Lurie v. Pinanski

• Decision Date: 17 June 1913
• Citation: 102 N.E. 629,215 Mass. 229
• Parties: LURIE v. PINANSKI.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

215 Mass. 229

102 N.E. 629

LURIE v. PINANSKI.

Supreme Judicial Court of Massachusetts, Suffolk.

June 17, 1913

SYLLABUS

The following is the master's report:

'This is a suit brought in equity to secure by an accounting the payment of certain sums of money to which the plaintiff says he is entitled on account of his connection with the defendant as a partner.

'The plaintiff, defendant and one Silverman, as partners engaged in the real estate business in Boston in 1890 or 1891. They took leases of several parcels of real estate and acquired the fee in others, the management of the several properties being divided among them by mutual agreement. In October, 1893, they took from one, Brooks, a lease of certain premises on Prince and Salem streets Boston, which will be designated in this report as the Brooks estate. This lease was for a term of ten years from November 1, 1893, with an extension of three years terminating November 1, 1906, and for a short time the plaintiff had charge of the premises thereby demised. The three partners lost confidence in one another and at some time which was not definitely fixed by the evidence--their general real estate business was disposed of.

'A paper which had been referred to by the defendant as a formal dissolution of the partnership, when produced, proved to be an agreement, dated December 19, 1894, recognizing the partnership as a going concern, and providing that the defendant should give bond to the other two members of the firm, and collect all rents accruing to the firm until all its existing liabilities should be paid, when the management of the various properties was again to be divided among the three.

'In December, 1895, the plaintiff once more took charge of the Brooks estate, collected the rents and paid the charges until December 1, 1902. In the meantime all other partnership property appears to have been disposed of, and the defendant had severed his connection with the other two except in relation to said Brooks estate. The plaintiff and Silverman continued in business together two or three years longer and then had trouble and separated. So far as the Brooks estate was concerned, until the termination of said lease, the plaintiff, defendant and Silverman continued to hold and manage it as partners, sharing all losses and expenses, and dividing the net profits equally. The plaintiff, after managing said estate for about seven years, had in his hands December 1, 1902, the sum of $300, which he insisted upon keeping. The defendant and Silverman claimed this money was the property of the firm, and should either be divided among the three equally or be applied to the payment of taxes assessed upon the leased premises for the year 1902. It was finally agreed that the plaintiff should retain as his own the $300 which he was holding; that the defendant should take charge of said Brooks estate and collect the rents for the benefit of himself and Silverman until each should have an equal sum, after which the net rents should again be divided equally among the three lessees, and this arrangement was carried out, the defendant retaining the management of said premises while the lease was in force.

'In the course of ten months after December 1, 1902, he had collected for himself and Silverman the same amount which the plaintiff had retained and thereafter he paid the plaintiff his equal share of the net rents.

'It was customary for the plaintiff and Silverman to meet the defendant at his office to examine the accounts, to consult about the management of the property, and to receive their respective shares of the net rents. Early in 1904 one Cohen was injured on the premises, and brought suit against the lessor, Brooks. Said lease contained the provision that the lessees should save the lessor harmless from all damages on account of injuries sustained on the premises, and his attorney at once called upon them to defend the suit.

'After some negotiations, a settlement was arranged between Cohen and the insurance liability company which had insured the lessees. Cohen agreed to settle for $600. The liability insurance company offered to pay one-half of this sum called upon the lessor to advance an equal amount, but the latter through his attorney notified the lessees that this liability was wholly theirs, and orally and by letters addressed to each of them individually urged them to settle said suit by paying $100 apiece, and these efforts were continued during a period of several months.

