Case Name: Bernard Wilson, Appellant, v. Robert W. Tailer, Respondent
Court: New York Supreme Court, Appellate Division
Jurisdiction: New York
Decision Date: 1896
Citations: 7 A.D. 232
Docket Number: 
Parties: Bernard Wilson, Appellant, v. Robert W. Tailer, Respondent.
Judges: 
Reporter: Appellate Division Reports
Volume: 7
Pages: 232–237

Head Matter:
Bernard Wilson, Appellant, v. Robert W. Tailer, Respondent.
Gontraet—services in erecting buildings, to be paid by a share of the net profits of sales — an exchange amounts to á sale —rights-of the parties in the increase or decrease in mlue.of the property received on the exchange.
In an action brought to secure an accounting as to transactions relating to the erection of buildings upon, and the-sale of, certain real estate, it appeared that the defendant owned four lots on: the corner of the Boulevard and West Eighty-fourth street, in New York, on each Of which he was engaged in erecting a building, and that he employed the plaintiff to- superintend the erection of the buildings, under,a contract made in 1890, by which the plaintiff was to be paid for this service one-half of the net profits upon the sale of any lot sold on or before January 1, 1895; that the Corner lot on Eighty-fourth street, upon which a building had been erected; was sold and conveyed to Charlotte R ' Lee in March, 1893, and the purchase price was paid in part by the conveyance to’ the defendant of a lot on the corner of the Boulevard and Eighty-sixth ,. street. The plaintiff asked that an accounting be had as to the cost of the lot on the corner of the Boulevard and West Eighty-fourth street and of the net profits of its sale to Charlotte R, Lee, and that an accounting be also had as to' the íot on the corner of tiie Boulevard and Eighty-sixth street, taken in exchange therefor.
Meld, that the exchange of the properties constituted a sale of the Eighty fourth street lot within the meaning of the'contract;
That the property on the ■Eighty-sixth street corner having been taken, in lieu of cash, in exchange for the property on Eighty-fourth street, in equity belonged to both parties to the contract, and that the' plaintiff should share in any increase or decrease- in the value thereof subsequent to the: exchange; and was entitled to receive his share of the amount received for this property in case it had been sold; or, in case it, had not been sold, to have his equitable rights in the property fixed and determined.
- Appeal by the .-plaintiff, Bernai’d Wilson, from a judgment of the Supreme Court in favor of the defendant for nine dollars and fifty-one cents, entered in the office of the cleric of the county of New York on the 3d day of February, 1896, upon the report of a referee, with notice of an intention to bring up for review upon such appeal an order made at the New York Specials. Term on the 29tli day of J anuary, 1896, and entered in the office of the clerk of the county of New York, granting the defendant an extra allowance.
The action was brought for an accounting as to transactions between the parties under a written contract with reference to the erection of buildings upon, and the sale of, real estate.
The contract was made June 25, 1890, and provided in brief that the defendant was the owner of real estate on the corner of Boulevard and West Eighty-fourth street, New York city, 111 feet 7 inches on the street and 102 feet on the boulevard; that he had divided the property into four lots, and was engaged in the erection of a building on each of the lots; that he had employed the plaintiff to manage and superintend the. erection of the buildings, and that it was agreed that for plaintiff’s services in procuring the materials and superintending the construction of the buildings he should be paid by defendant one-half the net profits upon the sale of any lot sold on or before January 1, 1895; that no sale should be made on or before that date without plaintiff’s approval, and if there should be a bona fide offer in writing from a responsible purchaser for any lot on or before that date, which offer was satisfactory to the plaintiff, defendant should either accept such offer and sell the lot for the amount offered, or pay to the plaintiff one-half of the net profits which would be realized if the offer, were accepted, such payment to satisfy and terminate the agreement so far as such lot was concerned; that time was of the essence of the contract, and if no offer was made as to any lot on or before such date, the contract should then terminate as to such lot, and no profits accruing therefrom should inure in any way to plaintiff’s benefit; that the term net profit meant the profits realized over and above cost of land and building and all, outlay and expenditures of every kind in the purchase, construction and management of the lot Up to the final conveyance of the same pursuant to such offer, if accepted, or up to the date of the offer if declined, with six per cent per annum interest on all such moneys from the time of disbursement, less any moneys received from rent or use of such lot; and that when • the houses should be completed they should, be rented for the best sums, obtainable, until sale.should be effected.
