17 Ala. 145 | Ala. | 1850
Lead Opinion
At law real property is supoo-ed to belong to the persons in whose name the title appears to stand by a conveyance. If it is in the name of one of several partners, he alone will be deemed the owner; and if the conveyance is to all the partners, they will be regarded as tenants in common. But no matter how the title may stand at law, real estate belonging to the partnership will in equity be treated as belonging to the firm like its personal funds, and disposable and distributable accordingly; and the parties who appear to be owners of the legal title will be held to be trustees of the partnership and accountable as such to the partners, according to their respective rights and interests as cestuisque trust, or beneficiaries. So far as the partners and their creditors are concerned, real estate belonging to the partnership is in equity treated as mere personalty ; and so it will be deemed as to all other intents, if the partners have by agreement or otherwise purposely impressed upon it that character. But the decisions are contradictory upon the question whether in the absence of such agreement or other act affecting its general character, real estate held as a part of the partnership stock ought to descend as such to the heir or devisee, or belong as personalty to the executor or administrator. Upon this point there has been a diversity of judicial decision. — Story on Partn. § § 92-’3, and note at the end of the latter section; Colly, on Partn. b. 2, ch. 1, $ 4.
It is said that although the law considers each partner as pos
Whether the interest of a deceased partner in real estate descends to his heirs or devisees, or as personalty to his executor or administrator, at law it is perfectly clear that the surviving partner has nothing more than a mere equitable interest, in virtue of which the latter may make it available for the purposes of the partnership and to enable him to settle its affairs. Can such an interest be sold under a fieri facias to satisfy a judgment against the survivor for a debt of the partnership ?
By the act of 1812, the sheriff was authorised to sell and convey to the purchaser under ah execution, all the right, title and interest of the defendant in “ real estate, either in law or equity;” but the act of 1820 provides that “no other than-the legal title to land or other real estate shall hereafter be sold or conveyed by virtue of any execution.” Also, that “ the equitable title or claim to land or other'real estate shall hereafter be liable to the payment of debts, by suit in chancery, and not otherwise; and when a bill shall be filed for that purpose all persons concerned in interest shall be made parties thereto.” In doc cxdcm. Davis v. McKinney and McKinney, 5 Ala. Rep. 719, we were inclined to think that under the act of 1812, it would have been no objection to the sale oí lands under execution, that the defendant had only an equitable title; but were of opinion that the statute had been" modified in this respect by the later act. This we said was “explicit in its terms and does not leave the intention of the legislature to be ascertained by construction. - It inhibits the sale of an equitable title under
The bills filed by the administratrix of Lang againsfcthe surviving partner, McRea, and against the same defendant and Bartlett & Waring, and. the decree thereon, do not conclude any matter in controversy upon the title which, the complainant attempts to deduce from Gayle and Phillips. The first bill was fora discovery of the partnership effects and an account; the second alleges that the notes of H. C. Dade, on which judgments were recovered against McRea as surviving partner, up- ■ on the assumption that McRea & Lang were their endorsers, were endorsed by McRea for Dade’s benefit, without the-assent or approbation of Lang; that Bartlett & Waring held a mortgage on real estate, for their security, executed by Dade; and .upon these facts prayed that the sale of the property now in question might be enjoined, and that the partnership estate might be .devoted to the payment of its debts. By the death . of McRea the first suit abated; and the bill in the latter was dismissed at the hearing. The mere statement of the character and objects of these suits, and the disposition of them, is sufficient to show the correctness of the conclusion we have ex-as to their effect. pressed
____partner cannot, after the dissolution of the partnership, make, endorse or accept a note or bill in the joint name, even in substitution of a pre-existing debt of the firm; but the origiginal debt will remain a joint charge, unless the partner not signing was intended to be released. — Parker v. Cousins, 2
Where a note is made by one partner during the existence of the partnership, in the joint name, the law will intend in the absence of opposing proof, that it was for the benefit of the firm, and within the scope of their dealings. — Knapp & McBride v. Norman, 7 Ala. Rep. 19. But one partner cannot bind his co-partner by signing their names as sureties in a note, nor can he draw, endorse, guaranty or accept in the firm name, a note or bill of exchange for the benefit of a third person; and where it appears that he has thus used the partnership name, it devolves upon the party who seeks to enforce such a security, to show that the transaction was sanctioned by the inactive partner.— Wagnor et al. v. Clay, 1 A. K. Marsh. Rep. 257; Smyth v. Strader et al., 4 How. Rep. (U. S.) 404; Rolston v. Click et al., 1 Stew. Rep. 526 ; Mauldin v. The Br. Bank at Mobile, 2 Ala. 502; Kibbler & Pearson v. De Forest, Morris & Wilkins, 6 Ala. 92.
The admissions of one partner, after the dissolution of the concern, will not establish a debt against his copartner.; — Barringer & Rhodes v. Sneed, 3 Stew. Rep. 201; Thornton v. Kerr & Hope, 6 Ala. Rep. 823; Ward v. Howell, 5 Har. & Johns. Rep. 60; Evans v. Dubbery, 1 A. K. Marsh. Rep. 1S9; Boyce v. Watson, 3 J. J. Marsh. Rep. 500; Yandes et al. v. Lefavour et al., 2 Blackf. Rep. 240; Willis v. Hill, 2 Dev. & Bat. Rep. 535; Scott, Harper & Co. v. Dansby, 12 Ala. R. 714.
