Mich. Comp. Laws § 449.14

Sec. 14. (Partnership bound by partner's breach of trust). The partnership is bound to make good the loss: (a) Where 1 partner acting within the scope of his apparent authority receives money or property of a third person and misapplies it; and (b) 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.