the purchase of 255 shares of stock of the defendant corporation. The material facts are not disputed. On June 27, 1914, Stuart signed what is called a "subscription agreement" reading as follows:

"Subscription Agreement.

"Capital Stock, $50,000. Number of Shares, 5000. Par Value, $10 each. "We, the undersigned, hereby subscribe for and agree to take, at par value, the number of shares of the capital stock of the New York Community Mausoleum Construction Company, Incorporated, set opposite our respective names. The amount of subscription is payable in cash as follows: Twenty (20%) per cent. of said subscription payable with the subscription, and the balance or any proportion of said balance to be payable on ten (10) day demand. No subscription is binding, unless $25,500 is subscribed for. "Dated June 27, 1914.

Address.

"Name. "Ralph Stuart. 139 W. 47th St., City.

Number of Shares.
255

Amount. $25,500."

Stuart died in September, 1915, and plaintiff was appointed administrator of his estate. Some time in 1916, the defendants presented a claim against the estate of Stuart for the sum of $528.36, which was rejected by the administrator, and the defendant corporation herein instituted an action to recover thereon. Issue was joined in that action, and the material portions of the amended complaint filed in that action are in substance as follows:

"For a first cause of action:

"I. That the plaintiff was at all times hereinafter mentioned and now is a corporation organized and existing under the laws of the state of New York. "II. That the defendant is a resident of the city of New York. "III. That by plaintiff's certificate of incorporation it is duly provided that its capital stock should consist of 5,000 shares, of the par value of $10 each. "IV. That on or about the 16th day of January, 1914, the plaintiff duly opened books of subscription to such capital stock, and thereafter and on or about the 27th day of June, 1914, Ralph Stuart duly subscribed and agreed to take 255 shares of plaintiff's capital stock, and then and there paid to the plaintiff the sum of $510, being twenty (20) per cent. of his said subscription, on condition that his subscription was not binding unless $25,500 of stock was subscribed for."

The complaint then sets up that on October 23, 1914, and again on February 5, 1915, by resolution of the board of directors of the corporation, the president and secretary were authorized to issue and call for an additional 10 per cent. subscription; that due notice thereof had been given Stuart; that he had neglected to pay the amount of these assessments; that defendant in that action had been duly appointed administrator, and had qualified, and had refused to pay said assessments; and it further alleged that the plaintiff in that action had duly performed all the conditions to be performed on its part, and asked for judgment for $255 and interest from October 23, 1914, and $255 and interest from February 5, 1915, which it will be seen is the amount of 10 per cent. assessment upon 255 shares of stock subscribed for by Stuart under the subscription agreement of June 27, 1914. The defendant in that action interposed a denial of these allegations of the plaintiff's complaint, and also set up a counterclaim, which need not be considered, as no testimony was given in support thereof, and it was withdrawn at the trial.

(179 N.Y.S.)

The first trial took place in October, 1917, and it developed upon that trial that the condition under which Stuart subscribed to the agreement to purchase the stock, and which was set forth in plaintiff's complaint, namely, that the subscription should not be binding, until $25,500 worth of stock had been subscribed, had not been complied with; it affirmatively appearing therein that $25,500 of stock had not been subscribed for.

The main issue, therefore, in the first action was whether or not there had been subscriptions obtained to the amount of $25,500, and upon that issue the court below found in favor of the defendant in the first action, the plaintiff in this action, and directed a verdict in favor of the defendant in that action, and on October 31, 1917, a judgment was entered. An appeal was taken from this judgment to the Appellate Term, and the judgment was affirmed by that court, and an order entered to that effect on February 7, 1918. Thereafter, and on April 2, 1918, the plaintiff in this action offered to return 51 shares of stock of the defendant corporation, which had been issued to Stuart, for the amount paid by him, at the time he signed the subscription agreement or soon thereafter, and then brought the present action to recover said sum of $510.

