208 Pa. 335 | Pa. | 1904
Opinion by
At the time of his death in November, 1888, and for several years prior thereto, William Hall and his two sons, Thomas C. Hall and John H. Hall, were engaged, under the firm name of William Hail & Company, in the shoddy manufacturing business in Upper Darby township, Delaware county. The firm carried on its business at a plant which, including the land, buildings and machinery, was owned by William Hall,
The controversy here arises over the distribution of this fund. The sheriff reported a schedule of distribution as provided by the Act of June 4, 1901, P. L. 357, to which exceptions were filed. An auditor was then appointed by the court to pass on the exceptions and to make distribution of the fund. The claimants before him were “ the holders of the three mortgages, the individual judgment creditors of John H. Hall, the
This appeal was taken by James A. McCullough who purchased the interest of John H. Hall in the firm of William Hall & Company sold by the sheriff on the judgment of Edward W. Perrott. The appellant claims that the manufacturing plant was the property of the firm, “ was absolutely necessary to the partnership, and was openly and notoriously occupied by the firm and used for partnership purposes as firm property.” It is, therefore, contended that as the firm had no creditors the proceeds of the sale of the plant, after the payment of the mortgages, should have been awarded to William Hall & Company or to Thomas C. Hall as liquidating partner of the firm, and not to the members of the firm as individuals or to their judgment creditors. It was further contended that as against James A. McCullough, the appellant, Edward W. Perrott was not entitled to claim any part of the proceeds of the sale of this property on his judgment against John H. Hall for the reason that Perrott had sold Hall’s interest in the firm on his judgment and McCullough had purchased it.
The manufacturing plant, including the land, mill, machinery and houses was acquired, as we have seen by Thomas C. Hall and John H. Hall' partly by descent from their father and partly by deed as tenants in common from their mother and sister. This title was never changed of record, but the property was held by the owners as tenants in common until the sale was made on a scire facias issued on one of the mortgages. There was nothing of record to show that the plant or any part of it was held or used as partnership property. All that the record disclosed as to the title to the property was that Thomas C. Hall and John H. Hall owned it as tenants in common. Such briefly are the conceded facts as to the record ownership of this property.
For seventy years and in an unbroken line of decisions, we
In Ridgway, Budd & Co.’s Appeal, 15 Pa. 177, the court by Rogers, J., says : “ To affect the title or possession of land, it is not competent to show by parol that real estate conveyed to two persons as tenants in common, was purchased and paid for by them as partners, and was partnership property. This is firmly settled in the cases cited, and in other cases which it is unnecessary to quote. Here there can be no doubt the property was held as a tenancy in common; and as nothing was put on record, manifesting the intention of the partners to regard it otherwise, it must be treated as separate estate, and of course liable as such to their creditors. In all such cases, parol testimony is totally disregarded.” “ It is certainly determined in a long train of decisions,” says Agnew, J., in Ebbert’s Appeal, 70 Pa. 79, “that as to purchasers of the title and creditors having liens on it, a deed to persons who are in fact partners, but who take the title to themselves as tenants in common, must stand as the foundation of their rights, and govern in the distribution of the proceeds of a sale of the title. Partnership creditors cannot by parol evidence change the effect of the deed, and convert lands so individually held into assets of the partnership, and thereby dislodge and postpone
The record title to the real estate in question being in Thomas C. Hall and John H. Hall as tenants in common, it follows that the auditor and .court below were right in awarding the proceeds of the sale of the property, after payment of the mortgages, to Thomas C. Hall individually and to the lien creditors of John H. Hall according to their priority. The appellant purchased John H. Hall’s interest in the firm of William Hall & Company. As against the individual creditors of John H. Hall, therefore, he cannot have any claim on this fund. It must be distributed in conformity with the character impressed upon it by the title to the property which produced it.
The appellant relies upon Erwin’s Appeal, 39 Pa. 535, and Abbott’s Appeal, 50 Pa. 234, to sustain his position that he has the right to show that the manufacturing plant was partnership property and that the proceeds of the sale must be distributed as such. These cases, however, do not sustain the appellant’s contention. In Erwin’s Appeal, Meyers, one of the partners of the firm of Imhoff & Meyers, paid the pur
We do not agree with the appellant’s contention that the sale of John H. Hall’s interest in the partnership on the judgment of E. W. Perrott estops the latter from claiming payment of the judgment or the balance due thereon out of Hall’s interest in the proceeds of the sale of the real estate. Hall’s interest in the real estate which, as against that judgment, was not firm assets and did not pass by the sale of his interest in the partnership. Hence, the appellant - as purchaser of the partnership interest did not acquire any interest in the real estate or the proceeds resulting from the sale of it. Perrott is not now claiming Hall’s interest in the partnership sold on his judgment and purchased by the appellant but is seeking to enforce his judgment against his debtor’s interest in the proceeds of the real estate on which it is a first lien and which is not an asset of the firm of William Hall & Company.
The assignments of error are overruled and the decree is affirmed.