author: .Pierrepont, J. Slossoh, J. Hoffman, J.

text:
    Eli Hasbrouck, Jr., v. Emery E. Childs.
    Two persons (H. & C.), both of whom then resided in the State of New York, entered into written articles of copartnership, by which they agreed to transact, as partners, at Keokuk, Iowa, the wholesale and retail dry goods business. H. & 0. severally agreed to contribute and did contribute §2,000, of capital, in cash. H. agreed to devote himself diligently in Keokuk to the said partnership business, except when the purchasing of goods or other necessary business of the firm required him to be absent from Keokuk. C. agreed to attend to that part of the business which could be conducted in the city of New York, as far as he was able, without interfering in any way with his duties there, as clerk of any firm by whom he might be employed. It was stipulated, that H. should be entitled to receive and be paid “ three-fourth parts of the profits of said partnership,’’ and the said 0. “ one-fourth part.” The agreement did not, in terms, make any provision in respect to losses. No profits were made, but on the contrary the losses absorbed §3,120.20 of the money contributed as capital:
    1. Held, on these facts, that in respect to the portion of the capital absorbed in the payment of losses, neither party had any claim against the other, and that the §879.80 remaining of the sum originally contributed as capital, belonged to, and should be divided between the partners equally. (Per Slosson and Pierrepont, J. J.)
    2. Held, also, that by a just construction of the articles of copartnership, the partners thereby, agreed, that H. should receive half of the profits for his extra services if profits were made; and if none were made, that he should not be compensated therefor; and that if losses were incurred, they should be borne by the partners equally. (Per Slosson and Pierrepont, J. J.)
    1. Conclusions of Hoffman, Justice. The terms of the copartnership agreement do not afford satisfactory proof of the intention of the parties being such as the majority of the Court have drawn from it. It cannot be construed on the supposition of such being the expressed or necessarily implied intention; and the question is, how the law construes the provisions and what rule of apportionment it will apply ?
    2. In the absence of any decisive case in the English or our own Courts, upon the particular point, the Court is at liberty to resort to the doctrines of the civil law for assistance.
    3. The rule of such law .is nearly universal, that in cases of a contribution of labor and skill by one, and of a money capital by another, the intendment of the law is, that the labor and skill are to be compared with the use or interest of the money, and be estimated at that value. In such a case, the money is at the risk of the contributor; whatever is lost in the business is his loss; whatever remains, belongs to him. He loses, also, the interest on his capital, and the.associate of labor loses his time and services, taken as equivalent for such interest
    4. The Code of France has changed this rule, and made the money, in such a case, to belong to the association, and be at its risk, but such Code has not provided for the case of a contribution by one of industry in conjunction with a money capital, and by another of money alone; nor especially when such circumstances are combined with an inequality in the share of profits.
    5. In such a case, the intendment that the labor is to be compared and valued with the use of the money, in some proportion to be deduced from the circumstances is reasonable; conformable to the rules of the general civil law; sustained by writers upon it; and not opposed by any principle or rule of our law.
    6. Under such rules and their exposition, the legal construction of the agreement in this case is that the extra services of H. are represented by, and are to be estimated at, the interest on one-half of the aggregate capital.
    Assuming the profits to be §280 (the legal interest for one year on §4,000, the aggregate capital), O. will receive §70'on his capital, and H. §70 on his equal capital; §140, therefore, represents the extra services of H.
    The common fund is made up of the extra services of H, thus estimated and represented; the interest on the money contributed by him; and the interest on the money contributed by O. The money capital itself, is owned by the partners equally. This was put at risk by them respectively, and was lost, except the §879.80 of capital still remaining. That must be divided equally between the partners.
    (Before Hoffman, Slosson and Piekkepont, J. J.)
    Heard, April 12;
    decided, May 15, 1858.
    This controversy comes before the court at General Term, upon a case containing the facts upon which it depends, agreed upon by the parties, as prescribed by § 372 of the Code. The case so agreed upon, exclusive of its title, is in these words, viz.: “ We, Eli Hasbrouck, jr., of the village of Hewburg, in the State of Hew York, and Emery E. Childs, of the city, county and State of Hew York, having a ‘question of difference, which might be the subject of a civil action,’ viz.: As to the proportion each party shall bear of the losses incurred, as hereinafter stated, have agreed upon the following case, which states ‘the facts upon which the controversy depends,’ and hereby submit the same to the Superior Court of the city of Hew York, according to § 372 of the Code of Procedure, &c.
    (Signed) “ Eli Hasbrouck, Jr.,
    “ Emery E. Childs.
    “Dated, October 31, 1857.”
    The parties entered into the following agreement: “The undersigned Eli Hasbrouck, jr., of the city of Hewburg, in the State of Hew York, and Emery E. Childs, of the city of Brooklyn, in the State of Hew York, hereby agree, each for himself, to form a limited partnership, for the transaction of the wholesale and retail dry goods business, in the city of Keokuk, in the county of Lee, in the State of Iowa, under the name or firm of ‘ Hasbrouck & Childs,’ to commence the fifteenth day of April, in the year one thousand eight hundred and fifty-six, and terminate on the first day of January, in the year one thousand eight hundred and sixty-one.
    “ The said Eli Hasbrouck, jr., for himself, agrees to contribute two thousand dollars of capital, to the common stock of said partnership, and to pay same in cash, on or before the twenty-second day of April next.
    “ The said Emery E. Childs, for himself, agrees to contribute two thousand dollars of capital to the common stock of said partnership, and to pay same in cash, on or before the twenty-second day of April next.
    “ It is further mutually agreed, that the said Eh Hasbrouck, jr., shall be entitled to receive and be paid three-fourths parts, of the profits of said partnership, and the said Emery E. Childs one-fourth part.
    “ The said Eli Hasbrouck, jr., hereby agrees to devote himself diligently, in Keokuk, to the said partnership business, durmg the continuance of the partnership, excepting the time the purchase of goods or other necessary business of the firm, may require his absence from Keokuk.

      “ The said Emery E. Childs, hereby agrees to attend to that part of the business, which can be conducted in the city of Few York, as far as he is able, without interfering in any way, with his duties as clerk to any firm there, by whom he may be employed.
    “Eli Hasbrouck, Jr.,
    “ Embry E. Childs.
    “Few York, April 15th, 1856.
    “ The whole capital was contributed -as agreed upon and paid in, nothing has been paid to Mr. Childs.
    “The firm was unfortunate and has been dissolved; the assets remaining are eight hundred and seventy-nine dollars and eighty cents, the losses consequently are three thousand one hundred and twenty dollars twenty cents.”
    .(Signed by the attorneys of the parties.)
    There was, appended to the case, an affidavit that “the controversy is real, and the proceeding in good faith, to determine the rights -of the parties.”

      T. McKissoclc, for E. Hasbrouck, jr.
    The parties entered into partnership, and each put an equal amount in cash into the concern—Hasbrouck was to devote his whole time to the business, and Childs an indefinite and very small portion of his time—Hasbrouck to receive three-fourths of the profits. The partnership is dissolved without profits—a little more than three-fourths of the capital has been lost. The question presented is, in what proportion shall the partners bear the loss.
    I. The loss should be borne equally, each partner taking a moiety of the capital left.
    II. The one-half of the profits, to which Hasbrouck was entitled beyond his partner, was manifestly a compensation for his extra services, and not profits—the profits were only named as a basis on which to calculate the compensation he was to receive.
    Hasbrouck did not render his extra services instead of a share of the capital stock of the firm, but advanced as much in cash to the capital as Childs his partner.
    TIT. Besides, there is no equitable rule of adjustment that would subject Hasbrouck to bear three-fourths of the loss, merely because by the articles of copartnership he was to have received that portion of the profits.
    It was only of the net profits he was entitled to any share. So that if the profits had been a $1,000, and the losses $999, he would have been entitled to receive three-fourths of a dollar, of which, fifty cents would have been for extra services, and in this way he would have borne three-fourths of the loss, which is according to the meaning of the articles of copartnership.
    But when the three-fourth ratio is applied to the capital stock remaining, then the principle is not only destitute of equity or reciprocity but arbitrary and unjust..

      F. Byrne, for Henry E. Childs.
    I. The amount of pecuniary capital contributed by each partner was equal, and whether one did the whole labor or not is immaterial in law, as the parties have made the amount of compensation for the labors of each determinate on the amount of profits. The capital was “common stock,” and the individuality of each share was lost during the continuance of the partnership.
    II. The duties of the several parties were distinct. Mr. Childs was to attend to the affairs of the firm, such as purchasing in, and forwarding goods from, the city of New York to Mr. Hasbrouck and Mr. Hasbrouck was to dispose of them in Iowa. All the capital was contributed according to the agreement (Mr. Hasbrouck received it), and “nothing has been paid to Mr. Childs.” “A communion of profit implies a communion of loss, for every man who has a share of the profits of a trade, ought also to bear his share of the loss.” “And if there is nothing to guide the judgment of the court to give unequal shares, there is no rule for them, but to give equal shares.” (Story on Partnership, § 24, Note 3.)
    “The proportion of the profits, as well as the mode of conducting the business, may be modified and regulated by private agreement, if there be no such agreement on the subject, and no evidence to the contrary, the general conclusion of law is, that the partnership losses are to be equally borne, and the profits to be equally divided. In equity (according to Pothier), each partner should share in the profits, in proportion to the value of what he brings into the common stock, and he should share in the loss, in a ratio to the gain, to which he would, in a prosperous issue to the business have been entitled. (3 Kent’s Com., 3d ed., p. 29; S. P. Turnipseed v. Goodwin, &c., 9 Alabama R., 372; Colyer on Partnerships, § 167 and notes.)
    HI. From the above extracts, it appears that if the pecuniary amount contributed is unequal, the losses and profits would be borne in the same ratio. In the agreement in question, in a prosperous issue of the business, Hasbrouck would be entitled to three-fourths profits. Why, therefore, according to the principles of equity and law, should he not be required to sustain his-share of the losses in the same ratio ?

