Case Name: J. L. PHILLIPS vs. W. H. TREZEVANT
Court: Supreme Court of North Carolina
Jurisdiction: North Carolina
Decision Date: 1872-06
Citations: 67 N.C. 370
Docket Number: 
Parties: J. L. PHILLIPS vs. W. H. TREZEVANT.
Judges: 
Reporter: North Carolina Reports
Volume: 67
Pages: 370–373

Head Matter:
J. L. PHILLIPS vs. W. H. TREZEVANT.
When one partner, who is insolvent or in tailing circumstances, without the consent and against the will of the other partner, is disposing of the effects of the partnership, and appropriating them to his own use, the other partner has the right to an injunction, and to have a receiver appointed’.
Motion for the appointment of a receiver, heard before Logan, J, at Spring Term, 1872,'of Mecklenburg Superior Court.
Plaintiff alleged that in September, 187ft, he and the defendant formed a partnership in the city of Charlotte, N. C., for the purpose of conducting the business of merchant tailoring ; that defendant was to furnish $5,000, and plaintiff was to use his skill and experience as*a set-off to such capital; that extensive purchases of material, &c., were made in the northern cities, and the business was conducted profitably until January, 1872, when it was dissolved by mutual consent; that at the time, of tbe dissolution it was agreed that all the stock of goods on hand should be sold, and the proceeds received by the defendant, and that all the outstanding claims should be collected and the proceeds of all applied to the payment of the debts, arid in case of any losses, plaintiff was to be accountable for one-half and the defendant the other half; that a sale ol the goods was made; that the defendant purchased to the amount of $3,500, and also received cash from purchasers to the amount of $898. Plaintiff purchased to the amount of $1,636. That there were in the hands of the defendant, at that time, goods and solvent claims to the amount of $2,768, doubtful accounts $493.45; cash $237,25, 20 shares of stock of theFair of the Carolinas,” a policy of insurance valued at $60 ; that plaintiff had drawn from the firm $1,266.55, and defendant the sum of $870.72; that debts were due-from the firm amounting to over seven thousand dollars, and which defendant agreed to pay out of the assets, as far as they would go; that he has failed to do so, and that plaintiff has been surprised at the receipt of letters, alleging that defendant has written that he would only pay seventy-five cents in the dollar of the indebtedness of the firm. Plaintiff avers, as his belief, that the defendant, instead of applying the assets of the firm to the discharge of the indebtedness, has been misapplying them to his own individual purposes, much to the injury of plaintiff, contrary to the trust reposed in him, &c. He alleges that since the dissolution he has, with his own funds, paid off and discharged a debt due from the firm amounting to $1,577. He avows his readiness to pay his share of the losses of the firm, as soon as they can be ascertained.
Plaintiff further alleges that the defendant has collected the larger part, if not all of the claims due to the firm, which were in his hands, and the funds have not been applied to the extin. guishment of the debts.
Plaintiff' prays that a receiver may be appointed, and an injunction issued.
Upon application to Judge Cloud, at Chambers, an order of injunction was granted. The injunction was issued by the. Clerk of the Superior Court of Mecklenburg county.
Plaintiff filed an affidavit in addition to the above complain t, .stating in substance that, since his complaint was filed, he has learned that defendant has collected from the sale of goods about $1,500, from the debts of the firm $2,350, and $60 by transferring the policy of insurance; that none of the funds have been applied to the discharge of the debts, and that they have been forwarded for collection, and he has been called on for payment; that defendant has repeatedly stated that he is insolvent, and, he is informed and believes that defendant intends to remove from the State as soon as ho can dispose of the goods in his possession.
During-the term of the Superior Court, notice of a motion to dissolve the injunction was given to the plaintiff, and a notice was given to defendant of a motion for the appointment of a receiver. During the term of the Court aforesaid, the motion for appointment of a receiver was made before his Honor, Judge Logan, and the following entry appears of record : “ Motion to appoint a receiver. Motion refused.”
Erom the above iuling plaintiff: appealed.
ÍI. W. Guión, for plaintiff, filed the following brief:
1 Story’s Equity, sec. 675.
2 Story’s Equity, sec. 1,243. Each partner has a tacit or implied pledge or lien on the partnership property, as his indemnity against the joint debts, and to secure to him his share of the profits. And it is upon the principle of this implied lion that creditors, by subrogation, in equity acquire a priority of payment out of the partnership effects.
2 Story’s Equity, sec. 1,253. Creditors have a right to follow the property as a trust into the hands of all others, &cv
As to appointment of receiver, 2d Story’s Equity, sec. 827 et seq.
■ Jones cfi Johnston, for defendant

Opinion:
Be Adi?, J.
Whore one partner, who is insolvent or in failing circumstances, without the consent and against the will of the. other partner, is disposing of the effects of the partnership and appropriating them to his own use, the other partner has the right to an injunction and to have a receiver appointed. That is our case. There was error in reiusing the plaintiffs motion for a receiver.
Note. — If necessary, an application may be made to ihe Judge at Chambers for a receiver.
Note. — In another case between the same parties and upon the seme state of tacts, a motion was made to vacate the injunction granted by Judge Cloud. The " motion was allowed," and plaintiff appealed. The opinion e'e ivered by the Court in the rep< r ed case is equally applicable to this. Rep.
This.will be certified, to the end that a receiver may be appointed, with power to collect and receive the effects of the partnership, subject to such directions as may, from time to time, be given by the Court below.
See case between the same parties at this term; motion to vacate injunction.
Pee CueiaM. . Error.