Opinion
November, 1894.
Blumenstiel Hirsch, for respondent.
William R. Wilder, for appellants.
The account, as stated, between the plaintiff and the defendants, according to the finding of the referee, for the purpose of sustaining the judgment in this action, can find justification upon the evidence in but one aspect of the case, the aspect conceded by the parties to have obtained; and in this view the judgment rests upon an unjustifiable method of computation.
It being found that the plaintiff was entitled to one-eighth of the net profits of the business, according to the oral agreement proven, and that this amount was to be computed upon profits accruing between the 1st day of January, 1889, and the 1st day of January, 1891, the referee proceeded to compute the amount of these profits upon the basis formed by statements as to the state of the assets of the firm at successive periods of six months between those dates. It appeared that the stock on hand, which formed the major portion of the assets, had been taken, during all periods except that for the last six months, at an increase of thirty-three and one-third per cent, this denoting the difference between the cost and the selling price, and the referee, therefore, translated the cost price, as shown for the last period, into the selling price, by adding thirty-three and one-third per cent, and upon this basis computed the plaintiff's share, less his drawings.
The amount of stock on hand appears to have increased largely during the periods considered, and the judgment for the plaintiff is founded, in amount, upon the increase of assets as shown during the time of his partnership.
The vice of this method of computation, for the purpose of determining the profits of the business, is apparent.
The percentage arbitrarily added by the defendants to the cost price in order to reach the selling price is in no way claimed to represent profits, and indeed the evidence shows that such was not the fact. It obviously represented an amount made up of firm expense and firm profit on the sale of the goods, and the plaintiff's recovery is hence unduly enhanced by the disproportion between the relative expenses and profits upon the goods on hand at the commencement of his partnership and the corresponding relation upon the greater amount of stock as taken at the time of his withdrawal.
In other words, the plaintiff was awarded, as profit, some undetermined amount which did not represent an increase of assets over expenditures, and the record discloses no trace of an agreement which would justify a computation upon the basis considered.
The judgment is open to the further objection that it fails to adjudge the respective liability of the defendants, and gives to the plaintiff a remedy jointly against them for the full amount of his claim. Bates Part. § 455, and cases cited; Williams v. Lindblom, 68 Hun, 173.
Our conclusion renders discussion of the further points raised by the appellants unnecessary, since a new trial must result.
The judgment should be reversed, reference discharged and new trial ordered, with costs to abide the event.
BOOKSTAVER and PRYOR, JJ., concur.
Judgment reversed, reference discharged and new trial ordered, with costs to abide event.