Bredow v. Mutual Savings Institution

Richaiidson, Judge, delivered the opinion of the court. The main questions in this case are, whether the statute regulating the administration of partnership estates (R. C. 1835, p. 121) prohibits a surviving partner from winding up and settling the partnership concerns unless he first gives bond with security for the faithful discharge of his duties; and next, whether a surviving partner, independently of the statute, has authority to pass the legal title to a partnership note when transferred in payment of a partnership debt, If the surviving partner executes a bond as provided in the fifty-fourth and fifty-fifth sections of the act, he can not be [185] disturbed by the personal representatives of his deceased •partner in the possession of the partnership property and in the right to use it in any manner consistently with the primary duty of closing the partnership affairs. He ought to give the bond required by law whenever he undertakes to wind up the partnership estate, and, if he fails to do so for the period of thirty days after letters testamentary or of administration have been granted bn the estate of the deceased partner, he is liable at any time to have the business taken out of his hands ; but this power as surviving partner is not suspended until he gives a bond; nor is it superseded by the mere appointment of an administrator of the deceased partner ; for the administrator as such has no right to administer upon the partnership effects without giving an additional bond. (R. C. 1855, p. 124, § 59.) The grant of letters testamentary to Mrs. Golberg gave her no authority to interfere with the partnership property, because she did not give the further bond required by law; and though Koehls omitted to give a bond as surviving partner, his authority continued until superseded by the appointment of Enslin as administrator de bonis non, who gave both of the bonds required by the statute ; and until he qualified all the rights of the surviving partner remained unaffected by the statute, though he did not attempt to comply with it. The dissolution of a partnership as between the partners themselves operates as a revocation of their joint power to employ the property or funds of the partnership any longer in the business or trade thereof. As soon as the partnership ceases, the partners become tenants in common of all the partnership property and effects; and neither of them can create new contracts binding upon the partnership, nor buy or sell goods on account thereof, nor endorse or transfer the partnership securities; (McDaniel v. Wood, 7 Mo. 543; Long v. Story, 10 Mo. 636 ;) but each of the partners has authority to collect and pay debts, to adjust unliquidated accounts, to receive any property belonging to the firm, and to apply the partnership assets and effects to the payment of [186] its liabilities; for these rights and powers remain as indispensable to the final settlement of the affairs of the partnership, and are subordinate to the paramount duty of the partners to 'wind up the partnership concerns with diligence and in good faith for their mutual interest. The authority of one partner, which is implied from a partnership, to act for another, is revoked the moment the partnership ceases; and as the partners then become only tenants in common of the property and assets undisposed of, one of them, without the consent of the others, can not transfer the title to any of the partnership securities, and all of them must join in an action to recover any of the outstanding debts. The reason of this is not simply because one partner after a dissolution can not by his endorsement of a note create a new liability binding upon the others, but because, only having an undivided interest in a partnership note, he can not, without the consent of the other partner, transfer the title to the whole of it. ' f When, however, a partnership is dissolved by death, although the personal representatives of the deceased partner become tenants in common with the survivor of all the partnership property and effects in possession, they do not become tenants in common of the choses in action belonging to the partnership, for they belong to the survivor. The legal title to them by operation of law is cast upon the survivor, and he has the exclusive right to reduce.them into possession and must sue upon them in his own name without joining the representatives of the deceased partner, though he will be accountable to the partnership for whatever he collects. (Story on Part. § 346.) This is upon the principle that though chargeable as a trustee for the proceeds of partnership notes when received, the legal title to them is in the survivor; and if he has the legal title, he can transfer them, although his endorsement may not affect the estate of his deceased partner with any remote or contingent liability. It is. a mere question of power. j Upon the death of G-olberg, the title to the partnership notes vested in Koehls, as surviving partner, and he had the [187] power, before Enslin qualified, to transfer the notes in controversy to the plaintiff in payment of a partnership liability. He did not thereby impose any new obligation on the partnership, but on the contrary paid a firm debt, and reduced the partnership liabities to that extent. The proposition contained in the fifth instruction asked by the defendant is embraced in an instruction given by the court. The measure of damages, in an action of trover for the conversion of a chose in action, is, prima facie, the amount that appears to be due on it, subject to be reduced by proof showing that it is of less value than it calls for. (O’Donoghue v. Corby, 22 Mo. 393 ; Menkins v. Menkins, 23 Mo. 252.) The circumstance that the notes in controversy were in suit, we do not think was evidence that the makers of them were insolvent or that the principal and interest due on them would not be collected, but perhaps the reasonable expenses for collecting them ought to be deducted from any recovery against the defendant. On the authority of Barclay v. Globe Mutual Insurance Co., 26 Mo. 490, the court improperly excluded Mr. Caven-der as a witness on the ground that he was a stockholder in the defendant, and for that reason the judgment will be reversed and the cause remanded; the other judges concur.