      TV. The amount of capital contributed was... $4,000 00
    The losses have been.................. 3,120 20
    The assets are........................ 879 80
    $4,000 00
    Mr. Childs should bear one-fourth of the
    losses, viz.,........................ $780 05
    Mr. Hasbrouck three-fourths,........... 2,340 15
    $3,120 20
   .Pierrepont, J.

—Each partner contributed the same amount of capital; had there been no special agreement, each would be entitled to half the profits, and each would be liable for half the loss.

It was competent for the parties to agree, that one should render extra services, taldng his risk of compensation out of anticipated profits, and that such compensation should be half of the profits if any were made, and that the other half should be equally divided; had such been the agreement in terms, the capital left in this case would be equally divided.

A written contract of partnership, like any other contract in writing, is to be construed according to the true intent of the parties, as fairly deduced from the terms used.

I think the fair construction of this contract is such, as to amount to an agreement, that Hasbrouck should have half the profits for his extra services, if profits were made, and no compensation for such services, except in that way; leaving the remaining profits to be divided equally if profits there were, and the losses to be shared equally if losses were sustained.

The balance of capital remaining (the fund in question), should be divided equally between the partners, and judgment should be entered accordingly.

Slossoh, J.

—We think the intention of the parties sufficiently manifested by the agreement itself. Apart from the provisions as to profits and labor, a perfect equality exists between the two, each is to contribute an equal amount of capital, but Hasbrouck is to perform all the work of the partnership, with the exception of what might conveniently be done by Childs in Hew York without prejudice to his other business; moreover Hasbrouck, though a resident in the State of Hew York at the time the partnership was formed, was to remove to, and reside during the five years provided for its continuance, at Keokuk, in Iowa, where the business was to be transacted. There was a propriety therefore, in making a discrimination between them as to the profits, and in giving the larger share to the partner who was to do the larger share of the work, and on whose industry and ability depended the success of the enterprise.

Whether we call this difference, a compensation for extra service, payable out of profits, or call it a larger share of profits by way of compensation is a matter of no moment, as it is very manifest, that compensation for service was the sole object of the provision.

Had no discrimination been made in the agreement as to profits, each would have shared equally, not only on the general presumption, in absence of proof to the contrary, that partners are interested equally, but because each had contributed an equal amount of capital, notwithstanding the services to be rendered by one were wholly disproportionate to those which the other was to bestow. The fact that a discrimination is made, there being no cause for making 'it, in any difference in capital contributed, indicates clearly that it was intended to compensate for the superior service to be rendered by Hasbrouck. If this be so, it is quite manifest that the parties could never have intended that Hasbrouck was to run a risk in respect to his capital, three times greater than that incurred by Childs; in other words, that he was to bear losses in the same proportion he was to receive profits, even to the entire absorption of all his capital, and possibly the bringing him in debt to his copartner besides.

There is nothing unreasonable in holding the intention of the parties to have been that losses were to be borne equally in consideration of an equal contribution of capital, while profits were to be shared unequally in consideration of the difference in services to be rendered. Hasbrouck absolutely stipulates to render the greater service, and his compensation is to depend wholly on the success of the trade, the making of profits. If no profits are made he loses his services, and also the interest on Ms capital, while Childs who has rendered no service, or comparatively none, loses the interest on Ms capital. They are then remitted to the position in which they would have stood had no discrimination been made in respect to profits. If the losses intrench on the capital, they must be equally borne, and if after all the debts are paid any capital remains, it must be equally divided.

I think tMs to be the fair spirit of the agreement, the understanding of the parties, and the true rule of construction.

Judgment should be entered that the fund, being a residue of capital (all the debts being paid), be equally divided between the partners.

Hoffman, J.

— I concur in the result to which the Court has arrived. There are some other views which I have taken of the case, and proceed to state. T do not find in the articles of partnership any satisfactory evidence of an intention in fact, to pay Hasbrouck the extra fifty per cent of profits as a compensation for Ms services. That conclusion makes him a clerk, with a salary rated upon profits in one point of view, and a partner in another. (Burckle v. Eckart, 1 Denio, 337; St. Victor v. Daubret, 9 Louis, R., 314.) I regard the articles as not supplying any plain indication of the intent or meaning of the parties upon the subject. The question in my mind is, what rule has the law given for interpreting the provisions, and apportioning the sum remaining ?

I understand the case to be, that the debts are paid, the assets collected, and of the money capital contributed there remains the sum of $879.80; that the residue has been lost in the operations of the concern. All that has been received from the business has been used in discharge of the expenses or liabilities. These have exhausted $3,120.20 out of the $4,000, contributed in equal portions. How is the residue to be divided between the partners ?

There are some general propositions bearing upon this question to which I shall first advert.

A partnership may be formed, not only as to strangers but between the parties, in which one contributes all the money capital, and another his skill and industry alone; and such a partnership may involve the entire community of the labor and skill with the money, upon the footing, not only of an equal, but of a higher estimate and value placed upon the former than upon the latter. (Peacock v. Peacock, 16 Vesey, 49; Dob v. Halsey, 16 John. Rep., 34; Chase v. Barrett, 4 Paige, 158; Kent’s Com., vol. 3, p. 28; Collyer on Part., §§ 16, 17; Bell’s Com., 2, p. 614, and the foreign authorities hereafter cited.) “ Partnerships may and do exist, in which all the capital is contributed by one, and nothing but his labor by the other, who notwithstanding, is entitled to consider the capital as joint stock, and claim an equal share of it, or of its produce. The law in all these cases moulds itself to the intention of the parties, when that can be ascertained, and is conformable in this respect to the docrine of continental jurists.” (Smith’s Mercantile Law, p. 12.)

Again, it is a settled rule that a liability for losses follows a right to profits, and ordinarily, in the same proportions. (Ch. J. De Grey in Grace v. Smith, 2 Wm. Bl., 999 ; Dob v. Halsey, 16 John. Rep., 40; Catskill Bank v. Gray, 14 Barb. Rep., 471; Burckle v. Eckart, 1 Denio, 337; Bowman v. Bailey, 16 Vermont Rep., 170.) Generally speaking, the cases are those in which the question arose as to a responsibility to creditors.- This was the case also in Perry v. Bull (14 Georg. Rep., 699), in which the point is fully examined.

I apprehend also, that where there is no express provision, profits are to be taken, and losses are to be borne, in proportion to the contribution of the associates to the common fund. This is the doctrine of the great majority of the writers of the civil law. (Troplong clu Contrat de Societé, tome 2, p. 84.) He shows that the text of Ulpian is really not contradictory. Pothier approves of it, with a modification not important to be noticed (Ibid); and Pardessus adopts the proposition of Pothier, Code Comm., N., 985, tome 4, p. 36; Domat, vol. 1, p. 149. Article 1853, Code of France; Pirtle v. Penn, 3 Dana’s K’y Rep. See also the full and able comment of Yinnius, who examines and criticises the opposite doctrine with care. Inst., Ed. 1726, De Societate, Lib. iii, tit. 251.

The passage in Bell’s Commentaries (vol. 2, p. 614) intimating a different rule, cannot be regarded as of force in opposition to such strength of authority as I have adduced to support this doctrine.

The different rule apparently stated by the text writers, with the authorities relied upon, when fully examined, do not conflict with the civil law. (See Collyeron Partnership, p. 161, § 167, Perkins’ Edition.)

After a careful examination of the English authorities, I am satisfied that we are at liberty to adopt any just principle for the valuation of labor contributed to the partnership funds, which the agreement of the parties does not preclude, and equity may dictate. It is manifest that if the law permits us to do this in the simple case of labor given by one, and money by another, it will sanction it in all the combinations into which they may be brought.

The case of Peacock v. Peacock is generally cited as settling an arbitrary rule for the appreciation of labor, upon the question of . profits and losses, where the parties have not expressly regulated it, and settled it upon the footing of equality. The case is reported in 16 Yesey, 51, and (upon the trial of the issue before Lord Ellenborough), in 2 Campbell, 45. The latter treated it as a question for a jury on evidence.

The subject received a full discussion and determination in the case of Thompson v. Campbell (5 Wilson & Shaw, 16; Ibid, 7th Bligh, 432), in the House of Lords. Campbell had been a clerk, and was taken into partnership without contributing capital, and no share of profits fixed. The Lord Ordinary sent the case to a jury court to determine whether there was a partnership, and if so, the proportions of the parties. On a reclaimer, the Court above found that there was a partnership from a certain day; and that the presumption of law was, that there was to be an equal participation of profits.

On appeal to the House of Lords, the judgment was reversed, and the Lords of Session were directed to frame issues to try the whole of the matters in dispute. It was held that there was no such presumption of law as was insisted upon; that it was a presumption of fact which a jury might act upon in the absence of everything tending to control it; but that such evidence should not only not be shut out, or discountenanced, but should be even courted to show what would be a just proportion.

It was decided that the rule stated by Lord Ellenborough, and acted upon by the jury, was not shaken by anything which fell from Lord Eldon, in Peacock v. Peacock. The jury of merchants was the best tribunal in the land to settle such a question; and the Scottish law was not, that equality of division was a settled rule.

Justice Story is dissatisfied with the reasoning of the great judges in this case, and doubts the decision. He cites Chancellor Kent as opposed, and also some later English authorities. (Kent’s Com., vol. 3, p. 28; Gould v. Gould, 6 Wend., 263; Webster v. Bray, 7 Hare, 177; Fanar v. Beswick, 1st Moody & Rob., 527.) Chancellor Kent cites Peacock v. Peacock, and Gould v. Gould.

In Gould v. Gould Chanceller Walworth adverts to Peacock v. Peacock, and observes “ that in the absence of all proof to the contrary, partners are presumed to be equally interested. It was after a trial had been had, and inequality, if any, could have been proven by Bradley, a competent witness.”

