Kate H. Wakeman and Kate B. Noel, Appellants, v. Anna Somarindyck, Respondent, Impleaded with Others

Kate H. Wakeman and Kate B. Noel, Appellants, v. Anna Somarindyck, Respondent, Impleaded with Others. The title to real estate purchased for the benefit of three persons taken in the name of one of them — right of the other two to compel the third person to account — the use of the word “copartnership” in a complaint to enforce the agreement is not conclusive as to the cha/racier of the transaction. The complaint in an action, brought by the sole devisees under the will of Abram Wakeman against the heirs at law of John J. Latting and Anna Somarindyck, the devisee under the will of John W. Somarindyck, alleged that in 1875 Wakeman and Latting, being the owners of a parcel of real property which was subject to a mortgage for §15,000, “entered into an agreement of copartnership with one John W. Somarindyck, whereby it was mutually understood and agreed that the parties thereto should engage in real estate speculations, the said Wakeman and said Latting to act as attorneys and agents under the said agreement and to use their discretion and give their advice concerning the propriety of all investments, and said Somarindyck to furnish the requisite funds for such investments, the title to all of said property to be taken in the name of Somarindyck in trust for the benefit of Wakeman and Latting, and it was further understood and agreed by and between the parties thereto that said Somarindyck was to be reimbursed for his advancements in respect to all purchases, either by cash repayments or by sale, all surplus arising upon such sale, after payment of all legal interest and expenses, to be turned over to said Wakeman and Latting, and upon such reimbursement the property to be conveyed to said Wakeman and Latting. ” It further alleged that “under the terms of copartnership ” an agreement was entered into between Wakeman, Latting, Somarindyck and the mortgagee, pursuant to which an amicable action to foreclose the mortgage was brought and was prosecuted to a judgment of foreclosure and sale; that “in accordance with the said copartnership contract” Wakeman and Latting agreed with Somarindyck that upon the said foreclosure sale the property should be bought by Somarindyck for §16,000, very much less than the value thereof, but “should be held by him in trust for the said Wakeman and the said Latting as collateral security ” for the payment to Somarindyck by Wakeman and Latting of the amount expended by Somarindyck in the purchase of said property “and legal interest on said amount, and should be reconveyed to the said Abram Wakeman and the said John J. Latting, or their heirs or assigns, upon payment of said amount and interest,” and in case of non-payment thereof Somarindyck should have the right to sell said property and to retain said amount and interest, but to return the surplus, if any, to Wakeman and Latting or their heirs, assigns or devisees; that, in pursuance of such agreement, the property was sold in foreclosure and bid in by Latting' in the name of Somarindyck for §16,000 and a referee’s deed procured and recorded; that various transactions were had between Wakeman and Somarindyck, under and in pursuance of such copartnership agreement, and said Somarindyck conveyed-the property involved therein to said Wakeman, or his successors in interest, after the payment of the advances by him, with interest thereon; that, in 1880, §5,000 was paid to Somarindyck on account of his claim, being an award in condemnation proceedings instituted by a railroad company, which sum and interest should be credit.ed to plaintiffs; that in 1896 Somarindyck died, and that in 1898 the defendant Anna Somarindyck conveyed a portion of said premises and received a consideration therefor largely in excess of §16,000; that since 1878 said defendant has rented said premises, the rents of which, less the taxes and assessments, should also be credited to plaintiffs, and that said Wakeman and Latting fully performed all the covenants on their part in said copartnership agreement contained. The plaintiffs demanded judgment that the residue of the property be declared to be held by the defendant Anna Somarindyck in trust, one-half for the plaintiffs and one-half for the other defendants, and that the defendant Anna Somarindyck be directed to convey the property accordingly and to account to the plaintiffs and the other defendants. Upon an appeal from a judgment, dismissing the complaint apparently upon the ground that, as the complaint alleged the agreement between the parties to be a partnership agreement, no action could be brought thereon by the plaintiffs as devisees of Wakeman until an accounting of the partnership affairs had been had, the real estate in the meantime retaining the character of personal property, Meld, that the judgment should be reversed; That the use in the complaint of the term “ copai’tnership ” to characterize the agreement between the parties was not conclusive as to the true nature thereof; That from the terms of the agreement as set out in the complaint it was evident that John W. Somarindyck was interested in the profits only to the extent of reimbursement for the amount which he might expend in the purchase of real estate together with interest on that amount, and that this was not sufficient to constitute him a partner; That the facts set forth in the complaint, if established, were sufficient to entitle the plaintiffs to an accounting from the defendant Anna Somarindyck as trustee. Appeal by the plaintiffs, Kate H. Wakeman and another, from a judgment of the Supreme Court in favor of the defendant, Anna Somarindyck, entei'ed in the office of the clerk of the county of Queens on the 4th day of October, 1901, upon the decision of the court, rendered after a trial at the Queens County Special Term, dismissing the complaint as to" the defendant Anna Somarindyck. This is a suit to establish a trust in favor of ¡ffaintiffs in an undivided one-half of the unsold portion of certain real estate known as the Oentreville Race Course, located in Queens county. The amended complaint was dismissed at the beginning of the trial on the ground that it failed to state a cause of action. The amended complaint alleged that in 1871 Abram Wakeman and John J. Latting were seized of the Oentreville RaceCourse; that they then gave a mortgage upon said property for $15,000; that in the year 1875 “ said Wakeman and said Latting entered into an agreement of copartnership with one John W. Somarindyck whereby it was mutually' understood and agreed that the parties thereto should engage in real estate speculations, the said Wakeman and said Latting to act as attorneys and agents under the said agreement and to use their discretion and give their advice concerning the propriety of all investments, and said Somarindyck to furnish the requisite funds for such investments, the title to all of said property to be taken in the name of Somarindyck