[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] *Page 558
[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] *Page 559 The adjudication in this case, announced in 61 N.Y. 123, is binding upon the parties, and hence upon the court, unless a state of facts materially different from that there presented was shown upon the last trial. We do not understand that upon the vital question in the case such difference is claimed, save in this: that before, it did not appear but that the leases in the first instance were to the parties jointly, while *Page 562 now it is shown that the leases, for the most important and useful part of the premises, were to the defendant alone, directly or by assignment. This fact does not affect the principle on which the former adjudication was based, for it is said to be a universal rule that no one who is in possession of a lease, or a particular interest in a lease, which is affected with any sort of an equity in behalf of third persons, can renew the same for his own use only, but such renewal must be considered as a graft upon the old stock. (See Moody v.Matthews, 7 Ves. 185 [Sumner's ed.], note.) It is well to observe, also, that it is noticed in the opinion of DWIGHT, C., in 61 N.Y. (supra), that the leases in the case in hand were in different forms and rights, some being to the party directly, and others, "through a series of transactions, * * * vested * * * in the partnership." It is for us, then to inquire, only whether there were errors committed in the conduct of the last trial.
It is claimed that the measure of damages adopted by the trial court was erroneous. The question put to the witnesses, who were called by the plaintiff to speak to the damages, assumed that it was proper to consider the furniture and good-will as put up for sale together with the leases, and that the parties, or either of them, had a right to bid, and that what those three together would bring at such a sale was a basis for a computation of damages.
It is objected that the furniture and the good-will were not proper constituents in the inquiry. The furniture had already been sold with a confirmation of the sale by the plaintiff's testator, and the purchase-price had been paid by the defendant.
But that sale was brought about as a necessity of the termination of the partnership of the parties, and not as an interference by the plaintiff's testator and a voluntary or willful act on his part. As the matter stood when this suit was begun, the testator was entitled to an interest in the leases renewed, in the furniture, and whatever else was a thing of partnership value. It is manifest that the property of a partnership engaged in the business of keeping a public house is more valuable if that property may be kept together at the place of business to which *Page 563 the customers were used, and in the hands of those to whom they were used, with the right to carry on the same business at that place by the same proprietors for a fixed term, than if put up for sale with the need upon most bidders for it, including one of the partners, of taking it elsewhere into other business or into a new place for the same business. The defendant had done damage to the testator by bringing about that last-named state of things, and one element of that damage was the diminution in value to the testator of his interest in the property as thus affected.
So it was an element in the estimate of damage, what the property would have brought, had there gone with the sale of it the right to keep it on at the same place in the same business. The law's delay, and the course of events, had precluded the plaintiff's testator from an enjoyment of the leases, and there was no practicable way of learning what was his damage from the act of the defendant, but to inquire what the leases and property would have been worth if still united in interest and enjoyment, and thus offered for sale. It is not claimed, but that the suit of the testator to dissolve the partnership and to close its affairs and to convert its assets into money for division was well brought and properly closed. The leases would have been made a part of the assets then sold or disposed of, had it not been for the pendency of this suit, brought to overcome the resistance of the defendant to the testator's claim of a right therein. The leases were excepted from the judgment in the other suit, because of this litigation. But for it they would have been sold at the same time with the other property, and the product of all thus sold would have been the avails in which the testator would have shared. It is the right of the plaintiff now to be put as nearly in that position as is possible, and the practicable way to do that is to find out what would have been the result in money if she or her testator had then been therein. We think that there was no error in making the assumption on which to get the judgment of the witnesses, so far as the furniture, stock in trade, and accounts current and the like were concerned. *Page 564
The matter of the good-will is made a subject of separate consideration in the points of the defendant. That there is such a thing as good-will, which is a matter of value in such a business, is not to be denied, nor that it is a part of the assets of a copartnership in that business. Doubtless, some of it, as is suggested by the learned counsel for the defendant, grows from satisfaction of customers with the individuals composing the partnership. The manifestation of it is, however, so much attached to the place at which the business has been done, as that it enhances the value of the lease of the place to the partners jointly, or to any one of them. Hence it has generally been held that, where a lease is partnership property, the good-will of the business enters into the value of the lease, and affects the amount of the purchase-price. The good-will of the business of the testator and the defendant was a valuable matter in which they had a joint interest, — it was a part of their joint property. There could be no just and equable division thereof between them without each got his share thereof. If his share was to be had by a sale of the joint assets, that good-will must then be sold, or he would not have his share, and to reach its full value it must go with the lease of the place. And inasmuch, because of the matters above-stated, the leases could not be sold at the time other property was sold, it was proper to consider what would have been the value of both, had they been sold together. The question also assumed that the partners, or either of them, had a right to bid at the sale of the leases. This is criticized, for that this suit proceeds on the ground that the defendant had no right to obtain the leases to himself to the exclusion of the testator, and that, if that ground be well taken, he would have no right to bid at the sale. Manifestly there is a difference between acquiring the leases from the landlord privily, to the wrong and harm of the co-tenant and copartner, and publicly bidding at a judicial sale of them with the sanction of the court, and on no more than equal terms with all others interested. Nor is the point of merit that the copartnership having expired of its own limitation the matter of the good-will could not enter into consideration. The wrong *Page 565 of the defendant began before the partnership had terminated, and it consisted in prematurely and privily obtaining the leases without giving his copartner a chance to seek the same, either jointly or solely. If that chance had been given the testator, he could have put his own estimate on the good-will and brought that estimate into the data on which to make up his offer for a lease, or in some other way he might have been compensated for his share in it. It is claimed that the good-will went with the sale and transfer of the property of the parties other than the leases. Grant that it is so. That does not preclude the plaintiff from an inquiry of what would have been its value had the leases accompanied the rest of the property. She has now had it determined that her testator had a right in the new leases. That was not then adjudged. In an inquiry into the damages for having that right denied and refused, it is competent to ask how the sale of the leases with the good-will would have affected the value of the latter. Nor is it a matter that works a total denial of damages, that the testator went into business in rivalry with the defendant, and in proximity to him. If that is a matter to enter into the estimate of damages, we cannot say that it did not.
These views cover the points made by the defendant
We think that the judgment should be affirmed.
All concur, except RAPALLO, J., absent.
Judgment affirmed.