Court Opinion

ID: 5199854
Source: CourtListenerOpinion
Date Created: 2022-01-06 15:50:08.989152+00
Date Added: 2024-06-11T08:27:10.700562
License: Public Domain

Kellogg, J.:
When the defendant, the managing partner in Van Densen Bros., owning a one-fourth interest therein, became the senior partner in Crispell & Boughton, owning a one-half interest, both firms being in the same city, and each engaged in carrying on a retail drug business, he assumed the burden of proving that the former firm was not injured by his relations and its relations with the latter firm. lie, as representing the former firm, sold to himself, as representing the latter firm, the principal part of the merchandise sold by the latter. Did he obtain the best price for the goods sold, or did his greater pecuniary interest in Crispell & Boughton lead him to buy cheaply? Most of the books were destroyed by the fire. As to the few matters which may be gathered from the remaining books, it is a fair inference that he did purchase cheaply. The evidence of the defendant and his present clerk is principally relied ‘upon as tending to show that the plaintiffs’ firm suffered no injury. The defendant says he directed that the sales to Crispell & Boughton be ten per cent above the cost price, and then states that that ten per cent is not the net profit going to the partners of Van Densen Bros, for the reason that the expenses of rents, salaries and for carrying on the business must be ascertained and a proper portion deducted.
It appears that the expense account for one year was $18,352.21. Ten per cent of the total sale of Van Deusen Bros, was $12,459.48, and in answer to this question, “ And so when you sold goods to Crispell & Boughton at ten per cent gross profit that year you actually sustained a loss?” the defendant said, “Yes.” The explanation given by the defendant and his clerk of the discrepancy *364between the price at which certain articles were sold to Crispell & Boughton and to other dealers at a larger price is not satisfactory, and it is reasonably apparent that Van Deusen Bros, did not get the same prices from Crispell & Boughton that they obtained from other customers, and that the latter firm realized a profit by the defendant’s being the purchasing agent of one firm and the selling agent of the other. The defendant, in explaining the larger price paid by one dealer over that paid by Crispell & Boughton, said that that firm did not like it because Van Deusen Bros, had a retail department and in that way competed. We cannot say how other dealers felt or how much trade Van. Deusen Bros, lost from the fact that its managing partner was the senior partner in a firm organized and carried on solely for conducting a retail business.
The defendant, in his amended verified answer, contends that while he formed the partnership with Boughton it was his mother’s money; that the business was for her benefit, and that lie was only nominally the partner, having no interest therein. He offers no evidence upon that subject, but his evidence shows that he was the partner. In the absence of the books the dealings between the two firms and how much Crispell & Boughton profited by its relations with Van Deusen Bros., or how much the latter firm lost on account of the business of the second firm, rests entirely upon the credit to to be given to the defendant and his witnesses. They are interested, and their evidence is not entirely convincing. The finding of the referee is sustained by the evidence, and his conclusions are right.
An oversight was committed on the trial to the prejudice of the defendant. While he is charged with the profits received from Crispell & Boughton, and the interest thereon, no credit was given to him for the cash he had contributed to the capital of that firm. He contributed §2,200, and the interest thereon of §132 per year should be credited each year against the amount of profits he is charged with, and interest against him should be computed upon that balance. The judgment should be modified in that respect, and as so modified affirmed, without costs.
All concurred.
Judgment modified as per opinion, and as so modified unanimously affirmed, without costs.