Van Kleeck v. McCabe

Grant, J. Plaintiffs sued the defendant, who is sheriff of the county of Livingston, in trover, for the conversion of the goods seized by him under a writ of attachment [602] issued in the suit of Henry Wright and Orry Waterbury v. John Weimeister and Albert Weimeister, in which the judgment rendered in favor of the plaintiffs has been« affirmed by this Court. 87 Mich. 594. John Weimeister made a general assignment for the benefit of his creditors on September 35, 1889, to the plaintiffs, now his administrators. The assignees took no possession of the property, filed no bond, and made, no inventory, for the reason, as they testified, that John Weimeister died before these were completed, and before the time had expired within which they should have completed and filed them. It is unnecessary to consider the effect of this assignment, for it did not purport to convey the partnership property of John Weimeister & Co., if such a partnership existed. The assignees, therefore, would take no title 'to, and have no right to the possession of, the partnership property. If, therefore, the partnership actually existed between John and Albert, the title to the property belonging to it still remained in the firm, and upon the death of John the title thereto became vested in Albert as the surviving partner. In all matters connected with the partnership he was the proper party to sue and to be sued. If a partner, it became his duty to close up the partnership matters, collect the assets, pay the debts, and then distribute the fund. Until the partnership fund is ready for distribution, the representatives of the deceased partner have no right to interfere, so long as the surviving partner is proceeding, in good faith, to wind up its affairs. Barry v. Briggs, 22 Mich. 201; Pfeffer v. Steiner, 37 Id. 537; Merritt v. Dickey, 38 Id. 41; Bassett v. Miller, 39 Id. 133. On all other material questions, except the assignment, the evidence is the same in the present case as in that of Wright v. Weimeister, ante, 594, and it is unnecessary to repeat it here. Mr. Hammell was a witness in this [603] case, but not in the other, and does not deny the statements, made by Wright and others, that he informed them that the firm of John Weimeister & Co. was composed' of John and Albert. It is insisted by the defendant that the former suit involved the same issues as this, and that it therefore concludes the rights of the parties. If John Weimeister had lived till the suit was tried and judgment rendered, the question would have been res jzidicata, both as to him and Albert. It is undoubtedly true that all the acts of a surviving partner, and the result of suits brought by and against him as survivor, are binding' upon the representatives of the deceased partner, so long as they are conducted in good faith. But in the present case the existence of the partnership is disputed, and is the real question at issue. This being settled, there can be but little doubt as to the rights of the parties. Upon this question John Weimeister, in his life-time, did not have his day in court, nor have his representatives since his death. The judgment in that suit is therefore not binding upon them. ' The rights of the parties to this suit depend upon two questions of fact: 1. If John and Albert Weimeister were copartners in fact, then verdict and judgment should be rendered for the defendant. 2. If they were not in fact copartners, but ha$ held themselves out as such, and the plaintiffs in the attachment suit had dealt with them upon the faith of such representations, and in the honest belief that they were copartners, and the property levied upon belonged to the business in which they represented themselves as copartners, then verdict and judgment should be for the defendant. Persons who deal with parties representing themselves as partners in a business are entitled to have the property [604] used in that business applied to the payment of their debts in preference to the individual debts of those representing themselves as partners. This rule may operate severely upon the individual creditors, but a contrary rule would operate just as severely upon the partnership creditors. The testimony of Albert Weimeister that he was misled by the statements of John as to the value of his property was incompetent. Whether John intentionally or unintentionally made false statements to Albert, and thus induced him to enter into the partnership, could not affect his liability to those who had meanwhile trusted them. Albert was in a better position than were their creditors to ascertain the assets of John, and their value. He cannot avoid liability by saying John defrauded him. Plaintiffs introduced evidence tending to show that Albert was present when John executed the assignment, and was then asked by the attorney for John if he should also execute the assignment, and then he disclaimed having any interest in the property. This might be competent evidence in a controversy between John and Albert, and the fact might estop Albert from laying any claim to the property as against John or his assignees; but this doctrine cannot be invoked by the representatives of John in an adverse proceeding brought by creditors against them. both. If they were partners, it was the duty of Albert, as well as of John, to protect the partnership creditors. If they had held themselves out as partners, while not so in fact, the same duty rested upon them both. Albert could not, in either event, avoid this liability by consenting that the property might be assigned as the individual property of John. The same rule also applies to statements made by John at the same time. This testimony should have been excluded. The circuit judge was in error in instructing the jury [605] that the prosecution of the suit against Albert as survivor was an abandonment of the suit against John, and that the plaintiffs in the attachment suit should have proved their claim against John's estate, or have proceeded in equity to settle the rights of the estate and creditors. TVe need not determine whether the administrators might properly have been made parties defendant. It is sufficient to say that they were not necessarily parties, and that the action was properly revived against Albert as survivor. How. Stat. § 7401. They might have presented their claim against the estate, but this would not have operated as an abandonment of their suit. Manning v. Williams, 2 Mich. 105. No attempt was made to obtain a dissolution of the attachment, and it will therefore be presumed that there were valid grounds for the issuance of the attachment. A creditor who, by his diligence in instituting proper legal proceedings, has obtained a lien, is not deprived of it by the death of one of his debtors, when the suit is revived and prosecuted in the manner provided by law. His lien is continued, and upon the rendition of judgment the property attached may be seized and sold under an execution. Judgment is reversed, with costs, and a new trial ordered. The other Justices concurred.