in trust for the benefit of Wakeman and Latting, and it was further understood and agreed by and between the parties thereto that said Somarindyck was to be reimbursed for his advancements in respect to all purchases, either by cash repayments or by sale, all surplus arising upon such sale, after payment of all legal interest and expenses, to be turned over to said Wakeman and Latting, and upon suck reimbursement the property to be conveyed to said Wakeman and Latting.” It was further alleged that “ under the terms of copartnership ’ above set forth an agreement was entered into by said Wakeman, Latting, Somarindyck and the mortgagee whereby a friendly action to foreclose said mortgage was brought and judgment of foreclosure entered therein and a sale of the property ordered; that “ in accordance with the said copartnership contract” Wakeman and Latting agreed with Somarindyck that upon the said foreclosure sale the property should be bought by Somarindyck for $16,000, very much less than the value thereof, but “ should be held by him in trust for the said Wakeman and the said Latting as collateral security” for the payment to Somarindyck by Wakeman and Latting of the amount expended by Somarindyck to purchase said property “ and legal interest on said amount, and should be reconveyed to the said Abram Wakeman and the said John J. Latting, or their heirs or assigns, upon payment of said amount and interest,” and in case of non-payment thereof Somarindyck should have the right to sell said property and to retain said amount and interest, but to return the surplus, if any, to Wakeman and Latting or their heirs, assigns or devisees; that, in pursuance of such agreement, the property was sold in foreclosure and bid in by Latting in the name of Somarindyck for $16,000 and a referee’s deed procured and recorded; that various transactions were had between Wakeman and Somarindyck, under and in pursuance of such copartnership agreement, and said Somarindyck conveyed the property involved therein to said Wakeman, or his successors in interest, after the payment of the advances by him, with interest thereon; that, in 1880, $5,000 was paid to Somarindyck on account of his claim, being an award in condemnation proceedings instituted by a railroad company, which sum and interest should be credited to plaintiffs ; that plaintiffs are the sole devisees under the will of said Wakeman, since deceased, and the defendants, other than Somarindyck, are the heirs at law of said Latting, since deceased; that, in 1896, said Somarindyck died, leaving a last will and testament which was duly probated, “ and by virtue of which title to the said property hereinbefore mentioned vested in Anna Somarindyck subject to the trust hereinbefore mentioned;” that in 1898 defendant Somarindyclc conveyed a portion of said premises and received a consideration therefor largely in excess of $16,000; that, since 1878, said defendant has rented said premises, the rents of which, less the taxes and assessments, should also be credited to plaintiffs, and that said Walceman and Latting fully performed all the covenants on their part in said copartnership agreement contained. The amended complaint further alleged that a demand had been made upon defendant Somarindyclc for an accounting for the difference between $16,000 and interest and the amount realized on the sale of a portion of the said property, with interest, and also for all rents and profits received, less taxes and expenditures, and also for $5,000 awarded in condemnation proceedings, with interest, and that she convey to plaintiffs an undivided one-half of the residue of said property, but defendant Somarindyclc has refused to comply with said demand. Judgment was prayed for, declaring that the residue of said property is held by defendant Somarindyclc, in trust, one-half for plaintiffs and one-half for the other defendants, directing defendant Somarindyclc to convey said property by deed accordingly and directing said defendant to account to plaintiffs and the other defendants. Henry Siegrist, Jr. \F. R. Minralh with him on the brief], for the appellants. Henry L. Brant and William G. Nieoll, for the respondent. [MAJORITY — Willard Bartlett, J.:] Willard Bartlett, J.: The learned trial judge stated no reason for the dismissal of the complaint other than that it failed to set out a cause of action. According to the appellants’ brief, however, the ground upon which he proceeded was that inasmuch as the complaint alleged the agreement between the parties to be a copartnership agreement, no action could be brought thereon by the plaintiffs as devisees of Abram Walceman until an accounting of the partnership affairs had been had, the real estate in the meantime retaining the character of personal property. This view was correct if the use of the term “ copartnership ” in the complaint is to be deemed conclusive as to the character of the contract. Where, however, as in the present case, the terms of the agreement are so fully stated as to negative the idea of a copartnership, it seems to me that the use of the phrase may he disregarded and that the sufficiency of the complaint should be determined by a consideration of the true nature of the agreement itself, irrespective of the adjective by which the pleader has mistakenly characterized it. An examination of the complaint shows that the agreement of 1875 between Abram Wakeman and John J. Latting on the one side, and John W. Somarindyck on the other, did not constitute them partners at all. Somarindyck was only interested in the profits to the extent of reimbursement from Wakeman and Latting of the amount which he might expend in the purchase of real estate, together with interest on that amount. This was not sufficient to constitute him a partner. (Cassidy v. Hall, 97 N. Y. 159, 168.) Nevertheless the contract and the transactions had thereunder, as alleged in the complaint, appear to have entitled Abram Wakeman, and to entitle the plaintiffs as his devisees, to some equitable relief, if the facts alleged shall be sustained by proper proof. (Ryan v. Dox, 34 N. Y. 307.) In the case cited the defendant had undertaken to purchase certain real estate at a foreclosure sale for the benefit of the owner of the equity of redemption, and had thus acquired the property at a price very much below its true value. Under these circumstances such purchaser was held to be a trustee of the party for whom he promised to act in buying the land, and was compelled to convey it to the party for whom he really acted upon a tender of the purchase money and interest. I am unable to see why, under the rule thus applied, the respondent in the case at bar is not compellable, upon proof of the facts set out in this amended complaint, to account as trustee to the plaintiffs in the present action. The judgment should be reversed and the plaintiffs afforded an opportunity to try their case. All concurred. Judgment reversed and new trial granted, costs to abide the final award of costs.