Case Name: William B. Franklin and George Isham Scott, Respondents, v. Joseph H. Hoadley and Joseph Leiter, Appellants, Impleaded with Cyrus Field Judson, Defendant
Court: New York Supreme Court, Appellate Division
Jurisdiction: New York
Decision Date: 1908-06-05
Citations: 126 A.D. 687
Docket Number: 
Parties: William B. Franklin and George Isham Scott, Respondents, v. Joseph H. Hoadley and Joseph Leiter, Appellants, Impleaded with Cyrus Field Judson, Defendant.
Judges: 
Reporter: Appellate Division Reports
Volume: 126
Pages: 687–691

Head Matter:
William B. Franklin and George Isham Scott, Respondents, v. Joseph H. Hoadley and Joseph Leiter, Appellants, Impleaded with Cyrus Field Judson, Defendant.
First Department,
June 5, 1908.
Evidence — proof of partnership — declaration of partner.
The declarations of one party that another is his partner are not competent to establish the partnership, nor are such declarations admissible for that purpose after prima faaie evidence of the existence of the partnership has been given. The only purpose for which they are competent is to hind the partnership when its existence is established by other evidence.
Laüghmn and Houghton, JJ., dissented in part, with opinion.
Sep abate appeals by the defendants, Joseph H. Hoadley and Joseph Leiter, from a judgment of the Supreme Court in favor of the plaintiffs, entered in the office of the clerk of the county of Hew York on the 14tli day of May, 1907, upon the verdict of a jury, and also from respective orders entered in said clerk’s office on the 14th day of May, 1907, and on the 22d day of May, 1907, denying the said defendants’ respective motions for a new trial made upon the minutes.
J. S. L'Amoreaux, for the appellant Hoadley.
Alton B. Parker [Anson McCook Beard with him on the brief], for the appellant Leiter.
Edmund L. Mooney [John A. Garver with him on the brief], for the respondents.

Opinion:
Laughlin, J.:
On a former appeal herein the majority of this court, in reversing a judgment against these same appellants, held, among other things, that where the existence of a copartnership is in issue, one partner may testify concerning the formation of the partnership, but that neither the admissions nor declarations of an alleged partner are competent evidence on the question- of the existence of the copartnership, but that after prima facie evidence of the existence of the copartnership has first been adduced such admissions and declarations in the course of the copartnership business are admissible and binding on the copartners. (Franklin v. Hoadley, 115 App. Div. 538.) Two of the justices of this court dissented upon the ground that such admissions or declarations were not admissible where the copartnership was disputed even after prima facie evidence of the existence of the copartnership had been presented. Hr. Justice Houghton, in writing the prevailing opinion, after stating the rule as above, said: " Nor is there any difficulty in the practical application of this rule. It often happens in the trial of an action that it is necessary to instruct the jury that they must first determine a particular fact before considering evidence bearing on another issue in the case, and by instructing them in a case like the present that from the evidence alinmde the partnership relation must first be determined, before considering the evidence of the acts and declarations of the proven partners, no injustice will be done and no evidence, pertinent to one issue only, will be improperly considered as bearing upon an issue to which it does not relate. The plaintiffs having mad e prima facie proof of the partnership, and legally sufficient proof of that fact to raise a fair question for the jury, the evidence of the acts and declarations of the proven partners, while engaged in the proven partnership business, came within the rule which we have stated and was competent and properly received. The declaration of Judson to the plaintiffs when he gave his order to buy stock, that Hoadley and Leiter were partners with him, and that he was buying it for the partnership, was properly received after the prima facie proof of partnership had been given, not only because it was a communication in connection with, the alleged partnership business, but as showing with whom plaintiffs contracted and to whom they gave credit. Even if there was a partnership, Judson could buy stock individually as well as for the partnership account. If the plaintiffs trusted him as an individual, being advised or knowing he was also a' partner with others, they could not hold the partnership even if it existed, and the evidence was competent at least for the purpose of showing to whom credit was given. Jndson's declaration that he was buying it for the partnership could not establish the partnership; but, if the partnership was established by other proof, the evidence was material at least in determining whether the plaintiffs dealt with the partnership or with Judson alone.. (Rogers v. Murray, 110 ÍL Y. 658.)' The case is one of magnitude, necessarily occupying much time in its trial. It is with the hope of relieving the retrial of some of its burdens that we have gone beyond giving our reasons for reversing the judgment, and have elaborated the rule respecting a large class of evidence pertinent, to the action." On the last trial our decision in this regard was not followed, and whether the omission was owing to the failure of counsel to draw the attention 'of the trial court to the points decided and the views expressed by this court on this particular question, or through the inadvertence of the trial judge, is immaterial, for in either event a new trial must be granted.
The action is brought upon the theory that these appellants and the other defendant Judson entered into a copartnership for the purpose of forming a pool for the purchase and sale of International Power Company stock. The existence of the copartnership was denied and that became the principal issue on the last as well as on the former trial. Upon the last trial, evidence of declarations made by the defendant Judson which, if true, tended to show the existence of the copartnership was received. Similar evidence given on the former trial gave rise to the discussion of this question in the opinion delivered on the former appeal. Under the decision of this court on the former appeal this evidence was properly received after the existence of the copartnership was shown by other competent evidence. The court, however, in the main charge failed to instruct the jury as suggested in our opinion with respect to the materiality and bearing of this testimony. At the close of the charge counsel for the appellant Leiter requested the court to instruct the jury as follows: " The jury cannot consider the declarations of Judson to plaintiffs or either of them, as binding upon the defendant Leiter, until the jury finds from other evidence than those declarations that a partnership existed between the three defendants on the 29th day of April, 1902." Also, that " Judson's declarations to the plaintiffs or either of them, cannot establish the existence of the partnership. The jury must first find from other evidence that a partnership existed on April 29th, 1902, between the three defendants. If you do not so find, your verdict must be in favor of defendant Leiter."
The action 'of the court on each of these requests was " Refused except as charged." The jury had received no instructions on this point. Counsel for appellant Leiter duly excepted to the refusal of the court to charge as requested. Similar requests were made by counsel for appellant Hoadley, the language of the requests being as follows : " The existence of a pool or copartnership cannot be proved by the admission or declaration of one that others are or were partners with him. Such evidence is incompetent and cannot be considered for the purpose of establishing the pool or copartnership." And, " The jury cannot consider the declarations of Judsou to plaintiffs, or either of them as binding upon the defendant Hoadley, until the jury finds from other evidence than those declarations that a partnership existed between the three defendants on the 29th day of April, 1902."
These requests were refused without any qualification and counsel for appellant Hoadley dulv excepted. The decision of this court on the former appeal entitled the appellants to have the jury instructed as requested by these requests, and the failure so to do clearly constituted prejudicial error.
It follows that the judgment and orders should be reversed and a new trial granted, with separate bills of costs and disbursements to the appellants to abide the event.
Houghton, J., concurred.