I have examined with care the other cases cited, and presume to say that there is nothing in them inconsistent with Thompson v. Campbell. If there was they would be contrary to the law of England, as finally settled in the House of Lords.

I take it then to be the law of England, that in the case of a partnership constituted by the contribution of the labor or skill of one, and the capital of another, there is no presumption of law, of equality of participation. A court or jury is at liberty to value the former upon all the facts of the particular case. They may consider youth, eminence or inferiority of skill, physical vigor, and experience; in short, all that can influence an estimation ex eqiio et bono. The law is not, that a legal presumption must be overcome by demonstrative evidence of a different contract; but it is, that equality is merely a presumption of fact, as a piece of evidence to be weighed by a jury or judge with all the other facts, to lead to a right decision and estimate.

This is in truth the recognition of a great doctrine of the civil law, traceable through all its ages, and which the Code of France has attempted to render precise, the doctrine, viz.: of the appreciation of labor in contrast with capital. There was on the one side, what may be termed the imaginative theory carried to excess, which lifted industry and skill far above money ; and there was on the other side, the material theory, which made money preeminent, and labor insignificant. The wisdom and the learning of a succession of able commentators have been employed to adjust, by the laws of truth and reason, these rival pretensions.

In a case then of labor furnished by one, with or without a contribution of money, and money alone supplied by another, what rules of law govern the relations between the parties ? I am satisfied that the various questions which arise in such cases, and several of which arise here, cannot be well answered without recourse to the foreign law.

There is, perhaps, no passage in which the outline of the general principles upon this subject, is more fully or precisely stated, than the following from Vinnius: “ This contribution of work is not made in one mode only, for either the work is contributed with the use of money only, in which case the capital perishes to its owner, or the work is contributed with the very proprietorship of the money, in which case he who supplies the work is a sharer of the capital. In the first case, it is not the capital which is compared with the labor, but the risk of losing that capital and losing the gain which may probably be expected from it. In the other case, the value of the work is, as it were, added to the capital, and he who furnishes the work has a share for its amount, in the capital itself.” (Inst., p. 697, Ed. 1726).

See also Eutherforth’s Institutes (b. 1, cap. 13, §§ 32, 36,) for a valuable statement of the rule. It is quoted by Justice Story (On Partnerships, p. 38, note).

The equalization of labor with capital was a favorite dogma of many writers. The authors of what is termed the School of the Theologians particularly supported it.

When industry and capital form thus a common fund on a footing of parity, the result is, that as to profits, every portion of the money which has contributed to produce them is compensated by an equal value in the labor supplied. Each portion of money lost is met by its equivalent value in so much labor spent; and what may remain of money is a fund owned jointly and so divisible.

This principle and its operation is admirably stated by Duranton. (Droit Francaise, tome 17, p. 487, n. 452.)

But the case is very different when labor is fiirnished as an equivalent for the use of money only, and not as of equal value with the money itself. The contributor of capital has then a right to reclaim the amount from the fund. The associate of labor is not liable for any part of a loss of such money. Res peril domino is the maxim strictly applicable; and if any portion of the money is unexhausted, the party who advanced it receives it back.

This rule is supported by a multitude of the ablest commentators of the civil law. From the list of them to be found in Troplong (tome 13, p. 62, el seq), I should judge it to be almost universally received.

The testimony of Puffendorf in its favor may be usefully stated at length.

Upon the termination of a partnership, if each party contributed only money, it is plain that upon a division, each must receive according to his contribution. But if both money and labor were contributed, it must be considered, after what manner the collation was made; for when labor is contributed on the one side, and only the use of money on the other, he who contributed the money does not admit the other to a share in the principal, but only to his proportion of the gain that might be made of the money and labor joined together; and in this case, as he who contributed only labor has no title to any part of the money, so the other alone as owner is concerned in the risk that the money is exposed to. The risk that the money runs, and the gain that may be expected from it, is compared with the labor.”

The best way in this case is, to rate the risk of the principal and the hope of the gain according to the interest generally given for money. Supposing then this interest is to be £6 per cent, if one party contributes labor worth £60, and the other £1,000 in money, they shall share equally of the gain.” (Law Hat. and Hature, book v, c. 8, § 2.)

I may add that if the capital is £1,000, the value of the labor when not defined, is fixed at $60 per annum as an equivalent for the risk of the contributor of money losing £60, the interest receivable, had the amount been invested at the legal rate.

Yet some writers contested this view, and chiefly the distinguished Pothier, who introduced a different regulation into the Code of France. The 1851st article provides, “that all subjects of contribution which are not fixed, but consume in the usage, are at the risk of the association.” Money is treated as of this class. The case is put of a contribution of the use of 20,000 francs by one, and of labor only by the other, and of the loss of 10,000 francs. Is the associate of labor to bear 5,000 francs of this loss? The answer of the civil law, by its great mass of eminent writers, is Ho! The answer of Pothier, and of the Code of France, is Yes! (Troplong, ut supra, also p. 187, n. 660)

Another important point was much contested. In the absence of express provisions, what shall be the presumption of the law? Is it that the body of the money capital is brought into the common stock (communicata), or only the use of it? This is a question which has long agitated the interpreters of the Roman law.

I quote the opinion of Pardessus in his own language. In the absence of precise stipulations, or controlling circumstances, where an associate brings, in industry alone, the other who has contributed property shall be treated as giving only the use of the thing; for that use is an equivalent more exact for the industry; than the proprietorship. (Droit Com., tome 4, 51.)

He is supported by Duranton, who cites a number of authors to the same effect. (Tome 17, p. 490, &c.)

Yet the prevalence of the attractive idea of the exaltation of labor and skill to an equality with money, has led several writers to combat this conclusion, and Grotius decides; that we cannot erect into a maxim the equality of labor with the interest of money only; but the circumstances of each case must be consulted to determine the intention of the parties; whether the labor was to be balanced with the money, or only with the use of the money. (De Jure Pacis et Belli, 2, 12, 24.)

Carrying out this leading idea of the value of labor, the Code of France has sought to establish a fixed rule in place of the speculations of the learned; and it has declared in the 1853d article, that when one brings in only his industry, his share in the benefits and losses is regulated, as if his contribution had been equal to that of the associate, who has brought in the smallest amount.

M. Duranton’s comments upon this article, appear to me to be clear and satisfactory. “If there are two parties, the labor of the one who contributes it, is estimated as of equal value with the money contribution of the other. If there are several partners, it is estimated as equal to the contribution of the one who has brought in the least amount.

“But if the service and the money are not confounded as to ownership, in other words, not combined in a common stock, but only the use of the money is compared with the industry, then the money is reclaimed befor a division. But when the contribution of one is confounded as to the ownership itself, with the industry of the other, as the amount cannot be reclaimed, the portion of the one who famishes industry, is not only in the profits and losses, but in the fund itself.”

It is sufficiently obvious, that the 1853d article of the Code before noticed, provides for a case in which the labor is plainly not brought in comparison with the use of the money merely. When that point is indeterminate, the Code settles it. When the money is at the risk of the association, it becomes the property of the association. The labor is made equal to the money of one, or to that of the lowest contributor, if more than one.

But the Code has not provided for the case of a contribution by one of industry, together with a certain amount of capital, and by another of capital only. The authors of the Journále de Palais consider that this question should be left to the decision of the judges upon the circumstances of the case. (Repertoire Generate, vol. 11, p. 838, n. 382, Astor Library.) They put this case—a contribution of 50,000 francs by one, and of 25,000 francs and industry by another. They insist that the contribution of the latter is to be estimated at 50,000 francs only, not at 75,000. They cite Duvergier to the same point.

On the other side, the principle of Troplong would estimate it at 75,000 francs. He gives an example of one party putting in 20,000 francs, and another 10,000 and his industry. He deems the contribution of the latter to be 30,000 francs. (Tome 13, p. 88, n. 619).

Duranton fully discusses this subject, especially as connected with the case of three associates. He concludes thus: “After all, as the Code has not provided for this case, the Tribunals must decide, upon the circumstances, whether the parties have estimated the industry of one simply by the value of the money he himself put in, or according to the difference between his contribution and that of his associate who has contributed the least; or, lastly, upon the footing of the actual amount of the money contribution of the associate who puts in the least. (Tome 17, p. 495.)

In the Treatise of Scheiduuin, edited by Weisenbach, the rule is stated, with decision, that where one contributes money, and the other labor, the latter, upon the termination of the partnership, neither shares in the money nor bears any portion of what is lost. He loses his labor, and the other his money. (Comm, on the Institutes, p. 459.)

I understand that no writer upon the civil law of modern days is of higher authority than Str'ykius. In his chapter De Societate (Supplement, vol. 13, p. 118, § 6), he says: “Care must also be taken” (he is speaking of an act for forming a partnership) “if one brings in only labor, and another capital, as to what shall be the rule, when, upon the dissolution, nothing but the capital remains; because, of strict right, he who has contributed the work, receives nothing of the capital, but the whole returns to him who furnished it.” He then adverts to the exception advocated by Molina and others; when the work is so important as to be an equivalent for the capital itself. He condemns the exception, and concludes that to entitle the partner of labor to share in the capital, there must be a provision in the articles to that effect.

See also a passage from Ansaldus, quoted by Mr. Loubat in his work on Limited Partnerships, p. 305.

But as the Code has not fixed any rule for the estimate of labor, when one party contributes it in conjunction with money, neither has it prescribed that in such case, the money is to be at the risk of the association; in other words, to be compared with capital itself. Especially, it has not provided for this case, when, as in the present instance, the rate of profits is fixed and unequal.

But M. .Duranton meets this case. “Suppose that Paul and Peter have contracted a partnership for five years. Paul has put in 30,000 francs, and Peter 10,000 francs with his industry, or his industry merely; if it is provided in the contract that each of the parties shall have a certain portion of the profits or in the losses (and it is unimportant whether this is equal or ■ unequal) there is no difficulty in the case; for it is evident that the parties meant that the use or enjoyment only of the capital should be in common, as it is in the profits or in the losses; that they have regulated, the shares, and the body of the contribution is not profit. Each one, therefore, is to take back the sum contributed respectively, or by one of them solely, and the fruits are divided according to the proportions fixed. (Tome 17, p. 439.)

