Davies v. Atkinson

Citations

• 124 Ill. 474
• 16 N.E. 899

Syllabus

<p>1. Eabtnebship—payment of individual debts out of pa/rtnership funds—recovery back by the other partners. Where an individual creditor of a partner knowingly receives payment of his claim out of the partnership funds, it is per se a misappropriation of the assets of the firm to that extent, and it may be recovered back for partnership purposes.</p> <p>2'. But when such payment is made with the consent, express or implied, of the other partners, the latter will have no right to recover the money back to satisfy any demand they may have against the firm.</p> <p>3. Sake—conditions to recovery back as to money so misapplied. Even in case money so misapplied in payment of individual debts may be recovered back in the names of the other partners, or in the name of the firm, for the use of firm creditors, a suit in equity can not be maintained for such purpose without showing-the insolvency of the firm, and that the money sought to be recovered is necessary for the payment of firm debts.</p> <p>4. And on bill by one partner to recover back payments made by the other of his individual debts from the partnership funds, it should be shown that such payments exceeded the sum the latter was entitled to draw from the firm on his own account.</p> <p>5. Same—of notice to the individual creditor—that he will be required to refund. If a partner misappropriates the firm assets by the payment of his individual debts, without the knowledge of the other partners, it is their duty, upon learning the fact, to notify the persons so paid of their intention to hold them liable, so as to enable them to take steps to secure themselves. A delay of nearly two years to take steps to collect such payments of the individual creditors so paid, is unreasonable.</p>