36 Wis. 131 | Wis. | 1874
1. The doctrine is elementary, that one partner has no right to apply the partnership funds and effects in payment of his individual debt, without the assent, express or implied, of the other members of the firm. Story on Part., §§ 132 and 133; Parsons on Part., p. 210. To apply a debt due the copartnership, without such assent, in payment and discharge of a separate debt due from one of the partners, is a violation of duty on the part of the partner so misappropriating the partnership securities and effects. Dob v.. Halsey, 16 Johns., 34; Rogers v. Batchelor, 12 Peters, 221; Gram v. Cadwell, 5 Cowen, 489; Homer
2. But the counsel for the defendants insists that it is not every disposition of the partnership property for the individual use of one member of the firm, which amounts to a fraud on the rights of others, but that it depends upon the circumstances attending the particular transaction. He therefore claims that the court erred in refusing to allow the defendants to show that at the time of furnishing the materials and doing the work for which they received their pay from the firm of Simmons & Viles, and at the time of the settlement of the account with Simmons, they acted in good faith, supposing they were dealing with him about a matter within the scope of the partnership, and thus repel and presumption of fraud in making the settlement. The defendants were permitted to show all the facts about doing the work and furnishing the materials which constituted the basis of their account. They were allowed to prove, and did prove, that the work and materials were furnished and expended in building a store, and were first ordered by Simmons, in May, 1870,-nearly five months before the formation of the partnership of Simmons & Viles. This building, it appears, was occupied by the firm for a store from November, 1870, to September, 1871, when the firm was dissolved; but it was not partnership property, and the firm had no interest in the building. Besides, the defendant Fish testified that they opened their account with Simmons & Grilman in May, 1870, and that the articles and work furnished by them were charged to that firm upon their account books until March 7,
3. It is not denied that on the dissolution of the partnership in September, 1871, all accounts due the firm, including the account sued on, were assigned the plaintiff, who is now the sole owner thereof. And the question is, Can the plaintiff maintain this action in his own name for the recovery of the partnership debt, or must he resort to a suit in equity, making Simmons a party defendant ? It is said in many cases that an insuperable objection exists to an action at law, because, as the contract is joint, the remedy upon it must also be joint,' and this involves the necessity of making the fraudulent copartner a party plaintiff to the suit. And consequently, if a recovery is had, the amount recovered is the property of the firm, and the fraudulent party would have his share. Lord Tektekden,.
It is suggested that a distinction may well exist between cases like that of Jones v. Yates, and others of a similar character, where the partnership seek to avoid the wrongful act of a partner and can only have relief by the affirmative action of the court declaring such act void, and a case like the one at bar, where a party sues upon a partnership demand valid in favor of the partnership, and which can only be defeated by a defense setting up the validity of the wrongful act of the fraudulent partner. Here, it is said, the plaintiff has sued upon an account which was due the firm, and of which he is the sole owner. And the defendants in effect answer that the debt has
In Estabrook v. Messersmith, 18 Wis., 545, which was an action by copartners for the alleged conversion of partnership property, one of the questions presented was, whether a recovery could be had in a case where one partner had been guilty of fraud in purchasing the goods of a fraudulent vendor, and
By the Court. — The judgment of the circuit courtis affirmed.