“ Even when the contract is silent as to the shares, it is more reasonable to suppose that the industry has Deen compared with the interest of the money put in by one, or with the interest of the excess of that sum over that brought in by the associate who has contributed labor also.” (Ibid.)

The principle of the author seems reasonable and practical. Profits naturally indicate the fruits or accretions of the fund, and are separate from and independent of it, although springing out of it; and, conversely, losses may be regarded as the liabilities to be paid beyond the capital first applied in their discharge. It is in firuits beyond capital that the party is to have his proportion, and losses beyond capital he is to bear in the same ratio.

I may add that this view receives some support from the general doctrine of the law; that upon the final adjustment of accounts, after debts are paid, the capital of each is to be restored before profits are ascertained and divided. (Collyer, § 318; Cary on Partnership, 89; Bell’s Com., vol. 2, p. 616 ; 2d Yesey, Sen., 242; Levy on Mercantile Accounts, § 200.)

The application of the rules of the civil law thus stated to the present case seems to be both clear and just. We are to appreciate the value of Hasbrouck’s extra labor by comparing it with the interest of some given amount of contribution or capital found in the case. We have the capital of $4,000 contributed equally. We have an extra half of profits given to him, and withdrawn from Childs. Assuming the capital to yield, with the application of labor, legal interest, we have $280 as the annual profit. Childs takes of this one-fourth or $70 on his capital of $2,000; Hasbrouck an equal amount on his same capital. Hence the appreciation of his extra labor is the interest on one-half of the capital, or the profit of the same, whether beyond or below legal interest. Lr case nothing is earned, Hasbrouclc’s labor thus valued, and the interest on his capital is lost. Childs’ interest on his capital has been also lost. The loss is thus proportionate to the profits, had any been earned. Then the payment of capital towards a further loss begins on a footing of equality and if anything remains, it is equally divisible.

The theory of Childs’ counsel is, that three-fourths of all the losses (or three-fourths of $3,120.20), is to be borne by Hasbrouck. This would be $2,340.15, and leave him chargeable with $340.15, his contribution being $2,000. That Childs is to bear one-fourth, $780.05, which leaves him entitled to $1,219.95. The whole of the residue must, therefore, be paid to him, $879.80, and he would be entitled to $340.15, which Hasbrouck owes.

It is obvious that had the losses exhausted the whole capital, Hasbrouck would thus have been bound to pay Childs $1,000, upon this theory. Thus, in effect, Hasbrouck would be made the guarantor of $1,000 of Childs’ capital, because in remuneration of his extra labor and capacity, three-fourths of profits are reserved to' him, instead of one-half. I apprehend that the agreement does not imply this; that the law does not warrant it; and- Certainly justice disclaims it.

My conclusion is, that the remaining fund is to be equally divided between the parties.

Judgment was ordered accordingly.

       This case was submittedin December, 1857, at a General Term, held before Bosworth, Hoffman, Slosson and Woodruff, J. J.; the Judges were unable to agree upon the proper judgment to be entered; Bosworth and Woodruff, J. J., were of the opinion that the losses should be borne by the partners in the same proportions that they had agreed that they should share in the profits.
      They deemed the general rule, that when articles of copartnership declare the proportion in which the profits are to be shared, but are silent on the subject of losses, the partners are bound to contribute in the same proportion to the losses, to be well settled.
      That in a case like the present, the Court are not at liberty to indulge in conjecture respecting the motive which induced the parties to make the apportionment of profits to which they agreed.
      That the parties to the agreement must be assumed to have known the general rule before stated, and that it is therefore to be assumed as matter of legal construction, that when the parties agreed that Hasbrouck should receive three-fourths of the profits, one of the considerations moving thereto, was his known liability in such case to bear the like proportion of the losses.
      That if the Court are to inquire at all into the reasons which induced the assent of the parties to the arrangement, it cannot be said, judicially, that the services which Hasbrouck was to render were worth any particular sum, nor that they were necessarily more useful to the firm than the credit and influence of Childs with such services as he was bound to render, while on the other hand it is reasonable that he who had the chance of the largest profit should in turn take the hazard of the greatest loss.
      Nor can the services and talents of Hasbrouck be regarded as equivalent to a contribution of capital, to the amount of the aggregate of money contributed, so as to draw to itself on that ground one-half the profits, for the same reasons last suggested. But if they can be regarded as capital, then they should be set down in stating the accounts as so much money, to wit, §4,000, and as in their nature they cannot be lost (but the temporary use thereof only) they remain to Hasbrouck as part of his distributive share of the surplus assets, and then this reason for allowing him three-quarters of the profits will result in charging him the same proportion of the losses, for plainly, if Hasbrouck had contributed §6,000 and Childs §2,000, and the services being equal, Hasbrouck, by agreement, was to receive three-quarters the profits, he would, so long as any capital remained, bear three-quarters of the loss.
      But that the reasonable and obvious explanation of the arrangement made was, that the business was placed more especially under the management of Hasbrouck, and was to be conducted mainly at his risk, as to profit and loss. Having the actual control and the hope of larger gains, losses, from his failure in skill or judgment, or from his unforeseen misadventures, though without any fault, might properly and equitably fall upon him for whose greater benefit the adventure was made.
      That no Court could say that Childs had agreed or would have consented that his capital should be employed in the business, under a stipulation that Hasbrouck should enjoy threé.-fourths of the profits, except upon a clear recognition of the principle, that if his own chances of profits were small, his hazard of loss existed only in the like relative degree.
      That it is not only in accordance with the general rule above stated, and which, as a general rule, is not denied, but it is safer and best calculated to do justice, to apportion losses according to the chances of profit, than to indulge in speculation and complicate the subject by conjectures respecting the motives of the parties in each particular case, not declared in the instrument, and so to destroy the rule itself, render any general rule impossible, and leave the distribution of surplus assets to the uncertainty which always results from suffering the supposed hardships of the case to affect the decision, or which may be worse, to the peculiar views of the judge who, for the time being, may be charged with such distribution.
      That the application of these principles in truth works no hardship. Since in this view it conforms to the true construction of the agreement of the parties. Hasbrouck has had his chances of profits and his full opportunity to make his services and skill avail to produce them, and each should share the loss in the like proportion.
      Hoffman and Slosson, J. J., were of the opinion that the losses should be borne by the partners equally.
      A reargument was ordered, and was had in April, 1858, before Hoffman Slosson and Piebrepont, J. J., and after such reargument was had, the case was decided as, and for the reasons above stated.


source: Caselaw Access Project

author: Bosworth, J.

