REDFIELD against MIDDLETON

REDFIELD against MIDDLETON. New York Superior Court ; General Term, June, 1863. Pleading.—Cause of Action foe Accounting. Where the complaint alleged that the plaintiff and defendant had made an oral agreement to carry on the business of publishing books, to which the plaintiff was to contribute contracts with authors, &c., and was to give his personal attention for several years at a salary, and afterwards to have an interest in the business, and further alleged that under such agreement the defendant had become possessed of the stereotype plates of certain books, the right to, publish which, upon terms set forth in the complaint, was contributed by the plaintiff; but that the defendant refused to perform the agreement or to form the business connection contemplated, although the plaintiff had been at all times ready and willing, and had offered to perform; and that the defendant was proceeding'to publish such books in his own name, denying that the plaintiff had any interest therein, and refusing to surrender the plates and books, though the plaintiff had demanded them, and offered to indemnify him;—Held, that these facts were sufficient to constitute a cause of action.for a surrender of the hooks and plates, and an accounting. The former decision in this case (Redfield v. Middleton, 7 Bosw., 649) distinguished. Appeal from an order overruling a demurrer to the amended, complaint in this action. A former decision upon the original complaint is reported in 1 Bosw., 649. Tire plaintiff subsequently served an amended complaint, the allegations of which are sufficiently stated in the opinions. The cause was heard upon the demurrer, before Mr. Justice White, at a special term in December, 1862, who sustained the complaint, delivering the following opinion: White, J. The defendant demurs to the amended complaint in this action, on the ground that it does not set forth facts sufficient to constitute a cause of action. All the statements of the complaint are to be taken as true, and they are in substance these : The plaintiff had formerly carried on the business of publishing, and had mortgaged his stock and material in that business to Bangs Brothers & Co., who took possession of it under the mortgage, and placed it in the hands of a trustee for sale. During this condition of things, the defendant and plaintiff made an oral agreement in January, 1860, by the terms of which the defendant was to carry on the business of publishing as successor of the plaintiff, so soon as he (defendant) could purchase said stock and material. The plaintiff was to contribute to the business his contracts with authors, his influence with them and others, his experience and knowledge as a publisher, and the good-will generally of the business formerly carried on by him. lie was also to gi ve his time and personal attendance to the business ; and for this he was to receive a salary, the amount of which was to be determined at a future time; and on January 1, 1864, he or his appointee was to receive from the defendant, and become absolute owner of, oné-half of the then business, with its accumulated stock and assets of every kind, subject, however, to one-half of the then liabilities of the concern. From January to June, 1860, the plaintiff received from England, from R. C. Trench, advance sheets of two of his (Trench’s) works, for the purpose of having an American edition of each issued simultaneously with the British publication, and under an agreement between the plaintiff and Trench that the plaintiff should stereotype and publish the work, and that Trench should receive ten per cent, of the retail price of the-books, and that the plaintiff have all the remainder, with the stereotype plates. The plaintiff ordered the stereotype plates to be made in his (the plaintiff’s) name and upon his own credit. About the time when the stereotype plates were completed, the defendant effected the purchase of the old stock and material formerly belonging to the plaintiff, and entered upon the publishing business as successor of the plaintiff; and the plaintiff thereupon, in pursuance of and relying upon the good faith of the defendant and the agreement between them, permitted the. defendant to take a bill of sale of the stereotype plates from the founder, and to give his note to the founder for their cost, being §445. The defendant immediately caused an edition of each work to be printed, and advertised them for publication by himself, as successor of the plaintiff. The plaintiff then requested the defendant to have the oral agreement between them reduced to writing; but he refused to do so, and repudiated the agreement in all its parts, stating that he would not fulfil any stipulation of it, except that relating to the payment of a salary to the plaintiff; and denied that the plaintiff or Trench had any right, title, or interest in or to said plates, or editions, or the profits thereof. The share of the business and its assets which the plaintiff was to have in January, 1864, was to him the most valuable of the consideration of said agreement. The plaintiff could and would have paid for the stereotype plates when they were completed if it had not.been for his confidence in the defendant’s good faith, and his reliance upon the agreement between them. The plaintiff, upon this repudiation by the defendant of their contract, obtained possession of the defendant’s note given by him for the plates, and tendered it to the defendant, and alsd offered to reimburse him all the expenses he had incurred about said stereotype plates and the printing of said works, and offered to idemnify him fully against any liabilities he had incurred in the business ; and he demanded from the defendant the advance sheets and plates and the printed