Bredow v. Mut. Sav. Inst.

• Decision Date: 31 March 1859
• Citation: 28 Mo. 181
• Parties: BREDOW, Respondent, v. THE MUTUAL SAVINGS INSTITUTION, Appellant.
• Court: Missouri Supreme Court

28 Mo. 181

BREDOW, Respondent,

v.THE MUTUAL SAVINGS INSTITUTION, Appellant.

Supreme Court of Missouri.

March Term, 1859.

1. Upon the dissolution of a partnership by the death of a partner, the surviving partner may proceed to wind up and settle the affairs of the partnership without giving bond as required by the fifth section of the first article of the act respecting executors and administrators; he may transfer a promissory note held by the partnership in payment of a partnership debt or liability.

2. Should the surviving partner fail, within the time limited, to give bond as required by the fifty-fifth section of the first article of the administration act, he is liable to be ousted from possession of the partnership effects, and divested of the right to administer on the same, by the executor or administrator of the deceased partner, if the latter should give bond as required by the fifty-ninth section of the first article of said act.

3. In an action in the nature of an action of trover for the conversion of a promissory note, the measure of damages, prima facie, is the amount called for on the face of the note.

4. In a suit against a corporation, a stockholder thereof is a competent witness in behalf of the corporation. (Barclay v. Globe Mutual Insurance Co. 26 Mo. 490, affirmed.)

Appeal from St. Louis Court of Common Pleas.

Alpheus E. Koehls and Henry Golberg were partners in trade under the style of Koehls & Golberg. They held two promissory notes payable to their order as partners. These notes, during the existence of the partnership, were endorsed to the Mutual Savings Institution for collection and as collateral security for an indebtedness then existing from Koehls & Golberg to said institution. On the 27th of August, 1856, the partnership was dissolved by notice. A few days thereafter Golberg died, and on the 29th of September, 1856, his widow received letters testamentary and qualified as executrix. She included in her inventory the whole of the partnership property, but did not give the further bond required by the statute to authorize her to administer on the partnership effects. On the 16th of October, 1856, Koehls gave a power of attorney to one Rudolph Macwitz, authorizing him among other things to settle up the affairs of the late firm of Koehls & Golberg. Koehls never gave bond as surviving partner under the provisions of the administration act. On the 1st of December, 1856, Macwitz, acting under his power of attorney, assigned said two notes to the firm of Bredow & Schaffler. This transfer to Bredow & Schaffler was made to secure them against their liability on an accommodation endorsement of a promissory note which they had made in behalf of the firm of Koehls & Golberg. On the 2d of December, 1856, this assignment was presented to the Mutual Savings Institution and the notes were demanded. They were not given up. The indebtedness of Koehls & Golberg to said institution, to secure which said notes were endorsed to said institution, was paid and extinguished December 12, 1856. Said notes were never collected by the Mutual Savings Institution. The letters of Mrs. Golberg were revoked, and on the 6th of January, 1857, one Charles Enslin was appointed administrator de bonis non of the estate of Golberg, and gave the bond required by the fifty-ninth section of the first article of the administration act, and undertook the administration of the partnership estate according to the provisions of the act. On his demand, the Mutual Savings Institution gave the notes up to him. The present suit was instituted by Bredow (to whom Schaffler had assigned his interest in the notes) to recover damages for the alleged wrongful conversion of said notes. On the trial, John Cavender, president of the Mutual Savings Institution, and a stockholder therein, was offered as a witness on the part of the defendant, and excluded for the reason that he was a stockholder.

N. Holmes, for appellant.

I. Enslin was the only person entitled by law to demand and have from the defendant the possession of the notes in question. The surviving partner has no right to administer on the partnership estate unless he gives bonds as required by the statute. The surviving partner had no power to endorse and assign in the name of the firm notes held by the firm, even in the settlement of debts. (3 Kent, 63; 13 Verm. 452, 522; 5 Geor. 166; 2 Gratt. 372; Sto. on Part. § 322; 3 Esp. 108; 1 H. Bl. 155; 4 Johns. 224; 1 Hump. 51.) The power of attorney conferred no such power on Macwitz. (3 Sneed, 508; 18 Pick. 505.) These notes having been endorsed to the defendant before the dissolution of the firm, the legal title to the instruments and the possession were in the defendant, and the supposed assignment by attorney could only give to the assignee an equitable interest in the proceeds of the notes when collected by the institution, but no right to demand the possession of the notes themselves. The assignment under the power could transfer nothing but his interest as a tenant in common in the final balance of the partnership accounts when adjusted by the person entitled to administer on the partnership estate. The administrator was that person under the statute. The notes having been endorsed to the institution as collateral security, the burden of proof was thrown on the plaintiff to show that the debt had been paid off before demand was made for the notes. The fifth instruction should have been given.

II. The court erred in excluding the testimony of Cavender. (Barclay v. Globe Mutual Ins. Co. 26 Mo. 490.)

III. Even if trover could be maintained for the notes as such, no more could be recovered than the value proved. It was proven that the notes were in suit in Iowa and Illinois.

Gardner, for respondent.

I. The surviving partner had the right to apply the partnership assets to the payment of partnership debts prior to administration upon the partnership estate. If Koehls could have transferred the notes himself he could do it by attorney. Enslin was not appointed administrator until more than a month after plaintiff's right of action accrued. His subsequent appointment could not affect plaintiff's rights. (See 7 N. H. 567; 6 Pick. 360; 6 Cow. 441; Watson on Part. 267.)...