Reece v. Hoyt, 4 Ind. 169

Perkins, J. Replevin by Thomas W. Reece against Beniah C. Hoyt, for a lot of goods. Pleas, the general issue; property in the defendant; property in the defendant and one Patty, as partners. Replications severally to the second and third pleas, denying that the property was in the defendant, and that it was in the defendant and one Patty, and re-affirming that it was in the plaintiff. Trial by jury, verdict for the defendant, motion for a new trial-overruled, and judgment on the verdict, and for a return of the property.

The evidence is upon the record, and shows that Hoyt and Patty were partners in a clothing store; that Patty sold his interest in it, without Hoyfs consent, to the plaintiff Reece; that Reece demanded to be admitted as a partner in the place of Patty, and that Hoyt refused to admit him; whereupon Reece brought replevin for the stock of goods in Hoyfs hands.

The sale in this case by Patty of his interest in the partnership, was a dissolution of the partnership, as between the partners; and the remaining partner, Hoyt, could not be compelled to receive a stranger as a partner with him; for partnership is founded on personal confidence. Coll. on Part., Perk, ed., p. 96, n. 1. Upon a dissolution of a partnership, the surviving or continuing member of it has a right to the possession of the effects of the concern for the purpose of settling it up; see McDonald v.

Beach, 2 Blackf. 55; and that, too, without interference, unless for good cause shown, on the part of such as may have purchased the shares of retiring partners. In the case of McGlesney v. Cox, Phil. Law Reg., vol. 1, p. 34, a court of equity refused an injunction and the appointment of a receiver on the application of such a purchaser, where no cause was shown but the refusal of the continuing members to permit him to interfere in the affairs of the concern. The Court say: T. J. Sample, for the plaintiff. D.

Kilgore, for the defendant. “Whatever may be the rights of a partner upon the dissolution, it is clear that he cannot transfer to a stranger his interest in the partnership, and thereby introduce him into the concern as a partner. (Mason v. Connel, 1 Whar. 381.—Cochran v. Perry, 8 W. and S. 262.—Horton’s Appeal, 1 Harris 67). Can he, then, by a transfer, convey to a stranger those rights which he possesses only because he is a partner?

The stranger thus coming into the concern may be entitled to use appropriate means to ascertain the situation of the partnership; he may demand an account, and perhaps, an immediate settlement; but, not being a partner, he has no right personally to interfere, and the refusal of the remaining partners to permit him to do so, is no sufficient reason for depriving them of any rights to which their position entitles them.

The remaining partners, after a dissolution thus effected, are entitled to hold possession for the purpose of paying off the debts and winding up the assets of the firm, (1 Harris 67); and in a case where no improper conduct is charged in the complainant’s bill, and where everything like mismanagement is fully refuted by the counter affidavits presented, and where it further appears that the complainant has had further opportunity to investigate the situation of affairs, and to ascertain the value of the interest claimed by him, it would be a harsh exercise of the power of the Court to deprive parties of their rightful control over their own property, without some more efficient cause shown than appears in the present case.” Per Curiam.

The judgment is affirmed with costs.