books. With this demand the defendant refused to' comply. The plaintiff now brings this suit, and asks judgment that the defendant be required to deliver the plates and books to him, upon his reimbursing the defendant all his expenses, and fully indemnifying him against all liabilities upon account of said plates or works. He asks, also, for an account of any sales made of the books, and that the proceeds be paid over to him by the defendant; he also alleges that the defendant has little or no property, and is pecuniarily irresponsible, and that the works referred to are valuable, and will find a ready and profitable sale; and he further avers that he has tendered performance, and is ready, fully, to perform the contract upon his part. I think these facts constitute a sufficient cause of action They allege, in effect, that the defendant, an insolvent, under the pretext of forming a regular permanent business connection with the plaintiff, of considerable value to the plaintiff, obtained from'him, as part of his contribution to the proposed joint undertaking, the privilege of advance sheets, and- means of publishing, two works, of much profit to the publisher ; and , having obtained them, he published the works and refused to form the connection, or quasi partnership, upon the promise of forming which, he obtained from plaintiff, the property and interests in question. This is so fraudulent upon its face, ■ that so long as the property wrongfully acquired existed, and was in its nature capable of recaption and delivery, I can see no reason why it could not be forthwith retaken by the plaintiff in an action of replevin. But as the property or fights acquired by the defendant in this case have undergone a change in their conditions, or been incorporated with other rights or interests, since the plaintiff parked with their control, the present application to the equitable powers of the court is the proper form of proceeding, and the plaintiff should have all the relief which the power of the court can give. The fact that the contract w'as not in writing, and therefore void, as being within the Statute of Frauds, does not apply here; because the action is not brought to enforce the performance of any contract, but simply upon the averment that the defendant, under a false promise, or pretence, that he would make a certain contract with the plaintiff, obtained the plaintiff’s property; and now, while refusing to, and declaring that he will not fulfil that false promise, fraudulently retains and uses the property and interests which he had acquired by means of making it, and refuses to return it, or to account respecting it, although requested to do so by the plaintiff. The suggestion, that the plaintiff should not sue the defendant until January, 1864, but should continue to serve him in the mean while, and allow him to enjoy the interest which the plaintiff had contributed to the business, and take the risk of a recovery against him at that time for his breach of contract, is neither sound nor reasonable. The plaintiff could be no more bound to go on and give his time, and services, and means, to the defendant for four years, when the defendant notified him beforehand, that he, defendant, would only pay him half price, or no price at all, for such time, and services, and means, than a merchant would be bound to continue to deliver merchandise upon a contract running for four years, to an insolvent man, who, upon the receipt of the first parcel, should refuse to pay for it, and should declare that he never would pay any thing, or, at best, but a very small fraction of the value or contract. price, of whatever the merchant might thereafter deliver to him. Such a frank, freebooting purchase would receive but slight comfort or encouragement from any court of justice, whose process the despoiled merchant might demand for the recovery, in specie, of the first parcel which his unprofitable customer had succeeded in fraudulently extracting from him. I take this view of the case only upon the assumption, which a demurrer always requires, that all the material allegations of the pleading demurred to, are true. Upon an answer taking issue upon those allegations, the case may prove to be a very different one. But as it stands upon the demurrer, I must order judgment for the plaintiff, with costs; but with liberty to the defendant to answer in ten days after notice of the order to be entered upon this decision, upon payment of the costs of the demurrer to be taxed. From the order entered on this decision, the defendant now appealed. F. F. Bangs, for the defendant, appellant R. Wynkoop, for the plaintiff, respondent. I. The oral agreement was void under the statute; because, by its terms, it was not to be performed within one year from the making thereof. But this is not an action to compel performance, nor is this an action for damages for breach of that agreement. II. The agreement being void (unless reduced to writing, . and defendant refusing this), there would be no force in the -suggestion, that plaintiff should have waited till January 1, 1864. He could not then enforce specific performance, nor recover damages for breach of contract. III. This is an action to recover property (or its proceeds), which has been obtained by' defendant from plaintiff by false pretences, without consideration, and by a promise which defendant now repudiates, and which cannot be enforced. - IY. An injunction and a receiver were asked for, and should have been granted; because the defendant was irresponsible, and the plaintiff’s rights were in peril. Y. The advance sheets were valuable only because of their . exclusiveness. That value passed to the stereotype plates, and thence to the books printed therefrom. Defendant possessed himself of that value by fraud. By means of his promise to enter into business with plaintiff, he induced plaintiff to allow him possession of the plates; having obtained possession, he repudiated his promise. YI. The plaintiff has been ever willing, ready, and able to perform his part of such oral agreement. VII. Plaintiff’s demand of possession was sufficient. VIII. Plaintiff is now entitled to judgment, that the defendant account, and that he pay over to plaintiff .all the proceeds of sales of said hooks, over and above the actual cost Of the manufacture of the same, and of the stereotype plates; and that he deli ver to plaintiff possession of said plates, and the unsold books and sheets; and to further judgment, that plaintiff is entitled to injunction and receivership. [MAJORITY — By the Court.