Slater v. Slater

• Decision Date: 12 May 1903
• Citation: 175 N.Y. 143,67 N.E. 224
• Parties: SLATER et al. v. SLATER et al.
• Court: New York Court of Appeals Court of Appeals

175 N.Y. 143

67 N.E. 224

SLATER et al.

v.SLATER et al.

Court of Appeals of New York.

May 12, 1903.

Appeal from Supreme Court, Appellate Division, First Department.

Action by Cecelia L. Slater and others, executors of John Slater, against James Slater, individually and as executor of John Slater, and another. From an order of the Appellate Division (80 N. Y. Supp. 363) modifying, and affirming as modified, an interlocutory judgment entered on a decision of the Special Term, both parties appeal.

John A. Garver, for plaintiffs.

James W. Hawes, for defendants.

O'BRIEN, J.

This appeal presents a question of some novelty and considerable importance. It does not seem to have been passed upon directly by this court, at least in the form in which it is now presented. Counsel upon both sides have bestowed upon the question a very thorough examination, and it is quite apparent from the briefs that they have found a wide field in which industrious research has discovered a wealth of learning that has more or less application. It is quite clear that the numerous authorities cited are not all in harmony, and it would be an endless task to collate them so as to exhibit their true bearing upon this case. The work of reviewing, explaining, and distinguishing these authorities has been done by the learned court below with an much success as it is reasonable to expect from the nature of the question, the condition of the cases, and the views of the text-writers upon the subject. It would not be profitable for us to attempt to add anything to the discussion in this respect, and so we must be content to express our own views of the law and its application to this case, derived from a somewhat diligent study of what has been said and decided in the very numerous precedents to which we have been referred by counsel.

The question is whether, in an action for an accounting between the widow and executrix of a deceased partner and the surviving partner, the firm name of the partnership, under which the business was transacted for more than 40 years, is a part of the good will and partnership assets, subject to sale and purchase under the decree in the same way and with like effect as all the other assets of the firm directed to be sold and conveyed. This question arises in the case upon a state of facts, found at the trial court, as to which there is no dispute or controversy. The firm of J. & J. Slater, composed of two brothers, was formed in 1859, to manufacture and deal in boots and shoes under that firm name, each partner sharing the profits and losses equally. The business was carried on continuously from that time until the year 1901, when the elder brother John died, leaving the defendant James, the other partner, sole survivor. The deceased left a will in which the plaintiff, his widow, and James, the brother, were appointed executrix and executor. The surviving partner has continued the business under the same firm name, at the same place, and in the same manner, since his brother's death, with the view of closing out the business as a going concern, and this was the situation when the action was commenced for an accounting and distribution of the assets. Besides the bills receivable, merchandise, and fixtures on hand, the firm had leases terminating in 1907 of the store and premises in the city of New York where the business had been conducted. The trial court directed that the entire assets of the firm be sold at auction under the direction of a referee, including the leases and all other firm property, as one parcel. The court decided that the right to continue the use of the firm name was not a firm asset nor a part of the good will, and that the estate of the deceased partner had no interest therein, but that it belonged to the survivor, and should not be included in the sale of the firm assets, and to this part of the decision the plaintiff excepted. On appeal to the Appellate Division, that court modified the judgment in this respect, namely: That the firm name is a firm asset and part of the good will; that the estate of the deceased had an equal right and interest therein; and that the good will to be sold under the decree includes the exclusive right of the purchaser to hold himself out as the successor of the firm and its business, but that such good will does not include the right to continue the business in the old firm name, unless such purchaser be the surviving partner; and with this modification the judgment was affirmed. Both parties have appealed to this court from the judgment as thus modified, and the learned court below has certified to us the following question, of law involved in the case: (1) Whether or not, upon the facts found in the decision of this case, the firm name of J. & J. Slater, or the right to continue its use, is a firm asset; or did the right to continue such use inure to the surviving partner? (2) Whether or not, upon the facts found in the decision of this case, a purchaser at a sale provided for in the judgment herein, not being the surviving partner (the defendant, James Slater), will acquire the right to continue the business under the firm name of J. & J. Slater, upon complying with the provisions of sections 20 and 21 of the partnership law, Laws 1897, p. 561, c. 420.

We think that the learned court below was correct in so far as it decided that the firm name was inseparable from the good will, and hence just as much a part of the assets of the firm as the good will itself. This proposition seems to be supported by the great weight of authority. Pollock on Partnership, art. 39; 2 Lindley on Partnership, star page 445; Allan on Good Will,...