Beudel v. Hettrick

Curtis, J. The action is to recover for work, labor and materials. The answer states that the work was performed by the plaintiff and -one Wagner, composing the firm of Beudel & Wagner; that the latter should have been joined as a plaintiff, and also that $300 had been paid on account of the claim to the firm, and that what remains due for the work was due to the firm, and not to the plaintiff. The plaintiff testified on the trial that the arrangement to do the work for the defendant was made by Wagner, on plaintiff’s account; that Wagner was then working in his employ; that the work commenced in March, 1872; that they' last worked at it, and that it was finished, about the end of June, and amounts to $505 and some cents. The plaintiff also put in evidence an agreement made between him and Wagner, dated April 15, 1872, containing the following provisions : First. The said Beudel agrees to take the said Wagner into his employ in the carpentering and building business for the term of one year from date. Second. The business to be carried on under the firm name of Beudel & Wagner. IMrd. Wagner is to have no interest in the business, or in the property, assets, accounts or claims belonging to the same. Fowrth. And the said Beudel agrees to pay-the said Wagner for his services wages at the rate of a sum equal to one-half of the net profits of said firm, and said wages are not to be paid, and are not to become due, until the said profits are first collected by said Beudel. [203] A bill in the firm name of Beudel & Wagner was made out for this work, dated Hay 31, 1872. The plaintiff testifies that the day Wagner left the bill with defendant he went to defendant, who told him that he held a note for $300 against Wagner, made before plaintiff ever knew Wagner, and that he wanted to deduct it from •the bill. The plaintiff told defendant he would never agree to such a settlement; that he had to pay everything, and was responsible for everything, and that a day or two after he showed the defendant this agreement between himself and Beudel. The business card was Beudel & Wagner. The defendant testified he employed only Wagner to do the work; that he paid him $200 on account during its progress, $100 each time; and that before he commenced the work Wagner agreed to let $100 that the defendant had loaned him previously apply upon the work. He had heard when he employed Wagner to do the work that he had a partner, and he thought the receipt for the payments to Wagner on account were made out in the firm name. The receipts were not produced on the trial, or the note. At the conclusion of the testimony the defendant’s counsel moved to dismiss the complaint on the grounds: First. That the plaintiff has proved no cause of action. Second. That it appeared by the evidence and by the bill-head and card that the work done for the defendant was done under a contract between one Wagner and the defendant, and that the plaintiff had no interest therein, except as a copartner of said Wagner, who was not joined as a party plaintiff herein. Third. That payments had been made by the defendant to Wagner, which, under the circumstances, were operative against Wagner, either individually or as a copartner with the plaintiff, and that whatever relation exists in fact between Wagner and the plaintiff, so far as the defendant was concerned, they were to be considered copartners. Fourth. That the private arrangement between the plain [204] tiff and Wagner could not affect the defendant, as he had no notice thereof until after the transactions complained of, and until after he had paid the $300, as sworn to by him. The court granted the motion and the plaintiff excepted. The evidence fails to show that the plaintiff and Wagner were actual partners; a participation in the profits of a business by a party as a compensation for his labor or services, without having any other interest or right in it, does not make him a partner (Conklin agt. Barton, 43 Barb., 435; Ogden agt. Astor, 4 Sand., 311). It is clear, however, that Wagner was a nominal partner of the plaintiff, and the first question to be considered is, in whose name the action should have been brought. In the case of Kell agt. Namby (10 Barn. & Cres., 20), it was held that where an attorney carries on business under the firm of “ A. & Son,” and the son was not in fact a partner, but acts as a clerk to his father, with a salary, that the attorney A. might maintain an action in his own name alone for business done as an attorney. The present case seems to be analogous, and the tendency of the provision of the 111th section of the Code, directing every action to be prosecuted in the name of the real party in interest, apparently leaves little room for doubting the correctness of the proceeding in bringing this suit in the plaintiff’s name only. It appears to me that the action should have been brought as it was, in the name of the plaintiff, Beudel, alone, the real party in interest. Wagner, by holding himself out as a partner, became liable to third persons who may have trusted Beudel & Wagner as a firm, but, as between himself and the plaintiff, Beudell, his actual rights and position are defined by the agreement, which declares that he is to have no interest in the business, property or assets of the nominal firm; as no wrong is worked by this, it is the duty of the court to give effect to it, and after notice of this agreement the defendant was bound to rec.og [205] nize its provisions, and, so far as he was concerned, they were no longer to be considered as copartners. In this view of the case the plaintiff was entitled to a verdict, at least for all that portion of the claim remaining unpaid over the $300. There is conflicting evidence as to whether this sum of $300, or only $100 of it, was paid by the defendant to Wagner upon the pre-existing individual indebtedness of Wagner to the defendant.. However that may be, a partner cannot release a debt due to the firm, even during copartnership, in consideration of a debt due from him individually (Gram agt. Cadwell, 5 Cow., 489). A release by Wagner of a firm debt, or any part of it, due by the defendant, in consideration of a debt due from him, Wagner, individually to the defendant, is void, and fails to sustain the defense pleaded in the answer, that the defendant paid to the firm $300 on account of the work and services, and is entitled to credit therefor. If, in the conflict of evidence, the jury had found that any part of the $300 had been paid by the defendant to the firm,'as alleged in the answer, such finding would be sustained by evidence that such payment was made to him as one of the firm, and before notice was given the defendant of Wagner’s actual position in respect to it under the agreement. The facts in this case were so contested and conflicting in respect to Wagner’s employment by defendant, and in respect to the alleged payments on account, that they should have been left to the jury to pass upon. As to the position taken upon the argument, but not at the trial, that some portion of this work was done before the making of the agreement, I do not very well see how the question can now be raised by the defendant, in view of the allegations of his answer, that the work was done by the firm, and that whatever is due of the money is due to the firm. The dismissal of the complaint should be set aside, and a new trial granted, with costs to abide the event. Monell and Freedman, JJ., concurred.