Brickett v. Downs

Knowlton, J. The arrangement made between the defendant and Shorey, a member of the firm of Shorey and Briekett, that the coal delivered to the defendant by Shorey and Briekett should be paid for by setting off the private debt of Shorey to the defendant, and the settlement made on this basis between Shorey and the defendant without the knowledge of Briekett, were a fraud upon the firm, and are of no effect as against the plaintiff. The finding of the judge, that there was no evidence of actual fraud on the part of the defendant, must mean that there was no evidence of a wrongful purpose, but Only evidence of the legal fraud set out in the bill of exceptions. The facts proved are prima facie evidence of fraud upon the partnership, which requires a finding in favor of the plaintiff, unless facts or circumstances are shown which might justify the defendant in believing that the settlement was authorized expressly or impliedly by the other partner. To receive property of a partnership from one of the partners in payment of his personal debt, without the consent of his copartner, is no less a fraud Upon the partnership than to pay a debt due the firm by doing or furnishing something for the personal benefit of one of its members. Such an arrangement accompanying the receipt of partnership property would be void against the other partner, and would leave the party receiving the property liable upon an [73] implied contract to pay the firm its value. Homer v. Wood, 11 Cush. 62. Williams v. Brimhall, 13 Gray, 462. Tay v. Ladd, 15 Gray, 296. Farley v. Lovell, 103 Mass. 387. Locke v. Lewis, 124 Mass. 1. The reasons for holding that the plaintiff could not maintain his action in Homer v. Wood, ubi supra, do not apply to this case. This plaintiff, in order to maintain his action, is not obliged to set up the fraud of a person joined with him as co-plaintiff on the record. He succeeds to all the rights of the .assignee and of the firm, and he is free from the embarrassment which would attend an attempt by the members of the firm to maintain an action jointly in their own names.. By Pub. Sts. c. 157, § 109, it is expressly provided that “ suits upon claims sold by assignees shall be brought in the name of the purchasers.” The defendant’s settlement with Shorey being ineffectual to bar the debt, the plaintiff can recover the full amount of the debt, as the assignee could have done if it had not been sold. Bxeeptions overruled.