Gibson v. Henley

SMITH, C.

The appellant, Henley, was sued as a member of the law firm of Henley & McSherry, doing business in San Francisco during the year 1892-93, and judgment recovered against him for six hundred and two dollars and fifty cents and costs. McSherry was made party to the complaint, hut was not served. The suit was commenced February 4, 1896, within three years, hut not within two years of the accrual of the cause of action. The defendant pleaded the two years statute.

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(Code Civ. Proc., sec. 339.) The sole question, involved in this appeal is as to the bar of the statute pleaded; and this, again, turns upon the question whether the action is to be regarded as an action for relief on the ground of fraud or merely as an action on contract, or for money had and received. If the latter, the action is barred; otherwise not. The facts on which the question turns are as follows: Henley and McSherry and one Hart of Hew York were attorneys for the plaintiff in the matter of an estate in process of settlement in Brooklyn, Hew York, in which plaintiff was interested. Hart, on or about February 8, 1893, having collected the money coming to the plaintiff, transmitted to Henley and McSherry, by mail, a check for four hundred and forty-five dollars, payable to the order of the plaintiff. This check was received by McSherry, who, it is found, obtained and embezzled the money. The plaintiff did not learn the fact of the embezzlement of the money until June

2,

1893, within three years, but not within two years of the commencement of the suit, which occurred February 4, 1896.

There is no allegation that the defendant, Henley; participated in, or knew of, or received the benefit of, the money embezzled; indeed, it is expressly found that he did not know of it until on or about November 35, 1893.

On this state of facts it is very clear that there is no cause of action for fraud against the defendant Henley. The complaint shows a fraud committed by bis partner McSherry, but it is not pretended that Henley was in any way connected with it, otherwise than by the existence of the partnership relation. By force of this relation he became responsible for the money received by McSherry, and also for the damages caused by the fraud, if any; but he did not become guilty of the fraud, nor could he be sued directly for it. There are certain cases where all the members of a firm become