92 Ky. 400 | Ky. Ct. App. | 1891
delivered the opinion op the court.
These two appeals involve the same question. John A. Carter and James G. Carter were brothers and had been in business for years as partners, engaged in purchasing and selling real estate for profit. James Gr. Carter died, and after his death his brother, John A. Carter, as surviving partner, sold certain parcels of this partnership real estate to the appellees, Elexner and Baird. The sale was evidenced by a writing, and the appellees refusing to comply with its terms, this action was instituted by John A. Carter, as surviving partner of Carter & Brother, that being the style of the firm, against the two purchasers, appellees, and the widow and heirs at law of the deceased partner, asking that the contract be enforced and the vendees compelled to accept a deed from the surviving partner as provided in the contract between them. The appellees refused to comply upon the ground that John A. Carter was not invested with the legal title because at the death of his brother the one-half interest descended to his heirs at law. The chancellor below so held and the surviving partner has appealed. In the ease of Galbraith v. Gedge, reported in 16 B. M., 635, this court in effect decided that the surviving partner could not convey the real estate of the firm as the title of the dead partner had passed to his heirs at. law. The question for decision in this case is: Does land become personalty in
It is the settled doctrine of the English courts that in such a case the land is to be treated as personalty and the share of the person dying will pass to his personal representative ; but the weight of the American decisions is the other way and there is no reason, it seems to us, why partnership realty should not descend to the heir at law as any other real estate, subject to the equitable right of the surviving partner to convert it into money for the purpose of paying partnership debts.
In this case there is a large quantity of real estate, consisting of various lots in the city of Louisville and land in other places, and if no necessity existed for its sale to pay firm debts why should the heir at law be deprived of his inheritance and the estate pass to the personal representative.
It is, we think, settled by the decided weight of American authority in cases where there are no debts of the partnership that the land passes to the heir, or where there is a surplus of land left it passes in the same way. The case of Buchan v. Sumner (2 Barbour’s Ch’y, 165), reported in 47 Am. Dec., 305, decided by Chancellor Walworth, reviews the authorities on this subject holding that where there are no debts the realty passes to the heir and not the personal representative. (Andrews’s Heirs v. Brown, 21 Ala., 437; same case, 56 Am. Dec., 252; Tillinghast v. Champlin, 4 R. L. 173; same case, 67 Am. Dec., 510; Buffum v. Buffum, 49 Me., 108.)
Time is not of the essence of the contract, and if the purchaser has no other defense when it is made to appear that it is necessary to sell this land to pay debts, and there is no sacrifice of the property, it becomes the duty of the chancellor to aid the surviving partner in executing his contract. This is not a proceeding to sell infants’ real estate under the statute, but is an action to enforce the equitable lien of the surviving partner on the realty to pay debts. That such a lien exists in favor of the partner and through him for the benefit of the firm creditors is unquestioned, and if the surviving partner has
Ye are aware that in Cornwall v. Cornwall, reported in 6 Bush, 869, where the building or real estate was used as, or in connection with, a soap factory and a part of the plant, this court held that the real estate should be regarded as personal assets and that such must have been contemplated by the parties. It is further said in that case that when treated as personalty it passed under the law of distribution and not by the law of descent.
In Lowe v. Lowe, reported in 13 Bush, 688, this doctrine was again discussed, in which it was held that there was an apparent conflict between the case of Cornwall v. Cornwall, and that of Galbraith v. Gedge, reported in 16 B. M., 635. In the case of Galbraith v. Gedge there were four brothers dealing as partners in tobacco and real estate. They owned a tract of land as partners, and one of the brothers having died, the survivors sold the land to Galbraith, and it was held that the legal title to the dead brother’s interest in the land passed to his heirs, and to make the title perfect it was necessary for the heirs to join in the conveyance. In the Cornwall case the realty was sold and distributed as personalty, and in the case of Galbraith it passed by descent to the heir.
In Lowe v. Lowe the two conflicting opinions are attempted to be reconciled on the idea that in the one case it was- the intention of the partners to convert the real estate into personalty, and in the other no such intention was shown. We think it was well said in Lowe v.
The true rule, and the only one that reconciles the conflicting views on this question, is, that where partners own real estate as such it can not be treated or considered as personalty except for the purposes of the partnership, and then as assets for the payment of firm debts. It can not be sold by one member of the firm in the firm name, but all i;he partners must unite in the conveyance. It can be sold to pay partnership debts, but the title must pass as the title of any other real estate, and a surviving partner is not clothed with a perfect title because of his survivorship, but the title of the deceased partner vests
In our opinion the purchasers in this case should have the title of the heirs at law or devisees; and as this case is brought here when the conveyance tendered is insufficient, the judgment is reversed and remanded for further preparation, but at the cost of the appellant.