. The plaintiff alleged in his complaint that the corner lot, with the building erected thereon, was sold in March, 1893, and conveyed to Charlotte R. Lee; that the purchase price thereof was paid in part by the conveyance to defendant of a lot of land' on the corner of Boulevard and Eighty-sixth street, west, subject to a mortgage of $65,000, the lot being worth $120,000; that there was a net profit upon such sale, under the terms of the contract between plaintiff arid defendant, to which plaintiff was entitled to one-half'; that a bona fide offer of $120,000, which was satisfactory to plaintiff, had been made by a responsible party to the defendant for the Eighty-sixth street property, .which plaintiff had requested defendant to accept, but which defendant had' refused to accept, and, if the offer had been accepted and the property conveyed, the. plaintiff would have been entitled to a net profit under the agreement,- and the defendant had refused to pay such net profit. Upon this'state of facts alleged, plaintiff asked that an accounting be had as to the cost under the contract of the Eighty-fourth street lot, and the net profit of the sale to Mrs. Lee, and that a similar accounting be had as to the Eighty-sixth, street property, taken in payment for the Eighty-fourth street lot, and that the sum to which tlm plaintiff was entitled -be'/ ascertained, and that he have judgment therefor.. • W /
The .defendant, by his answer, denied that the Eighty-fourth street lot was .sold, but alleged that it was exchanged for the Eighty-sixth street property, and further alleged that the Eighty-sixth street property was subject to a mortgage of $75,000 of which $10,000 was paid off by defendant, thus leaving the mortgage. $65,000, and that this property, subject" to the $75,000 mortgage, was all that he received for the Eighty-fourth street lot, and that he paid Mrs. Lee on the exchange $2,660 ^besides. He also denied that, upon the exchange, any net profit arose to which plaintiff was entitled to a share; and he denied that a bona fide offer of $120,000 from a responsible party had been made for the -Eighty-sixth street property, and alleged that no sale of' the Eighty-fourth street property had been made on, or jDi'ior to, .January 1, 1895, so as to entitle plaintiff to any share of the net profit whatever; and he alleged a counterclaim for $1,500, moneys paid by him to the plaintiff, under the contract. There was a reply to the counterclaim.
The referee, in deciding the case, held that the exchange of properties, in view of the terms of the contract and the circumstances disclosed by the evidence, amounted to a sale of the Eighty-fourth street lot, and thereupon he took an accounting as to the net cost of the Eighty-fourth street house, including all the matters under the contract, and allowing for rents received therefor, and fixed the net cost at $95,081.56. He found that the lot was covered by a mortgage of $60,000, leaving a balance of $15,081.56, which had been paid by defendant. He also found that he received for the Eighty-fourth street lot, as so incumbered, the Eighty-sixth street property; that this Eighty-sixth street property was worth $93,500, and was incumbered by a mortgage for $75,000, and, therefore, was worth, subject to the mortgage, $18,500, and after deducting from this amount the $15,081.56 above, there remained in his hands as net profits of the sale $3,418.44; that plaintiff’s one-half of this was $1,709.22.
The referee allowed.the defendant’s counterclaim, with interest, at $1,717.30, and thus found a balance due defendant of $8.08, and adding interest, $1.43, ordered judgment for $9.51. And from this judgment this appeal is taken.
Gratz Nathan, for the appellant.
Henry L. Burnett, for the respondent.

