(74 N. J. E. 684)

RODBURG v. LAMACHINSKY. (Court of Chancery of New Jersey. Oct. 1, 1908.)

(Syllabus by the Court.)

1. PARTNERSHIP (§ 230*) — RETIREMENT MEMBER-COMPETITION WITH FIRM.

OF

Where it appeared that the complainant and defendant were partners in the business of selling coal in the city of Newark, and upon the dissolution of the copartnership the defendant executed a receipt and release to the complainant inserting therein this covenant: "I further bind myself not to open or go in the coal business in the city of Newark, either in my own name, or in anybody else's name, where I shall be connected or benefited, by and for a term of five years from date"-held, that such covenant restricts the defendant from being connected with any coal business in Newark, from which he may derive any benefit, whether such business shall be conducted in his name, or in the name of anybody else, for the term of five years.

[Ed. Note. For other cases, see Partnership. Cent. Dig. 4772; Dec. Dig. § 230.*] 2. PARTNERSHIP (§ 230*) — RETIREMENT MEMBER-COMPETITION WITH FIRM.

OF

It appearing that shortly after the execution of this covenant the defendant entered the employ of one P., and at once began to sell coal for his employer,, in paper bags, to retail grocers, being benefited by the receipt of 35 cents per ton for every ton of coal he might sell, held, that the defendant had thereby violated such covenant, and that an injunction should be is sued against him.

[Ed. Note.-For other cases, see Partnership, Cent. Dig. 4772; Dec. Dig. § 230.*]

Suit by Max Rodburg against Morris La-
machinsky. Decree for complainant.
See, also, 74 Atl. 44.

On final hearing on pleadings and proofs.
Frank W. Long, for complainant.
J. Schotland, for defendant.

Philip

HOWELL, V. C. In this case the injunction prayed for in the bill should issue.

which day the complainant paid to the defendant a sum of money less than had been agreed on, and defendant executed a receipt and a release to the complainant in which he inserted this covenant: "I further bind myself not to open or go in the coal business in the city of Newark, either in my own name, or in anybody else's name, where I shall be connected or benefited, by and for a term of five years from date." Shortly after the execution of this covenant the defendant entered the employ of one Patoker, and at once began to sell coal for his employer, in paper bags, to retail grocers, or, in other words, to carry on the same occupation which he had carried on while he was a partner with complainant.

The covenant, as I read it, restricts the defendant from being connected with any coal business in Newark from which he may reshall be conducted in his name or in the ceive any benefit, whether such business name of any one else, for the term of five years. This being the construction of the covenant, it is quite plain that the defendant has violated it. He is engaged in a coal business which is being carried on in the name of Patoker, from which he (the defendant) is being benefited by the receipt of 35 cents per ton for every ton of coal which he may

sell.

I will advise a decree in accordance with these views.

(80 N. J. L. 941

COLLIER v. DE BRIGARD. (Supreme Court of New Jersey. Sept. 15, 1910.)

(Syllabus by the Court.) CONTRACTS (§ 187*)-CONSTRUCTION - RIGHTS ACQUIRED BY THIRD PERSONS.

Where an assignment has been made by a firm for the benefit of its creditors, and the assignee reassigned the property to the assignor in order that the latter might reassign to a third person who promised, in consideration of the said assignment, to pay the firm's debts, held that the promise to pay the firm debts was enforceable by a firm creditor. The fact that this creditor had misstated the amount of his claim to the assignor in making up the list of creditors annexed to the original assignment did not bar such creditor from recovering a less sum due him by the firm in an action upon the promise of the defendant to pay the debts of the assigning firm.

[Ed. Note. For other cases, see Contracts, Dec. Dig. § 187.*]

The complainant and defendant were partners in the business of selling coal. The complainant had formerly carried on the same business alone. When the defendant came into the business as a partner he undertook to manage that part of the business, which consisted of selling coal in small quantities in paper bags to retail grocers. The defendant was engaged in this branch of the business for several months and had an opportunity to become acquainted with the customers of the complainant, who formerly had patronized this branch of the business. The parties did not agree, and in August, 1908, it was orally agreed between them that the partnership should be dissolved; that the complainant should repay to the defend- Brigard. ant a sum about equivalent to the amount which he had contributed to the business; but that, inasmuch as he could not pay this amount at once, the defendant should continue to sell coal in paper bags to grocers until the complainant could raise the necessary funds. The complainant was ready to close the bargain on September 14, 1908, on •For other cases see same topic and section NUMBER in Dec. Dig. & Am. Dig. Key No. Series & Rep'r Indexes 77 A.-33

Appeal from District Court of Plainfield.
Action by Asa Collier against Arthur De
Judgment of nonsuit, and plaintiff
appeals. Reversed.
Argued February term, 1910, before REED,
TRENCHARD, and MINTURN, JJ.