license: Public Domain

text:
    Hugh Maxwell et al., Respondents, v. The East River Bank, Appellants.
    Thomas E. Davis (on the 1st of February, 1831) owning in fee the lots of land fronting on both sides of Eighth street (then 60 feet wide) and extending from the Second to the Third avenue, in the city of Hew Tork, before selling any of the lots, in order to make .that part of Eighth street a handsome place of residence, formed a plan to set back the houses on both sides of the street from the Second to the Third avenue eight feet, and so laid it out and gave it the name of St. Martís Place; and then caused a map to be made of St. Mark’s place, showing a street seventy-six feet wide between these avenues; and then erected on the south side of the street, on a uniform line and according to this plan, sixteen dwelling-houses of a superior class; and on the north side, thirteen such dwelling-houses according to said plan; and when he sold any of the houses or lots, exhibited this plan and map to the purchasers, and represented to all who purchased, that the street was always to remain as laid out, and that when he so formed and laid out the street and built thereon, he gave up and dedicated the strip of eight feet of land on each side of the street from the Second to the Third avenues, to be used as a part and portion of the street in the manner it has since been used; and the plaintiffs severally purchased some of said dwelling-houses on said street, or a lot and lots and erected dwellings thereon; on the faith of and relying on such assurances, and prior to the sale by Davis of the lot in question; and in February, 1833, the lot in question (now owned by the defendants), and being at the northeast comer of Third avenue and Eighth street, and fronting on said avenue, was sold by Davis to one Wilkes on the like representations and assurance, and on the exhibition to him of such plan and map, and Wilkes immediately thereafter erected the building in question thereon, according to, and to conform to such plan ; and the defendants subsequently became grantees and owners of the premises in question by a deed dated the 2d of November, 1852, which deed declares that “ the premises hereby conveyed, including (include) a certain courtyard of about eight feet in width, laid off along the southerly side thereof}” and conveys the premises granted, “ subject to all restrictions and covenants, if any exist, in relation to keeping the court-yard perpetually open as such court-yard; ” and all of said lots having been built upon according to and with a view to conform to and carry out said plan; and the buildings so erected on said premises from the Second to the Third avenue, and the said premises having been used and enjoyed thenceforth according to said plan ; and the defendants threatening to pull down the building so built on their said lot and to erect a new one up to and on tire line of Eighth street as originally laid out.
    1. It was held, that the plaintiffs were entitled to a judgment enjoining the defendants perpetually from building or erecting any house or building on the open space of ground between the northerly line of Eighth street as originally laid out, and the northerly line of said street as drawn on the said map of St. Mark’s place. .
    2. It was also held, that on the facts as found, there was an agreement or understanding between Davis and each purchaser from him, that the plan he had adopted and which he exhibited to them as an inducement to buy, should be conformed to in building upon both sides of St. Mark's place from the Second to the Third avenue; and that the open space thus made to constitute the apparent street should continue permanently seventy-six feet in width; and that the plan having been conformed to by Davis, and every such purchaser solely with a view to conform to it and to execute such agreement; the original purchasers, after the long time that had elapsed, had acquired a right both against each other and against said Davis to have the street so kept open and used, and that the defendants bought the lot in question with such notice, that their rights are not superior to those of Wilkes, their remote grantor.
    3. It was also held, that such were the rights of the parties, notwithstanding each deed from Davis bounded the lot it conveyed, by the line of Eighth street as originally laid out, and contained a covenant that he owned it in fee, free from all charges and incumbrances thereon.
    (Before Bosworth, Woodruff and Pierrepont, J. J.)
    Heard, February 8;
    decided, May 29, 1858.
    Henry F. Tailmadge, Hugh Maxwell, James J. Van Allen and Cornelius R‘. Bogart, the plaintiffs in this action, being, severally, owners in fee simple of several lots of land on the north side of and fronting on Eighth street, in the city of Hew York, between the Second and Third avennes, brought this action against the East River Bank, as defendants, to restrain the latter ffom erecting any building on the open space of eight feet in width, between the southerly wall of defendants’ building, at the northeast corner of Eighth street and Third avenue, and. the northerly line of said street as originally laid out; (its width, as originally laid out, being sixty feet, and the buildings on either side of it, being on a uniform line, eight feet hack of it).
    The plaintiffs bring the action “ as well on théir own behalf, as on behalf of all others who may be affected by the several matters herein- complained of, against the defendants, the East River Bank.” It was commenced on the 22d of April, 1858, and tried in May, 1856, before Mr. Justice Duer, without a jury, who gave a judgment granting the relief sought, and from that judgment the defendants appealed to the General Term.
    The complaint sets forth: First. That the plaintiffs are severally owners of lots fronting on the north side of Eighth street, between Second and Third avennes, with valuable dwelling-houses, which, and also all the dwelling-houses on said north side, and also on the south side of Eighth street, between Second and Third avenues, are built eight feet hack from the original line of said north and south sides of Eighth street, having in front an open space or court-yard of the width of eight feet, the whole distance between Second and Third Avenues, on each side of Eighth street.
    Second. That said dwelling-houses were so built and set back in pursuance of an understanding and agreement in regard to, and dedication of, said strip eight feet wide in front of said houses, for such open space and court-yard, and to form a part and portion of said street, by Thomas E. Davis, who about the 1st of February, 1831, became the owner of the entire block between Eighth and Ninth streets and Second and Third avenues, and about the same time became the owner of the land on the south side of Eighth street, between the Second and Third avenues, and who soon thereafter, as an inducement to purchasers, adopted a line eight feet back from the original line of Eighth street, on both sides, between Second and Third avenues; and that such line, thus adopted, became and was, by agreement, and by formal and public dedication of said owner, Davis, the line upon which all buildings on each side of said street should be erected.
    Third. That afterward, about 1832, Davis, in pursuance of such plan, erected dwellings on the south side of Eighth street, on the line so adopted, thereby. promoting increased convenience, beauty and value; that Eighth street, between Second and Third avenues, became and was known as St. Mark’s place; that afterward, about 1834, a row of dwelling-houses was erected, on each side of Eighth street, between Second and Third avenues, on the lines so fixed and adopted; and that Davis sold all the houses erected by him, with an express declaration, agreement and assurance that the entire line so adopted, should be continued uniform on both sides of Eighth street, from the Second to the Third avenues, whereby many persons were induced to purchase ; and that all the owners of lots on Eighth street, between Second and Third avenues, in pursuance of said understanding, agreement and dedication, adopted said line, and buildings were erected thereon accordingly.
    Fourth. That the owner of the lot on the northeast corner of Eighth street and Third avenue, in pursuance of said understanding, agreement and dedication, adopted said line, and about twenty years ago erected the building on said line, which now remains standing on said lot.
    Fifth. Claims that Davis, by his said dedication, and his grantees, by a similar dedication, &c., in pursuance of the original agreement, plan and intention of said Davis, are bound by said agreement, and dedication of the use of said eight feel, as a part of the street, and that the owners of lots in St. Mark’s place have no right to encroach thereon, &c., &c.
    Sixth. That on or about the 1st of November, 1852, the defendants purchased of Caleb 0. Halstead, said lot and building thereon, on the northeast corner of Eighth street and Third avenue, with express notice of said understanding, agreement and dedication: and that the deed to Halstead contained a clause subjecting the grant to all existing restrictions and covenants, as to keeping said space or court-yard perpetually open.
    Seventh. Claims that defendants are bound by said agreement and understanding in regard to, and dedication of, said strip of ground, &c., &c.; but, in violation thereof, threaten to pull down the building erected and now standing on their said lot, and to build thereon a large building, fronting on Eighth street, and extending to the line of said street, as originally laid out, and covering the said eight feet, &c., which will be a serious injury and damage to the plaintiffs, and other owners of lots and dwelling-houses on Eighth street, between Second and Third avenues, &c., &c.
    Eighth. Plaintiffs, for themselves and others, therefore, demand an injunction order, and also a perpetual injunction against the defendants, restraining them from erecting any building on the open space of eight feet on the northerly side of Eighth street, in front of the southerly side of the building at the northeast corner of Eighth street and Third avenue; or such other remedy and relief as their case entitles them to.
    An injunction order, as prayed for, was granted on the filing of this complaint, and has been ever since continued in force.
    The answer: First. Admits that the dwelling-houses on Eighth street, between Second and Third avenues are built several feet back from the orignal lines of the street. But avers that all the spaces between the dwellings and said original lines are inclosed and used, and occupied by the occupants of the dwellings, and are not open, as alleged in complaint.
    Second. Has no knowledge as to the purchase, in 1881, by Davis, of the block between Eighth and Ninth streets, and on the north side of Eighth street, between Second and Third avenues, and the adoption by him of a line eight feet back from the original line of Eighth street, between those avenues; and denies that such line was, by adoption, or agreement, or dedication, the line upon which all buildings on each side of said street, from Second to Third avenue, should be built.
    Third. Denies that the owner of the lot on the northeast corner of Third avenue and Eighth street, with notice, or in pursuance of the alleged understanding, agreement, or dedication, adopted said line eight feet back; but avers he so located the building erected by him, for his own convenience, and of his own volition.
    At the time of its erection, all the other houses in Eighth street, between Second and Third avenues, had been erected, and without any agreement or understanding whatever, to which the owner of said corner lot was a party, that such lot should be built upon, or used, in any particular manner, or be in any manner subservient to the other lots or their owners.
    Fourth. Denies that Davis, in the manner alleged, or otherwise, dedicated the eight feet, or any space, or that his grantees are bound by any agreement and dedication whatever, of the use of any such space, as a part of the street, or otherwise.
    Fifth. Admits that defendants purchased of C. 0. Halstead; but denies all notice of any such understanding, agreement, or dedication, as alleged in the complaint; or that there was any covenant, restriction, or agreement, as to keeping open such space or court-yard; and insists that they should not be restrained from using their said property as absolute owners thereof.
    Sixth. Admits that defendants, in virtue of their absolute title, are about to take down the building now standing on the lot, and to erect thereon a larger building, to be used as a banking-house, covering the whole front of the lot on Third avenue down to the line of Eighth street, which building will not encroach on any space or land belonging to the plaintiffs, or in which they have any right or interest; and will be a beautiful edifice, and will tend to improve the appearance of the avenue and street, and to enhance the value of the property.
    Seventh. As a separate defence, defendants say, that on the 13th of February, 1833, Edmund Wilkes became seised, in fee-simple, of said lot on the northeasterly corner of Third avenue and Eighth street, and of other adjoining premises; and on or about the 30th of September, 1833, executed a mortgage to the Jackson Marine Insurance Company, of said corner lot and an adjoining lot, to secure the payment of $12,000, lent by the Company to him, which mortgage was duly acknowledged and recorded. That said Company had no notice of 'the alleged understanding, agreement, and dedication, or of any other agreement affecting the premises; and, to the extent of said loan of $12,000, are bona fide purchasers without notice. After the mortgage, the building now on the premises was erected, and default being made in payment, said Company, on the 17th of January, 1837, filed in the Court of Chancery their bill of foreclosure against Wilkes and others; obtained on the 8th of May, 1838, a decree of foreclosure and sale; and on the 10th of June, 1838, caused the mortgaged premises to be sold by a Master in Chancery, at which sale said Company became the purchasers, and the premises were duly conveyed to them by the Master. On the 9th of March, 1844, said Company sold and conveyed the same to Caleb O. Halstead for $9,000, by him paid, he being at the time a bona fide purchaser without notice; and that defendants have acquired, as bona fide purchasers, all the rights and title which said Jackson Marine Insurance Company and said C. O. Halstead had in the premises; and defendants insist that such rights are superior to the alleged agreement, understanding and dedication, if any such existed.
    The decision of the Court was as follows:
    “ The following facts are found to be established by the pleadings and evidence in the case:
    “ This action was commenced on the 22d day of April, 1853.
    “ The plaintiffs severally own lots of land, and the buildings thereon, on the northerly side of, and fronting on St. Mark’s place, between the Third and Second avenues, in the city of New York; (Maxwell owns a lot of land and building thereon, on the northerly side of St. Mark’s place, between Second and Third avepues.)
    “ The defendants own a lot at the northeasterly corner of Third avenue and St. Mark’s place.
    “ [This building fronts on Third avenue and also on St. Mark’s place, and is on a line with the fronts of the buildings east of it,yrhich front on the north side of St. Mark’s place.]

