Stearns v. Houghton

[586] The opinion of the court was delivered by Pierpoint, Ch. J. This is an action of trover brought to recover the value of two notes executed by one Michael Sanford. From the facts reported by the referee it appears, that prior to the 15th day of April, 1858, the plaintiff a.nd one Goodell were copartners in the business of running a line of stages; that on the said 15th of April they sold out their line, with a part of the property they had used in the business to said Sanford, and that the notes sued for in this action, were a part of the consideration given by said Sanford for such property; that notwithstanding these notes were taken, payable to Goodell or bearer, they were the joint property of the plaintiff and said Goodell, as such copartners ; that their copartnership business, and accounts, were never settled between themselves, or the copartnership dissolved, until it was dissolved by the death of said Goodell. When Goodell died these notes were in his possession, and afterwards went into the possession of the defendant as his administrator. Subsequently the plaintiff demanded the notes of the defendant who refused to deliver them to him, claiming the right to hold them for the benefit of Goodell’s estate. It is an elementary principle that on the death of one copartner the right to the possession and control of the partnership effects, vests in the survivor. He takes them, subject to the right and duty of settling and closing up the copartnership affairs. He alone has the right of disposing of the property, and of collecting and paying the debts. All actions to enforce the claims of the company must be brought in his name as survivor. The right of the survivor to the copartnership effects, does not in any respect depend upon the question whether or not, upon a settlement of the business, there will be funds in his hands belonging to the estate of the deceased copartner. If the company is solvent there necessarily will be. If the representative of the deceased partner has reason to fear that the copartnership funds will be misapplied or squandered, the aid of the court of chancery may be invoked to prevent such a result, but a court of law has no power to interfere in that respect. It is insisted that the plaintiff ought not to recover, because the said Goodell had agreed that whatever he owed to said Sanford [587] might be applied upon said notes. What might have been the effect if the application had actually been made in Goodell’s lifetime, it is not necessary now to determine. It was an agreement to apply the company effects in payment of his individual debt, but not having been carried out by Goodell, it is quite clear that the survivor is not bound by the arrangement. Neither is the right of the plaintiff prejudiced by his saying to Sanford that whatever he had paid to Goodell, ought to go in payment of their notes, as this remark was evidently made in reference to those payments that Sanford had made to Goodell, and which were applied by the referee upon the notes. The fact that the plaintiff presented a claim before the commissioners upon Goodell’s estate, can have no effect upon his right to recover in this suit. The claim as the referee finds had no connection with these notes, no claim could properly have been made against the estate of Goodell, growing out of these notes. They were rightfully in his possession at the time of his death as one of the copartners. They were the evidences of a debt against Sanford, and as such the plaintiff became entitled to them upon the death of Goodell, and his right to recover their value of the defendant results from his refusal to deliver them to the plaintiff when he demanded them 'aftey Goodell’s death. //' It is said that the refusal of the defendant to deliver-' the notes... upon the plaintiff’s demand, was so qualified that it dfd^ not’amount' to evidence of a conversion. We think the refusal wj not only an absolute one but it was accompanied by the assertion of, an absolute' right to hold the property as against the defendant at'All. events¿This instead of qualifying the refusal, rather intensifies it, and it is to settle the right so asserted that this action is brought. Upon examining carefully the report of the referee, we are unable to find therein any sufficient reason why the plaintiff is not entitled to recover. The proforma judgment of the county court is reversed, and judgment rendered for the plaintiff for the amount reported by the referee with interest thereon and his cost.