(182 N.Y.S.)

"It is very clear that in Roman law a rich woman 2.000 years ago might have loaned and invested and reinvested her billions of sesterces at her private chambers, or private office, if you please, without any danger of being classed by the public authorities with the negotiatores and accused of carrying on business, provided she had not opened a taberna argentaria, or money shop, where the public could resort for transactions of their own."

The surrogate, therefore, bases his decision that the decedent was not engaged in business in this state upon the fact that she did not have a public place of business, into which she invited the public for the purpose of permitting the public to transact in such place their own business. Surely this 2,000 year old illustration is hardly applicable to the instant case. Capitalists of the present day, who make a business of loaning money, would hardly think of opening a public resort for the transaction of such business. It would seem that the gigantic and numerous loans made by the decedent from her liquid estate were operations which in our American way of thinking classes the decedent as one engaged in business. It is hardly consistent with our American ideas to say that the only capitalists who are engaged in business are those who follow the vocation of money lending in a place open to the public for such purpose.

It is true that decedent had no office open to the public, and placed no money lender's sign or device above her door. Nevertheless, her whereabouts was well known, and she was frequently and constantly sought by those who would borrow her money, and she herself went about loaning it. In fact, the evidence is replete with facts showing decedent's constant and persistent endeavor to obtain for herself larger loans and good securities at high rates of interest. Moreover, she did not conduct her affairs at the place of her domicile, but voluntarily came to this city to market her money, and here she made it her constant business to loan her money to the best possible advantage. Had her transactions been conducted in her individual name in a public place or office, she would undoubtedly have been a money lender, and therefore, a business woman, within the rule laid down by the learned surrogate. The fact that decedent transacted her business in a manner peculiar to herself does not alter her status. She and her property were here in this state, under the protection of our laws, and she was operating here for the sole purpose of obtaining the greatest return possible from her vast estate. This certainly was doing business.

The evidence now before this court, we think, conclusively shows that the decedent was engaged in business within this state, within the contemplation of section 220 of the Tax Law. The greater part of her qapital was, at the time of her death, in the form of credits upon the books of the Westminster Company. The fact that this company was concededly organized for the purpose of conducting her business, and that the credits on its books were taken directly from the personal books of the decedent, shows, we think, conclusively that all of those credits were capital belonging to the decedent at the time of her death, used in her general business of money lending, and was capital invested in her business within the state of New York. It therefore follows that the moneys thus invested were subject to taxation under section 220 of the Tax Law.

The order appealed from should be reversed, with costs, and the matter remanded to the surrogate for appraisal and taxation in accordance herewith. All concur.

Order reversed, with $10 costs and disbursements, and proceeding remitted to surrogate for further action in accordance with the opinion of this court.

(191 App. Div. 745)

GREENSLETE v. FERGUSON.

(Supreme Court, Appellate Division, Third Department. May 14, 1920.) 1. Partnership -257-Surviving partner required to account for partnership assets only.

A surviving partner is required to account for the partnership assets and proceeds thereof only, and good will of an unsuccessful firm is not considered.

2. Partnership 255 (4)-Representative of deceased partner held not entitled to share in gain in business made on survivor's investment of added capital.

Where, shortly before death of a partner, an inventory showed debts exceeded assets, and after his death a second inventory showed net assets of $63, and under any method of valuing assets his indebtedness to the survivor exceeded his interest, and his widow turned the business over to the survivor, who carried it on as his own, the latter cannot be required to account for profits thereafter made, on his investment of additional capital, etc.

3. Partnership 255 (4)-Surviving partner entitled to compensation for carrying on business with consent of widow.

Where a surviving partner carries on the business with consent of the widow of deceased, he is entitled to compensation.

4. Partnership 255 (4)—If representative of deceased elects to share in profits of continued business, survivor is entitled to reasonable compensation.

If, without the consent of the representatives of the deceased partner, the surviving partner continues the business and makes a profit, the estate is bound to allow reasonable compensation, if it elects to share in the gains thus made.

5. Partnership 255 (4) -No fixed rule as to compensation of partner who carries on the business after dissolution by death.

There is no fixed rule of law as to the right to compensation of a partner who carries on the business of the partnership after dissolution by the death of one of its members, and each case must be decided on equitable principles, and compensation cannot be allowed, where it would produce an inequitable result.

6. Partnership 255 (4)—Survivor, continuing business, cannot receive compensation, unless agreed to or services beneficial.

