Sterman

This is an action for damages for an alleged conspiracy to defraud respondent Sterman of his interests in a certain partnership.

In 1930, Jack Sterman and Roy IT. Ziem formed a partnership known as Ziem-Sterman Upholstering Co., and continued as such copartners until September, 1933. At that time the partners made a voluntary assignment of their business and assets to M. J. Flavin, for the benefit of their creditors, which assignment was in the usual form and provided that after the payment of their partnership debts and liabilities, the surplus, if any, should be paid to the partners. The assignment also contained a memorandum that either party had the option of purchasing, within a specified time, the interest of the other for $2,500.

After the assignment to Flavin he paid the current bills, but permitted the former partners to carry on the business as a going concern. During this period Carrie J. Duffy loaned to Flavin the sum of $2,600 to be used as the working capital in the business and received from Flavin his promissory note therefor. Of this $2,600 so loaned, $2,000 belonged to Mrs. Duffy and $600 to a Mrs. Hushman, a relative of appellant Ziem. During the receivership…