1 Bradf. 321 | N.Y. Sur. Ct. | 1850
This case, though long pending in this Court, presents no complicated questions of fact. Die immense amount of testimony taken, and the protracted proceedings before the auditors, were in the main unnecessary ; and indeed it is difficult to imagine any reason why an accounting which might have been argued before the Surrogate, at the farthest, in the course of a few weeks, should thus have dragged its slow length along for four years before being brought to argument.
The points of controversy between the parties, are three in number.
1st. Mr. Ames, husband of one of the daughters and legatees of the deceased, objects to certain charges made by the executors for repairs on leasehold premises Mo. 30 Rutgers Street. After the testator’s death, Augustus C. Downing, one of the executors, and brother of Mrs. Ames, who was then unmarried, made an arrangement with Mrs. Sackett, another sister, the substance of which was, that Mrs. Sackett should take Mo. 30 Rutgers Street, at a certain rent, and her brother and sister should board with her, the rent of the house to be applied in liquidation of their board. Mrs. Ames being then unmarried, this was a wise and. prudent plan, to give her the comfort and respectability of a home with her nearest relatives; and I can see no reason why the repairs and improvements of the house during the period of her residence there should not be allowed against the estate. The lease contained a covenant for renewal for a further term of twenty-one years, and also for the payment of the value of the improvements to the lessee at the expiration of the term. The introduction of the Croton water and the construction-of the bath-house, con
2d. It is urged that the sale of the lot on Avenue 0, in this city, for $2,325, by the executors under the power contained in the will, was void. The property was sold at public auction, and was purchased by Francis Tillou, one of the counsel for the executors on this accounting, under an arrangement with Augustus 0. Downing, one of the executors, that he should individually loan him the money to pay for the purchase. The executors accordingly conveyed the lot to Mr. Tillou, who gave a mortgage for the whole amount of the purchase money to Downing, the executor, but in his own individual right. Mo bond was given, nor did Tillou become in any manner personally responsible for the amount. But on the contrary, an express provision was inserted in the mortgage, that the remedy of the mortgagee in case of non-payment should be confined to the land alone. Downing, as mortgagee, has ever since been in possession of the premises, receiving the rent, paying the taxes, and for insurance and repairs. Tillou bought, at the request of Downing, who owned the adjoining lot, and wished a friend to purchase it, because the line of the lot went through a building standing partly on his own lot, and if a stranger bought it he was apprehensive of trouble. The understanding was, that Downing should receive the rent, pay the taxes and other charges, and apply the balance of the income to keep down the interest on the mortgage. Tillou was to consult him before disposing of the lot. The mortgage was never recorded, nor does it appear that any payments have been made or credited upon it, or any settlement had between the parties. Mr. Ames, the day previous to the sale, inquired the value of the pro
3d. The testator, at the time of his decease, was a special partner of Mr. Hicks, the executor, in business in this city; and the position has been taken by the counsel for the executors, that the firm was not dissolved, hut notwithstanding the testator’s decease, continued till the expiration of the term limited for its duration. The idea at first impression is apt to win attention if not favor, but on closer scrutiny cannot, I think, be upheld. The legislation which brought into existence among us this form of partnership, had for its main object the encouragement of commerce by permitting the investment of capital in trade, without danger to the public, or risk to the special partner
¡No doctrine is more universally established, than that by the death of any one of the partners the partnership is ipso facto dissolved; and this not only as to the deceased partner, but also as between all the survivors, and, however numerous the association may be. The reasoning upon which this result is attained, as well as the rule itself, is amply illustrated by the Civilians, the doctrine having its foundation in the Civil Law, though it has been recognized and adopted, to its fullest extent, by the Common Law. The personal qualities, skill, character, and credit of each partner enter so thoroughly into every contract of this kind, that the law very wisely considers it a personal contract, expiring with death. Though these reasons are not so apposite to a special as to a general copartnership, yet they are measurably applicable. It is true that a special partner has no