J. Henry Crane, for appellant. Harry C.
Runyon, for appellee.

REED, J. The facts appearing are these: On September 29, 1909, De Brigard & Collier,

a partnership doing business in Plainfield, | creditors of the firm could compel the asmade an assignment for the benefit of the firm's creditors to one William G. De Meza. On October 1, 1909, De Meza reassigned the property contained in the previous assignment to him to De Brigard and Collier for the purpose that the latter should assign the said property to the defendant Arthur De Brigard. The assignment was made to Arthur De Brigard who was the father of Louis De Brigard of the firm of De Brigard & Collier.

signee in equity to execute the trust. Nevertheless, when the assignee did reassign the property to the firm for the purpose of having the firm itself convey it to the defendant upon his promise to pay all the firm creditors, De Meza conveyed an interest which passed to De Brigard. So long as the latter paid all the creditors, there was no one to invoke the trust with which De Meza was invested. The defendant was clothed with power to enforce the trust to the extent of the claims he had paid off; and, in case he paid all the claims, no other person existed with any right to enforce the trust, or attack the legal title which the defendant derived from the reassignment to the firm. For this reason, therefore, a valid title passed to Arthur De Brigard, and this consideration which so passed to him supported his promise to pay the debts of the firm, and raised a privity between him and each creditor. Joslin v. New Jersey Car Spring Co., 36 N. J. Law, 141.

The evidence is satisfactory that after the assignment by De Brigard & Collier made for the benefit of their creditors to Mr. De Meza that Mr. Arthur De Brigard, the defendant, promised Mr. De Meza that, if he would turn the partnership business over to him he, the defendant, would pay all the debts of the firm, and all the expenses of the assignment. The evidence shows that the assignment was made back to the firm, and by the firm the property was conveyed to Arthur De Brigard in pursuance of this agreement. The defendant took possession The existence of this consideration also of this firm property, and paid most, if not removes the transaction from the operation all, of the firm creditors. One of the firm of the statute of frauds, so far as that statcreditors was Asa Collier. His claim for ute forbids an action to charge the defendant $73 the defendant refused to pay, and for it upon any special promise to answer for a this suit was brought. Upon the close of debt, default or miscarriage of another perthe plaintiff's case the court granted a non- son. There was a special, substantial consuit. One ground stated for this judicial ac- sideration moving to the defendant as the tion was that De Meza, the assignee, had no inducing cause of his promise. Cowenhoven authority to reconvey the firm property back v. Howell, 36 N. J. Law, 323. Blackford v. to the firm, and therefore no title passed | Plainfield Gaslight Co., 43 N. J. Law, 438. from the firm to Arthur De Brigard, and no consideration arose to support the defendant's promise to pay the firm creditors, including the plaintiff. This lack of power of the assignee is put upon the language of section 26, Assignment Act 1899, p. 158. This section confers power upon an assignee under the act where the creditors have entered into a composition with the assignor to reassign. The language of the act empowers the orphans' court upon petition to it setting out such a composition agreement to direct a reassignment, and relieves the assignee from the trust imposed upon him by that instrument. The argument urged being that, inasmuch as there was no composition in this case, the assignee had no right to reassign his interest in the property to his assignor.

The question, however, presented is whether De Meza by his assignment to the firm, and through the firm to the defendant, conveyed an interest in the property which furnished a consideration which supported the promise of the defendant to pay the firm creditors, including the plaintiff. It is clear that De Meza, the assignee, after the assignment, had a legal title to the property of the firm. Upon that legal title was imposed a trust for the benefit of the creditors of the firm. The assignee could, not rid the property of this trust by the reconveyance of the

Another point relied upon to support the nonsuit was that Collier, the plaintiff, was guilty of fraud in permitting his claim to be overstated by the assignors in their list of creditors and the amount of their respective claims annexed to the assignment. In that list the plaintiff's claim was stated to be $190 instead of $73, the amount for which judgment was claimed and entered. The list of claims was made up without each claim being carefully calculated. It does not appear that Collier fraudulently suggested that the amount due him would not equal $190. Collier did not put in, nor did he have the opportunity to put in, his claim to the assignee under oath, so no fraud appears in making a false claim to that officer. The action of the court in nonsuiting upon the ground that Collier committed a fraud in permitting his claim to be overstated in the original list of creditors and claims must rest upon the theory that this overstatement fraudulently induced the defendant to make his contract to pay the creditors of the firm. But it is obvious that the fact that the claim was stated in the list to be $190 instead of $73 was not calculated to induce the defendant to enter into his bargain, but, on the contrary, would tend to deter him from doing so. The contract was in fact less onerous than it appeared to be if the list of claims was relied upon by the plaintiff as

We think, therefore, there was no ground for a nonsuit, and the judgment should be reversed.