—Bosworth, Ch. J.] By the Court.—Bosworth, Ch. J. According to the allegations in the complaint, all of which the defendant, by demurring, admits to be true, the plaintiff and defendant agreed, orally, in January, 1860, that the defendant should enter upon a designated business as soon as he could effect a specified purchase; that the plaintiff was to make certain contributions to such business, and give to it his time and personal attendance. The defendant was to pay him a salary, the amount of which was to be fixed subsequently, to commence at the time of such purchase ; and on the first of January, 1864, the plaintiff was to have one-half of the business in its then condition, subject to one-half of its then liabilities. That in January and June, I860, the plaintiff received from R. C. Trench the advance sheets of two works to be stereotyped and published, said Trench to have ten per cent, of the retail price of the books, and the remainder of the profits and the plates were to belong to the plaintiff. The plaintiff ordered the stereotype plates made, and relying upon his agreement with and the good faith of the defendant, allowed a bill of sale of the plates to be made to defendant for their price, $450, for which the defendant gave his note. That the defendant effected the purchase first mentioned, about this time, and although the plaintiff demanded it, the defendant refused, and still refuses to reduce the oral agreement to a written one, and alleges his right and intention to carry on the business for his own exclusive profit; that he has not only refused to sign a written agreement like the oral one, but “declared that he would not be bound by such agreement; that he would not form such a business connection with plaintiff.” That the plaintiff has at all times been ready and willing, and has offered to perform his part of said agreement, and to have the same reduced to writing and signed by the parties. That the defendant caused an edition of said works to he printed in his own name, and has advertised them for publication by himself, as successor of J. S. Redfield, and denies that the plaintiff, or Trench, has any right, title, or interest in said plates, editions, or the profits arising therefrom. That the plaintiff has offered to surrender to defendant the note he gave for the plates, and to indemnify him against loss or any expense in the premises, and has demanded of him the plates, and the sheets, and books manufactured therefrom, which the defendant refuses to surrender; that said works are valuable and salable; that defendant is a man of little or no property, and a judgment in damages against him would not be of any value, as plaintiff believes. It prays that defendant be adjudged to surrender to the plaintiff “ said plates, sheets, and books, and to account for and pay to plaintiff the proceeds of sales thereof, if any such shall have been made, upon such terms as the court may adjudge,” and also for an injunction and receiver, pendente lite. I think the complaint is rather inartificial. But it alleges, . in substance, that the defendant is possessed of certain property of the plaintiff, which came to his possession as part of plaintiff's contribution to a business, which he agreed to prosecute for the common benefit of the two, but which business he now refuses to prosecute in connection with "the plaintiff, or otherwise than for his own sole and exclusive benefit. The whole consideration for the transfer has failed, and that, too, by the Wrongful conduct of the defendant, and without fault on the part of the plaintiff. An action in damages would, •presumptively be of no value, and the plaintiff's damages arenot susceptible of computation, and the property should be restored io him, on such terms as may be just. ■ The complaint is now quite different from the one before us in this case on the appeal reported in 7 Bosw., 649, as Redfield a. Middleton. That did not allege that the plaintiff had offered to perform the oral contract on his part (Ib., 652). That did not allege that the defendant declared “he would not form such a business connection with the plaintiff,” as he had agreed to do (Ib., 654). The present complaint shows the extent of Trench’s interest, and also of the plaintiff’s interest, under the contract between them, on the advance sheets and sales of copies of the works. The present complaint shows, though not as clearly as more formal averments would express it, that the plaintiff has offered to perform all things on his part, and that the defendant refuses to have tlie business connection with the plaintiff agreed upon. The agreement would be void by the Statute of Frauds, and the defendant has given formal notice that he will not be bound by it, or act under it, or permit any thing he may do, to be deemed done under or in part execution of it. I think the complaint states a cause of action, and that the order appealed from should be affirmed. Present, Bosworth, Ch. J., Moncrief and White, JJ.