control over the business of the firm, and contributes, as a matter of duty, no portion of his time, labor, or abilities, towards the management of its affairs, but he may from time to time examine into the state and progress of the partnership concerns, and advise as to their management. This brings him into the most intimate relations with the general partner; and, in view of his right to give advice, it is evident the general partner may perhaps have built up well-founded hopes of a successful and thriving trade, upon the experience, wisdom, and abilities of his associate, expectations sure to be destroyed by death. How often is it the case that a successful merchant, retiring from the cares of active business, enters into a partnership of this kind, where his knowledge and sagacity, and his influence, are important inducements with the general partner to enter into the contract. Does a limited partnership siuwive the death of the special partner ? Then it is compulsory on the survivor to receive into the partnership, at all hazards, the executor or administra
The system of limited partnerships, which was introduced by statute into this State, and subsequently very generally adopted in many other States of the Union, was borrowed from the French Code. (3 Kent, 36; Code de Commerce, 19, -23, 24.) Under the name of la, Société en commcmdite, it has existed in France from the time of the middle ages; mention being made of it in the most ancient commercial records, and in the early mercantile regulations of Marseilles and Montpelier. In the vulgar Latinity of the middle ages it was styled commenda, and in Italy accomenda. In the statutes of Pisa and Florence, it is recognized so far back as the year 1160; also in the ordinance of Louis-le-Hutin, of 1315 ; the statutes of Marseilles, 1253 ; of Geneva, of 1588. In the middle ages it was one of the most frequent combinations of trade, and was the basis of the active and widely-extended commerce of the opulent maritime cities of Italy. It contributed largely to the support of the great and prosperous trade carried on along the shores of the Mediterranean, was known in Languedoc, Provence, and Lombardy, entered
It thus appears, that in the jurisprudence of that nation whence the peculiar contract of a special partnership has been adopted by us and grafted into our law,—where the system has long existed, is familiarly known, and its nature, qualities, and practical relations to various events and circumstances, have been well considered under the light of no brief experience—the effect of the death of the special partner is to dissolve the firm. This agrees with the conclusion I had attained upon independent reasoning, before consulting these authorities, and I am consequently led to pronounce the firm in which the testator was a special partner, dissolved at his death; and to "hold the ex-_ ecutor, who was his general partner, responsible for the testator’s interest in the firm at that time, upon a liquidation of the affairs as if made then.
In accounting upon this basis, some questions of a practical character arise.
The valuation in an inventory is made by the appraisers. An inventory is not conclusive against executors .or admimstrators, but may be explained. The inventory was made fifteen months ■ after the testator’s decease, and the valuation of his interest in the partnership appears to have been fixed at the original sum put by Mm into the firm, without any actual examination being made into the affairs of the firm. There can be no reasonable objection, then, to the executors showing what was the real value of the testator’s interest in the copartnersMp at the time of his decease, April 6, 1842. -x- -x- -» -x- *
I am asked by the counsel of the executors, to estimate the liability of Mr. Hicks at what the stock would have 11
As to allowing auctioneers commissions upon the value of the stock upon a hypothetical sale at auction, it is entirely out of the question. Mr. Hicks, the surviving partner, retained the goods, and traded with them, under a misconception of the law, it is true, but still he did not sell them at auction, and he is to be charged with their value to Mm, and he cannot gain advantage by charging against them expenses he never paid, or commissions that never accrued. This is not punishing him for his mistake of the law, it is only requiring him to pay the value of the goods for. which he has made himself liable, as a purchaser, who gives what a thing is worth, without regard to the expenses of the seller, or the commissions of -his agent. Hor can Mr. Hacks charge commissions, as surviving partner, for the collection of the debts. His legal duty was to collect the assets and wind up the business of the firm; a duty the law imposes upon him as an incident to the contract of partnership, and for the performance of which no remuneration is promised or implied. Such a claim is new to me, and I am not aware that it is supported by precedent or authority.