Greene v. Surviving Partners of William Greene & Co.

1 Ohio 535 | Ohio | 1824

Opinion of the court, by

Judge Sherman :

This case depends upon the question whether the widow of a ■deceased partner is entitled to dower in lands purchased and paid for out of the partnership fund, under articles stipulating for the sale of the whole partnership property for the payment of debts, and used exclusively in carrying on their trade, the partnership ■being insolvent, and the deceased partner greatly in debt to the firm.

The widow, by our statute, is entitled to dower of all lands of which the husband was seized, as an estate of inheritance at any ■time during coverture.

Her estate is but a part of his, is derived from him, and must be subject to all incumbrances existing against it at the time of the marriage, or the acquisition by the husband; the husband can, by no act of his, destroy or affect her right of dower where it has •once attached, but it only attaches where he has a real beneficial interest in the lands of which dower is claimed. Upon this principle it has been held, that the wife of a mere trustee was not entitled to dower in the trust estate, although the husband was at law seized of an estate of inheritance.

A mere technical seizin of the husband, without any beneficial interest in the estate, will not entitle the wife to dower, as where lands descend to the husband, and are afterward, by virtue of the provisions of the statute, sold by the administrator of the ancestor, to pay debts due by such estate; here the husband is seized of a legal estate in inheritance, cast on him by operation ■of laws, but subject to the payment of the debts of his ancestor, and its being sold *for that purpose, shows that the husband never had a beneficial interest therein.

So where the husband is only seized for an instant. Co. Lit. 31. "Where lands are mortgaged to the husband, and the mortgage money is afterward paid, the husband was seized during coverture of a legal estate of inheritance, and yet the wife can not have dower in the lands so mortgaged.

Also, where lands are purchased by the husband, and mortgaged at the same time to the vendor for the purchase money, it has been held that the mortgage is paramount to the claim of dower. 15 Johns. 461; Mass. 566.

In this case the property was purchased, and the deed taken in the names of the partners, but it was bought with partnership funds, and for partnership uses, and was therefore subject to the condition expressed in the articles of partnership, that at its termination all the property should be sold for the payment of the debts.

The interest which each partner had in the property so purchased, was, at the moment of the acquisition, subject to this condition of the agreement.

This agreement in equity converts the land into personal property, as between the partners and their creditors, and subjects it to all the liabilities of their joint stock in trade. It shows the original understanding of the parties, that it is to be treated as partnership effects, and not as an estate in lands held in common.

In Thornton v. Dixon, 3 Bro. Ch. Cas. 199, Lord Thurlow said, “ that had the agreement been that the lands should be sold, it would have converted them into personalty.” In this case the interest of the creditors was no way involved; it was a question between the real and personal representative of a deceased partner,, and it was held, that as the articles of partnership did not provide that the land held by the partnership should be sold, or otherwise manifest an intention of considering it as part of the effects used in trade that the real representative was entitled thereto. The right of the real representative is made to depend, not on the-character of the estate, but the want of any agreement between the partners that it should be sold or otherwise appropriated to the payment of debts.

*In the case of Smith v. Smith, 5 Ves. 189, dower was decreed to the widow of a deceased partner of lands purchased in the name of her husband, and paid for out of the partnership funds, on the ground that by the agreement between the partners these lands were to be the husband’s, and be made debtor to the ¡partnership for the purchase money, the court observing, that had there been no agreement between the partners, the estate purchased with the partnership funds, though conveyed to one partner, would have been part of the partnership property, and this-principle was carried still further in the late case of Featherstonhaugh v. Fenwick, 17 Ves. 298, by Lord Eldon, who held that a lease of premises where a partnership trade was carried on, renewed by one partner in his own name, was a trust for the partnership, to be accounted for as joint property, although the lessor refused to execute a lease in which the other partners should be inserted.

The principle has often been recognized that lands bought with partnership funds and applied to partnership uses, are, when there is an agreement that they shall be sold for the payment of debts- or other purposes connected with the trade, considered in equity as personal property so far as necessary for any of the purposes of the partnership. It is considered as a trust attaching to the estate, at the time of its acquisition, and which a court of equity is bound to execute as against the partners, or those claiming under them with notice; Bell v. Phyn, 7 Ves. 454; Balmain v. Shore, 9 Ves. 500; 7 Ves. 425; 1 Ves. Jr. 431; and this is in accordance with the general principle that lands, agreed to be turned into money, or money into lands, shall be considered in equity as that species of property into which they are directed to> be converted, a rule, as observed by the Supreme Court of the United States, that is universal. Craig v. Leslie, 3 Wheat. 543.

In the case at bar, the partners, before the' purchase of this land, agree that it shall, at a particular period, be converted into money; this agreement a court of equity would specifically execute, by directing it to be sold, upon the application of either of the partners, on the ground that it was hold by the partners in trust, for the purposes mentioned in the articles of partnership, and that each partner was interested *in having it converted into money for the payment of the debts of the firm. At the moment of the acquisition oí this estate each partner acquired, as against the others, an equitable right to have this trust specifically executed according to the terms of their agreement, and each was, under a corresponding obligation to the others to dispose of the. land and appropriate the proceeds as originally agreed upon. It was an equitable lien which attached to the estate at the moment of its acquisition, and each partner and all claiming their estate as the heir or widow must take subject thereto, and can have only the interest that the deceased partner had.

It has been too repeatedly determined to be now questioned, that the separate estate of a partner consists of that part of the partnership effects which shall remain after the debts of the partnership and the demands of the partner qua partner are satisfied; Ex parte King, 17 Ves. 115 ; Taylor v. Fields, 4 Ves. 396; Nicoll v. Munford, 4 Johns. Ch. 522; and that interest or surplus only is liable to the separate creditors of each partner claiming either by assignment or under execution. Church v. Knox, 2 Day, 514; 6 Mass. 242, 271; 11 Mass. 249, 472; 2 Johns. 280.

The interest which William Greene, the husband of the complainant, had at the moment of his death in the partnership effects, was the surplus after payment of' the partnership debts, and the balance due his partners. The case shows that he had never advanced anything; the whole funds, both for the purchase of the lot of which dower is claimed, and for carrying on the business, was advanced by his partners, and at the time of his decease the partnership was insolvent. If this estate is to be considered in equity as personal property, and the court have no hesitation in saying it must be so considered as between the partners and their creditors, he had no substantial interest at the time of his death which would go to his representatives, or could be taken by his ■separate creditors. If it be considered as real estate, it was acquired subject to a condition or agreement that qualified the estate of the husband, and the wife, when there is an agreement, unless it were executed +after her right attached, would be bound thereby so as to exclude her right of dower.

The court are satisfied that the husband was at no time during ■coverture seized of such an estate of inheritance in these lands as is contemplated by the statute giving the widow dower, and that she is, by force of the statute, entitled only to a share of the beneficial interest he had in the lands; and where real estate necessary or convenient for the conducting a trade is purchased by a partnership, and paid for by their joint funds, under an agreement that they shall, at the termination of the partnership, be sold for the payment of debts, and the residue of the partnership effects are insufficient to discharge the debts, that the land so purchased, whether conveyed to one or all of the partners, is not subject to dower of the widow of a deceased partner.

The bill must therefore, be dismissed with costs.

NOTE A.

It was intended to insert here an examination of the cases that relate to the doctrine of sustaining a general count, where there was a special contract proven, but it is omitted in consequence of the reports make a larger volume than was expected.