App. Div.]

First Department, February, 1920.

In their complaint the plaintiffs allege that they are copartners and engaged as wholesale dealers in granite and marble in New York city, having a foreign office in Carrarra, Italy, and that the defendants are also copartners engaged in buying and selling Italian statues, statuettes, and Italian pumice finished monuments.

The plaintiffs allege that they entered into an agreement with the defendants whereby the plaintiffs were to purchase in Italy certain goods and merchandise desired by the defendants and ship the same to the latter in New York city upon. the consideration that the defendants should pay the plaintiffs, within four months of shipment and with interest at six per cent per annum, the cost of the said goods delivered in New York, together with ten per cent commission on the price paid by plaintiffs in purchasing said goods; that it was further understood and agreed that the payments by plaintiffs in purchasing said goods and in the payment of freight and various charges would be paid in Italian lire, and that settlements would be made between the parties in American dollars in the ratio of five lire to one dollar.

Plaintiffs further allege that in accordance with the said agreement and upon the express order of the defendants, the plaintiffs forwarded to the defendants at New York four different shipments of merchandise covered by the contract, a schedule of which is annexed to the complaint. In their complaint the plaintiffs allege the particulars with reference to said several shipments, and allege that there is due plaintiffs from defendants as the price paid for the goods shipped, together with incidental expenses incurred by plaintiffs in the performance of said contract, and including their said commissions thereon, in the aggregate, in American money, the sum of $6,660.42.

For a second cause of action the plaintiffs allege the performance of work, labor and services and the furnishing of materials by plaintiffs at defendants' request and upon their promise to pay, in connection with the making of a portrait model, a marble monument and photographs and negatives of models, amounting in all to $315.

Upon said allegations of the complaint the plaintiffs demand judgment against the defendants in the aggregate sum of

First Department, February, 1920.

[Vol. 190. $6,975.42, together with interest upon said several shipments of goods from the time when the same became payable.

To this complaint the defendant demurred generally upon the ground that the complaint did not state facts sufficient to constitute a cause of action. The demurrer was sustained by the court at Special Term upon the ground that the plaintiff copartnership included within its membership a person who was a member of the defendant copartnership, to wit, the defendant Edwin O. Townsend. It was conceded upon the demurrer that said Edwin O. Townsend, plaintiff, and Edwin O. Townsend, defendant, were one and the same person, and such fact is now conceded upon this appeal. It is admitted that under such circumstances the plaintiffs cannot maintain an action at law to recover money of the defendants. This being so, of necessity the plaintiffs, if they succeed at all in recovering judgment herein, must claim in equity. Such, I think, is the logical interpretation that should be placed upon the plaintiffs' complaint. Under well-settled rules of law, a party may not sue himself in an action at law, and it appearing by the complaint that one of the plaintiffs is of necessity a party defendant, said plaintiff being a member of the copartnership plaintiff, seeking to recover for goods sold and delivered to the copartnership defendant, of which he also is a member, no recovery can be had at law. But from the allegations of the complaint it is clear that while the cause of action therein set forth did not involve a settlement of partnership accounts or the adjustment of any matter between any copartners, the plaintiffs were entitled to recover a money judgment against the defendants upon a separate and distinct transaction between the two firms. From the fact that Townsend was a member of both firms, plaintiff and defendant, it does not follow that any accounting between partners is required in order to adjust this difference between the two firms. A recovery at law being precluded, equity will permit such a recovery. (Cole v. Reynolds, 18 N. Y. 74; Schnaier v. Schmidt, 59 Hun, 625, opinion in 13 N. Y. Supp. 725; Mangels v. Shaen, 21 App. Div. 507.)

The contention of the respondent that equitable relief can only be accorded plaintiffs herein upon an accounting between the parties is not well taken. As was said by Mr. Justice DANIELS

App. Div.]

First Department, February, 1920.

in Schnaier v. Schmidt (supra): "Neither did the circumstance of Schmidt being a member of each of the firms present a case for an accounting, for the cause of action set forth in the complaint was a separate and distinct transaction, not of a partnership nature, requiring the settlement of partnership accounts. It was entirely separate, involving only an obligation for the payment of a specific sum of money, wholly disconnected with transactions between the members of the plaintiffs' firm as partners; and for that reason an action could be maintained, upon proof of the facts set forth in the complaint, for the recovery of the amount owing on the purchase of the inks."

Unless plaintiffs can maintain this action in equity they are without remedy. It is peculiarly the province of equity to step in and afford the plaintiffs relief to which they are justly entitled, but which is denied them in an action at law.

