
    Joseph Slevin, Resp’t, v. Margaret C. Wallace, Individually and as Ex’rx, App’lt.
    
      (Supreme Court, General Term, First Department,
    
    
      Filed May 13, 1892.)
    
    1. Statute of frauds—Acquirement of interest in land.
    Plaintiff claimed an interest in certain lands under a paroi agreement made with W., defendant’s testator. Said land had been purchased in W.’s name in 1870; extensive repairs were made; different parcels bought and grouped in one improvement and so held and managed until W.’s death in 1883. Held, that this was not a joint adventure, nor a temporary speculation, but ra’her an investment, and that the payment of money by plaintiff would not give him an interest in the property unless there was some note or memorandum expressing the consideration and signed by the party sought to be charged.
    2. Same—Evidence.
    Evidence of 'conversations between plaintiff and W.’s bookkeeper, though made at the time of payment of the money, is inadmissible, except so far as such conversations are shown to have been communicated to W.
    Appeal from judgment entered on report of referee.
    
      S. P. Nash, for app’lt; S. W. Fullerton, for resp’t
   Van Brunt, P. J.

This action was brought for an accounting respecting the profits made on the purchase, renting and sale of certain "real estate in the city of New York, the title to which real estate was taken by Francis B. Wallace (of whom the- defendant Margaret 0. Wallace is the executrix), in his individual name and for the recovery of one-fourth part of such profits.

To maintain the action, the plaintiff relied upon a paroi contract alleged to have been made on or shortly prior to March 17, 1870, by virtue of which he claimed he was entitled to one-fourth of the net profits on the purchase, renting and sale of the entire parcel of real estate.

The defendant denied that there was any arrangement between the plaintiff and said Wallace that he should have an interest in the property, and also that there was any note or memorandum in writing of any such arrangement as was required by the statute, so that even if made it was void.

The referee found that there was such an agreement as claimed by the plaintiff, but that there was no memorandum in writing in respect thereto and reported in favor of the plaintiff; and from the judgment thereupon entered this appeal is taken,

The evidence offered upon the part of the plaintiff for the purpose of establishing the cause of action alleged in the complaint consisted chiefly of the testimony given by a bookkeeper of said Wallace in relation to certain conversations had between himself and the plaintiff which was repeated to Wallace, and conversations with Wallace, the testimony of the plaintiff, and the evidence of certain witnesses in respect to admissions made by Wallace during his lifetime in respect to the interest of the plaintiff in the property in question.

From the evidence thus adduced, having come to the conclusion that an arrangement did exist between the plaintiff and Wallace by which the plaintiff was to have an interest in the property in question, and that such arrangement did not come within the statute of frauds because it was a partnership adventure, and not an agreement for the sale of an interest in lands, the referee reported in favor of the plaintiff.

It is claimed upon the part of the appellant that there was no sufficient evidence to justify the findings of the referee of any agreement or arrangement between the plaintiff and Wallace, and that even if such an arrangement were made it was not an arrangement for a joint adventure, but for the acquisition of an interest in lands; and, also, that the referee erred in the receipt of certain testimony during the progress of the trial.

There is no question that the principle is well established by the adjudications in this state that where two or more parties enter into an agreement for the purchase of real* estate as a joint adventure and thereby a partner-ship is formed in that adventure, although the title is taken in the name of one, the others may, notwithstanding the statute, enforce their rights in respect thereto.

But it seems to me from a reading of the testimony in this case that there is no evidence that this real estate was bought for the purpose of trading therein or of speculating thereon. It was rather bought for the purpose of investment, undoubtedly in the hope that the property invested in would enhance in value. But there is no evidence justifying the finding that the property was bought for speculative purposes or for the purpose of trade, and therefore the principle to which attention has been called has no application.

The plaintiff, according to the testimony, was to have an interest in the property. Nothing was said about an interest in the profits arising from the joint adventure. And if he was to have such-an interest in the property the payment of the money did not give him such an interest, under the statute, unless there was some note or memorandum expressing the consideration and signed by the party sought to be charged.

The case at bar differs from all those which have been cited, in that no copartnership relations existed between the plaintiff and Wallace, which relation did exist between the parties in many of the other cases.

