126 Mich. 497 | Mich. | 1901
In 1894, and until some time in 1895, Lou J. Le Veque and Henry Alway were copartners; their business, as testified to by Alway, being “making board timber, buying and selling pine lands, looking up lands, estimating timber, taking options, and making waney board timber.” They claim to have made a parol contract with defendants by which it was agreed that they were to get out for the defendants waney pine timber on certain descriptions of land, for which they (the plaintiffs) were then negotiating, and which they claim to have afterwards purchased under the contract with defendants. They also claim for services in acquainting defendants with the fact of there being a large quantity of pine timber upon these same lands.
Le Veque & Alway commenced a suit by attachment January 25, 1895, and caused a large amount of timber belonging to the defendants to be seized. This suit was based upon the alleged refusal of defendants to carry out this contract. The ground alleged for the attachment was that the obligation upon which suit was brought was fraudulently incurred by the defendants. Defendants moved to dissolve the attachment. This motion was heard upon the merits, and the record contains the testimony of Le Veque and Alway, then taken. Defendants denied making the agreement. The attachment was dissolved, and there is nothing in the testimony of Le Veque and Alway to justify their affidavit for the attach
“Parties positively will not continue Le Veque case, but, if you wifi give bond satisfactory to us to pay whatever judgment recovered on retrial, and pay costs of this term, will consent that new trial be ordered. This is very best clients permit me to offer. Answer immediately. Court now waiting.”
To which Mr. Hill replied immediately by telegram to the circuit judge:
“Flannigan offers retrial on our giving bond. I prefer trial on Monday. Can I have it? If not, will accept Flannigan.”
“Judgment for plaintiff for $5,902. Telegram came too late. Forward your- bond soon. I go home tomorrow.”
To this Mr. Hill replied:
“Give me stay for 20 days to get bond, and till next term to move for new trial.”
To which the judge replied:
“Yes; this is bond under Flannigan’s proposition.”
On July 8th, Mr. Brown, the attorney of record for plaintiffs, sent to Mr. Hill a form of bond in the penal sum of $8,000, with a stipulation for vacating the judgment upon the execution of the bond. In reply to this-Mr. Hill wrote, offering a bond for $3,500, to which Mr. Brown replied, on July 13th, that a bond in the sum of $6,000 would be satisfactory. On July 18th, Mr. Hill entered a motion for a new trial, at the same time filing a bond in the sum of $3,500. Learning that an execution had been issued, Mr. Hill then filed a bond in the sum of $6,000, whereupon the circuit judge, on the 24th day of' July, entered an order reciting the filing of the two bonds, and recalling the execution until the motion for a new trial could be heard. This was superseded by a similar order, made August 6, 1895.
While matters thus stood, defendants and Le Yeque & Alway, through Mr. Alway, entered into an agreement of settlement of this suit and all other differences between them. By this settlement defendants were to pay LeVeque & Alway $1,100. Before the amount was paid, Le Veque & Alway were to produce a release and discharge of all claims by or on behalf of their attorneys. Such releases were obtained from all the attorneys, and on the 11th of September $1,100 was paid, and Le Veque- & Alway gave a receipt in accordance with the agreement.
On February 1, 1895, Le Veque & Alway executed an agreement to Luther M. Packard and Albert J. Pauli, reciting a consideration of one dollar and other valuable things, and agreeing to pay said Packard and Pauli “an .amount in money equal to fifteen per cent, of the total amount recovered by us, after paying all legitimate expenses of suit, in a suit commenced by attachment by us ■against Alexander McCall and James McBurney in the circuit court for the county of Ontonagon, January 25, 1895.” The agreement further recited:
“We also agree, for the consideration above mentioned, to allow B. J. Brown, Esq., attorney of record in said case, on the final settlement of the case, either by judgment in our favor or otherwise, to deduct from such •amount the fifteen per cent.,aforesaid, and to pay the same to said Luther M. Packard and Albert J. Pauli; the balance to be paid to us.”
On July 26, 1895, Le Veque made an assignment of his ■interest in the judgment to Mary Line. On the 9th of September a notice of this assignment was served on Mr. Hill. On the same day notice was also served of the .agreement with Packard and Pauli. Subsequently complainants filed this bill to set aside the settlement and satisfaction of the judgment. The case was heard upon pleadings* and proofs taken in open court, and the bill dismissed.
The claims of the complainants are:
1. That there was no legal consideration for the settlement and discharge of the judgment.
2. That it was fraudulent, and therefore not binding.
3. That it was unreasonable, unjust, and a fraud upon -complainants.
4. That Alway had no authority as against complainants to settle and discharge the judgment without the •consent of the complainants.
“I did not take it as a bribe, but I took it, as I considered, for signing Le Yeque’s name to that document. I had already discovered that signing that would not be lawful, according to the best attorney’s advice in Mar*503 quette; that my signing Le Veque’s name was not worth the paper it was written on, as he had made an assignment.”
One who confesses that he knowingly entered into a corrupt and fraudulent bargain is not entitled to much credence. The circumstances of the settlement, as stated by Hill and Rood, two reputable attorneys, and Mr. McBurney, show that there was no concealment, and no attempt to defraud, but that the negotiations were open and fair. The judge, in his opinion, says, “Neither Le Veque nor Alway is worthy of belief when contradicted.” He saw them upon the stand, and was familiar with the history of this litigation from the beginning. I think there is enough upon the record to justify this conclusion without the benefit of seeing the witnesses and noticing their appearance when testifying,— a matter of no little value when the testimony of witnesses is in direct conflict.