Opinion:
Williams, J.:
We agree with the learned referee that the exchange of the Eighty-fourth street lot for the Eighty-sixth street property amounted to a sale of the Eighty-fourth street lot under the terms of the contract between plaintiff and defendant, and that the defendant received for the Eighty-fourth street lot on such sale the Eighty-sixth street property; but it seems to us that the referee erred in taking the accounting upon the theory he did, that is, by charging the defendant upon such accounting with the value of the Eighty-sixth street property at the time of the transfer or sale.
The Eighty-fourth street lot was sold, not for cash, but for the Eighty-sixth street property. The property received' was the pur chase price. It was to be accounted for. It belonged tti both parties/ The legal title was taken in defendant's name, but equitably the plaintiff was entitled, to the undivided one-half thereof, subject to the payment or deduction therefrom of the cost of the Eighty-fourth street lot, under the terms of the contract.
The contract did not, in express terms, provide for any sale of the Eighty-fourth street property by way of the exchange thereof .for other property, and no such sale could have -been - made except by agreement of thé parties. They did agree to it, however, and the evidence shows that the fair intendment of the parties was that the plaintiff should have an interest in the property received therefor, the Eighty-sixth, street property.
The plaintiff testified that he had several interviews with 'the defendant at the time they were making the trade for the Eighty-sixth street property, and that the talk was that he, plaintiff, Was to have one-half of the profit when the Eighty-sixth street property was sold; that about the time the trade was made they had a talk, in which he, plaintiff, wanted his name in the deed of the Eighty-sixth street property, and defendant said no, but whenever the property was sold he, plaintiff, would be entitled to, and would get his one-half ; and that he, plaintiff, after that tried to procure a purchaser for the property.
Defendant did not deny the 'conversation above testified to by plaintiff, but he did testify that he did not remember the conversation referred to by plaintiff about the time the trade was made, except that he thought plaintiff did then make the remark that he ought to have a deed of one-half of the Eighty-sixth- street property.
The Eighty-sixth street property, as the purchase price of the Eighty-fourth street lot, stood in the place of cash,, which would have belonged to both parties 'if' cash had been received. Out of cash received, on a cash sale, the cost of the Eightytiourth street lot would first have been paid, and the balance would have been divided equally between the parties. The property received, instead of cash, stood in the same position. It was to be treated the same as the cash would have been if cash had been received. It was not real .estate held under the contract, and to be treated as real estate under the -contract,- the absolute title to which would vest in the defendant, if not sold prior to January, 1895, divested of any equitable interest in the plaintiff. It was real estate in which the plaintiff had an interest so long as it remained undisposed of, and plaintiff was entitled to have his interest determined and awarded to him, even though it was not disposed of until after January 1, 1895. The defendant had no right to the absolute title to the property by allowing therefor what it was worth at the time it was received in payment for the Eighty-fourth street lot. The plaintiff had no.right to charge the defendant with the value thereof at "that time. If the property thereafter increased in value, the plaintiff was entitled to his share, of the increase. If it decreased in value, the plaintiff was obliged to share in the loss by such decrease, In other words, the Eighty-sixth street property equitably belonged to both parties, the same as. though the legal title were vested in both, instead of in defendant, alone.
As a necessary result of these views, it follows that the plaintiff was entitled to have what he asked for in his complaint, an accounting as to the Eighty-sixth property and the amount received therefor, if sold, and, if not sold, to have his equitable rights therein adjudged and determined. The learned referee denied him this, relief, and in this he erred. The decision being, therefore, erroneous, the judgment should be modified by ordering a reference to-take an accounting as to the Eighty-sixth street property in accordance with the views herein expressed.
We do not think a full retrial of the case is necessary, but the judgment appealed from should be modified by providing for an order of reference to take an accounting as to the amount received by the defendant for the Eighty-sixth street property, to the end that, on the coming in of the report of the referee, final judgment may be rendered for the'relief to which the plaintiff is thus entitled. As so modified the judgment should be affirmed, without costs of this appeal to either party.
Van Brunt, P. J., Patterson, O'Brien and Ingraham, JJ., concurred.
Judgment modified as directed in opinion, arid affirmed as modified, without costs.