Bank of Arthur v. Ellars & Humble

Opinion of the Court, the Hon. Carroll C. Boggs, Judge. The appellee firm caused the sum of $476.59 to be deposited in the Hational Live Stock Bank of Chicago, to the credit of the appellant bank for the account of the appellee. The appellant bank placed the amount to the credit of the individual account of William Humble, one of the members of appellee’s firm, and paid the money upon his individual check. Humble was not then indebted to the bank and the question of the application of firm assets to the payment of the individual indebtedness of a partner does not arise. The case was submitted to the court without the intervention of a jury, and the finding and judgment being against the appellant bank the case is brought here for review. It appears from the evidence that each member of the appellee firm had an individual account upon the books of the appellant bank and that they did not desire that a firm account should be kept by the bank. We think it further shown that a prior course of business between the firm and the bank was such as authorized the bank to place the amount to the credit of the individual account of either member of the firm, and pay it out upon his individual check, leaving the partners to adjust their partnership interest and rights between themselves as they had uniformly before that done. The payment to Humble must be deemed, if we are right as to the effect of the evidence, to have been with the implied consent of Ellars, the other member of the firm, and if so, it can not be recovered back either at law or in equity to satisfy any demand Ellars may have against the firm. Davis v. Atkenson, 124 Ill. 474. Even if the consent of Ellars be not implied, yet the payment is good as to Humble. Being a complete satisfaction as to one of the parties, a court of equity is alone competent to grant the relief, which the firm seeks by this action in assumpsit. Church v. First National Bank, 87 Ill. 68, and cases there cited. The court refused to hold as correct a proposition of law to this effect, and as the evidence tended strongly to support such a proposition, the judgment must be reversed. This case must be distinguished from cases where a right of recovery at law or in equity in the name of the firm has been sustained on the ground that an individual creditor of the firm knowingly received, payment out of the partnership funds, or where there was a wrongful misappropriation of partnership funds or property without the consent, express or implied, of the other partner. Whenever the act complained of is done with the consent, express or implied, of the injured partner, no right of action exists to recover the funds or property for the benefit of the partners, though it may be that if the firm is insolvent a suit in equity may be maintained for the benefit of the creditors of the firm. Church v. First National Bank, supra; Davis v. Atkenson, supra; 17 Amer. and Eng. Ency. of Law, pages 1247 and 1248. The judgment must be and is reversed and the cause remanded.