Upon the trial of this action, the judgment roll in the first action was offered by plaintiff and received in evidence, and the plaintiff substantially rested its claim thereon. The defendant, over the objection of the plaintiff, was allowed to show that, within a few days after Stuart had signed the subscription agreement, a meeting of the stockholders of the defendant was held; that a resolution was offered and passed to the effect that "when the money was paid, and for those who had paid, that stock should be issued in the amount of their first payment, or 20 per cent., more or less, at par value"; that Stuart voted for such resolution; that stock was issued to those who paid their "first 20 per cent., or however much they had paid, at par value in the amount that they paid"; that in pursuance of that resolution Stuart received 51 shares, and that Stuart subsequently "took part in the activities of the company."

Upon cross-examination of the witness who testified to the foregoing, it appeared that the meeting at which the above-mentioned resolution was offered was held about six days after Stuart had subscribed for his stock, and that his "activity" in the company was limited to subscribing for some "crypts" in the mausoleum which was to be constructed by the defendant. The court below directed a verdict in favor of the defendant.

The defendant attempts to sustain this judgment upon the grounds: [1] (1) "That the defendant was not a party to the subscription. agreement."

It must be observed that the complaint in the former action alleged that the plaintiff therein, the defendant herein, had opened its books for subscription of the capital stock of the corporation; that Stuart had subscribed for 255 shares; that he had paid to the company the sum of $510, being 20 per cent. of the said subscription, and that such sub

scription was made upon the condition that it would not be binding unless $25,500 worth of stock was subscribed for. The plaintiff in the first action, therefore, not only alleged that it was a party to the subscription agreement, but it expressly adopted it, and sought by action to enforce it, and for that reason, if for no other, it is now estopped from claiming that the subscription agreement was one merely with the several subscribers of the stock.

[2] (2) Defendant claims that Stuart's "course of dealing with the corporation waived any condition in the subscription agreement." There is nothing in the record to sustain this contention. When the resolution providing for the delivery of the stock of the corporation to the several subscribers according to the amount actually paid at its par value was adopted, there is nothing to show that Stuart knew or had any information that the entire amount named in the subscription agreement had not then been obtained, and there is nothing to show any waiver of any right upon his part to recover the amount of his subscription actually paid to defendant in the event that $25,500 worth of stock had not been subscribed.

[3-5] (3) Defendant claims that the withdrawal of the counterclaim. in the first action was "an abandonment and waiver of the right of said claim, and precludes the plaintiff from bringing another action thereon."

This is also an erroneous position. See Simon v. Bierbauer, 154 App. Div. 506, 507, 139 N. Y. Supp. 327; Barber v. Ellingwood, 137 App. Div. 708, 122 N. Y. Supp. 369. As before stated, the main issue in the first action was whether or not there had been obtained subscriptions to the amount of $25,500, and upon that issue the court below found in favor of the defendant in that action, and as the decision of an issue in a former action is res adjudicata upon the same issue between the same parties in a subsequent action (Thorn v. De Breteuil, 179 N. Y. 82, 71 N. E. 470), it follows that the fact that defendant had not obtained subscriptions sufficient to make the subscription agreement binding upon the plaintiff in this action was established in this action by the introduction of the judgment roll in the first action. It follows, therefore, that the plaintiff in this action should have had a judgment as asked for in the pleadings.

Judgment reversed, with $30 costs, and judgment directed in favor of the plaintiff for $510, with interest from June 27, 1914, and appropriate costs in the court below. All concur.

(179 N.Y.S.)

DANNENBERG v. FENSTERER et al.

(Supreme Court, Appellate Term, First Department.

December 18, 1919.)

PARTNERSHIP 139-PARTNER WITHOUT AUTHORITY TO BIND PARTNERSHIP BY CONTRACT WITH CORPORATION OWNED BY HIM.

Where a partnership was engaged in the business of buying and selling glassware, and one of the partners was practically the sole stockholder of a corporation in which the other partner had no interest, the partnership was not bound by a contract of the partner interested in the corporation that did not come within the scope of the partnership business, made for the benefit of the corporation, although the partnership had at times made payments on account of obligations of the corporation, and on one occasion assumed an obligation in its behalf, where the other party to the contract had no reason to believe that the copartnership had any interest in the business of the corporation, or that it made any payments for the corporation that were not charged to the account of the partner interested in the corporation.

Appeal from Municipal Court, Borough of Manhattan, Fourth District.

