Marine Co. v. Carver

Citations

• 42 Ill. 66

Syllabus

<p>1. Partnership—payment of individual debts of partners with partnership funds—relative rights of the creditors and the other partners. The duties and obligations between members of a partnership and third parties are reciprocal. So, while it is true that one partner cannot rightfully appropriate the partnership funds in payment of his individual indebtedness, yet it is equally true, that, if he does so appropriate them, his acts, when they come to the knowledge of the other members of the firm, should be clearly and promptly repudiated. No room should be left for doubt, in the minds of the parties concerned, as to whether the act is repudiated or ratified.</p> <p>2. Same—and herein, what will amount to a ratification. Where a member of a partnership, who was indebted on his own private account, to the bank in which the funds of the firm were deposited, drew a check in the firm name in favor of the bank, which was placed to the credit of his individual account, and the other members of the firm had knowledge of this misapplication of the partnership funds within a month thereafter, but omitted to repudiate the act until four years afterward, when a suit at law was brought in the firm name against the bank to recover the money, it was held, however clear the right of recovery might have been if the act had been promptly repudiated, these facts amounted to a ratification, which would prevent a recovery against the bank.</p>