
    Abraham H. Sarasohn, Appellant, v. Rebecca Kamaiky and Others, Respondents. Leon Kamaiky and Ezekiel Sarasohn, the Surviving Members of the Copartnership Firm of Sarasohn & Son, Respondents, v. Bertha Sarasohn and Abraham H. Sarasohn, as Administrators, etc., of Kasryel H. Sarasohn, Deceased, Appellants.
    First Department,
    January 26, 1906.
    Partnership — receiver, when appointed, to sell assets —• when appointment of receiver postponed pending litigation.
    When two actions are pending, one brought by the son of a deceased partner against the surviving partners to compel the specific performance of an alleged agreement by said deceased partner to give said son a share of the partnership assets, and the other brought by said surviving partners against the representa- , .lives of the deceased partner to obtain a decree .for the sale of 4he partner^ ship assets with leave to the. surviving partners to bid, a receiver should not be appointed until the determination of said issues, when the partnership assets are'not perishable in their nature and -it dues not' appear that a loss will accrue . by such postponement, • or that the "conduct of the surviving partners in conducting the business will cause: a loss, or that they, aré" not financially responsible. , . . . . ...
    
      It seems, however, that when such sale-bf the assets takes place., it should be under the direction of .a receiver and not a referee, if the surviving partners are to be allowed to- bid. . . ' ' - . .
    Appeal by the plaintiff, Abraham H. Sarasohn, in the first entitled .action, and by. the defendants, Bertha Sarasohn and another, as administrators, etc., of Kasryel IT. Sarasohn, deceased,, in the second entitled action, from so much of an- order of tlie Supreme Court, made at the New York Special Term and- entered in"the office of the clerk of the county of'New York on-the 13th-day of November, 1905, as denies their motion for the appointment of a receiver of the copartnership assets of the .firm of' Sarasohn &. Son, and denies their motion that such receiver be -directed :to take an accounting" of the firm a'ssets and liabilities and render a report, and thereafter to properly advertise and sell said assets. .
    
      ■Edward W. S. Johnston, for the appellants. ■
    
      G. II. Engelhard, for the respondents.
   Laughlin, J.:

■ The copartnership firm of Sarasohn & Son was .composed of the plaintiffs dn the second entitled action and the intestate of the' - defendants therein,: each owning a oneJhird interest. The first, entitled action is for specific performance of a contract between the plaintiff therein and his father, the ‘deceased member of the firm, whereby the latter, for a valuable Consideration, promised and agreed to provide for his son, the plaintiff, by certain monthly allowances _and by will which would devise to him a one-fourth interest in the: real estate known as No. 185 East Broadway,; and also a one-fourth interest in the business of publishing the Jewish Dally News and the Jewish Gazette Owned and published by the firm, and in the profits and business of the firm,., and also twenty' five thirty-thirds, of a one-third interest in and to eighty:seven shares of the capital stock of the Jewish Press. Publishing Company. That action was brought against the surviving partners, who are the brother and brother-in-law of the plaintiff therein, and against the widow, heirs and next of kin of the decedent. Part of the order, not appealed from, directs that the personal representatives of the decedent, who were appointed subsequent to the coihriiencement of the action, be brought in as parties defendant. They are the widow as administratrix and the plaintiff as administrator.

The second entitled action is brought by the' surviving - partners against the personal representatives for a decree appointing a referee to conduct the sale of the copartnership assets, and granting the surviving partners leave to bid on the sale. The decedent died on the 12th day of January, 1905. The business was prosperous. It has been continued by the surviving partners with increasing profit. The plaintiff in the first action and the defendants, the personal representatives of the decedent, in the second, complain of the conduct of the surviving partners in thus continuing instead of liquidating the business. The surviving partners offer as an excuse that it is to the mutual interest of all parties that the business be sold as a going concern, and that since they are familiar with it and are desirous of buying and continuing it, they awaited the appointment of the personal representatives for the purpose of bringing the second action to have the sale conducted by a referee to be appointed by the court,, and to obtain leave of the court to enable them to lawfully purchase the business, which, being fiduciaries, they could not do otherwise. The appointment of the administrator and administratrix and the issuance of letters to them were delayed until the 21st day of June, 1905, owing to a contest over the probate of an alleged will of the decedent. In the instrument which was offered for probate as a last will and testament the decedent attempted, partially at least, to comply with his agreement with his son. Its -probate was defeated on an objection filed by one of the surviving partners upon the ground that it was not duly executed. The action by the surviving partners was commenced the day after the personal representatives of the decedent were appointed. . The defendants in the second action set up three counterclaims of the following nature:

(1) For an accounting by the surviving partners for their acts as agents of the decedent in conducting the business for him prior to the formation of the copartnership, on the 22d day of January 1900.

(2) For their acts as copartners during the existence of the firm, and

(3) For an accounting for their acts in conducting the business since the death of the deceased member and for the appointment of a receiver of the assets of the firm.

The conduct of the surviving partners in thus continuing the business as if it were their own and other acts of theirs in refusing information to persons representing themselves as intending bidders when the assets are to be sold — except the bare information that the profits are $50,000 per annum — and in claiming that the sale will be a mere formal proceeding to cut off the interests of decedent and rendered necessary by the death of the,decedent, but that they intend to purchase the property and continue the business and will not allow it to be sold to any one else except for an exorbitant price and declining to recognize the rights of the plaintiff in the first action or to give him either individually or as administrator access to the firm books or information concerning the business and assets,are set up as a defense to the action and as showing the necessity for the appointment of a receiver. The motion for the appointment of the receiver was made jointly by the plaintiff in the first and the defendants in the second action and before the trial of the issues in either. The moving affidavits show a disposition on the part of the surviving partners to further their own interests in a sale of the assets in disregard of the rights of the representatives of the deceased partner, and those affidavits are neither overcome nor met by the respondents. A_ suggestion was made by counsel upon the argument in the points as to the disposition made on the tidal of the issues in the second actiori, but we must decide this appeal upon our view of the law as applied to the facts presented by the record.

On the papers before us it quite satisfactorily appears that if the surviving partners are to be permitted to bid on the sales of the assets a receiver, and not a referee, should be appointed. It is difficiilt to perceive, how a referee could confer title on a purchaser. ' It could only be done as agent of the surviving partner. It is manifest that no person can bid intelligently on the sale-of a newspaper business, and especially one of the magnitude and value of this, without accurate information as to its circulation, the nature and extent of its subscription and advertising contracts and the expenses of operation and the gross' receipts. If a referee were appointed he could only furnish such information as he may receive from the surviving partners, but a receiver would take possession of the plant and property and could furnish reliable information on any point desired by intending bidders. The property is not of a perishable nature, however, and it does not satisfactorily appear that any financial loss will ensue by postponing a. sale of the assets until after the trial of the issues and a decision thereon. There is no proof of any conduct on the part of the surviving partners that is likely to affect the assets or their value prior to the sale, nor does it appear that they are not financially responsible. Any erroneous information or impression they may have given or may give intending bidders concerning the sale will be corrected, we think, when it is decided that, if they are to be permitted to bid, the sale must be conducted by an officer of ffhe court clothed with authority to see to it that they have ' no advantage over other bidders. ,

It follows that the order should be affirmed, with ten dollars costs and disbursements.

O’Brien, P. J., Ingraham, McLaughlin and Clarke, JJ., concurred.

Order affirmed, with ten dollars costs and disbursements.  