Opinion
(June Term, 1862.)
Where one of a copartnership, by any means, gets a fund belonging to the firm, he is not at liberty to appropriate it to his own exclusive benefit but must share it with his copartners.
CAUSE removed from the Court of Equity of BERTIE.
Joseph B. Cherry, William H. Tayloe and Alfred Eason, entered into a copartnership for the purchase of a large quantity of cypress timber (standing), with the purpose of jointly working it into shingles, and of shipping and selling the same, for which they gave their joint notes to the proprietor, one Roscoe, for the sum of $5,000. Afterwards, instead of working the timber, they sold it for an advance of $800, for which the partner Cherry received the money. In the purchase and use of said timber, each of the said partners was to pay one-third of the expenses, and receive one-third of the profits. Cherry agreed, on receiving the money, on the resale of the timber, to pay Roscoe the original purchase money, but he has failed to do so, and is now insolvent. After receiving the money on the resale, he advanced of it to Eason the sum of $2,601 for which he took his notes, payable to himself (Cherry), and on which suit has been brought and judgment taken, and it is to enjoin the collection of this judgment that this bill was filed by Eason's administratrix, he being now dead. The ground of this application is, that the original debt is still due Roscoe, and suit has been brought thereon, and judgment and execution will be obtained against the three, Cherry, Tayloe and Eason's estate; that Cherry is insolvent, and judgment and execution will be taken against him for more than the amount of his share of the property; that Eason's estate (he being now dead) is good for his part of the debt to Roscoe, and Tayloe is good for his half of it, but if Cherry is permitted to enforce the judgment he has obtained on account of the advancements to him, he will lose the benefits of these advancements, on account of the insolvency of Cherry. The prayer is, therefore, to restrain Cherry from pressing an execution at law on this judgment against Eason's estate.
There is no controversy as to Cherry, but Tayloe answers and insists that inasmuch as Eason has received so much of the joint (262) copartnership funds, and he (Tayloe) has received nothing, and, inasmuch as he is able, and will have to pay half of the original purchase money to Roscoe, he is entitled to share in one-half of the advancements made by Cherry to Eason, and that as to that much of Cherry's judgment against Eason's administratrix, she should be decreed to pay it to Tayloe.
The cause was set for hearing on bill and answers, and upon a motion to dissolve the injunction, was sent to this Court by consent.
Garrett and Barnes, for the plaintiff.
Winston, Jr., for the defendant.
There can be no doubt that the plaintiff is entitled to relief against the defendant Cherry; but we think it is equally clear that the defendant Tayloe is entitled to share in the relief. The plaintiff's intestate and the defendants being partners in the purchase and sale of a lot of timber, mentioned in the pleadings, whatever part of the partnership funds came to the hands of either of the members, before a final settlement of the concern, belonged equally to all. This is so obvious a principle of the law of partnership that it scarcely needs the aid of an adjudicated case for its recognition, but if it did, that of Allison v. Davidson, 17 N.C. 79, is one directly in point. It was there held, among other things, that where of four partners, one died insolvent, largely indebted to the partnership, and two others, without the consent of the fourth, received their shares from the executor of the deceased, the sums so received remained, as between the survivors, joint stock. So, in the present case, Cherry being insolvent, largely indebted to the partnership, the sum received from him by the plaintiff's intestate is, as between her and the defendant Tayloe, joint stock, to which they are equally entitled. An analogous principle prevails among co-sureties, (263) so that when one of them, by any means, gets a fund belonging to the principal, he is not at liberty to appropriate it to his own exclusive benefit, but must share it with his co-surety. This has been decided in may cases, among which are Barnes v. Pearson, 41 N.C. 482, and Leary v. Cheshire, 56 N.C. 170.
A decree may be drawn in accordance with this opinion.