OPINION
ROSE,
J.
This is
an action to recover $ 27,700 for the conversion of
partnership property consisting of merchandise, book
accounts, bills receivable and the good-will of a mercantile
business. From the judgment on a verdict in favor of
plaintiffs for $ 6,000, defendants have appealed.
For the
purposes of review, the consideration of one question only is
necessary. Are plaintiffs entitled to relief in an action at
law for conversion? Plaintiffs, Charles W. Edwards, Edgar
North and Jess B. Edwards, were conducting a hardware and
implement business at Minatare, January 29, 1908, as partners
under the firm name of North & Company. They
were then unable to meet their obligations, and so notified
their creditors, giving their liabilities as $ 11,733.83 and
their assets as $ 17,549.44, and asking time for adjustment.
A creditors' committee, composed of Edward A. Hatfield,
C. A. Newberry and C. O. Aspinwall, met plaintiffs at
Minatare, February 12, 1908. As a result, the partnership
property and the real estate
of individual members of the firm were transferred to the
creditors' committee by a bill of sale, containing, among
other provisions, the following:
"North & Company are entirely solvent, but on account of their
inability to collect their accounts due them and realize upon
their assets, by reason of the slow sale thereof, they are
unable, at the present time, to promptly liquidate their
indebtedness, and have requested their said creditors to
postpone the maturity of their indebtedness until the 1st day
of November, 1908.
"This
assignment is made for the purpose of enabling the said
creditors' committee, upon obtaining the consent of the
creditors to such postponement of the maturity of their
claims, to cause the said assets to be sold, and the business
to be conducted and the proceeds to be applied, from time to
time, to the payment of the said indebtedness pro
rata in proportion to the amounts thereof.
"Immediately
after the execution and delivery of this assignment, the said
North & Company and the said creditors' committee shall
together take an inventory of all the assets hereby
transferred, and make an estimate of the present value
thereof, and thereupon the said committee shall authorize the
said Jess B. Edwards and Edgar North as their agents to
proceed to sell the said merchandise at retail, and to
collect the said notes and accounts, and remit the proceeds
of all sales and collections to the chairman of the said
committee.
"The
said committee shall be authorized to make such purchases
only as may be absolutely necessary to keep the said stock in
a condition to carry on the business, and shall also be
authorized to meet the necessary expenses
thereof. All other funds realized by them from sales and
collections shall be distributed ratably among all the
creditors in proportion to the amounts of their claims.
"Whenever
the claims of all the creditors of the said firm of North & Company have been fully paid and satisfied, and all expenses
incurred in this liquidation shall have been fully paid, any
balance of property or money remaining in the hands of the
committee shall be returned to the said North & Company,
their successors and assigns."
To this
arrangement all of the creditors agreed. The creditors'
committee, with plaintiffs Edgar North and Jess B. Edwards in
charge, conducted the business until March 3, 1908, when the
following paper was executed:
"Know
all men by these presents: That we, the undersigned, North & Company, do hereby authorize E. A. Hatfield, C. O. Aspinwall
and C. A. Newberry, of the creditors' committee holding
the stock of goods of North & Company under the bill of sale
of February 12, 1908, to sell the said stock of goods
described in the said bill of sale, in bulk, at private sale,
upon such terms as the said committee may deem advisable, and
apply the proceeds of such sale in the manner provided in the
said bill of sale. Dated at Minatare, Nebraska, this 3d day
of March, 1908. North & Company, by Edgar North. Witness: C.
O. Aspinwall, R. G. Mitchell."
Newberry,
a member of the creditors' committee, offered for the
stock 80 per cent. of its value as inventoried, intending, as
he says, to conduct the business in the name of the Minatare
Hardware Company. This offer the creditors' committee
accepted, and the following bill of sale was executed:
"Know
all men by these presents: That we, the undersigned, North & Company, a copartnership, in consideration of the sum of one
dollar to us in hand paid by North & Company, have bargained
and sold, and do hereby bargain, sell, assign, transfer and
set over to the said Minatare Hardware Company all that stock
of merchandise, hardware, farming implements,
buggies, wagons and all the stock of goods now kept and
maintained in and at the store building of North & Company,
in the town of Minatare, Scott's Bluff county, Nebraska,
as more fully described in an inventory which is hereto
attached and identified by the signature of the parties, and
made part hereof. In witness whereof the said North & Company
has caused this bill of sale to be executed in its
partnership name this 24th day of March, 1908. North & Company, by Edgar North. We join in the above bill of sale.
Creditors' Committee: E. A. Hatfield, C. O. Aspinwall, C.
A. Newberry. Witness: Clyde Spanogle."
A month
later Newberry, the purchaser, a member of the creditors'
committee...