'The matter of a renewal or extension of said lease was discussed, and through his attorney the lessor made known to the lessees that if they would settle the Cohen suit, paying each his proportionate share, he would grant them a new lease of the premises upon the same terms or would extend the old lease for a term of years. This proposal was made repeatedly by said attorney to each of the lessees both orally and by letters. The defendant from the outset had shown a willingness to pay his share of the Cohen damages, while the plaintiff and Silverman for some time objected on the ground that they were insured, but finally the lessees informed said attorney that they would settle the Cohen matter in the manner proposed by paying $100 apiece, upon the condition that they should have an extension of their lease. The plaintiff and Silverman directed the defendant to take their respective shares of said damages out of the net rents of the Brooks estate. On or about January 30, 1905, the defendant for the purpose of settling the Cohen suit paid the lessor $300 by giving him his check for $100 and four notes of $50 each signed by him personally, and received from the lessor either directly the same day, or the next day by mail, a paper of which the following is a copy:

"Cambridge, Jan. 30th, 1905.----

"Received of Mr. Nathan Pinanski the sum of $300, in cash and notes with which to settle damage claim now pending in court against estate cor. Salem and Prince Sts., Boston, which estate having been under lease from Sumner J. Brooks to Messrs. Pinanski, Silverman and Lurie, for a term of years and which will expire Nov. 1st, 1906.

"In consequence of Mr. Nathan Pinanski having paid me the sum of $300, I, Sumner J. Brooks, do hereby promise to lease the above named estate to the said Nathan Pinanski individually for the term of five years from Nov. 1st, 1906, or on the expiration of the before named lease. The lease to Mr. Nathan Pinanski shall be worded the same and in fact be an exact copy of the lease given to Messrs. Pinanski, Silverman and Lurie, except wherein some particular change may be mutually desired. Sumner J. Brooks.'

'The defendant continued dividing the net rents of the Brooks estate with the plaintiff and Silverman monthly until October 15, 1905. All rents accruing after that date until the termination of said lease November 1, 1906, he retained in his own hands for the purpose of reimbursing himself for the $300 which he had paid on the account of the joint liability of the three lessees in the Cohen matter, and he notified the plaintiff and Silverman of his intention to do this, and it was done with their full knowledge and consent. After November 1, 1906, assuming that he alone was interested as lessee in said Brooks estate, the defendant kept no account of receipts or disbursements in connection therewith, and applied all of the net rents to his own uses.

'The lessor died February 17, 1907, and in the summer of 1907 his son, the owner of said Brooks estate, offered the same for sale at the price of $42,000, told the defendant he could have it at that price, and also notified other real estate brokers. In August, 1907, the plaintiff procured a customer for the estate at the price asked, and received as his share of the commission on such sale $310. The defendant thereupon asserted his rights under the option for a new lease given him by the lessor January 30, 1905, as above set forth, and to satisfy his claims and to procure the surrender of said option the owner of said Brooks estate then paid him $2,000. Shortly afterwards the defendant paid Silverman $600 to satisfy all claims which the latter had against him on account of said Brooks estate. Later the plaintiff demanded an accounting and settlement with the defendant, and, having failed in an attempt to have their differences submitted to arbitration, began the present proceedings.

'The foregoing I find as a statement of facts upon all the evidence in the case.

'The plaintiff contended that said Brooks estate was leased to the defendant, Silverman, and himself as partners, and that as partners they continued to hold it while the lease remained in force; that nearly two years before its termination, the defendant, one of the firm, procured from the lessor an option for a new five years' lease of the same premises in his own name; that the consideration for this option was the $300 paid to the lessor to settle the Cohen suit; that although this sum was paid in the first instance by the defendant from his own funds, this was done with the express understanding between the three, that he should advance the whole sum and later deduct from the net rents of the Brooks estate the proportionate shares thereof which were to be paid by the plaintiff and Silverman; that this arrangement was actually carried out, so that one-third of the consideration for said option was paid by the plaintiff and one-third by Silverman; that said option was for the benefit of the three lessees, who were holding the premises as partners when it was obtained, and who paid the consideration for it in equal shares; that for these reasons he, the plaintiff, was entitled to one-third of the net rents which accrued under said option from

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