Sweet v. Morrison

• Decision Date: 05 October 1886
• Citation: 103 N.Y. 235,8 N.E. 396
• Parties: SWEET, Jr., v. MORRISON and others.
• Court: New York Court of Appeals Court of Appeals

103 N.Y. 235

8 N.E. 396

SWEET, Jr.,

v.MORRISON and others.

Court of Appeals of New York.

October 5, 1886.

The following are the facts of the case, so far as it is necessary to a clear understanding of the opinion to state them:

On the twenty-ninth day of September, 1871, the Northern Pacific Railroad Company entered into a contract with the defendants, Morrison, Brackett, King, Canda, and Payson, composing a firm of railroad contractors under the name of Payson, Canda & Co., to construct a portion of its railroad. On the second of April, 1872, the plaintiff, Elnathan Sweet, Jr., and John Fleming, Charles D. McCarthy, Bartholomew Kennedy, and John Fanning, entered into an agreement of copartnership, under the firm name of Fleming, Kennedy & Co., limited to the single purpose of executing a contract made with Payson, Canda & Co., contractors, for building the Dakota division of the road. The conditions of this partnership were that the parties were to contribute to the expenses, and share the profits and losses, as follows: E. Sweet, Jr., one-fourth, and the other four the remaining three-fourths, in equal proportions. It was mutually agreed that all the stock and outfit applicable to the work furnished by them should be equally inventoried and credited to the respective parties furnishing the same, and become the property of the firm of Fleming, Kennedy & Co., to be by them divided or disposed of as they mutually agreed on the completion of their contract. It was further agreed that the execution of the work should be under the personal supervision of the said Fleming, McCarthy, Kennedy, and Fanning, and that the engineering matters and settlements with the said Payson, Canda & Co. should be conducted by Sweet. The firm of Fleming, Kennedy & Co. proceeded to do the work required by their contract until the work was finished. The final estimate was made December 28, 1872. The estimate shows that the entire work amounted to $382,548.10, and that the previous payments were $188,521.48, leaving due on this estimate $194,062.64. On the tenth January, 1873, this amount was paid, and Fleming, Kennedy & Co., on that day, gave their receipt for $194,062.64, in full thereof. At the same time a formal release was signed by the firm of Fleming, Kennedy & Co. On or about December 2, 1872, Sweet left to take charge of another work, and, before leaving, gave to John Fleming a writing as follows:

‘MINNEAPOLIS, MINN., December 2, 1872.

‘ Messrs. Payson, Canda & Co.: John Fleming, of our firm, is authorized, in absence of Mr. Sweet, to settle our estimates with you.

‘FLEMING, KENNEDY & CO.’

This paper was delivered to the defendant Morrison, and was attached to the settlement. The settlement papers were signed between January 10th and 13th, although they bear date January 10, 1872. The closing up of this contract dissolved the firm of Fleming, Kennedy & Co., and nothing remained but an accounting and settlement between the members. No accounting or settlement has ever been had between them. This settlement the plaintiff claims was in fraud of his rights, and this action is brought to set it aside, and to recover his damages.

The cause came up for a final hearing before Justice PRATT at special term, March 12, 1881, who rendered a judgment in favor of the plaintiff against the defendants. From that judgment defendants appealed to the general term. The general term modified the judgment by reducing the recovery, and, as thus modified, affirmed it. From the judgment of affirmance the defendants and the Northern Pacific Railroad Company appeal, and the plaintiff appeals also.

Wm. W. Niles and John Van Voorhis, for appellants, Dorrilus Morrison and others.

E. W. Paige, for respondent, Elnathan Sweet, Jr.

FINCH, J.

There are possibly some facts in the mass of testimony taken in this case which admit of an inference that the settlement assailed was fraudulent and collusive as against the plaintiff. The proofs have not impressed us with the soundness of that conclusion; but the question is essentially one of fact, and, in the face of the finding of the referee and its approval by the general term, we can only reverse upon the ground that there was absolutely no evidence of fraud. We hesitate to do that, for the reason that certain incidents were proved, which, standing alone, would tend to show collusion between all the other parties to injure and impair the rights of Sweet; and, while they seem to us fairly explained, the adequacy of the explanation has not struck all minds alike.

But, conceding the fraud, and waiving the difficulty that the false estimates, if they were such, originated in the act and influence of the railroad company, which has been dismissed from the case, it is quite clear that such fraud was against Sweet alone, and furnishes a cause of action to him only, and not to his firm....