“The dissolution operates as a revocation of all authority for making new contracts. It does not revoke the authority to arrange, liquidate, settle, and pay those before created.”
See, also, T. Pars. Partn. pp. 386, 392; 2 Bates, Partn. §§ 681, 682; and also authorities there cited.
No notice had been given by complainants of their claimed assignments until after the agreement of settlement had been made. The agreement, being valid when made, could not be avoided by a subsequent notice of these assignments. The settlement did not relate to future contracts by the firm, but to a past partnership transaction. It is not within the principle of Griswold v. Waddington, 16 Johns. 491, and other similar cases cited by the learned counsel for complainants. In that case the partners were citizens of different countries, between
“The parties were still partners as to those goods which had been actually purchased by them before the war; and the parties, as partners,’were bound to account to each other for the proceeds of those goods, and equally bound, as partners, to pay for them, if not already paid for. A dissolution of a partnership only has respect to the future. The parties remain bound for all antecedent engagements. The partnership may be said to continue as to everything that is past, and until all pre-existing matters are wound up and settled. * * * With regard to things past, the partnership continues, and always must continue.”
It may be said of the arrangement with Packard and Pauli that it gave them no control over the suit or the judgment, and no right to interfere, or to receive any money,. until the amount had been settled, either by a judgment beyond the control of the court and of the parties or by a compromise. The assignment to Mrs. Line did not make her a partner with Alway, or entitle her to a half of the judgment. Under it she was entitled to receive only what remained after the partnership was settled, and it was determined what portion of the judgment would have belonged to Le Veque. A mortgagee or assignee of a partner’s interest can receive only his share of the surplus after the partnership is wound up. 1 Bates, Partn. § 183; Fourth Nat. Bank of New York v. Railroad Co., 11 Wall. 624; Lovejoy v. Bowers, 11 N. H. 404; Rosenstiel v. Gray, 112 Ill. 282; Hutchinson v. Dubois, 45 Mich. 143 (7 N. W. 714); Kunze v. Cox, 113 Mich. 546 (71 N. W. 864, 67 Am. St. Rep. 480). An assignment by one partner of all his interest in the firm dissolves the partnership, and all that such assignee is entitled to is what remains after the credits have been collected, the debts paid, and the remaining assets are ready for distribution. The assignment gives him no right to interfere with the management of the business by the remain
The bill does not seek to enforce a lien of complainants upon the amount of the settlement. If this were so, a, different question would arise. We are not prepared to hold that the owner of a judgment may not give-several parties a lien upon that judgment to secure their claims, which might be enforced in a court of- equity, as-was done in Moore’s Appeal, 92 Pa. St. 309. It is not necessary to express an opinion upon this question.
The decree should be affirmed.
I cannot agree with the conclusion reached by my Brother Grant. There is no doubt of the fact of the assignment by Le Veque of his interest in the judgment to the complainant Line. It does not appear that any creditor is complaining, and it does appear that Le Veque’s copartner, Alway, assented to-this assignment. In what manner, then, the assignment works any injury to the judgment debtor, I am unable to-see, unless it be true, as contended, that an assignment of a portion of a judgment is of no effect, either in law or equity, as against the judgment debtor. I do not understand this to be the rule. It is true that it has been, held in some jurisdictions that at law an assignment of a portion of a judgment is wholly ineffectual. In Missouri it seems to have been held that it is equally ineffectual in equity. See Love v. Fairfield, 13 Mo. 300 (53 Am. Dec. 148), and Burnett v. Crandall, 63 Mo. 410. But elsewhere the rule seems to be firmly established that an assignment of a portion of a claim is good in equity, and creates at least a trust in favor of the equitable assignee;
“Whatever term is applied to it [the assignment] by way of description, the result reached is to give to the assignee a property right in the thing assigned, — a right which is cognizable by and enforceable in a court of equity.”
In ¡the case last cited it was distinctly held that, after an assignment of a portion of a demand or judgment, the debtor, having notice of the assignment, could not discharge the entire demand, so as to cut off the rights of the assignee. See, also, North Chicago St. R. Co. v. Ackley, 58 Ill. App. 572; Moore v. Robinson, 35 Ark. 293; Beers v. Hendrickson, 45 N. Y. 665.
In my opinion, the previous decisions of this court in principle decide the present case. See Weeks v. Wayne Circuit Judges, 73 Mich. 256 (41 N. W. 269); Potter v. Hunt, 68 Mich. 242 (36 N. W. 58). It is suggested that the Michigan cases are cases in which an attorney’s lien has been enforced; but this is not the ground upon which they rest. In Weeks v. Wayne Circuit Judges it was held that the agreement between the attorneys and their client operated as an assignment of the judgment to the extent of the attorneys’ claims. It was further held that the plaintiff could give no valid discharge of the judgment until the attorneys’ claims were paid; and it was said:
“It is true, courts, as a rule, look with favor upon a compromise and settlement made by the parties to a suit, with the consent of all persons concerned, to prevent the vexation and expense of further litigation; but the rule only applies where the rights and interests of all parties concerned, both legal and equitable, have all been respected.”
In my judgment, complainants are entitled to relief in this case. The decree will be reversed and remanded to take an account of the value of complainants’ interest in the claim represented by the judgment, but with leave to defendants, McCall and McBurney, to apply for a new