Bogardus v. Reed

Smith, P. J.:

The property by this judgment partitioned was originally owned by three parties, Hamilton, Smith and O’Connor, who also owned a ferry boat crossing the Hudson river. This property consists of the docks at which this ferry lands upon the two sides of the river and appurtenant land. The parties above named have all died and their interests in the lands and ferry boat have passed to the heirs and devisees or legatees, who have all suffered the business to continue, each receiving his share of the profits from year to year. That this constitutes a partnership cannot be doubted. This land has always been used in connection with this business. By chapter 178 of the Laws of 1886 the original owners procured a license from the State to operate this ferry. Without such a license the operation of a ferry is a misdemeanor. (Penal Law, § 870.) A license to operate the ferry can only be obtained by one who owns property through which the highway runs approaching the ferry, except, as provided by statute. (Highway Law [Consol. Laws, chap. 25; Laws of 1909, chap. 30], § 270.) While the proof is not as full as might be desired, it is a fair inference from the fact that this property has on it the docks for the landing of the ferry boats and has always been used in connection therewith, that the property is mainly valuable for ferry purposes, and this fact is so found by the referee. In Darrow v. Calkins (154 N. Y. 516), in discussing whether real estate used in connection with a partnership becomes partnership assets, Chief Judge Andrews says: “The investment of partnership funds in lands and chattels for the purpose of a partnership business, the fact that the two species of property are in most cases of this kind, so commingled that they cannot be separated without impairing the value of each, has been deemed to justify the inference that under such circumstances the lands as well as the chattels were intended by the partners to constitute a part of the partnership stock.” In MacFarlane v. MacFarlane (82 Hun, 238) it is held: “ The mere fact of a bequest by will to two persons of certain real estate and of the business transacted by the testator thereon does not constitute such persons partners; it merely makes them joint owners; but their election to continue the business, each contributing thereto his share of the property bequeathed to him, renders the relation between them that of copartners and the property copartnership property.” It is not necessary, however, here to hold that this real estate has become copartnership property, and,' therefore, personalty. This property has passed by deed and will to many divers persons, all of whom have elected to jointly continue this ferry business under this license granted by the State, and all of whom have an interest in the ferry boat and license equal to. that of their interest in the land. A sale of the real estate without the franchise and the boat would probably and naturally largely impair' the value of the franchise and the boat. If sold together the joint interests would naturally bring a much larger sum. The real estate and franchise and boat should-be offered for sale separately and jointly on the principle of an upset sale, in which case the owners would obtain the greatest value that could be obtained for all of the 'property. -These facts seem to me to justify the court in directing such a sale and in refusing to decree that the real estate may be sold separately, thereby impairing if not destroying the -value of - the franchise and of the ferry boat.

The judgment should, therefore, be reversed and a new trial granted, and the action proceed as for a dissolution of the partnership and sale of its assets in connection with the sale of this land.

All concurred, except Kellogg, J., who dissented, in memorandum.