Under section 3339 of the present Code of Civil Procedure there is no distinction between actions at law and suits in equity. At present there is only one form of civil action. The Code (§ 481) requires that the complaint in a civil action contain a plain and concise statement of the facts constituting each cause of action without unnecessary repetition, accompanied by a demand for judgment to which the plaintiff supposes himself entitled. While there is no express allegation in the complaint before us that the plaintiffs have no adequate remedy in an action at law, the fact that the copartnership plaintiff and the copartnership defendant contain a member common to both shows the fact to be that the plaintiffs cannot receive adequate relief in an action at law, and must, therefore, apply to equity for relief. In this case the plaintiffs have alleged in their complaint, within the provisions of the Code, a plain and concise statement of the facts constituting their cause of action without unnecessary repetition, and appropriate demand thereupon is made for the judgment to which they claim to be entitled.

I think, therefore, that the court below erroneously sustained the demurrer to the plaintiffs' complaint, and that the plaintiffs, being foreclosed from obtaining relief in an action at law, may still, upon the equity side of the court, recover from the defendants the money for which judgment

First Department, February, 1920.

[Vol. 190. is asked, and that the complaint herein stated facts sufficient to constitute a cause of action.

It follows that the order sustaining defendants' demurrer should be reversed, with ten dollars costs and disbursements, and the demurrer overruled, with ten dollars costs, with permission to the defendant to withdraw said demurrer and to answer the complaint upon payment of said costs.

CLARKE, P. J., LAUGHLIN, SMITH and PAGE, JJ., concur.

Order reversed, with ten dollars costs and disbursements, and demurrer overruled, with ten dollars costs, with leave to defendant to withdraw demurrer and to answer on payment of said costs.

In the Matter of the Transfer Tax upon the Estate of GEORGE WILLIAM OTIS, Deceased.

W. FRANK NEWELL, as Executor, etc., Respondent; EUGENE M. TRAVIS, Comptroller of the State of New York, Appellant.

First Department, February 6, 1920.

Tax- additional transfer tax upon securities - exemption from taxation-payment of stamp tax to Comptroller or payment of local personal property tax-statute construed - purchase of securities and death of owner between period when personal property tax is levied.

By the enactment of section 221-b of the Tax Law the Legislature intended to enable an owner of securities to exempt the same from the additional transfer tax in either of two ways, first, by the payment to the State Comptroller of a stamp tax under section 331 of the Tax Law, or second, by the payment of a personal property tax thereon. Either method of exemption is open to the owner of such securities.

But the additional tax imposed by section 221-b of the Tax Law for a failure of the owner of securities to obtain the exemption aforesaid should not be imposed where it appears that, although he did not pay the stamp tax to the Comptroller, he bought the securities after the local assessment upon personal property was levied and died prior to the date when they might have been taxed in the next assessment roll, so that in fact he never had an opportunity to avail himself of that means of exemption. PAGE, J., dissents.

App. Div.]

First Department, February, 1920.

APPEAL by Eugene M. Travis, as Comptroller, from an order of the Surrogate's Court of the county of New York, entered in the office of the clerk of said court on the 18th day of June, 1918, modifying a prior order assessing a transfer tax.

Schuyler C. Carlton of counsel [Lafayette B. Gleason, attorney], for the State Comptroller, appellant.

Julius H. Beckwith, for the respondent.

MERRELL, J.:

This appeal is by the State Comptroller from an order of the surrogate of New York county modifying a previous order of the surrogate assessing a transfer tax upon the estate of George William Otis, deceased. The order of assessment imposed a tax of five per cent upon the sum of $27,805.68 of investment securities held by the decedent at the time of his death. The transfer tax upon this sum in the original order of assessment amounted to $1,390.28. Appeal was taken to the surrogate from the order of assessment, and the surrogate upon said appeal modified the order by striking therefrom that part thereof which imposed a tax of five per cent upon said investment securities. (103 Misc. Rep. 655.) The tax was originally assessed pursuant to the provisions of section 221-b of the Tax Law (as added by Laws of 1917, chap. 700). That section went into effect July 1, 1917, and is as follows:

"§ 221-b. Additional tax on investments in certain cases. Upon every transfer of an investment, as defined in article fifteen of this chapter, taxable under this article, a tax is hereby imposed, in addition to the tax imposed by section two hundred and twenty-one-a, of five per centum of the appraised inventory value of such investment, unless the tax on such investment as prescribed by article fifteen of this chapter or the tax on a secured debt as defined by former article fifteen of this chapter shall have been paid on such investment or secured debt and stamps affixed for a period including the date of the death of the decedent or unless the personal representatives of decedent are able to prove that a personal property tax was assessed and paid on such investment or secured debt during the period it was held by decedent; or unless the decedent was APP. DIV.- VOL. CXC. 46