Case Name: LORD et al. v. MURCHISON et al.
Court: New York Supreme Court, Appellate Division
Jurisdiction: New York
Decision Date: 1903-02-06
Citations: 80 N.Y.S. 321
Docket Number: 
Parties: LORD et al. v. MURCHISON et al.
Judges: 
Reporter: West's New York Supplement
Volume: 80
Pages: 321–327

Head Matter:
LORD et al. v. MURCHISON et al.
(Supreme Court, Appellate Division, First Department.
February 6, 1903.)
1. Contract — Consideration.
One’s aid, whereby a firm of architects gets a contract for work on a building, is sufficient consideration for the firm’s agreement to pay him part of the commissions.
2. Partnership— Accountimg — Equity Jurisdiction.
Equity will take a partnership accounting, though a dissolution is not sought, where the firm is engaged in important work, requiring time and. the service of all the partners till its completion, and the dispute is confined to whether a certain contract made by one of the partners in the firm name, stipulating for payment to a person of a percentage of the commissions on a certain job, was binding on all the partners, and, if so, how it was to be construed, and the person with whom it was made having been made a defendant by order of court
8. Appeal — Part of Judgment.
No appeal having been taken from that part of a judgment in an equity suit which awarded a money judgment to one of the parties, the claim
cnnnot be made on appeal that, as to the claim covered by that part of
. the judgment, appellant had a right to a jury trial.
McLaughlin and Laughlin, JJ., dissenting.
Appeal from special term, New York county.
Action by Austin W. Lord and another against Washington Hull. Kenneth M. Murchison, Jr., was made defendant by an order of court. From the judgment (74 N. Y. Supp. 711), defendant Hull appeals. Affirmed.
The action is in equity to obtain an accounting between partners, and an interpretation of their partnership agreement, and of a written contract entered into with the defendant Murchison in the partnership name. The latter agreement is embodied in a letter as follows:
“February 18, 1898.
“K. M. Murchison, Jr., Esq. — Dear Sir: Our proposition for the proposed
residence and mausoleum for William A. Clark, Esq., for which sketches are now being prepared in this office, is as follows: The above-mentioned work is to be done under the name of Lord, Hewlett & Hull and K. M. Murchison, Jr., associate architects. For the work on the mausoleum, 15 per cent, of the gross commissions is -to be paid to you, and 15 per cent, of the gross commission is to be paid to Horace B. Collins. For the work on the residence, 10 per cent, of the gross commission is to be paid to you; and any drafting or other work that shall be done by you under our direction in connection with either-of these contracts shall be paid for by us at a rate to be agreed upon between you and ourselves.
• “Very truly yours, Lord, Hewlett & Hull.
“Accepted.
“K. M. Murchison, Jr.”
The parties originally were Lord and Hewlett, as plaintiffs, and Hull as defendant; these three persons composing the firm of Lord, Hewlett & Hull, architects. By order of the court made after the action was brought, the defendant Murchison was brought in as a party defendant; and he thereafter appeared and served his answer, claiming the benefits of the agreement which is above set forth.
The special term, after a trial, rendered a decision determining the rights of the parties under the partnership agreement, and under the contract with Murchison, and ordered an accounting. To save a reference, the parties, by stipulation, agreed that under the terms of the decision there would be due from the defendant Hull to the plaintiffs the sum of $1,415.2,7, and from the plaintiffs and the defendant Hull to the defendant Murchison the sum of $3,000. From the judgment entered the defendant Hull appeals; but no appeal has been taken from the judgment in favor of Murchison.
Argued before VAN BRUNT, P. J., and McLAUGHLIN, PATTERSON, O’BRIEN, and LAUGHLIN, JJ.
John Henry Hull, for appellant.
J. Albert Lane, for respondents Lord and others.
Henry B. Culver, for respondent Murchison.

Opinion:
O'BRIEN, J.
The two questions which were principally contested Upon the trial, and which are again presented upon this appeal, are: First, whether this action for an accounting is maintainable, and, if :So, whether a money judgment could herein be awarded in favor of ¡Murchison; and, secondly, whether the so-called Murchison agreement is valid and binding upon the firm.
Upon this latter question, little need be added to what was said by the learned judge at special term in his opinion, wherein he pointed out the consideration which moved from Murchison to the firm, which consideration, we think, was sufficient to support the agreement.
