Mich. Comp. Laws § 449.14: Partnership; effect of partner's breach of trust.

Sec. 14.

(Partnership bound by partner's breach of trust). The partnership is bound to make good the loss:

Where 1 partner acting within the scope of his apparent authority receives money or property of a third person and misapplies it; and

Where the partnership in the course of its business receives money or property of a third person and the money or property so received is misapplied by any partner while it is in the custody of the partnership.