
    Charles F. Gerard v. Erastus W. Bates.
    
      Partnership—Bill of Mortgagee of a Partner’s Interest for an Accounting—Judgments—Estoppel—1lent.
    
    Upon a bill for an accounting and other relief, filed by the mortgagee of a partner’s interest in a livery and stock business, who also held by purchase certain judgments under which a levy had been made on certain interests, it is held: That the complainant is entitled to share in the entire assets subject to the debts of the firm, although the executions were not levied on all of the firm’s property; that the appellant, who was one of the partners, is estopped from setting up a certain contingent claim against the interest in question, because of representations made by him as to the value of such interest at the time of the complainant’s purchase; and that the complainant is not chargeable with rent for the stable pending this litigation.
    [Opinion filed November 18, 1887.]
    Appeal from the Circuit Court of Logan County; the Hon, G-eobge W. Hebdman, Judge, presiding.
    Messrs. Beach & Hodnett, for appallant.
    
      Messrs. E. Lynch and Blinn & IIojblit, for appellee.
   Pleasants, J.

On the 21st of April, 1885, Gerard and Wert were partners in a livery and stock business at Lincoln, under the firm name of Wert & Company, with the proportions in interest of three-fourths and one-fourth, respectively. On that day Gerard, in consideration of a certain half section of land in Nebraska, taken at an agreed valuation of $3,200, conveyed to Danley two-thirds of 1ns interest therein, being one-half of the whole, by a bill of sale specifying the items of such stock and containing an express warranty of title; and by agreement of the parties Danley became a member of the firm, with that proportion of interest therein. The co-partnership so formed continued until the 18th of June next following, when it was dissolved by sale of Danley’s interest, under executions for $769.91 in favor of Harts. Appellee, holding an unrecorded mortgage for $600 on the same interest, talked with appellant about the advisability of his taking an assignment of the Harts judgments, and purchasing at the execution sale to protect his mortgage debt. He testified that appellant advised him to buy, assuring him that Danley’s interest would be good to him for $1,400, at the least, and in this was corroborated by Frank Hoblitt, cashier of the First National Bank of Lincoln. He accordingly made the purchases, paying about $750.

At the time of the exchange of land for livery stock above mentioned, Gerard and Danley entered into another agreement under seal, whereby, after reciting said exchange, and that Gerard agreed to pay him, besides, the sum of $200, and assumed to pay a debt of $576, secured by said land, said Diinley guaranteed that the cash value of said land should be $3,200, within eighteen months from that date, and if not, that he would then pay the deficiency “ out of the livery stock of Wert & Company at such a value as the different articles may, by the partners composing the firm of Wert & Company, be appraised.” It further provided that Wert and Gerard should be entitled to all moneys due to Wert & Company, and that Gerard should be responsible for all indebtedness of said firm, to that date.

According to the Sheriff’s return the Harts executions were levied upon Da.nley’s interest in the specific articles of property therein mentioned, embracing all of the firm stock that could be found; hut there were two horses and some hay, oats and corn in possession or under control of said Gerard which were not mentioned in said return.

After his purchase at the execution sale, appellee cHimed absolute ownership of an undivided half interest in the firm stock, subject, of course, like the other half, to firm debts. Appellant claimed that the interest of Danley so purchased was not one-half of the firm stock absolutely or subject only to firm debts, but was contingent upon what should prove to he the value of the Nebraska land eighteen months from April 21, 1885, and refused to account with appellee upon the basis c’aimed by him. Thereupon appellee filed the bill herein to the September term, 1885, against Gerard and Wert, stating his claim, charging their refusal to recognize them, and praying for an accounting and for a receiver, and for general relief. Answer and replication thereto were filed, the cause was referred to the master and proof was taken and reported. The outcome was that a receiver was appointed, who, under the direction of the court, made sales, collections and payments; and reported the same in substance as follows:

Further testimony was taken and the account stated by the master, which added to the receiver’s statement the following items: the firm was credited, for feed sold by Gerard, with §70, making a total of §2,041.04, and debited with claims allowed to Isaac Wert, §64.87, to Gerard for rent of stalfie, §89.60, and for repair bill, §91.01, and to Gas & Electric Light Company, §14.85; in all §260.33, reducing the 1 ahnce to §1,780.70, of which one-fourth, each, was decreed to be paid to Gerard and Wert and one-half to Bates; and all the costs were adjudged against the defendants. From this decree Gerard alone appealed.

He claims that the court erred in two particulars: one in that the decree allows Bates a half of the 870 received from the sale of feed by Gerard and of collections on the firm books, notwithstanding the executions were not levied upon the feed or book account; and the other, in that it ignored appellant’s' claim against Banley’s interest in the event that the value of the Nebraska land should fail to be of the value of §3,200, by the time in that behalf limited.

These objections seem to be of no force. The feed and accounts belonged to the firm, and were liable for its debts. Those debts were piaid, and of all the remaining assets, appellant got his full one-fourth. What more can he justly claim, or how is he injured, by applying on firm debts the proceeds of this feed and the book accounts, rather than the proceeds of the property levied on? If appellee received more than he was entitled to, the injury is done to Banley. Appellant, having received his full share of the assets, can not be heard to complain for Banley, but Banley was not wronged. Gerard and Wert, as well as Bates, understood that his entire interest in the firm assets was divested by the execution sale. Hence it was, probably, that he was not made a party to the bill, and that appellant interposed no objection to it on that ground. In the settlement, or partition between him and Wert of the feed referred to, the extinguishment of Banley’s interest, and the succession of Bates thereto, were distinctly recognized. Wert testified that they put the whole at §70, and he sold a half interest therein to Gerard for §35, but with the express understanding that “ if Bates claimed it, he (Wert) was to pay back so much.”

An elaborate argument, referring to many authorities, is submitted by counsel to show that claims of Banley’s individual creditors against his interest in firm assets, would be postponed to that of appellant arising on the guarantee of the value of the Nebraska land. We deem it unnecessary, however, to discuss the rights of appellant, or other individual creditors of Hanley as against him, or as between themselves, since we apprehend that the case of appellee stands on another ground, and that as against him, appellant is estopped to urge his supposed claim.

He well knew that appellee’s attention was drawn to the Harts judgments by the peril of his mortgage debt, and that its protection was the sole motive for their purchase; and although he told appellee that he had a contingent claim upon Hanley’s interest, he declined to give him any particular information, or show him the papers, and distinctly advised him to make the purchase. The evidence on that subject warrants the conclusion that he assured him there was in it for him (Bates) at least a value of $1,400, which he knew was about the amount of the mortgage and these judgments. He denies such assurance in terms, but admits that he told appellee he was safe; and though this was in its nature matter of opinion, he did not state it merely as such, nor disc’ose the facts in his possession, which would have enabled appellee to estimate its weight, or exercise his own judgment at his own risk. . It would be unjust for him now, upon the strength of the facts thus withheld, to subject appellee to the loss of his mortgage debt and all he paid, upon his advice, to protect it.

In the reply brief counsel claim for the first time that appellant should have been allowed for rent of the stable during the pendency of this litigation. It was allowed for the time occupied by the firm of which Hanley was a member. But appellee never rented the premises. Immediately upon acquiring Hanley’s interest he sought to get it out of the stable by an accounting and settlement, which appellant refused. He was never a tenant and owed no rent. On the whole, we think appellant has no cause to complain of the decree.

Decree affirmed.  