Case Name: Henry A. Cæsar et al., Respondents, v. Jacob Kulla, Appellant
Court: New York Supreme Court, Appellate Term
Jurisdiction: New York
Decision Date: 1905-03
Citations: 46 Misc. 587
Docket Number: 
Parties: Henry A. Cæsar et al., Respondents, v. Jacob Kulla, Appellant.
Judges: 
Reporter: New York Miscellaneous Reports
Volume: 46
Pages: 587–588

Head Matter:
Henry A. Cæsar et al., Respondents, v. Jacob Kulla, Appellant.
(Supreme Court, Appellate Term,
March, 1905.)
Partnérship— Dissolution — Indemnity against firm debts — When creditor may not enforce.
An agreement by a person having no interest in a firm but who furnished the money to buy out one partner’s interest for the other, to relieve the retiring partner against firm debts, cannot be enforced by a firm creditor.
Appeal by the defendant from a judgment rendered in favor of the plaintiffs in the Municipal Cburt of the city of Hew York, seventh district, borough of Manhattan.
Goldfogle, Cohn & Lind, for appellant.
Morris J. Hirsch, for respondents.

Opinion:
Scott, J.
The plaintiffs were creditors of a copartnership composed of Jacob Kollenberg and Joseph Kulla, a brother of defendant. Differences arose between the partners and they both consulted defendant, who was not a member of the firm or interested in any way in its business. It was suggested that Kollenberg should sell out his interest in the firm and retire from it, which he agreed to do upon receipt of $300. The defendant thereupon gave his brother a check for this sum, which the brother indorsed over to Kollenberg, and thereupon a disssolution agreement was entered into between Joseph Kulla and Kollenberg, whereby the latter assigned and transferred to Joseph Kulla all right, title and interest in the copartnership assets, and Joseph Kulla agreed to assume and pay all the copartnership debts. Jacob Kulla was not a party to this agreement. Although the evidence is somewhat confused, and in certain particulars conflicting, the foregoing facts may he said to be certainly established. The plaintiff's claim rests upon Kollenberg's assertion that Joseph Kulla agreed with him, that if lie (Kollenberg) would take $300 for his interest in the firm, defendant would pay the firm debts. There is no evidence whatever that Jacob Kulla received any of the assets of the firm, or any of the proceeds thereof except' that after the dissolution Joseph Kulla paid a part of his indebtedness to his brother out of the proceeds of the assets which he was able to sell. The facts thus established bring the present case precisely within the facts of Berry v. Brown, 107 N. Y. 659, wherein it was held that such an agreement as the defendant is alleged to have made, taking the version most favorable to plaintiffs, which is supported by credible evidence, was merely an agreement for the benefit of the retiring partner to relieve him from, and indemnify him against, the debts of the firm, with no intention to secure any benefit to the firm creditors, and since no sale was made to the defendant, and no consideration passed to him, the plaintiffs, strangers to the agreement, could not enforce it. It was further held that such an agreement was void under the Statute of Frauds.
The judgment must be reversed and a new trial granted, with costs to appellant to abide the event.
O'Gorman and Blanchard, JJ., concur.
Judgment reversed and new trial granted, with costs to appellant to abide the event.