      “On the 29th of September, 1829, Nicholas William Stuyvesant and wife, and Charles Henry Hall and wife, executed a deed to the Mayor, Aldermen, and Commonalty of the city of New York, ceding to them a strip of land sixty feet in width, extending from the westerly side of the Second avenue to the easterly side of the Third avenue, which was then known on the map of the city as Eighth street.
    “ On the 22d of December, 1830, Thomas E. Davis purchased from Charles Henry Hall the entire property fronting on the southerly side of Eighth street, between the Second and Third avenues; and on the 1st day of February, 1831, Davis purchased from Nicholas W. Stuyvesant and wife, the entire block fronting on the north side of Eighth street, between the Second and Third avenues.
    “ Davis, then being the owner of all the lands on both sides of Eighth street, between the Second and Third avenues, and before he sold or disposed of any of the lots fronting on Eighth street, in order to make that part of Eighth street a handsome place of residence, formed a plan to set back the houses on both sides of the street, from the Second to the Third avenues, eight feet, and so laid it out, and gave it the name of St. Mark’s place.
    “Davis then caused a diagram or map to be made of St. Mark’s place, showing a street of seventy-six feet in width, from the Second to the Third avenue.
    “This was before he sold or built on any of the lots; and soon thereafter, and in conformity to this plan, Davis erected sixteen houses on the south side of the street, and thirteen on the north side, including the houses at the northwest corner of St. Mark’s place and Second avenue.
    “All these dwelling-houses were of a superior class, and all on one uniform line, and on the line he had so planned and laid out for the streets.
    “When Davis sold any of the houses or lots, he exhibited this plan to the purchasers, and represented to all who purchased, that the street was always to remain as laid out, and that when he so formed and laid out the street and built thereon, he gave up and dedicated the strip of eight feet of land on each side of the street, from the Second to the Third avenues, to be used as a part and portion of the street in the manner it has since been used.

      “Davis sold to Maxwell and Betts lots in St. Mark’s place; and Maxwell and Betts bought on the faith, and assurance of Davis, that the street was to be of the width, and according to the plan and diagram exhibited by him previous to the purchase; and before the sale of the lot, to Henriques, or conveyance to Wilkes.
    “On the 11th of October, 1832, Davis conveyed to Moses Henriques’ two lots on the Third avenue, at the northeast corner of Third avenue and Eighth street, and a lot on Eighth street, next easterly of the corner lots.
    “This deed appears to have been in the nature of a mortgage given to secure Josephs & Company, of which firm Henriques was a partner, for money loaned by them to Davis; [Davis still retaining the right to dispose of the property, accounting to them for the same when sold.]
    “ [On the 13th of February, 1833, Davis negotiated the sale of these lots to Edmund Wilkes, who, on that day, received a deed from Henriques and wife for said lots. At the time Davis sold these lots to Wilkes, he showed to Wilkes the diagram of the plan, and declared his intention to set the building back eight feet from the original line of the street. And when Wilkes built the corner building, now owned by the defendants, and also two other houses east of it, he erected them all on the line designated by Davis, and in conformity with the line of the other buildings previously erected by Davis on that street, car- . rying out the plan which Davis had previously formed to make St. Mark’s place a uniform, street of seventy-six feet wide.]
    “About the time Wilkes built the houses at the northeast corner of St. Mark’s place and Third avenue, he erected the building at the southwest corner of St. Mark’s place and the Third avenue. This house was built in conformity with the line of the other houses on that side of the street, previously adopted and built on by Davis. On the 30th of September, 1834, Wilkes mortgaged to the Jackson Insurance Company two lots at the northeast corner of the Third avenue and Eighth street, including the defendants’ lot. At the time Wilkes mortgaged to the Jackson Insurance Company, [the lot had been built on and the house covered in.]
    The premises so mortgaged were afterwards foreclosed and purchased by the Jackson Insurance Company. Afterward, and on the 9 th of March, 1844, the premises were sold by the company to Caleb 0. Halstead.
    “ The deed described the premises by boundary lines extending to the original line of Eighth street, and adds to the description of the property these words: “ The premises hereby conveyed, including a certain court-yard of about eight feet in width, laid off along the southerly side thereof.”
    “Caleb 0. Halstead and wife, by deed dated November 1,1852, and recorded the sixteenth of said November, conveyed the premises (granted by the preceding deed) to the defendants.
    “ The description of the premises is the same in both deeds. And there is inserted at the end of the habendum clause in said deed, these words: “Subject to all restrictions and covenants, if any exist, in relation to keeping the court-yard perpetually open as such court-yard.”
    “ The defendants, before and at the time of commencing this action, intended and declared that they were about to take down the building being on the said premises, and to erect thereon such new building as is stated in their answer, and to locate the same on the line of Eighth street, as it was originally laid out, covering the eight feet in front of their building on the southerly side thereof.
    “ The effect of such an act would be to narrow the street eight feet the whole length of the defendants’ premises, on St. Mark’s place, which would operate as a serious annoyance and substantial injury to the owner of every lot on both sides of that street, between the Second and Third avenues.
    “ The defendants bought with notice that it was claimed there were restrictions, which would prevent them from acquiring a right as purchasers of the lots to build upon the eight feet described as a court-yard, and that the same had been dedicated by Davis to the use of, and as a part and portion of the street not to be built on, as early as 1831; and this strip of land having been so used since that time, I find, as conclusions of law, from these facts, that Davis made a valid dedication of eight feet of ground on each side of that portion of Eighth street called St. Mark’s place to the use of the public, and that such dedication operated as a permanent enlargement of the street, and that its validity is not affected by the fact that it was made with the intention and understanding that the proprietors of lots fronting on Eighth street should be at liberty to inclose eight feet in front of the houses erected or to be erected thereon, as an area or court-yard; and I further find that the purchasers of lots from Davis having assented to the dedication so made by him at the time their respective purchases were made, they and their grantees are now estopped from disputing its validity; it follows, necessarily, from the facts and conclusions of law so found by me, that the plaintiffs are entitled to a judgment for the relief demanded in their complaint.”
    Judgment was entered, that the defendant “be and hereby is perpetually restrained and enjoined from building or erecting any building or house on the open space of eight feet of ground on the northeast side of Eighth street, in front of the southeast side of the building now standing on the defendant’s said premises at the northeast corner of Eighth street and the Third avenue in the city of New York, or any part thereof.”
    From that judgment the defendants appealed to the General Term.

      B. F. Butler, for appellants (among other things), insisted:
    III. The parol and other proofs given by the plaintiffs, of acts in pais, by Davis and others, fell equally short of proving any such dedication of the strip in question, as is alleged in the complaint.
    1. It is not pretended that Davis ever promised or proposed to dedicate the strip of eight feet in width, to the use of the public, as a carriage-way, or foot-way, or in any other such way as to be used by the public; and therefore, no dedication, in the sense of the law, or within the meaning of the adjudged cases, was ever attempted or intended to be made by him.
    The right claimed by the plaintiffs falls, not under the head of dedication of land to public uses, but that of predial urban servitudes, and to the particular servitude of the Roman law, non officiendi luminibus vel prospectui.