The more serious question is the one first stated, — whether or not this action is maintainable. The general rule is that courts of equity will not sustain a copartnership suit for an accounting, except with a view to dissolve the partnership. Thus, in x Coll. Partn. (6th Ed.) § 282, it is said, "The account which a court of equity decrees between partners is usually consequent upon a dissolution, and Lord Eldon was inclined to hold that it must depend upon a dissolution." And 2 Lindl. Partn. (4th Ed.) p. 1231, refers to "the old rule" that "a decree for an account between partners will not be made, save with a view to the final determination of all questions and cross-claims between them, and to a dissolution of the partnerships." This author, however, clearly points out the relaxation of this rule, and refers to certain exceptions, the second of which he states (page 1231) to be "where the partnership is for a term of years still unexpired, and one partner has sought to exclude or expel his copartner, or to drive him to a dissolution," under which circumstances an accounting may be granted without there being a dissolution of the firm. Here the partnership was engaged in important work which required time and the service of all the partners for its completion; and unless the questions about which they disagreed, and which were serious, could in some way be adjusted consistently with the rights of the partners under their firm agreement, it was evident that, to the great detriment of all, a dissolution would result. The principal contention between them was as to the construction of their partnership agreement, as bearing upon the contract entered into with Murchison, and how far this latter agreement was binding on the .firm. The defendant Hull insisted that he was entitled to withdraw one-third of all moneys from the firm as they were received for the work on the Clark buildings, and on his copartners he cast the burden of meeting"the obligations which they believed rested on the firm under the Murchison agreement. Were this to continue, it would unsettle the business of the partners, and widen the breach between them, and in the end would enable Hull, who had access to the firm's bank account, to' withdraw his one-third in full, and place upon his two partners the burden of paying out of their share what they believed and conceded was due to Murchison. The settlement of this controversy was important, not only as affecting the liability of the firm, but also as being essential for that harmony between the parties which was necessary to enable them successfully to work together and complete their various contracts. ft must be remembered, moreover, that the dispute did not embrace all of the partnership transactions, but was confined and related solely to the difference arising over the Murchison contract; and the settlement of the dispute, and a construction of their firm agreement as bearing upon that controversy, in no way affected the rest of their partnership affairs. . We think, therefore, that this action is within the exception to the general rule that a court of equity will not take a partnership accounting, except in connection with the dissolution of the firm.
Another feature bearing upon the question of the right and jurisdiction of a court of equity to take .cognizance of the action arises from the fact that the rights of Murchison, a third party, are involved, who, excepting as to the contracts for the Clark buildings, is a stranger to the partnership. He has been made a codefendant by order of the court, not appealed from, and herein he was permitted to litigate his rights. The dispute, therefore, involving, as it did, a third party to the firm, was one which could properly be brought into equity for adjustment. Although Murchison was not originally a party, having been duly brought in and being there of right, the action is to be viewed as though he had originally been made a party. Thus considered, there was a serious difference of opinion among the partners as to whether the residence of Clark, constructed and to be constructed by the firm, was the one referred to in the Murchison agreement; Hull's contention being that,' by reason of changes in the plans due to acquisition of a larger plot of land by Mr. Clark; the present building is entirely different from the one mentioned in such agreement, and that, in connection with the present building of Clark, Murchison is entitled to no payments from the firm. The direct question, therefore, is presented as to the construction to be given the written agreement between the firm and Murchison, upon which necessarily depend the rights and duties of the partners, not only as between themselves, but as regards Murchison. In one aspect of that agreement, Murchison might be regarded as a partner, because not only is he in name and designation on the plans held out as an associate architect with the others, but, regard being had to the manner in which he was to be paid, it might well have been held that with respect to the Clark buildings he was in effect a partner with the others. It is unnecessary, however, to determine this question, or to do more than refer to the facts bearing upon the controversy for the purpose of showing that, although a dissolution was not asked for or desired, it was still competent for the court, to the end that the firm might continue, to assume jurisdiction of this one subject of difference, and, upon a construction of the agreement, determine the respective rights of the parties.
This view' which we take of the controversy we think disposes as well of the contention that in such a suit it was not proper to award a money judgment in favor of Murchison. The defendant Hull insists that, as to Murchison's claim, he was entitled to a trial by jury. As we have endeavored to point out, Murchison's relation to the firm, if not strictly that of a partner, was that of a partner quoad hoc; and, in determining his rights in an action wherein both his contract and the partnership agreement were involved, it was permissible to direct, as was done, an accounting among all the parties or partners.
We deem it unnecessary to discuss the many subsidiary questions raised, because we think that they were properly disposed of at the special term. Having concluded that it was competent for the special term to order an accounting, and there being no valid ground for assailing the lines upon which the accounting was directed, and the parties agreeing as to the sums payable under the determination of the court, it follows that the judgment entered upon the decision, and in accordance with the stipulation of the parties, is right and should be affirmed, with costs.
VAN BRUNT, P. J., and PATTERSON, J., concur. LAUGHLIN, J., dissents.