A surviving partner, who continued the business after death of his copartner, cannot receive compensation, unless there was an agreement therefor, or his services were very beneficial to the estate, or the representatives of the deceased partner elected to share in the profits.

7. Partnership 255 (4)—Representatives of deceased held not entitled to share in profits of continued business, if less than value of survivor's services.

Where, after widow of deceased partner turned over partnership business to survivor, there being no net assets, good will, or the like, and the surviving partner invested additional capital and carried on the business, representatives of the deceased partner cannot share in the profits, where they were less than the value of the services of the surviving partner.

Woodward and Kiley, JJ., dissenting.

(182 N.Y.S.)

Appeal from Trial Term, Fulton County.

Action by Ethel Greenslete, as administratrix of the goods, chattels, and credits of William H. Greenslete, deceased, against Walter A. Ferguson. From a judgment for plaintiff, defendant appeals. Reversed, and complaint dismissed.

Argued before JOHN M. KELLOGG, P. J., and WOODWARD, COCHRANE, HENRY T. KELLOGG, and KILEY, JJ.

Keck & Littell, of Johnstown (J. Keck, of Johnstown, of counsel), for appellant.

Harry M. Garvey, of Utica, for respondent.

JOHN M. KELLOGG, P. J. [1] The defendant had carried on the grocery store, in the little village of Broadalbin, for about 16 years. The title to the store building and the fixtures was in him and his wife. Greenslete had been his clerk for several years, and, on the 15th day of September, 1915, was admitted as an equal partner in the business; each contributing $500, and the firm renting the store. and fixtures. Greenslete died December 4, 1916, leaving the plaintiff, his widow, the only person interested in his estate. The partners made an inventory November 26, 1916, at retail prices, which showed that the firm debts exceeded its assets by $400. Plaintiff's father-in-law, for her and with her consent and approval, and the defendant, each selected an appraiser, and the appraisers on March 5, 1917, inventoried the firm assets and liabilities-the stock on hand at $2,202.35; accounts, $1,151.11; total assets, $3,353.46; total liabilities, $3,290.12; apparent net assets, $63.34. The accounts were all treated as cash; the stock was inventoried at cost. The stock was retailed at from 18 to 20 per cent. above cost, and if we add 20 per cent. of the cost of the stock to the inventory it would represent the largest amount which by any possibility could be realized from the firm assets, if sold at retail without expense. That would make the net assets $503.81, of which one-half would be $251.90. The accounts were not all collectible. The findings of the court, upon ample evidence, establish an indebtedness from the deceased partner to the defendant, on account of the partnership business, of $274.08, and clearly demonstrate that, upon the most favorable view to the plaintiff, she had no interest in the partnership business. All that can be required of a surviving partner is to account for the partnership assets and the proceeds thereof. The history of the partnership, and its want of success, eliminate any discussion of good will from the case.

[2] Being unable to sell the business, the defendant used about $1,600 of his own money to buy other merchandise, making the purchases in his own name, and doing the business in his own name and in his own store. He believed the business was his, and carried it on as his own. He swears that the father-in-law, in the plaintiff's behalf, turned the business over to him. No administration was taken upon the estate of the deceased partner until December 10, 1917. This action was brought March 8, 1918, for an accounting of the copartnership business, and resulted in a judgment, September 8, 1919, for

plaintiff of $845.01 for her interest in the copartnership business, together with costs, $230.91. The referee finds that the defendant acted without the advice of counsel and in good faith, and that he disposed of the assets to the best advantage. It is difficult to understand. how the plaintiff's interest in the property, which was worthless in March, 1917, could materialize in this very substantial judgment. After the inventory, the plaintiff, while she was living at Broadalbin for some months, traded at the store for cash, as any other customer would.

The alleged profits arise from the defendant carrying on his own business in his own store, with his own capital. The fact that he was the surviving partner did not prevent him from again engaging in the grocery business and using his store and fixtures. He did not use the firm's credit or name, but the business was entirely his, and the carrying on of the business was to the advantage of the firm in marketing the goods, which were not otherwise salable, for a reasonable price. The judgment is erroneous, and a court of equity cannot allow it to stand when it is so unjust, giving the plaintiff, without reason, the fruits of defendant's labor. Bryant v. Gay, 88 Hun, 614, 34 N. Y. Supp. 632; Id., 153 N. Y. 655, 47 N. E. 1105. It is apparent that the plaintiff, her father-in-law, and the defendant, after the inventory, understood that she had no further interest in the business, and the conduct of each party makes that fact plain. Defendant swears that after the inventory he told the father-in-law:

"We were worth just $63.34: that he could take the $63 and the store, and I would sell the fixtures for $100 less than they cost us; and he told me I could have the store, as he didn't want to go in the grocery business."

