Belanger v. Dana

Landon, J.

It is conceded that, a partnership existed between the parties respecting the mill. But when the mill was sold the joint venture was at an end, and the partnership dissolved. A partnership is terminated by the accomplishment of the business or venture for which it was formed. Kennedy v. Porter, 109 N. Y. 526, 548 , 17 N. E. Rep. 426. The parties accounted with each other, and divided the surplus over and above the $400 due them from Dobson as the balance of his purchase price of the mill. This sum the parties agreed should, when collected, be paid to take up their four joint notes of $100 each, which were outstanding, and payable at the St. Lawrence County Bank. A few days after, Dobson paid this sum to the defendant, and he sent it by express to the bank, and the bank by mistake applied half of it upon two of the notes of the parties, and the other half upon the individual note of the defendant. The defendant afterwards, with full knowledge of the mistake, or with such repeated notice as charged him with full knowledge of all the facts, ratified the mistake, and thus by adoption wrongfully converted the misappropriated moneys to his own use. The plaintiff has in consequence been compelled to pay the two remaining joint notes, with costs, and the defendant has refused to do anything to rectify the wrong.

This action is not for an accounting, in which the moneys received .by the defendant and the amount paid by the plaintiff might be adduced, and the balance in favor of the plaintiff be made the measure of his recovery, but it is for a wrongful conversion by the defendant. We do not think it can be maintained. Upon the dissolution of a partnership, the partners thenceforth become distinct persons, and tenants in common of the joint stock. 3 Kent, Comm. marg. p. 63. But as to partnership debts, and for the purpose of closing the partnership affairs, the partnership relations still exist. Neither party, however, can do anything to impose a new obligation upon the other without his consent. Gates v. Beecher, 60 N. Y. 518 . The tenancy in common, therefore, between the partners is incomplete with respect to the partnership property devoted to the payment of partnership debts, or held by either partner for that purpose. Murray v. Mumford,, 6 Cow. 441 . The conversion by the defendant of the common fund was not, therefore, a conversion of property by him as tenant in common, and hence the rule invoked by the plaintiff that, where personal property is held in co-tenancy, its conversion by one tenant to the absolute denial of the right of the other gives the latter a cause of action, does not apply. Osborn v. Schenck, 83 N. Y. 201 .

The plaintiff insists that since the partnership affairs were all settled, ex *778 cept with respect to the payment o£ the joint notes for which the defendant held the funds under promise to pay, the partnership relation was eliminated, and the case is not affected by it. Howard v. France, 43 N. Y. 593 ; Crater v. Bininger, 45 N. Y. 545, 549 . But these cases and many others are to the effect that the partnership relation must have fully ceased with respect to the transaction in question before an action at law, as distinguished from an action in equity, can be maintained by one partner against the other. In other words, it must either never have been mingled with, or must have been completely separated from, the partnership affairs, in order to form a separate cause of action at law. Thus, it is said to be well settled in this state that one partner cannot recover at law against another, except after a full accounting, balance struck, and express promise to pay. Casey v. Brush, 2 Caines, 294 ; Westerlo v. Evertson, 1 Wend. 532 ; Halsted v. Schmelzel, 17 Johns. 80 ; Bloss v. Chittenden, 2 Thomp. & C. 11; Buell v. Cole, 54 Barb. 353 . And such an action, when maintainable, it is seen, is not ex delicto. The difficulty with the plaintiff’s case is that the defendant was still acting as partner in settling partnership affairs. He betrayed his trust, and thus subjected himself to the usual liability which one partner incurs to the other respecting partnership affairs. He converted partnership money, he being one of the partners. As he cannot sue himself, and cannot be sued for the wrong except by all the partners, this action fails. Judgment affirmed, with costs.

Learned, P. J., and Ingalls, J., concur in the result.