Court Opinion

ID: 6961017
Source: CourtListenerOpinion
Date Created: 2022-07-24 01:45:34.404766+00
Date Added: 2024-06-11T16:08:23.097172
License: Public Domain

Mr Justice Craig dissenting: I do not concur with a majority of the court in the decision of this case. Two questions of law arise upon the record: 1. Whether Johnson became personally liable for the loss occasioned to the estate of Ryerson by the fire of October 8 and 9, 1871, by continuing the business of the firm after the death of Ryerson in the manner shown by the evidence, and by using in the business the stock of lumber, and other property of the firm, together with the lumber product of the mill of Esau Tarrant & Co., delivered under the contract of Ryerson & Johnson with that firm, instead of selling the same at once upon Ryerson’s death and realizing the proceeds for the estate. 2. Whether the act of March 26, 1869, requiring a surviving partner to settle the partnership estate in accordance with its provisions, did not forbid Johnson using the property of the firm in the manner shown by the evidence, and subjecting it to the risk of loss attending such a course, even if the representatives of the deceased partner consented to it, or failed to object. Fyerson, as appears, died July 11, 1871, and the lumber for which appellee seeks to hold the estate of Johnson liable was destroyed by fire October 8 and 9, of the same year, in Johnson’s possession as a surviving member of the firm of Fyerson & Johnson. It is contended by appellee that, as Johnson continued the business of the firm after the death of his partner Fyerson, his estate is liable for the loss that occurred by the fire. Did Johnson continue the business in such a manner that the law would regard him as holding the partnership assets and property at his own risk ? On the death of Fyerson, Johnson, as surviving partner, had the right to dispose of the partnership property, collect the debts due the firm, and pay the partnership liabilities from the proceeds of the assets. He was entitled to a reasonable time to dispose of the property, and it was his duty to realize as large an amount from the sale of the partnership property as reasonably could be made by the exercise of a proper business talent. It appears that Johnson was a careful, prudent business man, and conducted the business to the best of his ability. That at the time of Fyerson’s death, thd firm was a joint owner with Esau Tarrant of a saw mill at Muskegon, Michigan, and of a large stock of saw logs at the mill, which it was necessary to manufacture into lumber, in order to dispose of the same in a profitable manner; that there was a written article of co-partnership, dated November 8, 1870, to continue one year, between Tarrant and the firm of Fyerson & Johnson; that each had a capital of $15,000 in the business. It also appeared that a verbal contract had been made between Tarrant and Fyerson & Johnson, that all the lumber manufactured at the mill during the season of 1871 should go to the yard of Ryerson & Johnson, in Chicago, and they were to pay E. Tarrant & Co. the market price for the same. It also appears that 9,520,000 feet of lumber was cut at the mill that season, and shipped under the contract to the firm at Chicago, about one-half of which was sawed after the death of Ryerson. When Ryerson died, there was in the yard a large stock of green lumber, all of which, together with the lumber put in the yard after Ryerson’s death, except one cargo, was manufactured at the mill of Tarrant & Co. It also appeared, from the evidence of lumber dealers, that it was greatly to the advantage of the business, and the firm interests and prudent management required that the business should be continued in the regular way during the season, and it could not be closed to advantage, nor without sacrifice, until in the fall or the following spring. It also appeared that the entire stock of lumber, and other property in the yard, was destroyed, without any fault or negligence of any person, by the fire of October 8 and 9, the net loss of the firm being $43,782.19. Now, while it was possible for Johnson to have disposed of the lumber on hand, when Ryerson died, before the fire, yet it is evident, from the facts, that he could not have done so without great loss to the firm. The great bulk of the lumber was green, and at that season of the year unsaleable. By holding it until fall, it would have been marketable, and could then have been sold without loss to the firm. Under such circumstances, we do not regard it the duty of the surviving partner to sell at once, and at all hazards, the property. Indeed, had Johnson proceeded immediately, and. made sale of the property at a sacrifice, at that season of the year, when it was unsaleable, there would have been much more reason for holding him responsible for the loss than now. Johnson was entitled to a reasonable time to settle up the affairs of the firm. Was three months an unreasonable time, taking into consideration the nature of the property and the season of the year? .It would, under the evidence in this case, be establishing, not