    As to dedications: (Matter of Seventeenth street, 1 Wend., 262; Matter of Lewis street, 2 Wend., 472; Livingston v. Mayor of New York, 8 id., 85; City of Cincinnati v. Lessee of White, 6 Peters, 431; Trustees of Watertown, 4 Paige, 510 ; Pearsall v.
      Post, 20 Wend., 111; 22 id., 425, 434, 474 to 483; Hunter v. Trustees of Sandy Hill, 6 Hill, 410; Pitcher v. New York and Erie Railroad, 5 Sand. S. C. R., 587; Munson v. Hungerford, 6 Barb. S. C. R., 265, 271, 272; Irwin v. Dixion, 9 Howard’s U. S. R., 10, 30 to 33; Badeau v. Mead, 14 Barb. S. C. R., 328, 339; Curtis v. Keesler, id., 511, 521, 522; Goulcl v. Glass, 19 Barb. S. C. R., 179, 194, 195.)
    As to the servitude claimed here: (Hills v. Miller, 3 Paige, 254, 256, 257; Pitkin v. Long Island Railroad Co., 2 Barb. Ch. R., 221, 231; Kaufmann’s Mackeldey, vol. 1, p. 340, § 311, No. 3, and Notes ; Digest, Book 8, tit. 2, §§ 15, 16; 3 Kent’s Com., 434 to 436, § 4; 446 to 448; Fishmongers' Co. v. East India Co., 1 Dick, 163, 165; Attorney-General v. Nicholl, 16 Ves., 342; Squire v. Campbell, 1 Mylne and Craig, 459.)
    2. Even had Davis intended to dedicate the strip of eight feet to the public, as a part of the street, he wholly omitted to do any legal act to effectuate this purpose; and what was actually done by him, and those who purchased of him, was inconsistent with any such dedication. They set their houses back, but retained the strip for their own private use. (Cases above.)
    3. The making and exhibition by Davis, of the map, diagram and plan, spoken of by him and other witnesses, however they might bind him, in equity, to leave open court-yards in front of the lots owned by him, could not bind or affect Henriques, or ’ his grantees. The obligation, if any, was personal as to Davis, and could not run with the land conveyed by him to Henriques. 4. Henriques' acquired a full and absolute title to the lots in Third avenue, on the corner of Eighth street, conveyed to him by Davis, in 1832; and neither he nor his grantees could be affected by any agreement or assurance thereafter made by Davis, or by any agreement between the owners and occupants of lots on Eighth street, to which such grantees were not parties; or by any acts done by such owners or occupants or by other parties.
    IY. The right claimed by the plaintiffs in this action, whether regarded as an interest in the lands of the defendants, or as an easement or servitude, could only, under the law of this state, be created by instrument, in writing, duly executed by competent parties; and there was no legal proof whatever of any such instrument in writing. (1 R. S., 738, §§ 137, 140; id., v. Shippam, 5 Barn. & Cres., 221; S. C., 7 Dowl. & R., 783; Mumford v. Whitney, 15 Wend., 380; Miller v. Auburn and 750, §§ 6, 10; 2 R. S., 134, 135, §§ 6, 8; id., 137, § 6; Hewlins Syracuse Railroad, 6 Hill, 61; Pitkin v. Long Island Railroad Co., 2 Barb. Ch. R., 221, 231, 232; Wolfe v. Frost, 4 Sand. Ch. R., 72, 88 to 93; and cases there cited.)
    Y. The rights of Wilkes, and his grantees, under the deed of Davis to Henriques, cannot be impaired or affected by the fact that the same was made to him by Davis, for the purpose of securing the payment of moneys due from Davis to the firm of Josephs & Co. The deed passed the whole title in the premises described therein to Henriques; and Wilkes, although he contracted for the purchase of Davis, is entitled to all the benefits of this deed. A fortiori, are his grantees so entitled.
    YI. There was nothing in the negotiations between Davis and Wilkes prior to, or at, the execution of the deed of Henriques to Wilkes, to impair the absolute title in the premises conveyed to Wilkes by that deed, or to charge the same with a perpetual easement or servitude in favor of the plaintiffs and their co-owners in St. Mark’s place.
    All negotiations, whatever they were, between Davis and Wilkes, were merged in the deed, by which alone the rights of the parties are to be determined.
    YH. Mr. Willces did not, by the erection of said building, as it was erected, affect or impair the absolute title in the premises conveyed to him by Henriques, nor charge the same with a perpetual easement or servitude in favor of the plaintiffs, and their co-owners in St. Mark’s place; nor have these consequences been produced by the user of the plaintiffs, or the non-user of the defendants or their predecessors in the title.
    1. Wilkes, by the mere omission to occupy, by his building, the strip of eight feet, did not lose his title in and dominion over the same; much less grant to the plaintiffs and their co-owners the title now claimed by them.
    2. There is no room for applying here the doctrine of prescription. The time of enjoyment is too short; and the grants have all been produced in evidence.
    3. Nor is there room for claiming by adverse enjoyment of twenty years. It existed for less than nineteen years; and for no part of the time was it adverse, or in derogation of the rights of Wilkes and his grantees. (Cases above cited; Parker v. Foote, 19 Wend., 309, 313 to 319; Townsend v. McDonald, 2 Kern., 381, 391, 392, and cases there cited.)
    VIII. The defendants are entitled to the full benefits of the title acquired by Wilkes, and by him conveyed by his mortgage, since foreclosed, to the Jackson Insurance Company.
    1. The mortgage from Wilkes to the Jackson Marine Insurance Company, of September 30, 1834, in respect to the premises described therein, is precisely like the deeds from Henriques to Wilkes, and from Davis to Henriques.
    2. The decree of sale on the foreclosure of the Wilkes mortgage (8th May, 1838), and the master’s deed in pursuance thereof (of 9th June, 1838), follow the description contained in the mortgage, and are equally absolute and unrestricted.
    3. The clause in the deed from the Jackson Marine Insurance Company to Halstead, of the 12th March, 1844, making the grant subject to all the provisions, stipulations, and restrictions, if any, concerning the court-yard, and the keeping the same perpetually open; neither proves the dedication alleged in the complaint, nor impairs or affects the title of Halstead. Nor from this clause, or any extrinsic fact can any covenant be implied. (Kinney v. Watts, 14 Wend., 38.)
    4. The same remarks apply to the like provision in the deed from Halstead to the defendant, of the 1st of November, 1852.
    IX. The defendants are purchasers, for a valuable consideration, without notice of any such dedication, restriction, or claim, as that now set up.
    1. The clause in the deed of the Insurance Company to Halstead repeated in the deed of Halstead to the defendants, although sufficient to put the defendants on inquiry, is, of itself, insufficient to create a binding, legal covenant or restriction, if none was before in existence.
    2. It was evidently inserted in these deeds, by the grantors therein, for greater caution, and to qualify the effect of their covenants of title.
    3. The inquiries made by the grantees resulted in their ascertaining that there was not, and that never had been, any such restriction or covenant as was referred to in said clause.

      P. Mott and Hugh Maxwell, for respondents'.
    I. The eight feet of land in front of the houses on the north side of St. Mark’s place, formerly Eighth street, is now and has been since the erection of the buildings thereon, permanently dedicated to the public use, and is now a part and portion of the highway; and the owners on the street have, in connection with the public interest, a right to insist that the eight feet shall continue and be kept for such use. .
    I. Because dedication, as the term is applied in reference to this subject, is the act of devoting or giving property for some proper object, and in such a manner as to conclude the owner.
    The law which governs such cases is anomalous. Under it, rights are parted with and acquired, in modes and by means unusual and peculiar. Ordinarily, some conveyance or written instrument is required to transmit a right to real property; but the law applicable to dedication is different.
    Dedication may be made without writing by act in pais, as well as by deed. (Hunter v. The Trustees of Sandy Hill, 6 Hill R., 411; 20 Wend., 116; Post v. Pearsall, 22 id., 434, 447, 473, 477 and 478; 14 Barb. R., 521 and 522.)
    II. Dedication may be made in two ways.
    1. By length of time the use has continued. Formerly twenty years was thought necessary; afterward twelve, then eight years, subsequently a shorter time has been held sufficient. (Livingston v. The Mayor of New York, 8 Wend. R., 105; 6 id., 556; 20 id., 117; 14 Barb. R., 523.)
    2. By an act so unequivocal as to show the intention of the party at the time.
    The Chancellor says, in the case of Livingston v. The Mayor of New York, 8 Wend., 105: “Mo particular time is necessary as evidence of dedication. It is not like a grant presumed from length of time. If the act of dedication be unequivocal, it may take place immediately. As, for instance, if a man build a row of houses on each side of a strip of land, making it a street leading into another, and sells or lets these houses, it is instantly a dedication.”
    In the case of Curtis v. Keesler, 14 Barb., 523, the Court said: “ A dedication of property to public use does not depend upon the lapse of time, but upon the intention and acts of the parties.” (See also 5 Taunt., 125; Ward v. Davis, 3 Sand. R., 502.)
    III. Lands may be dedicated partly for public and partly for private use, as the following authorities will show: (To a public quay in the city of London, 3 Term R., 253; To a watering place company, Litt. 56, a; To public landings, 1 Greenl., Ill; 8 Pick., 504; To a public square in Cincinnati, 6 Peters R., 431 to 438; In the State of Vermont, To the public square in the village of St. Albans, 2 Verm. R., 480; To a court-house square at Burlington, 3 id., 521; To a college green at Burlington, 3 id., 530; To a court-house square at Windsor, 6 id., 355; In this state to a burying ground, in Sandy Hill, 6 Hill R., 407; To a public square in the village of Watertown, 4 Paige, 519; In Lexington, Kentucky, To the reservation of a spring of water, 12 Wheat. R., 583.)
    Judge Cowen" lays down the principle as being well settled in this state, that lands may be dedicated for public ways and other easements in nature of ways, although there be no person in esse capable of taking as a grantee at the time. (Pearsall v. Post, 20 Wend. R., .119.)
    And, says Judge Duee, in the case of Ward v. Davis, 3 Sand. R., 520, a valid dedication may be made by a single act, if positive and unequivocal in its nature, and especially where purchases have been made upon the faith.that the act was meant to induce. That to constitute a public use, it is not necessary that the public at large shall share its entire advantages, &c.
    IV. Applying the principles of law, as settled by the cases here cited, to the facts in this case as found by the judge and sustained by the evidence, there can be no doubt but that a legal dedication of the eight feet of land on the north side of St. Mark’s place has been fully established. And the decision of the judge and the judgment of the Court should be sustained.
    1. Because, as early as 1830, the time Davis purchased the south side of Eighth street, from the Second to the Third avenues, from Hall, (and then, as Davis says, he had it in contemplation of purchasing the north side from Stuyvesant,) he prepared a diagram for both sides of the street, showing how he intended to build, and the particular location of the houses to be erected.

      2. In February, 1831, Davis purchased the entire block on the north side of Eighth street, from, the Second to the Third avenues, and then consummated his plan of building thereon. He made a map of the property, laid out the street from the Second to the Third avenues, seventy-six feet wide, and gave it the name of St. Mark’s place.
    3. Davis then built sixteen large dwelling-houses on the south side of the street, and twelve on the north side. These houses were all located on the line he had adopted, for the purpose of showing a street of seventy-six feet in width.
    4. Davis says the map was made before he sold any of the lots, and when he sold, he sold in reference to the diagram, with instructions that the street was to remain seventy-six feet wide, and did intend to dedicate the eight feet on each side to the pubEc, and did so dedicate it.
    That when he sold any of the lots the map was always shown the purchasers, and that he represented to the purchasers that St. Mark’s place was to remain open, and would not have sold otherwise, as he considered it the best improvement in the city.
    5. Davis says that when he made the bargain with Wilkes, he dedicated the eight feet to the street. That there was no doubt but the diagram was shown to Wilkes at the time.
    Wilkes says that Davis showed him the diagram before he purchased.
    It was a smaU diagram; it represented the lots to be built upon to be set back eight feet, in conformity with the other houses, and he built in conformity to that line.
    Davis says that there was an agreement (whether written or verbal he cannot say) that Wilkes should set back his house eight feet, aud that Wilkes did build on that line.
    6. In fact the whole street, from the Second to the Third avenues, was a matter of concession; as early as September, 1829, Stuyvesant & Hall ceded sixty feet in width from the two avenues to the corporation for a public street; and Davis afterward, and before the street was built on, gave up eight feet on each side in order to make the street seventy-six feet wide, and in consequence of the extra width of the street he changed the name to St. Mark’s place; and in consequence thereof the corporation passed a resolution confirming said street by the name of St. Mark’s place; and thereby adopting it as a street or public place of seventy-six feet in width.
    7. Samuel L. Doughty, a city surveyor, says he has known St. Mark’s place, as a public place, over twenty years; he has at various times measured it and found it seventy-six feet wide. A place is generally considered a portion of a street, improved, &c.
    Charles Turner, the deputy street commissioner, says he is acquainted with St. Mark’s place; it is seventy-six feet wide from house to house; the sidewalks and areas on each side are twenty-three feet, of which fifteen feet are sidewalks; the sidewalks are six feet wider than in an ordinary sixty foot street; St. Mark’s place does not appear like a sixty foot street; its appearance is more grand and the property more valuable.
    8. When Wilkes built on the northeast corner of St. Mark’s place and the Third avenue, he placed the front of his building on St. Mark’s place, with doors and windows on that side, conceding all in front to be the street not to be built on; although the bank have purchased the eight feet in front on St. Mark’s place in connection with the building.
    Under all the circumstances, would the defendants, if they should sell only so much of the lot as is covered by the building, have a right to build on the eight feet on St. Mark’s place, and obstruct the fight and passage-way into that building from St. Mark’s place ?
    We say they would not; that eight feet having been given up and dedicated to the public, has become a part and portion of said street.
    V. There having been a dedication of the eight feet of ground on both sides of St. Mark’s place by Davis, and acquiesced in for at least twenty years by all those who purchased of Davis and their grantees, St. Mark’s place must be now considered a public street of seventy-six feet in width. Betts says, when he purchased of Davis, he purchased on the faith that the plan would be carried out. That Maxwell showed him the diagram. Betts purchased in 1831, and Maxwell in 1832. Carvill also says that he purchased there in 1832, and has lived there ever since. That he would not have purchased if he had supposed the line would have been disturbed.
    YI. Those who now own property in St. Mark’s place have a right to insist that no part of that street, as a seventy-six foot street, shall be built upon or obstructed.
    1. Because the purchasers from Davis having assented to the dedication at the time of these- purchases, they and their grantees are now stopped from disputing the validity of the dedication.
    2. Because all the owners of property on St. Mark’s place (except the defendants) are in favor- of the street as it now exists, and are opposed to any change being made by building on the eight feet. They desire the line to remain as it is.
    3. Because the building by the defendants on the eight feet in front of their building would have the tendency to impair the value of property on St. Mark’s place. It would obstruct their view, shut out light and air, and in other respects depreciate the property.
    VH. When the defendants purchased the property at the corner of St. Mark’s place and Third avenue, they bought with notice that this eight feet was claimed as a part of the street. Although to be used as a court-yard, it was not to be built on. And the Court will not now permit these- defendants to violate an obligation so faithfully entered into with the public, first by Davis, then by Wilkes, and kept by all the grantees up to the time of the sale to the defendants, with notice to them that they were to keep the same obligation unbroken.
    VIH. There is no error in any of the rulings of the Judge; and the decision being according to the evidence and the law in such cases, there is no reason for disturbing it, and the judgment of the Court below should be affirmed.”
   By the Court;

