Mendez v. Schlueter — 30 N.Y. St. Rep. 150

Majority

p. 150

Jesus Mendez, App’lt, v. Sarah Schlueter, as Executrix of Gustav Schlueter, Resp’t.

(City Court of Brooklyn,

General Term,

Filed March 24, 1890.)

Headnote

1. PARTNERSHIP—PARTNER NOT LIABLE INDIVIDUALLY WHERE FIRM ASSETS SUFFICIENT TO PAY DEBTS.

One paitnei cannot call on the other to contribute out of his individual property to the payment of a firm debt so long as there are sufficient assets to pay all the partnership debts in full.

3. Same.

Plaintiff and defendant’s testator were partners. Intestate sold his interest to one J, the firm, assets at the time being sufficient to pay all the-debts. One debt of the firm was not included in the estimate made as the basis of such sale. Held, that this fact gave plaintiff no right to recover from testator’s estate contribution for the payment of such debt; that at most it was an injury to J, who alone could recover therefor.

Appeal from judgment dismissing the complaint.

Norman S. Dike, for app’lt; Harry Wilbur, for resp’t.

Gustav Schlueter and Mendez were equal partners in business up to October 26, 1883. It appears that the value of their assets (excluding the good will) exceeded their indebtedness by about $19,200. The assets as between the partners were primarily liable for all the debts of the firm. One member cannot call upon the other to contribute out of his individual property to the payment of a firm debt so long as there .are sufficient assets to pay all the partnership debts in full. This rule will defeat Mendez’ effort to recover from the Schlueter estate one-half of the Wahl debt to the firm for $310.50-100, which plaintiff claims to have paid out of his individual estate, unless Schlueter by express or implied contract agreed with plaintiff to contribute from his individual property one-half of this claim though the assets of the firm were more than sufficient to pay all the debts including this one. October 26, 1883, Schlueter sold his interest in this copartnership to Jauregui for $10,000. This price seems to have been fixed upon by estimating the value of Schlueter’s interest from the firm books and allowing $800 for the good will. Schlueter then retired from the business and in a few weeks died. “ A partner has no specific interest in any particular chattel or asset, or part of the property of the firm; his only interest is in a proper proportion of the surplus after payment of debts, including the amounts due other partners.” Bates on Partnership, § 180. A purchaser of the interest of one partner takes subject to all debts and liabilities, Id., § 183, and he has no right to participate in the winding up the business, and his only right is to receive his share of the surplus when ascertained. The remaining partner is charged with the duty of collecting credits, paying debts and disposing of the assets. Id.,- §§ 756, 1111. When one partner sells his interest with consent of the other “ but makes no bargain as to the debts, the continuing partner is impliedly bound to save him harmless to the extent of the assets he has received.” Id., § 634. “Where a partner sells his interest to a stranger, or it is sold upon execution against him, his right to have the partnership debts paid and his liability discharged out of the property is not divested by the sale. Partnership debts have in equity an inherent priority of claim to be discharged from the partnership property.” Menagh, v. Whitwell, 52 N. Y., 147 .

The trial court has found that Schlueter sold his interest in the firm to Jauregui, and the plaintiff did not request the court to find otherwise, and in his printed points asserts and admits the correctness of this finding. This left Mendez with sole right to liquidate the affairs of the partnership and with more than sufficient assets to pay all the debts of the firm and realize a handsome surplus to be divided equally between himself'and Jauregui, the assignee of Schlueter. So far, it is manifest there was no word or act of Schlueter from which it can be implied there was a, contract between Schlueter and Mendez that the former should pay the latter one-half of this Wahl claim so long as the firm assets were more than sufficient to pay all the debts. Mendez insists that such an agreement can be implied from the circumstance

p. 152

that, in estimating the value of Schlueter’s interest for the purpose of fixing upon the price that Jauregui should give him for the same, the Wahl claim was not taken into consideration; that. Schlueter, either innocently or fraudulently, failed to call it to the attention of Jauregui. We do not see how this can help the plaintiff. The strongest inference that can he drawn from this-circumstance is that Jauregui was induced by the mutual mistake of himself and Schlueter, or by the fraud of the latter, to pay to the latter about $155.25 more than the former agreed, or rather would have agreed to pay for this interest. Jauregui alone was-injured by this, and if it is such a wrong as can be righted according to tire rules of law or equity, then let him assert his right in that respect. He is not a party to this action, and we are not called upon to consider that" question.

For the foregoing reasons, the judgment must be affirmed, with costs.

Clement, Ch. J., concurs.