Howard v. . France

[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] No demand was necessary before bringing the action. It was the duty of the defendant to remit the money to the plaintiff if received by the defendant to his use. (Stacy v. Graham, 4 Kern., 492.) But the defendant, after receiving the money, denied the right of the plaintiff to receive it, and stopped the payment of his check, which had come to the possession of the plaintiff. His action was equivalent to a refusal to pay, and obviated the necessity of a demand, if demand would, under other circumstances, have been necessary.

The principal objections to the recovery, rest upon the supposed partnership relations of the parties. Passing without considering the question whether they could have been taken under the pleadings or whether they sufficiently appear by the case and exceptions to have been properly made and taken at the trial, they are not tenable upon all the evidence in the case. They are certainly not sustained by any findings of the referee. The judgment is fully sustained by the facts as found. It is well settled that ordinarily one partner cannot sue his copartner-at-law, in respect to their partnership dealings. If, however, the cause of action is distinct from the partnership accounts and does not involve their consideration, an action at law may be maintained. After an accounting and a promise to pay, an action of assumpsit will lie. (Foster v. Allanson, 2 T.R., 479; Casey v. Brush, 2 Caines, 293.) So an action of covenant will lie upon an agreement to continue a partnership. (Bagley v. Smith, 10 N.Y., 489.) If no matter of account is involved, and the money will not, when recovered, belong to the firm, there is no objection to the action upon the ground of the partnership connection between the parties. The property insured was not the property of any firm, or copartnership of which the plaintiff was a member. It was owned by Barnhart France as tenants in common, and the insurance was primarily for their benefit, as owners in common; and the loss, when paid under the policy, belonged to them, as did the insured property; and the plaintiff, as a partner in the milling business with Barnhart France, had no estate or interest in the premises, or title to the insurance money. His claim is not then as partner, but under a special assignment; and that assignment was for his individual protection against an individual liability, assumed for Barnhart France, the assignors.

The legal title to the policy and right to the insurance money was in the plaintiff individually, and he could have maintained an action in his own name for the loss. He made the defendant his agent to collect and receive the money, and the agency was accepted and the money received under it. If there are any equities growing out of the partnership business of the parties, or the use and occupation of the mill, by the plaintiff, under the agreement of August, 1863, and the right of the defendant and his co-owner to share in the profits, entitling the defendant to repudiate the agency and retain the money, they should have been asserted by a proper action for an adjustment of the accounts, to which Barnhart would have been a necessary party. The difficulty is that the defence, rather than the plaintiff's cause of action, grows out of and rests upon the partnership dealings of the parties, or dealings in the nature of partnership dealings, and involving the necessity of an account. To what amount the liabilities of the plaintiff, for which he was secured by the assignment of the policy, were reduced, depended upon the results of the business under the lease and contract of August, 1863, and in that business there was no partnership. But so long as there were any liabilities within the terms of the assignment, and secured by it, the legal title of the plaintiff cannot be disputed.

There were outstanding liabilities at the time of the receipt of the money by the defendant and the commencement of this action. The plaintiff's right does not depend upon the state of the accounts between himself and Barnhart France, nor will the money, when collected, belong to the three as partners, or jointly. So much of it as is necessary to discharge the liabilities for which the policy was assigned, belongs to the plaintiff, and the residue belongs to the defendant and his co-owner, Barnhart. The claim is entirely distinct from any partnership accounts of the parties.

The judgment should be affirmed.

CHURCH, Ch. J., FOLGER and RAPALLO, JJ., concurred; GROVER and PECKHAM, JJ., dissented.

Judgment affirmed.