(80 N. J. L. 119)

WILLIAMS et al. v. VOORHEES. (Supreme Court of New Jersey. Sept. 15, 1910.)

(Syllabus by the Court.)

1. BROKERS (§ 82*)-ACTION FOR COMMISSIONS -SUFFICIENCY OF DECLARATION.

for, instead of being liable to pay Collier REED, J. This action was brought to re$190, he was, in fact, only liable to pay him cover commissions for the sale of property $73. in Elizabeth, N. J. In the first count the pleader sets out that the defendant made and entered into a certain agreement in writing to and with the said plaintiffs (a true copy of which is thereto annexed and made a part thereof). This writing thus made a part of the count is as follows: "Elizabeth, New Jersey, April 12, 1909. C. W. Williams & Co., 207 Broad Street, Elizabeth, N. J.-Gentlemen: You are hereby authorized to act for me as brokers in offering for sale or on a forty to sixty years ground rental my property on the north-west corner of Broad and West Jersey streets, in Elizabeth, New Jersey, having a frontage on Broad street of about eighty feet and on West Jersey street of about one hundred and forty feet, and in case of sale, or lease as above on terms accepted by me, upon the execution of the proper papers and first payment, I agree to pay you in either case a sum of twenty-five hundred dollars in one payment at said time. The price I wish you to ask for the property, if sold, is two hundred thousand dollars, subject to my being able to cancel the present leases. The price I wish you to ask as annual rental for a ground lease of said property as above is eight thousand dollars, subject to my being able to cancel the present Any modification of these prices leases. shall be subject to my approval and acceptance, and only binding upon me if accepted in writing, prior to my making leases of any part of the premises, in which case this agreement shall be void. Yours truly, John Voorhees."

A count in a declaration set out that the defendant authorized the plaintiffs, as brokers, to sell a property for $200.000, and agreed that, in case of a sale upon terms accepted by the defendant upon the execution of proper papers and the first payment, to pay the plaintiffs, $2,500; that the plaintiffs procured a purchaser ready and willing to purchase the said property for the sum of $200,000, and willing to execute a proper contract and to make a first payment on the consideration; that the defendant refused to execute the said contract, and refused to accept the first payment. On demurrer to this count, held, that it exhibited no right of action against the defendant to recover the $2,500 in the absence of a statement that the defendant either had accepted the terms upon which the purchase price was to be paid, or a statement showing that the defendant had in bad faith refused to accept any terms. [Ed. Note. For other cases, see Brokers, Dec. Dig. § 82.*]

(Additional Syllabus by Editorial Staff.) 2. BROKERS (§ 82*)-ACTION FOR COMMISSIONS-SUFFICIENCY OF DECLARATION.

In an action by brokers for commissions, counts in the declaration alleging that defendant authorized plaintiffs as brokers to sell property for a stated sum, and agreed, in case of a sale upon terms accepted by defendant, upon the execution of proper papers and the first payment, to pay plaintiffs a certain sum as commissions, that plaintiffs did procure a purchaser ready and willing to purchase the property on terms accepted by defendant, and that defendant refused to execute the contract for the purchase or lease and accept the first payment, is sufficient, though failing to set out the execution of the proper papers for the sale or lease and the making of the first payment by the purchaser or lessee, since, if a purchaser or lessee was obtained by plaintiffs, who was able and willing to purchase or lease upon terms actually accepted by the owner, a duty would arise at once upon the owner to execute the proper papers to effectuate the contract, and to accept the first payment.

The pleader then sets out his construction of this contract to the effect that the said defendant authorized the said plaintiffs to act for him as brokers in offering for sale or on a 40 to 60 years ground rental the said property, and the defendant agreed with the plaintiffs that in consideration that the said plaintiff's should secure a purchaser for the said premises ready and willing to purchase the same for the price and consideration of $200,000 subject to said defendant's being able to cancel the leases of the said premises then in force, that he, the said defendant, would upon the execution of the proper papers or contracts for the purpose of effecting such sale pay to the said plaintiffs at the

[Ed. Note. For other cases, see Brokers, time of the making of the first payment by Dec. Dig. § 82.*]

Argued November term, 1909, before REED,

BERGEN, and MINTURN, JJ.

such purchaser the sum of $2,500 in one payment.

The pleader then proceeds thus: The said plaintiffs aver that they did and performed all acts and things which in and by said agreement they were required to do and perform, and that they did act for said defend

ant as brokers in offering for sale or on a 40

to 60 years ground rental, the said property

C. MCK. Whittemore, for plaintiffs. Leavitt of the said defendant, and that they did ob& Atwater, for defendant.

tain and secure as such brokers, in accord

For other cases see same topic and section NUMBER in Dec. Dig. & Am. Dig. Key No. Series & Rep'r Indexes

tracts, and accept a first payment, create a right of action, in the absence of a statement that defendant had accepted the terms upon which the purchaser was ready and willing to buy, or in the absence of a statement that the defendant had fraudulently refused to accept any terms respecting the payment of the consideration. It not appearing that the defendant did accept the terms of purchase proposed, and no conduct appearing which would raise a liability to pay commission without such acceptance, the first count is bad.

