Le Roy v. Mathewson

Headnote

Bents collected ~by real estate agents—when their property, as to general creditors.—Partnership—ichat not individual property of pa/rtner, as against firm creditor.

Where a firm exclusively engaged in the collection of rents of real property, deposit the same, as collected, in a bank account standing in the name of one of the partners, from which account parties for ■whom rents have been collected are paid by the check of such partner, the fund so constituted is copartnership property, as to a plaintiff who has recovered a judgment against the firm for rents collected by them, and seeks to reach said fund by a creditor’s bill against a surviving partner of the firm. This, though the evidence show such fund to be wholly made up of rents collected for different persons, and it does not appear how much of plaintiff’s said rents are included therein, nor that the firm’s commissions therein contained equal the amount of plaintiff’s said judgment.

Where the commissions on the rents so collected and deposited, are, under the copartnership agreement, the sole property of .the partner in .whose name the account stands, they do not, by such deposit, become the individual property of such partner, as against a firm creditor.

Appeal by defendant from a judgment adjudging a certain fund that stood in the Greenwich Bank in the name of John Mathewson at his decease, to be the property of the firm of J. Mathewson & Son, and directing the same to be paid to the plaintiff and applied upon a judgment recovered by Mm against the defendant, Andrew J. Mathewson, as surviving partner of said firm.

The facts, as found by the court below, are as follows:

John Mathewson. died September 26, 1878. For many years prior to .that time he and the defendant, Andrew J. Mathewson, as copartners under the firm-name of J. Mathewson & Son, had been engaged in business as collectors of rents for various parties on commission. The son testified that he did not receive, and was not entitled to receive, any portion of the commissions earned by the firm, but it appeared that he and Ms father held themselves out as copartners; that all the business was done under this firm-name, and that he was actively engaged with his father in the affairs of the firm business.

¡No bank account was ever kept in the firm-name. As rents were collected by the firm in the course of its business they were deposited in an account kept in the Greenwich Bank in the name of John Mathewson. The parties for whom rents were collected were always

paid by checks drawn on this account by or in the name of John Mathewson. John Mathewson also drew checks on this account for other purposes than the payment of rents collected. The firm, prior to the death of John Mathewson, collected about $2,000 of plaintiff’s rents, and deposited them in this account. At the death of John Mathewson there was $2,500 on deposit in this account.

Plaintiff having obtained judgment against the surviving partner, and issued execution thereon, which was returned" unsatisfied, brought this action in the nature of a creditor’s bill, to have the said fund on deposit in the Greenwich Bank declared the property of the firm and applied on his judgment.

The court also found that the money on deposit in the Greenwich Bank consisted “exclusively of rents collected by said firm in the course of its business, and including said rents collected for plaintiff, or some portion thereof, but there is no evidence to show definitely how large a sum collected for plaintiff was on deposit in bank. No individual property of said John Mathewson was intermingled with said moneys so deposited, but there were also on deposit in said bank moneys collected for other persons than the plaintiff.” And further, that “ The said fund on deposit in the Greenwich Bank was, and is, the property of the firm of J_ Mathewson & Son. Since the death of said John, Mathewson it has constantly remained in said bank. Said Andrew J. Mathewson has had the title of said account changed, and said account now stands in said bank in the name of Andrew J. Mathewson, administrator of the estate of John Mathewson, deceased.”

The court below awarded judgment to plaintiff, as above stated, delivering the following opinion :

“Sedgwick, Ch. J.—The counsel for the defendant, Mathewson, argues that the only cause of action

that the plaintiff can ever claim under the proof, rests upon the position that the account in bank actually represents the money of certain persons (of whom the plaintiff is one) whose money was deposited in bank by John Mathewson to his own credit. Therefore, the plaintiff affirmatively shows that the fund he is following is the property, not of himself solely, but of those whose moneys compose it. This does not seem to me to be a valid argument. The plaintiff is not bound to treat the fund as equitably the property of the persons referred to. He may confine himself, at-his option, to such rights as issue from his relation of creditor, whose contract has been put in judgment. The evidence satisfies me that the following facts existed: John Mathewson and Andrew J. Mathewson were partners, as to third persons and inter sese. They were partners inter sese, because of the contract between them that they should be partners. This contract made a partnership, although it was the fact that Andrew J. Mathewson was not to be paid any part of the profits. The money collected by the firm was deposited to the credit of John Máthewson in the account in question. As a result of the whole testimony, I find that there is no individual property or money of John Mathewson intermingled with the partnership property. The commissions that are supposed to be in the account have not been so separated from the other firm property as to become John Mathewson’s individual property. In this condition of things there is a characteristic of the funds in question which should be used as a test of the plaintiff’s rights. The plaintiff has a judgment against Andrew J. Mathewson as partner, and the latter was in fact a member of the partnership. Andrew J. Mathewson has a right to insist that the partnership property shall be used to relieve him of individual responsibility as far as possible. And he cannot refuse as against plaintiff to avail himself of

this right, or, as it is sometimes said, the plaintiff can act through the equity belonging to Andrew J. Mathewson. The other ground, however, is sufficient; the plaintiff has a right to the appropriation of the firm property to pay the judgment against the firm.”

“ The plaintiff should have judgment.”