Action by Solomon Dannenberg against Walter J. Fensterer and another. From a judgment of the Municipal Court for plaintiff, defendants appeal. Reversed, and complaint dismissed.

Argued November term, 1919, before LEHMAN, BIJUR, and WAGNER, JJ.

Theodore L. Frothingham, of New York City (Harold J. Baily, of New York City, of counsel), for appellants.

J. Solon Einsohn, of New York City, for respondent.

LEHMAN, J. The plaintiff herein has brought an action against the copartnership of Fensterer & Ruhe upon a contract claimed to have been made in its behalf by the defendant Ruhe. The only defendant served was Fensterer, and judgment has been entered against him. alone.

The evidence is sufficient to show the making of a promise, but there is no evidence to show that such promise came within the scope of the copartnership business. The promise was made for the benefit of a corporation of which Ruhe was practically the sole stockholder, and in which Fensterer had no interest. The copartnership was engaged in the business of buying and selling glassware, and it is clear that this contract did not come within the scope of that business. It is true that the evidence shows that the copartnership of Fensterer & Ruhe did at times make payments on account of obligations of the corporation, and on one occasion at least assumed an obligation in its behalf; but these acts were insufficient to give Ruhe apparent authority to bind the copartnership for an obligation of this nature, particularly since it would appear that the plaintiff's assignor had no reason to believe that the copartnership itself had any interest in the business of the corporation, or that it made any payments that were not charged to Ruhe's account. Judgment should therefore be reversed, with $30 costs, and the complaint dismissed. All concur.

For other cases see same topic & KEY-NUMBER in all Key-Numbered Digests & Indexes

KLEINHENZ v. HALLET POINT GARAGE.

(Supreme Court, Appellate Term, First Department. December 10, 1919.) COURTS 188(3)-COMPLAINT IN MUNICIPAL COURT STATING cause of action AT LAW AND NOT IN EQUITY.

Where plaintiff, in his complaint as amplified by bill of particulars, alleged that defendant in consideration of services agreed to pay plaintiff 15 per cent. of the profits of the business done by defendant in a given year, and that the profits were a certain sum, whereby plaintiff became entitled to 15 per cent., such complaint and bill of particulars did not set forth a cause of action in equity, but did set forth one at law, so that Municipal Court had jurisdiction.

Appeal from Municipal Court, Borough of Manhattan, Sixth District.

Action by Joseph Kleinhenz against the Hallet Point Garage. From a judgment for defendant, plaintiff appeals. Judgment reversed, and new trial ordered.

Argued November term, 1919, before LEHMAN, BIJUR, and WAGNER, JJ.

David D. Glanz, of New York City (Jacob Zelenko, of New York City, of counsel), for appellant.

Katz & Sommerich, of New York City (Otto C. Sommerich, of New York City, of counsel), for respondent.

WAGNER, J. The complaint in this action was indorsed upon the summons as "Action to recover commissions." This was subsequently amplified by a bill of particulars, which, briefly stated, alleged that the defendant, in consideration of services to be rendered, agreed to pay the plaintiff a "sum equal to 15 per cent. of the profits of the business done by the defendant in the year 1918; that the profits of defendant's business during the year 1918 was the sum of $5,869.71, by reason of which the plaintiff became entitled to the sum of $880.45." It also alleged a refusal to pay by the defendant.

The briefs of both parties refer to a second cause of action, but nothing regarding it appears in the record, and it is conceded that it was withdrawn. At the opening of the trial the defendant's attorney moved to dismiss the complaint upon the ground:

"That it appears that the action is brought for an accounting, and that the plaintiff stood in the relation of quasi partner to his concern, and that this court has no jurisdiction."

This motion was granted, and a judgment was entered in favor of the defendant. The complaint, taken together with the bill of particulars, does not set forth a cause of action in equity. In the case of Louda v. Revillon, 99 App. Div. 431, 91 N. Y. Supp. 194, the court, in pointing out the difference between a complaint in an action in equity and one at law, said:

"If the complaint had alleged that the profits of the business were an amount named, and that under his contract he was entitled to recover 15

For other cases see same topic & KEY-NUMBER in all Key-Numbered Digests & Indexes