Opinion
November 23, 1910.
Max E. Lehman, for the appellant.
George R. Holahan, Jr., for the respondents.
The pleadings in this case were oral. The action is stated to be one for conversion, and it is claimed that such conversion occurred in the course of defendants' employment in a fiduciary capacity, entitling plaintiffs to an order to arrest and a body execution. (Mun. Ct. Act [Laws of 1902, chap. 580], § 56, subd. 2, as amd. by Laws of 1903, chap. 156.) The judgment entered herein contains the words "defendant liable to execution against his person." (Mun. Ct. Act, § 251.) Henry Pistor and Louis Levy, named as defendants in this action, were copartners in the real estate business. Levy only was served, and the judgment runs against him alone. It appears that during the months of December, 1909, and January, 1910, Levy and his partner were employed to collect the rents of plaintiffs' property. The greater portion of such rents, according to the evidence, was collected by Pistor. A small portion was collected by Levy, but the evidence is undisputed that the money which Levy collected he turned over to Pistor to deliver to plaintiffs. Pistor embezzled not only the amount which Levy had turned over to him, but the amount which he himself had collected, and absconded. That the defendant Levy, as a member of the firm, would be liable in an action for money had and received is unquestioned. ( McFarland v. Crary, 8 Cow. 253.) That action was one in assumpsit, and not in trover, as stated by counsel for respondents in his brief. That an action may be maintained for the conversion of money received in a fiduciary capacity is also established. ( Britton v. Ferrin, 171 N.Y. 235; Jackson v. Moore, 94 App. Div. 504; People ex rel. Zotti v. Flynn, 135 id. 276.) The question in this case is whether in such an action an innocent partner is liable for the tortious acts of his copartner, and must go to jail if he is unable to pay the debt. "Partners are liable for the conversion by a copartner of the property of a third person, if done in the ordinary course of the firm's business. But innocent partners are not liable when the conversion is not effected in the course of the firm's business, but as an individual transaction of the wrong-doer." (30 Cyc. 525; Battle v. Street, 85 Tenn. 282, 287; Stokes v. Burney, 3 Tex. Civ. App. 219, 221.) The collection of plaintiffs' rents was within the scope of the partnership business, but the act resulting in the conversion was the individual crime of Pistor, committed without the defendant Levy's knowledge or consent, and from which he derived no benefit. It is true that if defendants' firm had not been employed to collect plaintiffs' rents Pistor would not have been in a position to steal them, but "a fraud committed by a partner while acting on his own separate account is not imputable to the firm, although had he not been connected with the firm he would not have been in the position to commit the fraud." ( Andrews v. De Forest, 22 App. Div. 132, 138.) If a tort is committed by one partner, even though it was made possible by reason of his connection with the performance of partnership business, it may, from its nature or attendant circumstances, be shown to be only a several act. (Pars. Part. [4th ed.] 125.) The author well illustrates the distinction when he says: "If two physicians were in partnership, and one intentionally maltreated a patient," the other partner would not be liable; but if one was injured by the negligent act of a firm of physicians, in the course of his business, the other member of the firm would be.
The judgment appealed from should be reversed and a new trial ordered, costs to abide the event.
WOODWARD, THOMAS, RICH and CARR, JJ., concurred.
Judgment of the Municipal Court reversed and new trial ordered, costs to abide the event.