Weber v. Zacharias

Mr. Presiding Justice Waterman

delivered the opinion of the court.

Counsel for appellee say that the bill filed herein is primarily a bill for a partnership accounting and dissolution and that the relief prayed for against the judgment creditors and sheriff is absolutely dependent upon the establishment of the right to the relief prayed for against Zacharias. We fail to see why it was necessary that Zacharias be made a party to appellant’s bill. Under the stipulated facts it is apparent that the sum in appellant’s hands is not sufficient to discharge the claim of the judgment creditors who are parties to the bill. There can be no residuum left for Zacharias. Moreover, Zacharias, if he had no creditors, could not establish a claim to the assets in appellant’s hands, or any portion thereof. Zacharias, for the purpose of defrauding his creditors, made a bill of sale to Weber of all his interest in the partnership assets. Having so done he can not, as against Weber, for his own benefit, set up his own fraud and compel Weber to give him one-half or any proceeds of the sale of such partnership assets. Appellant has doubtless been badly advised and has persisted in insisting that the bill of sale made to him by Zacharias was bona, fide and upon a good and valid consideration, until the judgment of 'the highest court in the state has been rendered against him on this matter.

His persistence in this may have been induced by the stipulated fact that on the first trial in the Circuit Court, upon the question of whether there was a tona fide sale to him for a valuable consideration, the verdict of the jury was in his favor; that being set aside and a new trial granted, the Circuit Court, jury having been waived,found that there was no consideration for the bill of sale made to him, but that the same was made by Zacharias for the purpose of hindering and delaying his creditors and that the transfer was fraudulent and void at law. Having unsuccessfully presented an appeal to the Supreme Court from the judgment of the Circuit Court, appellant was left in the position of having, by a writ of replevin, taken from the sheriff partnership assets which the sheriff had levied upon to satisfy judgments against Zacharias. Such action- could not be maintained. Appellant has thus been compelled to apply to a court of equity to prevent his interests in the assets being used for the satisfaction of claims against Zacharias only.

His bill under the stipulated facts is really not for an accounting. There is no pretense that Zacharias has anything to account for. It is conceded that long prior to the filing of the present bill of sale as well as by actual delivery, Zacharias transferred all the assets to appellant. This bill of sale and transfer was fraudulent and void as to the creditors of Zacharias, but good against him personally. Under the stipulated facts the bill of appellant became in effect a tender by him to the sheriff for the benéfit of the judgment creditors of the entire interest which Zacharias had in the partnership assets levied upon.

It is conceded by the stipulation that appellant took the entire assets of the firm, sold them for the sum of $2,800, Zacharias, at the instance of the purchaser, joining in the bill of sale to such purchaser; that appellant, having received such $2,800, paid off a chattel mortgage thereon amounting to $850, which mortgage existed prior to the making of the bill "of sale to appellant, and paid off all the partnership debts, thus discharging claims against the partnership assets superior to the claims thereon of the personal creditors of Zaeharias; and that the net proceeds, the result of such sale and such payment, left in the hands of appellant the sum of $1,383.

The validity and good faith of such sale and such payments by Weber, as well as that the net result thereof was the remaining in his hands of $1,383, is not contested. Had appellant been better advised, and instead of, under an action of replevin, taking the property levied upon away from the sheriff, let it be sold by him, the result would have been that whosoever had purchased the partnership assets would have acquired only the right, title and interest therein theretofore possessed by Zaeharias; and if such party or parties had failed to come to an understanding with appellant it would have been necessary that equitable proceedings be had, either at the instance of appellant or upon application of the purchaser or purchasers of such assets, for a distribution of the same or the proceeds thereof, in accord-' anee with the right and title of appellant and that of such purchaser or purchasers.

The sheriff, by a levy made under the executions against Zacharias, could not, by execution sale, acquire exclusive ownership and right of possession to said assets or any part thereof. Weber v. Hertz, 188 Ill. 68-71.

Appellees insist that by section 7 of the stipulation it appears that not only did Weber, November 27, 1891, sell the entire partnership assets for $2,800, but upon the same day paid the mortgage, rent and other partnership debts. We do not think that it appears from the stipulation that such payment took place upon the day on which the money was delivered to appellant.

We are not prepared to hold that in this state the statute of limitations runs against a right by one partner to sue another for an accounting before the partnership affairs have been entirely closed. As to this, see Askew v. Springer, 111 Ill. 662; Todd v. Administrators of Phillip Rafferty Estate, 30 N. J. Eq. 254; Storm v. Cumberland, 18 Grant’s Chancery Reports, 245; McClung v. Capehart, 24 Minn. 17; Coudrey v. Gilliam, 60 Mo. 86; Bates on Partnership, sections 949-950.

By the stipulation it appears that November 27, 1891, appellant had in his hands the sum of $1,383, as the proceeds of the sale of the partnership assets of Weber and Zacharias. One-half of this sum, they being equal partners, should have been paid to the sheriff to apply upon the executions against Zacharias, under which a levy had been made upon the partnership assets, such one-half not being equal to the amount of such executions. While, as before stated, it does not appear that the payments out of the $2,800 received by appellant were made November 27, 1891, nor at what time the last of such payments was made. Nevertheless, ho wever great the time before the last of , such payments was made and the business of the firm of Weber & Zacharias thus finally closed, appellant must have had in his hands, since November 27, 1891, $1,383, one-half of which, as before stated, belonged and still belongs to said execution creditors of Zacharias. Appellant has come into a court of equity to obtain relief against a judgment obtained upon a bond which he filed in the action of replevin. Having come into a court of equity, he must do equity. It is not equitable that he should keep in his hands money belonging to the execution creditors of Zacharias without paying interest thereon.

The decree of the Circuit Court will be reversed and the cause remanded, with directions to enter a decree against appellant for one-half the said sum of $1,383, together with interest thereon at five per cent per'annum from November 27, 1891, and also for the sum of $30.90 costs taxed against appellant in the Supreme, Appellate and Circuit Courts under the judgment entered against him in the Circuit Court upon the suit on the replevin bond given by him; and that upon the payment by appellant of such sums to the sheriff of this county for the use of the plaintiffs in the said executions against the said Zacharias, the judgment entered November 30, 1898, in the Circuit Court against appellant, August Lenzen and Martin Boch for $3,000 debt and $1,383 damages be set aside and discharged.