Neither, as already observed, is there anything tending to show that the interest which the plaintiff was to have looked to an interest in the profits rather than an interest in the real estate itself. This view is emphasized by the language of the plaintiff to Mr. Wallace at the time of the alleged payment of the monej’’, where it is testified that he stated: “ I have made that payment on account of the purchase of that property.”

That the purchase was not intended to be a temporary investment is shown by the evidence as to the manner in which the property was treated both by the plaintiff and Wallace for a large number of years. Extensive repairs were made, and different parcels bought and grouped together in one improvement, managed together and held in this way until the death of Wallace occurring about the month of June,' 1883; certainly a long period to await a realization upon a speculative investment.

There seems also to have been error in the admission of the testimony of the plaintiff in respect to a conversation had by him with Smith, the bookkeeper of Mr. Wallace, at the time of handing him the check, which it is admitted was received and credited to the plaintiff in the books of Mr. Wallace’s firm.

The plaintiff was allowed to go on and testify to that which he had stated to Smith in respect to his agreement with Wallace relating to the property in question. There is no evidence that a very material portion of such conversation was ever communicated to Wallace by Smith. If it is claimed that Smith testified that he stated to Wallace what had transpired between the plaintiff and himself, it is to be observed that that evidence related to what he testified had occurred between the plaintiff and himself, in which testimony a material part of the conversation as testified to by the plaintiff does not appear.

It is undoubtedly claimed that the conversation was admissible in connection with the payment of the money as part of the res gestee; and the learned counsel for the appellant seems to some extent to recognize the admissibility of such evidence if it did actually take place at the time of the payment of the money. But he claims that there is no evidence that it did take place at that time, which seems to be the fact, as the witness was unable to testify with any degree of certainty whether it took place before or after, or at the timé. It is manifest that unless such conversation did take place at the time of the payment and was therefore part of the res gestae it could not under any circumstances be admissible. But I fail to see, even if it did take place at the time of the payment of the money to the bookkeeper of Wallace, how it is admissible unless it was communicated to Wallace. I fail to comprehend how, by the mere fact of a man stating to my employee that he pays money in pursuance of an agreement made by me that he shall thereby acquire an interest in my property (such conversation never having been communicated to me), any such interest is established. How, therefore, can such testimony be competent ?

This is precisely the position occupied by the plaintiff in respect to a material portion of this alleged conversation. One of the important features • of the plaintiff’s case, and which it is claimed tends to support, in a very remarkable degree, the claim of the plaintiff, is the statement that the plaintiff made to Smith at the time of the payment of the money, that he was to take charge of the property, rent it, collect, etc., which was never communicated to Wallace; and because the plaintiff did take charge of the property, rent it, collect, etc., after the purchase, it is urged that the truth of his claim is strongly supported.

It seems clear to me that evidence of this kind is incompetent. Otherwise a principal may have a burden fixed upon his property in favor of a third party because of a conversation by such third party with an employee at the time of the receipt of certain moneys, of which the principal has not the slightest conception or knowledge ; and it only requires death to shut his mouth and the charge is complete. Such cannot be the rule of evidence. Agreements cannot be established in such a way, and the conversations between the plaintiff and the employee of Wallace were inadmissible, except so far as they were communicated to Wallace ; and such communication must be established by proof, and cannot rest upon conjecture.

Error, therefore, was committed in permitting such evidence to be given; the question which led to the giving of such evidence having been duly objected to, and exception taken to the overruling of such objection.

It does not seem necessary to consider the question of the weight of evidence which was urged to so great an extent by the learned counsel for the appellant on the argument, because, for the reasons already pointed out, it would seem that there should be a reversal.

The judgment should be reversed and new trial ordered, with costs to appellant to abide event.

Andrews, J., concurs.

O’Brien, J.

Had the contract alleged been proven by competent evidence, though made by paroi, it could be enforced. An important part of the contract was that relating to plaintiffs taking charge of the property. I agree, therefore, with the conclusion reached by Mr. Justice "Van Brunt, and concurin his reasons as to the error committed in the reception of evidence given by plaintiff as to what he told the bookkeeper of Wallace in the absence of proof showing either that it was a conversation when the money was paid or was subsequently communicated to Wallace.

I therefore concur with the presiding justice in the result.  