Case ID: ad_260/html/0943-02.html
Source: Caselaw Access Project
Author: {"author": "", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Fulton Service Corporation, Respondent, Appellant, v. Herman Richter and John Kaiser, Appellants, Respondents, and Others, Defendants.
   Pursuant to a plan of reorganization under section 77B of the Bankruptcy Act, plaintiff is the successor of the Lehrenkrauss Corporation. Plaintiff seeks to recover from defendants individually and as partners doing business under the name of J. Lehrenkrauss & Sons, the sum of $927,100. The complaint contains two causes of action. The first is for conversion and misappropriation of funds of the corporation; the second is for money had and received. Defendants Richter and Kaiser moved to dismiss both causes of action upon the ground that the claims set forth therein have been released by general releases executed and delivered to them by the trustees in bankruptcy of J. Lehrenkrauss & Sons. The motion was denied as to the first cause of action and granted as to the second. Defendants Richter and Kaiser appeal and plaintiff cross-appeals. Order modified by striking from the second ordering paragraph all matter after the words “ be and the same hereby is ” and inserting in place thereof the word “ denied;” and by striking out the fourth and fifth ordering paragraphs. As thus modified, the order, in so far as appealed from, is affirmed, with ten dollars costs and disbursements to plaintiffs, with leave to appellants-respondents to answer within ten days from the entry of the order hereon. Defendants are sued as individuals as well as partners and in the second cause of action it is alleged that “ the defendants had and received the sum of approximately $927,100, * * * which sum the defendants promised to repay to the Lehrenkrauss Corporation.” Assuming, as we must, that the allegations of the complaint are true, the defendants incurred, in addition to their liability as partners, a distinct and separate liability as individuals. Therefore, the general releases, while a bar to the liability asserted in the second cause of action arising out of defendants’ membership in the firm, are not a bar to the liability asserted in the same cause of action against the defendants individually. Lazansky, P. J., Hagarty, Carswell, Johnston and Taylor, JJ., concur.