46 Conn. 592 | Conn. | 1879
The partnership affairs of Moriarty & Bailey were placed by the court in tlie hands of a receiver, and a
Upon these facts the committee refused to make the set-off, on account of which a creditor of Moriarty & Bailey remonstrated, and the court having overruled the remonstrance, the question is brought to this court for review by a motion in error.
The legal proposition that, if a partner applies partnership funds to the payment of his own debt, the money may be recovered by the firm, although the creditor did not know that the funds belonged to the partnership, seems to be a well settled general rule. 1 Parsons on Contracts, 5th ed., p. 185; Filley v. Phelps, 18 Conn., 294; Frink v. Branch, 16 Conn., 260; Yale v. Yale, 13 Conn., 185; Rogers v. Batchelor, 12 Pet., 229; Dob v. Halsey, 16 Johns., 34; Evernghim v. Ens
This rule, though generally laid down in the test books without qualification, yet seems to us to require some restriction for the protection of a private creditor who, in good faith, and with no circumstances to put him on enquiry, receives partnership funds in payment of his debt and discharges security held by him therefor, and, if compelled to refund the money so received, could not be restored to the situation he was in before the payment.
But, whatever may be the correct rule, the facts of this case make it unnecessary for us to apply it. We may assume that if the funds of Moriarty & Bailey, when applied to the private debt of the former, could be followed into the hands of the Mason trustees, the money could be recovered back by suit for that purpose, or the amount could be set off against thpir claim, though presented by their assignees. But the trustees, holding a note against Moriarty, had a right to get it discounted, and then it was the duty of Moriarty to pay it to the holders. After the note became the property of the bank Moriarty did pay it, sending the checks for convenience to the bank through the firm of Mason, Chapin & Co. The note being negotiable was payable, not simply to the trustees, .but to their order, and when indorsed and discounted was payable to the bank as truly as if originally made so in terms. The bank therefore, and not the trustees, were the recipients -of the partnership funds. It is true that the trustees, being -contingently liable as indorsers to the bank, were thus indirectly benefited by the payment; but the debt when paid was not their debt, and the funds illegally used to pay it did not go into their hands.
There was no error in the judgment complained of.
In this opinion .the other judges concurred.