pleadings. If it was not, then the case should go back for a new trial, and.the court should take all the evidence bearing upon this branch of the case, and pass upon the question upon its merits. Moreover, no question was raised that the proofs were insufficient to authorize the court to afford such relief. The only question raised was whether the relief could be had under the pleadings, and the dismissal of the complaint was put solely on this ground of defective pleadings. By virtue of the defendants' election to discontinue the co-partnership at the end of the first five years, and the plaintiffs' election to purchase the interest of defendants' testatator, the plaintiffs were entitled to a transfer of such interest upon giving the security and paying the amount of the purchase price to be determined under the provisions of subdivision 15 of Agreement " A." A controversy having arisen as to what the amount of such purchase price should be computed and fixed at under the terms of such subdivision 15,. it was competent for the parties to adjust and compromise their differences. And then, if they did not, or could not, perfect such agreement and compromise, and the defendants refused to carry out the provisions of subdivision 15 of Agreement " A," because they could not agree as to the purchase price, it was proper for plaintiffs to appeal to the court and ask it to settle the rights of the parties, and compel a compliance with the provisions of the agreement. Such was the position of the case when the court found that Agreement " O " had not been made, executed or delivered, and that no agreement by parol to the like effect had been made. Certainly 'the plaintiffs were entitled to have the other branch of the case considered by the court and the merits relating thereto passed upon. It is hardly necessary to cite any authority for this proposition. The following cases may be referred to, however, as supporting the view taken by us: Bennet v. Vade (2 Atk. 324); Colton v. Ross (2 Paige, 396); Lloyd v. Brewster (4 id. 537); New York Ice Co. v. North Western Ins. Co. (23 N. Y. 537); Barlow v. Scott (24 id. 40); Sternberger v. McGovern (56 id. 12, 21); Hall v. Hall (38 How. Pr. 97).
. Our conclusion is that the judgment should be reversed and anew trial ordered, with costs to abide event.
Van Brunt, P. J., Rumsey, Patterson and Ingraham,. JJ., concurred.
Judgment reversed, new trial ordered, costs to appellants to abide event.