only an arbitrary, but a hard rule, to hold that Johnson was compelled at all hazards to sell the property within three months, and yet the fire occurred less than three months after Ryerson’s death. There is another fact to be considered. Johnson was bound to receive the lumber cut at the mill of Tarrant & Co. or else respond in damages for a breach of the contract, notwithstanding the death of his partner. There was no lumber purchased by Johnson after the death of his partner, except one cargo. The lumber received came from the mill of Tarrant & Co., and was received under a contract made long before the death of Ryerson. This he was bound to receive. Johnson had the right to collect whatever was due the firm. He had the right to sell the firm property. He' was bound to receive lumber of Tarrant & Co. under the contract. How, for the reason he has done what the law gave him the right to do, and what he was bound to do, it is contended he continued the partnership business on his own account, and must be held accountable for losses not caused by his fault. In Nelson v. Hayner, 66 Ill. 487, it was held that the death of either partner is ipso facto from the time of the death a dissolution of the partnership; but in the same case it is said: “ notwithstanding such dissolution, a community of interest still exists between the survivor and the representatives of the deceased partner, and the representatives have a right to insist on the application of the joint property to the payment of the joint debts and a due distribution of the surplus. So long as these objects remain to be accomplished, the partnership may be considered as having a limited continuance.” See, also, Cow on Partnership, where the same doctrine is announced. The partnership was dissolved upon the death of Ryerson, but although dissolved, it continued for the purpose of closing up the affairs of the firm. Burkhart v. Drener, 4 De Gex, M. & G. 542. We think Johnson was only required to use reasonable care and diligence in closing out the business, as held in Moore v. Huntington, 17 Wall. 417, and when this was done he could only be held liable for the amount realized from the partnership assets, for which he has fully accounted. In regard to the second proposition, we perceive nothing in the act of 1869 which prevented Johnson from settling up the affairs of the firm in the manner he did. As was held in Nelson v. Hayner, 66 Ill. 487, the act of 1869 contains nothing which changes the nature of the relation between the surviving partner and the representatives of the deceased partner. “ It is to be considered as confirmatory of their respective rights as previously recognized by equity.” But it is said no inventory was filed by Johnson. Whether an inventory and appraisement of the assets of the firm were made and returned to the county court within sixty days afcer the death of Ryerson, the record is silent, but if it was not done, the failure to observe this requirement of the statute could not affect this case. Ho loss occurred for the reason an appraisement and inventory was not returned. If such was the fact, it is not claimed that Johnson received any of the assets of the firm or converted them to his own use. Hor is there any dispute in regard to the amount of the property, its quality or value. In what manner, then, appellee was damaged, if Johnson failed to observe these provisions of the statute, is not apparent. If no loss occurred, upon what principle can Johnson be held liable? We are aware of none. Under the second section of the act the representatives of the deceased partner might have compelled the return of an inventory and appraisement if they had desired it, and the fact that they never required it, raises the presumption that they did not regard it of any benefit or importance. Had the surviving partner, Johnson, purchased heavy bills of goods and carried on the business in the same manner as it was transacted before Byerson’s death, as it was insisted in the argument he did, the case would have been different, but such was not done. He received lumber which had been bought before his partner’s death, which he was bound to do or pay such damages as would have been recovered for a breach of the contract, and this was all the lumber received into the yard except one cargo, which is not of sufficient importance to change the result. The law undeniably requires a surviving partner to proceed with all reasonable dispatch and close up the business of the firm, and where loss has occurred for a failure to observe this duty, it should be borne by the one in default, but what might be regarded as a reasonable time in one case could not be so regarded in another. Under the circumstances of this case, less than three months could not be regarded time sufficient to dispose of the property, and as "it was consumed by fire within that time without the fault of Johnson, he can not be held liable. Scott, J.: I concur in this dissenting opinion. Sheldon, J.: I also concur in the dissenting opinion, except as to the one cargo of lumber purchased after the death of the partner.