The same defect pervades the firs: counts of the declaration; the first and second counts claiming the procuring of a purchaser for the property, and the third and fourth counts claiming the procuring o. a lessee for the property under the contract. In neither of these counts is it stated that the defendant accepted the terms upon which the purchase price was to be paid, nor the terms upon which the rental was to be paid; nor is there any statement of a fraudulent refusal on the part of the defendant to accept any terms.

ance with the terms of said agreement, a pur- | refused to execute the said papers and conchaser for the same premises, ready and willing to purchase the same for the price and consideration of $200,000, the said defendant being able to cancel the leases of the said premises then in force, and said purchaser being then ready and willing to execute, the proper papers or contracts for the purpose of effecting such purchase by him and sale by said defendant, and to pay to said defendant a first payment on account of said price of said premises; but the said defendant, notwithstanding his promise and undertaking, and his duty under the terms of said agreement to execute such papers or contracts, and to accept said first payment from said purchaser, refused and neglected so to do, and the said sum of $2,500 specified in said agreement thereupon became due and owing from the said defendant to the said plaintiffs, and said defendant has failed to pay the same to the said plaintiffs. The theory upon which this count of the declaration is drafted is that the plaintiffs did all that they were bound to do, and that the failure to execute the sale resulted from the refusal of the defendant to execute the proper papers and contracts to effect such purchase, and to accept the first payment on account of such contracts. But the duty of the defendant to execute the papers and accept a payment of the contract price did not arise until the defendant had exercised his right under the contract to accept or refuse to accept the terms proposed by the purchaser. The written contract made by the pleader a part of the count shows that the sum sued for was to be paid in case of a sale on terms accepted by the defendant. The price which the purchaser was to pay was fixed by the contract; but the manner in which this price was to be paid is not mentioned. The terms which were to be accepted were evidently the terms upon which the two hundred thousand dollars was to be paid. That the parties had in mind the probability that the whole price would not be paid at once in cash is apparent from the condition that the commission sued for should be paid upon the first payment of the purchase price. The conditions to be accepted were evidently those which fixed the manner in which the consideration should be paid. The terms mentioned were referable to the number of installments by which the payments should be made, the amount of the several installments, the interval of time between the payments, and whether future payments should be secured, and, if so, how secured. The statement in the count that the plaintiffs procured a purchaser ready and willing to pay the consideration fixed and to execute the proper contracts for effecting the purchase, and to pay a first payment, was in sufficient to create a liability under the contract.

The last five counts differ from the preceding counts in this respect: The fifth count is typical of these last five, for in it, after setting out the contract in language similar to that contained in the first count, the pleader proceeds to state that the plaintiffs did secure a purchaser ready and willing to purchase the property on terms accepted by the defendant. The pleader then proceeds to declare, as in the other counts, that the defendant refused to execute the contract for the purchase or lease, and accept the first payment. In these last counts it is perceived that the pleader sets out the contract, and the obtaining of a person ready and willing to purchase or lease for the sum mentioned, upon terms accepted by the defendant.

The counsel for the defendant contends that the count should have further set out the execution of the proper papers for the sale or lease, and the making of the first payment by the purchaser or lessee. This contention, however, we think unsubstantial. If, as stated, a purchaser or lessee was ob tained by the plaintiffs who was able and willing to purchase or lease upon terms which were actually accepted by the owner, a duty arose at once upon him to execute the proper papers to effectuate the contract for the purchase, or the letting, and to accept the first payment.

The defendant could not defeat the claim of the plaintiffs for commissions by refusing to perform those acts so as to affect the sale or the letting.

We think, therefore, there should be judg ment for the defendant on the demurrer to the first four counts, and for the plaintiffs on

(Court of Errors and Appeals of New Jersey. promulgation of that decision the principle Sept. 16, 1910.)

there declared has been steadfastly adhered 1. WILLS (8 616*)-CONSTRUCTION-ESTATES to by this court. The cases are collated by DEVISED.

[Ed. Note. For other cases, see Wills, Cent. the case, therefore, turns upon whether there Dig. 88 1418-1430; Dec. Dig. § 616.*] 2. WILLS (8 600*)-CONSTRUCTION DEVISED USE"-"BALANCE."

*For other cases see same topic and section NUMBER in Dec. Dig. & Am. Dig. Key No. Series & Rep'r Indexes