Andrews' Heirs v. Brown's Adm'r

| Ala. | Jun 15, 1852

DAEGAN, C. J.

— When a partnership is dissolved by the death of one or more of the partners, the legal title to all the personal property and choses in action belonging to the firm becomes vested exclusively in the survivor: not, indeed, for his own peculiar benefit, but for the purpose of paying the debts, and then dividing the nett balance amongst those entitled, giving to the representatives of the deceased partner the same interest he would have taken, had he been in life, and the firm had been dissolved, not by death, but by mutual consent. But, as respects real property, the case is different at law; for the legal title descends to the heir at law of the deceased partner, and a court of law, looking to the legal title alone, cannot regard or protect the mere equities of others. In a court of equity, however, real estate belonging to the firm is considered as personal property, to this extent, at least, that it is liable to pay the debts of the firm, and then to distribution between the partners, in the same manner as if it had been personal instead of real estate. These charges upon the real estate, being prior to the claims of the representatives of the deceased partner, override his wife’s title to dower, as well as the title of his heir at law. The consequence is, that the heir at law holds the legal title subservient to, or in trust for, the surviving partner, who is charged with the payment of the debts. These principles of law, in my opinion, are so well settled, that they are no longer the subject of controversy. Story on Part. 127, et seq.; Coll. on Part. (Perkins’ ed.) 183 to 145; Ala. 446; Pierce v. Trigg, Leigh 406; Delmonico v. Guellaume et al. 2 Sand. Ch. 366" court="None" date_filed="1845-02-24" href="https://app.midpage.ai/document/delmonico-v-guillaume-5550702?utm_source=webapp" opinion_id="5550702">2 Sand. Ch. 366; Dyer v. Clarke, 5 Metc. 562; 7 Vesey, 425, Hare, 369.

Inasmuch as the real estate is considered as personal, for the purpose of paying the debts of the firm, and the surviving partner is charged with the duty of paying those debts, it must, of necessity, follow, that he has the right in equity to dispose of the real estate for this purpose; for it would never do to charge him with the duty of paying the debt, and at the same time to take from him the means of doing it. Therefore, although he cannot, by his deed, pass the legal title to the purchaser, which descended to the heir of the deceased partner, yet, as the heir holds the title in trust to pay the debts, and the survivor is charged with this duty, his deed will convey this equity to his purchaser, and through it, he may call on the heir for the legal title, and compel him to convey. See 2 Sand. Ch. 366 ; 5 Metc. supra.

Applying these principles to the facts exhibited by the pleadings and proof in the case before us, (but which we will not state in detail in this opinion,) we can perceive no error in the decree; for the proof, we think, is abundant to show that, although the legal title to the lands was held by E. L. Andrews alone, nevertheless, they belonged to the firm as partnership property, and were so treated by all the members of the firm. They never did belong exclusively to E. L. Andrews; consequently, the claims of the creditors of the firm are superior to his widow’s right of dower, as well as to the legal title of his heirs at law. The lands were purchased with the funds of E. L. and Z. Andrews, who were then partners, and stood upon their books as partnership property, and when the new firm was formed, composed of E. L. and Z. Andrews and Thomas G. Brown, these lands were carried into the new firm as part of its capital, and were, therefore, partnership property.

As to tbe stocks purchased with the funds of the new firm, it is very clear, that they also are subject to the control and disposition of the surviving partner, Brown, notwithstanding they stand on the books of the Bank and the Insurance Company in the name of E. L. Andrews alone. In reference to the money received by Messrs. Campbell & Chandler, growing out of the redemption of one of the lots by Mr. Glid-don, we think it should stand in the place of the lot itself, and, consequently, subject to the disposition made by Brown of the lot.

We are satisfied there is no error in the decree, and it must be affirmed.

I will observe, in conclusion, that we do not intend, by any thing said in the foregoing opinion, to hold that a surviving partner is authorized to sell real estate for the simple purpose of making distribution amongst the partners themselves, and their representatives. That question is not raised in the case, and has not been considered; we only intend to decide this: the firm being insolvent, the surviving partner may dispose of the whole property to pay the debts, whether that property consists of real or personal estate.

The decree is affirmed.