Killefer v. McLain

• Decision Date: 28 December 1889
• Citation: 44 N.W. 405,78 Mich. 249
• Court: Michigan Supreme Court
• Parties: KILLEFER et al. v. MCLAIN et al.

44 N.W. 405

78 Mich. 249

KILLEFER et al. v. MCLAIN et al.

Supreme Court of Michigan

December 28, 1889

Appeal from circuit court, Van Buren county; GEORGE M. BUCK, Judge.

Bill in chancery by William Killefer and Susan S. Briggs, executors of the will of Emory O. Briggs, deceased, complainants against John McLain, administrator of the estate of Charles G. Nash, deceased, William J. Sellick, Fitz E. Stevens Alonzo Sherman, Martha B. Nash, and E. O. Briggs Nash creditors and heirs of Charles G. Nash, deceased, defendants. From a decree in complainants' favor, defendants appeal.

Crane & Brech, for appellants.

Howard & Roos, for appellees.

CHAMPLIN J.

When this case was before us in June last, we indicated the law which should be applied to the facts, and the method of accounting which should be pursued. We adhere to the opinion then expressed. 38 N.W. 455. The directions given for the accounting have not been followed, and no account has been stated in accordance with that opinion. Emory O. Briggs and Charles G. Nash signed partnership articles bearing date January 2, 1882. They conducted business under the firm name of Briggs & Nash until the 6th day of August, 1882, when Nash died. September 14, 1882, Emory O. Briggs was appointed administrator of the estate of his deceased partner, and made and filed an inventory. Commissioners on claims were either appointed or the claims were allowed by the probate court on March 14, 1883, in favor of defendants Sherman, Sellick, and Stevens. August 6, 1883, Briggs, as administrator, filed a petition in the probate court for leave to file an amended inventory. He did nothing further towards the settlement of the estate after setting out the widow her statutory allowance. He continued until his death, which occurred in 1885, to carry on business in the firm name of Briggs & Nash, and handled the firm assets as he chose. Since his death his executors have managed the estate, and in the fall of 1885 filed the bill of complaint in this cause for an accounting and settlement of the partnership affairs of Briggs & Nash, making the administrator of Nash, who was appointed after the death of Briggs, the widow, the only heir, and the three creditors above named, parties. The decree entered in this court when the cause was here was to the effect that the whole of the real estate put into the firm of Briggs & Nash by the respective partners constituted firm assets for the payment of partnership debts, and also holding that the individual creditors of Nash had priority as to payment over the debts of the partnership to Briggs or his estate from the assets of the firm. It was ordered that the cause be remanded to the court below, and that further proofs be taken under the interlocutory decree, and that an account must be taken and stated before the circuit court commissioner showing the assets and liabilities, gains and losses, receipts and disbursements, made by the firm of Briggs & Nash up to its dissolution by the death of Nash, and the state of the account between the respective partners and the firm at the time of dissolution; and also showing what debts have been paid by the surviving partner, and when paid, and what he has done with the assets of the firm. The commissioner to whom the matter was referred has made a report, or "findings," as they are called, but he has stated no account. He states therein that "no evidence was produced showing what E. O. Briggs has done with the assets of the firm of Briggs & Nash." But he further finds that "Emory O. Briggs in his life-time did, by mortgage and otherwise, dispose of the entire one-half interest in all the real estate in question to which he had the title; and that he never accounted to C. G. Nash, nor to the estate of said Nash, nor to any one else in any way or manner interested in the estate of said Nash, therefor, nor of any part thereof, unless he paid partnership debts as herein stated, and that it is impossible to ascertain just what sum he realized therefor."

The surviving partner, Emory O. Briggs, upon the death of his partner, Nash, became a trustee for all concerned in the partnership,-for the representatives of the deceased partner for the creditors of the firm, and for himself. His trust was to wind up the concern in the best manner for all interested, without unnecessary delay, and his powers were such as to enable him most effectually to execute the trust. Pars. Partn. 479, (441.) It is said that "the surviving partners are held strictly as trustees, and their conduct in discharging their trust is carefully looked after by courts of equity." It is their duty as trustees to keep correct and accurate books of account, which shall show what property they hold in trust, and what disposition they make of the same. Perrin v. Lepper, 72 Mich. ---, 40 N.W. 859; Heath v. Waters, 40 Mich. 464. Indeed, the partnership agreement between these partners required the same thing. It was, furthermore, his duty to get in and pay the firm debts, and the debts he got in should have been placed to the debit of the late firm, and the debts he paid should have been placed to its credit. 2 Lindl. Partn. 591. In this case not only was Emory O. Briggs in his capacity of surviving partner a trustee, but he invested himself with the administration of his...