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Where money is received by one member of a law partnership for the expressed purpose of a special investment, there may be liability by one partner for the misconduct of another in the misapplication of the fund, but that if one of the partners receives money indefinitely, to lay out when a proper security may be found, he is not acting within the character of an attorney and does not thereby make his partner liable.
Complainant Rouse sought a separation from her husband. She went to the firm of Riker & Riker, and was referred to Thomas E. Fitzsimmons, a member of the firm. In the course of the incidental conferences Fitzsimmons asked complainant what money she possessed and was informed by her of the amount thereof and the manner in which it was invested. Fitzsimmons advised complainant regarding her investments. It was alleged that Fitzsimmons told the complainant that the law firm dealt in gilt-edge mortgage bonds, and that she should turn over her money to the firm. Complainant forwarded and endorsed a check to Fitzsimmons, which the latter deposited in his personal bank account. No part ever came to the firm except $ 350, which was paid by Fitzsimmons to the firm for the legal services rendered. Complainant and Fitzsimmons continued to communicate regarding the investment through letters sent by the latter written on his own stationery from his new office address. Complainant never communicated with the Riker firm until after she had learned of Fitzsimmons' defalcations and arrest. Complainant then filed a suit, charging all of the members of the Riker firm with liability for the embezzlement of the complainant’s funds by Fitzsimmons. The trial court dismissed the bill as to all of the partners of the Riker firm except Fitzsimmons. Complainant appealed.
Under the circumstances, should the court hold all members of the Riker firm liable for the embezzlement of the complainant’s funds by Fitzsimmons?
The court affirmed the judgment of the trial court, concluding that the evidence showed that complainant did not, and did not intend to, place her money with the Riker firm to invest. The evidence showed, rather, that she confided in Fitzsimmons and relied upon his integrity when she endorsed her funds to him personally to invest. Further, Fitzsimmons's correspondence to complainant indicated that he had invested the funds in his personal capacity and not as Riker’s partner. The court found that the Riker firm did nothing to indicate that Fitzsimmons had any authority to act on its behalf outside the practice of law when a member of the law firm introduced Fitzsimmons and complainant so that Fitzsimmons could assist complainant with a legal separation from her husband.