Bosworth, J.

—Whether the conclusions of law to which the Court, at Special Term, came, that, upon the facts found, Davis made a valid dedication of the strips of land on either side of Eighth street to the use of the public, which operated as a permanent enlargement of the street, is a sound one; is a question by no means free from difficulty. Davis conveyed every part of them, with the lots of which they were fronts, absolutely, and with a covenant against all incumbrances thereon. They have been inclosed and used as court-yards by the owners of the lots of which they form parts, and the public have been excluded, at all times, from entering upon them for any public purpose.

At the same time, by the appropriation made of them, and the use to which they have been devoted, the original street has not been encroached upon, by steps or areas to the dwelling-houses erected thereon, and the public have had the uninterrupted use of a carriage-way thirty feet wide, and of a sidewalk, on each side of the street, fifteen feet wide, and for all practical purposes, the enjoyment of a street seventy-six feet wide, as fully as if it had been made of that width by law.

We deem it unnecessary to express any definite opinion, whether the decision made of this question, at Special Term, was correct.

We think, that on the facts found, the judgment must be affirmed, even if it be conceded, or must be held, that no valid dedication has been made of this strip of eight feet in width as a part of the public street.

On the facts found, and admitted by the pleadings, it may, fairly, be said that those who first bought of Davis, bought upon the assurance, on which they relied, that the buildings to be afterward erected should be located to conform to the plan, and that the open space between the buildings on the opposite sides of the street should be kept open, permanently, to the width of seventy-six feet. Each subsequent purchaser, from Davis, of lots, or of a house and lot, on this street, bought on the like assurance and rebanee, expecting to have the benefit of that assurance being kept and realized, and that other purchasers, whether prior or subsequent to himself, should also have the benefit to result from his conforming to the plan himself, • and practising towards them the good faith which he expected them to observe towards him.

By this mode of proceeding all the lots on both sides have been built upon in conformity to this plan and common understanding, and in pursuance and in execution of it. Every prior purchaser, by reason of every subsequent purchaser having done what Davis assured each purchaser should be done, has had an actual execution, in respect to each lot, of the promise and assurance made by Davis to induce each and all of those who bought; to buy and build; or to buy a dwelling-house already built.

In such a state of things, and after an actual execution of this plan and common understanding, for the improvement of this part of Eighth street, and after it has been exactly conformed to and observed in good faith for so many years; and in consideration that large investments have been made by the purchasers who bought houses completed at the time of their purchase, or who bought lots and erected expensive dwellings conforming to the plan, relying upon the assurance that the benefits, to result from conforming to it were to be perpetually enjoyed; it would be inequitable to permit any one of such original purchasers, or any person succeeding to his rights, with notice of this common understanding and the execution of it, to damage seriously the property of every other owner on St. Mark’s place, by building upon this eight feet up to the line of the street as originally laid out.

After such an actual execution of the original plan and common understanding, and long conformity to it, the equitable rights of all of the owners of this property should be regarded as being as clear and certain, as their legal rights would have been, if all had covenanted with each other before any building was erected (they then owning the land), that such a plan should be conformed to in building, and that the buildings to be erected on either side should be on a uniform line eight feet back from the line of the street, and that this space of eight feet on each side of it should be kept open perpetually.

To allow the defendants to erect a building on the northeasterly corner of Third avenue and St. Mark’s place, covering the whole of this strip of eight feet in width, to the distance of seventy-five feet from the easterly side of the Third avenue, would permit a fraud to be practised on Mr. Maxwell and other original purchasers, who bought on the same assurances, and in reliance upon them, as he did.

To permit the defendants to do this, would be permitting them to do what Wilkes could not have originally done, without acting in bad faith towards Davis and all others who had previously bought of him on the same representations and expectations, as influenced Mr. Maxwell to purchase.

But no original purchaser ever departed, or seems to have thought of departing from the plan exhibited during the negotiations for Ms purchase, and with reference to which it was made.

Each purchaser in building as he did build, seems to have thus built solely with a view to conform to and execute the common understanding of the original purchasers.

Many of them, as the testimony discloses, supposed when they bought, that there was something appearing of record which would preclude any person from building nearer than within eight feet of the line of the street, and which would require him to place the front of any dwelling he might erect, on the uniform lme indicated by the plan which Davis had adopted.

It may be said that each purchaser, beginning with the first, had the agreement of Davis, on which he relied, that the lots not then built on, should, when built upon, be covered with dwellings fronting on this line, and that St. Mark’s place should be kept open, and remain seventy-six feet in width. Every purchaser, buying after some of the lots had been built upon, not only had this agreement or assurance of Davis to induce Mm to purchase, but he had the further fact to influence him, that as to those which had been built upon, there had been an execution of the plan adopted for the whole, and which they were assured was to be thereafter observed, in building upon both sides of the street, from avenue to avenue.

I think therefore that it may be held, on the facts as found, that there was an agreement between each purchaser and Davis, that the plan which he had adopted and which he exhibited, as an inducement to buy, should be conformed to in building upon both sides of the street, from avenue to avenue, until all the lots had been built upon; and that the open space thus made to constitute the apparent street, should continue permanently seventy-six feet in breadth.

That this agreement was relied upon by each purchaser, and was with him an operative inducement to purchase,'

That in building upon the lots on both sides of the street, whether they were built upon by Davis or such purchasers, they were built upon to conform to tMs plan and agreement, and solely with a view to conform to and execute both.

That the plan having been thus conformed to by Davis, and by every original purchaser, and solely with a view to conform to it, and tó execute such agreement, the rights of such original parties are in equity, as clear and absolute to have this plan and agreement conformed and adhered to in the future, as if.the first purchasers had owned their several lots before either was built upon, and had then agreed, in writing, that such a plan should be observed in building, and that the street should be so kept open permanently.

That after such an execution of the plan and verbal agreement, and after the long period which has elapsed, if any one original purchaser should rebuild, covering the whole of this space of eight feet within the limits of his own lot, he would commit a fraud upon every other original purchaser, and do him a substantial injury.

That the defendants bought, seeing the street built upon in conformity with this plan, and seeing in the manner in which it was built upon, something more than an accidental conformity of fronts on a uniform line. They took a deed the terms of which indicate that their vendor declared, he was unwilling to covenant that there existed no restriction upon the right to an uncontrolled use of this eight feet, and that he therefore conveyed the lot in question, subject to any restrictions that might exist requiring it to be perpetually kept open as a court-yard.

Their right to pull down and cover this eight feet with a new building is no greater than Wilkes’ would have been after he had built as he did build, and after every other lot had been built upon, as Davis originally assured every purchaser, and as the common understanding of all the purchasers was, that it was to be and should be built upon.

He would not have been permitted on such a state of facts to do an act which would have been a fraud upon and a damage to every other original purchaser.

We regard it as settled law that when the owners of adjoining lots agree, though verbally, that each will erect a building or store on his own lot and that the dividing wall shall be a party wall, and be used to support the beams and roof of each building, and they build according to such agreement, and with a view to execute it, neither can remove, or do anything to impair the stability or suificiencv of such wall, so long, at least, as the buildings continue in a condition to subserve in every substantial respect, the uses for which they were erected.

The equity, in the case before us, is as strong as in that last mentioned, that the common understanding of the parties after having been executed at great cost to each of them, should not be allowed to be violated by either so as to be a fraud upon and a serious damage and continuing annoyance to every other.

The grounds on which we affirm the judgment, were not much discussed on the argument of the appeal, but we think they are substantially raised by the plaintiff’s seventh printed point.

The judgment should be affirmed.

Pierrepoint, J., dissented. Judgment affirmed.