Warren v. Schainwald

The Court : On the eighteenth day of April, 1877, the plaintiff, Warren, [59]and the defendant, Schainwald, and others entered into a co-partnership for the manufacture of powder, under the firm name of R W. Warren & Co.

One Louis Pokoney was a member of the firm, and he departed this life in the month of September, 1878.

After the death of Pokoney, the surviving partners continued the business under the firm name, until the tenth day of January, 1879, at which time entire assets of the firm were sold and transferred to the Vulcan Powder Company.

In the month of December, 1878, the plaintiff and the defendants, Schainwald and Baum, had a meeting at which one of the defendants stated that the interest of Pokoney’s estate could be purchased for the sum of three thousand dollars, and the defendants expressed a willingness to purchase it at that price, but the plaintiff then and there stated that he was the owner thereof; and thereupon the defendants refrained from purchasing the same. The finding shows that the defendants were prevented from effecting such purchase by the statement of plaintiff. The Court further finds that “the statement made by the plaintiff was untrue, and was made for the purpose of preventing the proposed settlement.”

The Pokoney interest was transferred and assigned to one Lilienthal, and on the fifteenth day of January, 1879, he brought a suit ‘against the surviving members of the firm of R W. Warren & Co. for a settlement and accounting of the partnership dealings, and thereafter, in the month of September, 1879, the plaintiff, Warren, compromised said suit by paying therein a sum less than three thousand dollars.

The object of the present suit is to charge the defendants with the profits of the business which would be due to the estate of Pokoney if such interest were still in the estate. The Court below held that after Warren was repaid the amount expended by him in compromising the Lilienthal claim, the residue of the profits accruing to the Pokoney interest should be divided among the surviving partners of the firm of Warren & Co. according to their respective interests in the business of the copartnership.

We think the judgment of the Court below was correct. It is apparent from the facts in the case that the Pokoney interest would have been purchased by the surviving partners [60]