54 Kan. 793 | Kan. | 1895
The opinion of the court was delivered by
In the year 1873, M. H. Insley, Daniel Shire and E. R. Kellogg formed a partnership under the firm name of Insley, Shire & Co., with a view of carrying on banking and other lines of business at Leavenworth, Kas. About a year afterward, Kellogg withdrew from the firm and Insley and Shire continued the business as equal partners, without a change in the name of the firm. The partnership had no established capital, nor was there any fund set aside for that purpose. Each partner deposited a certain amount of money to his personal credit, subject to be checked out by himself at will. The two principal lines of business in which the firm was engaged was private banking, and the manufacture, construction and sale of bridges, but it also appears that they were interested in real-estate, mining and other business ventures, some of which were profitable and some unprofitable. In June, 1882, Shire died, leaving a will, under which Ann M. Shire, James W. Gaw and Levi Wilson were appointed as executors, who were empowered to manage and
After the issues were joined, the cause was referred to a referee, who, after trial, made an elaborate report of the facts and law. An accounting of the business was made, and among other facts it was found, that the plaintiff, on account of her sex and infirmities, had taken no part in the administration of the estate; that James W. Gaw was the controlling and active executor thereof; that the bridge business of Insley, Shire & Co., under the control of Tullock, had been well managed and profitable; that the banking business had been badly managed, the clerks and employés connected with the same having been negligently selected; that they had abstracted and misappropriated large sums of money, and that, from May 1, 1885, to December 6, 1887, the bank had been despoiled of $29,832.98 by and through the fraud of the employés. It was found that Insley had failed to exercise due skill, diligence and care in supervising the affairs of the bank, by reason of which great losses occurred; that at the close of the partnership business the plaintiff had overdrawn her account in the bank to the extent of $30,104.27, and that she was allowed to so improvidently overdraw her account because of the omission of Insley to keep accurate and intelligible accounts of the business. It was also found that James W. Gaw had failed to exercise ordinary care, diligence and
No settlement of the estate has ever been made, nor does there appear to have been any order of the probate court for the payment of legacies, or the distribution of the estate. She has no right, as an individual, at this time, to bring an action in behalf of the partnership against its employés for the recovery of money due to the partnership, or for losses occasioned by their neglect or wrongdoing. Although she is jointly concerned in the execution of the trust, she brings an
Some attempt is made to hold Insley to the liability of a surviving partner under the law, but from the testimony it is clear that he was not so regarded or treated by any of the parties; He did not assume title and control as surviving partner. No bond was given by him; no inventory of the partnership estate was made; and he did not undertake the management of the partnership estate as surviving partner. On the contrary, all the parties united in the control and possession of the property; the executors, representing the Shire interest, and Insley, representing his own, they joined together in carrying on the business until it was discontinued. They were partners to all intents and purposes, and all alike equally owed the duties of partners to each other. There was no agreement for a division of labor between the executors on one side and Insley upon the other. Insley was not employed to represent the executors or to attend to the business of the partnership for the estate. It is true that he devoted most of his time and attention to the partnership business, but, from 1885, Gaw was employed on behalf of the estate to attend to the Shire interest in the partnership, and he received an annual salary of $1,000 as compensation for his services. There is a finding by the referee that he undertook to represent the Shire interest in the partnership, and was continuously so engaged down to the close of the bank.
A partner of equal responsibility and who himself is indifferent to his own interest or guilty of negligence, is hardly in a position to claim and recover for the entire losses resulting from the negligence of both. In this case, the duty of carefully selecting employés and supervising the business of the partnership rested equally upon Insley and the represent
The judgment of the district court against Insley and Gaw will be reversed, and the cause remanded for further proceedings, in accordance with the views herein expressed.