Summary
In Hirshfield v. Robins (1930), 99 Pa. Super. 217, 219, plaintiff brought an action in assumpsit to recover damages for defendant's breach of an oral contract to enter into a partnership with plaintiff. He could not recover because he proved not only the oral contract to form a partnership, but also that the partnership was formed and the business actually conducted by them for three months.
Summary of this case from Donatelli et al. v. CarinoOpinion
April 22, 1930.
July 10, 1930.
Partnership — Breach of contract to enter into partnership — Evidence — Plaintiff disproves basic fact necessary for recovery.
In an action of assumpsit to recover damages for breach of an oral contract to enter into a partnership, it was alleged in the statement of claim that the plaintiff and defendant, by oral contract, agreed to enter into a partnership and that the defendant refused to carry out the terms of the agreement. At the trial the plaintiff testified on direct and cross-examination that the partnership had been formed and that it had actually been conducted by the two of them as partners for approximately three months. There was evidence that the business was conducted under the firm name and that the plaintiff received money every week on a drawing account. The defendant, however, stated that no partnership had been formed and that there had been no agreement to enter into a partnership.
Held: That having testified that the partnership was actually formed and carried on, the plaintiff effectually disproved one of the basic facts necessary for his recovery under the pleadings and a judgment for the plaintiff will be reversed.
The testimony of the defendant that no oral contract had been made and that no partnership had been formed cannot be used to supply the fundamental requisite of the plaintiff's own case, which he himself had disproved.
Equity — Partnership — Partner — Wrongful exclusion of — Profits — Accounting.
Where a party is wrongfully excluded from a partnership his remedy is by a bill in equity for an accounting of profits, and damages may be awarded therein for wrongful exclusion from further participation in the partnership. Where equity assumes jurisdiction it will adjust all the rights of the parties in respect to the controversy, without requiring them to seek another tribunal.
Appeal No. 112, April T., 1930, by defendant from judgment of C.P., Lawrence County, September T., 1927, No. 76, in the case of Arthur H. Hirshfield v. Harry Robins.
Before TREXLER, P.J., KELLER, LINN, GAWTHROP, CUNNINGHAM and BALDRIGE, JJ. Reversed.
Assumpsit to recover for breach of an oral contract to enter into a partnership. Before HILDEBRAND, J.
The facts are stated in the opinion of the Superior Court.
Verdict for the plaintiff in the sum of $2,500 and judgment entered thereon. Defendant appealed.
Error assigned, among others, was the refusal of the defendant's motion for judgment non obstante veredicto.
J. Norman Martin, and with him Norman A. Martin of Martin Martin, and John Lamoree for appellant.
W. Walter Braham, and with him Edwin K. Logan, William D. Cobau and J. Glenn Berry, for appellee.
Argued April 22, 1930.
Plaintiff brought this action in assumpsit to recover the damages suffered by him by reason of defendant's breach of an oral contract to enter into a partnership with him in the retail furniture business. It was so declared upon in the plaintiff's statement and the plaintiff's case was presented on that theory. See record, pp. 38-a, 58-a, 124-a.
A recovery consequently depended on the plaintiff's establishing to the satisfaction of the jury three things: (1) That the plaintiff and defendant had made an oral contract to form a partnership for the purpose of dealing in furniture in New Castle, Pa., the defendant to furnish the capital, and the plaintiff the experience and act as manager, with equal division of the profits; (2) that by reason of the defendant's breach such partnership was never formed; (3) that plaintiff suffered damages by reason of defendant's refusal to form said partnership.
Unfortunately for the plaintiff's right of recovery in this action he proved not only the oral contract to form a partnership, entered into while the parties were driving from Youngstown to New Castle and back, but also that the partnership was formed, and the business actually conducted by the two of them as partners for approximately three months. The plaintiff's evidence on this point is clear, consistent and unmistakable and he supported it by calling half a dozen witnesses to whom the defendant introduced the plaintiff as his partner, and who testified to the plaintiff's conduct of the firm's store and business as managing partner.
On both direct and cross-examination the plaintiff iterated and reiterated that he and the defendant were partners in the business and conducted it as a partnership under his, the plaintiff's, management. "We went into the business under the firm name of A.H. Hirshfield and Harry Robins, and it was to be registered that way." (Record p. 51-a). "We had to go out and contract for all these things [remodeling store, painting, arranging floors, and contracting for gas, electricity, telephone, motor trucks, etc.] Mr. Robins and I agreed that I should take care of all these things as a partner and sign them as a partner. Q. Did you? A. Yes, sir." (pp. 51-a, 52-a). "If anybody came in to see Mr. Robins about repairing or selling merchandise, he would say, `You will have to see my partner,' and he would call me over and introduce me, `Mr. Hirshfield, my partner,' and I did likewise." (pp. 52-a, 53-a). To his own counsel's inquiry, "State whether or not during the period of time that you were there at the store [approximately three months] you acted as a partner and took charge of the managing of the affairs of the concern;" he replied, "Yes, sir." (p. 53-a). And on cross-examination after testifying to the oral contract that "Mr. Robins was to furnish the capital, I was to furnish the experience, and we were to divide the profits equally," the examination continued, "Q. And that was a verbal agreement. A. Yes, sir. Q. A verbal agreement under which you were to go into the furniture business, was it not? A. Yes, sir. Q. And you did go into the furniture business under that agreement, did you not? A. Yes, sir, of partnership. Q. Well, that was your partnership agreement was it not? A. Yes, sir. Q. And you went into the furniture business under that partnership agreement, did you? A. Yes, sir. Q. And you carried on your business under that partnership agreement until Robins failed to produce a written contract in the form that you had agreed upon in the verbal contract, is that a fact? A. Yes, sir. Q. And it was because he failed to produce a written contract in the form that you had agreed upon in the verbal contract that you quit, is that it? A. Yes, sir" (pp. 72-a, 73-a). It was also testified by the plaintiff and the bookkeeper that the money which he received every week was not a salary but a drawing account which he and the defendant agreed each should have as a partner.
This is not the case of an oral agreement that should not go into effect until reduced to writing and signed. The oral contract as testified to by plaintiff contained no condition that the partnership should not become effective until a written agreement of partnership was prepared and executed. On the contrary under the plaintiff's own case, as made out by him and his witnesses, the partnership carried on business and was managed by the plaintiff as a partner for approximately three months. He therefore effectually disproved one of the basic facts necessary for his recovery in this action, viz., that by reason of the defendant is breach, the agreed partnership never had been formed. The testimony of the defendant that no oral contract such as the plaintiff stated had been made and that no partnership was formed cannot be used to supply this fundamental requisite of the plaintiff's own case, which he himself had disproved.
Having sworn that the partnership was formed and carried on business under his management for approximately three months, and supported this evidence by the testimony of half a dozen corroborating witnesses, the plaintiff, himself, prevented his recovery in this action.
His remedy is by bill in equity for an accounting of profits, and damages may be awarded therein if he was wrongfully excluded from further participation in the partnership business. Where equity assumes jurisdiction it will adjust all the rights of the parties in respect to the controversy, without requiring them to seek another tribunal.
The court did not err in refusing to decide the affidavit of defense raising a question of law in favor of the defendant (first assignment of error). Had plaintiff's evidence sustained the allegata of his statement he would have been entitled to go to the jury, even though his statement included some incorrect and inadmissible items of damage. The court could control that on the trial.
The second and third assignments of error are sustained. These dispose of the case and it is not necessary to pass on the remaining assignments. The judgment is reversed and is now entered for the defendant, without prejudice to the plaintiff's right to proceed for relief by bill in equity.