There was no satisfactory denial of this conversation, and the referee should have found that the business was turned over to defendant. [3-7] If the business was continued with the consent of the widow, the defendant is entitled to compensation for earning the profits she

claims.

"Care should be taken to distinguish between the cases arising over claim for compensation for winding up the affairs of a partnership which has been dissolved and those arising over claims for compensation for continuing, after the death of a partner, the business of the firm, pursuant to the articles, or with the consent of the personal representative of the deceased partner who receives the profits arising from the continuation of the business. Robinson v. Simmons, 146 Mass. 167, 15 N. E. 558, 4 Am. St. Rep. 299, is a type of this class of cases." Burgess v. Badger, 82 Hun, 488, 493, 31 N. Y. Supp. 614.

"If, without the consent of the representatives of the deceased partner, the surviving partner, at his own risk, continues the business and makes a profit, the estate is bound to allow reasonable compensation if it elects to share in the gains thus made." 20 Ruling Case Law, p. 1000; Consaul v. Cummings, 222 U. S. 262, 32 Sup. Ct. 83, 56 L. E. 192.

"There is no fixed rule of law as to the rights of compensation to partners who carry on the business of a partnership after the death of one of the members. Each case must be decided on equitable principles, appropriate to the facts of the case. * * But there are many exceptions to the rule [that

compensation is not allowable], where the courts recognize that the rule as applied to the facts would produce an inequitable result. Nothing can move a court of equity, but equity and good conscience." Stem v. Warren, 185 App. Div. 823, 833, 834, 174 N. Y. Supp. 36, 37.

(182 N.Y.S.)

"For his services in continuing the business, the survivor will not be allowed to charge unless there is an agreement therefor, unless the court is satisfied that the services have been very beneficial to the estate or unless the representatives of the deceased partner elect to share in the profits." 30 Cyc.

640.

These views are not opposed to Clausen v. Puvogel, 114 App. Div. 455, 100 N. Y. Supp. 49. There the surviving partner was also the administrator, and he was limited to an administrator's fees. The other cases referred to are not in the way when the facts of each case are fully understood. No case has its brother; good common sense and good conscience are the best guides in determining what a court of equity should do in any particular case. Equity will not compel an unjust and unreasonable result.

The defendant, in carrying on his grocery business from the date of the March inventory to the judgment, has made a profit of $2,194.84, and the evidence shows beyond contradiction that his services were worth $2,496, for which credit is denied. In other words, with his money and credit and services, the business has not earned him reasonable wages. The judgment gives the plaintiff substantially onehalf of his earnings, less certain indebtedness which concededly was due him. Adopting the view most favorable to the plaintiff, she cannot appropriate the fruits of defendant's service for 18 months without. compensation, and a reasonable compensation for his services leaves. the business where it was when the inventory was taken-insolvent. The judgment should be reversed with costs, and the complaint dismissed, with costs.

Judgment reversed on the law and facts, with costs, and the complaint dismissed, with costs. This court disapproves of findings of fact numbered 8 and 9. All concur, except WOODWARD, J., who dissents, with an opinion in which KILEY, J., concurs.

WOODWARD, J. (dissenting). The complaint alleges that in the month of September, 1915, the defendant and one William H. Greenslete entered into a copartnership for the purpose of engaging in the grocery business in the village of Broadalbin, N. Y., under the firm name and style of Ferguson & Greenslete; that the agreement provided that each should contribute $500 as capital, and that the defendant should contribute the use of store fixtures, while Greenslete was to furnish a horse and delivery wagon for the use of the business, and that the profits should be equally divided between them; that the copartnership thus instituted continued until the death of William H. Greenslete on the 4th day of September, 1916; that at the time of his death and the termination of the copartnership there were certain assets, the amount of which are unknown to the plaintiff, as well as liabilities, which are also unknown; that the plaintiff was duly made administratrix of the estate of William H. Greenslete; that from the time of the death of the said Greenslete the defendant has continued individually in the possession of said store and said business, and has continued to manage and carry on said business, and to dispose of said stock in trade, and to collect the debts and things in action, and to