In Hogan & Co. v. Reynolds, 8 Ala. Rep. 59, it was held, that a partnership to buy and sell notes does not authorise one of the partners to receive notes for collection: Further, that if a partner converts the money of a third person to his own use, and afterwards appropriates it to the purposes of the firm, the partnership is not liable.
It is shown by the testimony of Ryland, that he was the borrower of three thousand dollars of Bates, through the agency of McRea, for the re-payment of which he made his note at twelve months, endorsed by McRea in the firm name of McRea & Lang; that he left with his endorsers the note of John Graves, for thirty-three hundred and sixty-six dollars, due some months previous to the maturity of the witness’ note — instructing Me
Again: Although the witness states that the mortgage executed by McRea was intended to secure the money borrowed by witness of Bates, and which McRea & Lang failed to pay ■with funds provided for that purpose, it is certain that his knowledge must have been mere hearsay, derived from the parties to the mortgage. This is merely noted to show the loose and inaccurate manner in which the witness expressed himself— doubtless with the most honest intentions.
The note, then, of Rykud to Bates was endorsed by McRea in the partnership name, for the exclusive benefit of the maker,
The notes which were made by McRea as surviving partner, in the name of McRea & Lang, we have seen, could not bind the estate of his deceased partner — not being an act within the scope of the powers which by the death of Lang devolved upon McRea. And there being no prior indebtedness of the partnership to Bates,-the mortgage must be regarded, both in equity and at law, as a security for the individual debt of McRea, the effect of which will be to restrict its operation to his own interest in the property, without in any manner affecting the legal estate of the representatives of Lang. Even conceding that the terms of the mortgage indicate an intention to convey the joint estate, and that it was competent for McRea to mortgage it for the payment of a partnership debt, and still the law will not tolerate a divestiture of the estate of his deceased partner’s representatives for the. purpose of paying a debt with which he was individually chargeable.
Whether a surviving partner has only a lien in equity, or an equitable estate in the lands of the firm, we need not enquire; for, however this may be, the result on the proofs in the cause must be the same upon either hypothesis.
In Bartlett & Waring v. Doe ex dem. Gayle & Phillips, 6 Ala. Rep. 305, the question was whether the lien of the executions of the plaintiffs in error was suspended by the injunction awarded at the instance of Lang’s administrator, to restrain the sale of the property now in controversy, so as to give a priority to the mortgage by'McRea to Bates, which was executed pending the injunction. The effect of the sale under the executions to convey the joint estate was not controverted; and as the purchasers under the mortgage were suing at law, we should think they could have gained nothing by establishing the exemption of Lang’s interest from liability to sale on the executions against his surviving partner; for the mortgage at most could only pass the equity of the mortgagor, and this would be nothing more than an equity upon which the plaintiff, in ejectment could not recover. But we need not notice that case further, as it cannot constitute an element in the decision of the present, which asserts the title, jBesides, it was an action of ejectment, and perhaps for that reason is not conclusive upon the title of
The foregoing opinion was delivered by the late Chief Justice, at January Term 1849, and was held up to await the result of an application thereupon made by the defendant in error, supported by affidavit, to modify the decree so far as to reverse and remand the case, or at least to dismiss the bill without prejudice to the title derived under the deed of trust executed by McRea to Bates.
On first reading of the affidavit which is filed in support of the petition, I thought it was materially inconsistent with the deposition of the same witness. But after a careful comparison of the deposition and affidavit, we think they are not necessarily inconsistent, except in one point, and that we think admits of such explanation from what-is stated as to relieve the motives of the witness from suspicion. The witness states in bis deposition that he' left assets with McRea and Lang, among which was the note on Graves, — nothing more is said about those assets. It is therefore clear that the witness might, then have stated more in relation to them', as he has now done by bis affidavit. This, however, may not have been thought by the witness to be necessary, and we think we may fairly presume that he did not. The witness stated enough in regard to the note .on Graves, if taken according to his own language throughout, (and the chancellor did so take it,) to induce the party who had his deposition taken to suppose that any explanation about the other assets was immaterial, which relieves the party of the imputation of negligence. But this court, by construction of the entire deposition, arrived at the conclusion that the witness, on one point, .did not mean precisely what he said, and it now appears by the affidavit of the witness that this court was right. The witness stated .in his deposition that he paid his debt to .Bates himself, and now by his affidavit it appears that he paid .but part of it. This is the point of inconsistency. But it appears by the affidavit, in substance, that he put funds into the hands of McRea & Lang to pay it all, which were misapplied. Without violence to any authority cited by the counsel for the plaintiffs in error, as we understand them, we may now dismiss the bill without prejudice to the title of the defendant in error, which is secondly stated in their bill, and which he obtained by purchase from Gayle & Phillips, and we dismiss the bill accordingly
Concurrence Opinion
I concur in dismissing this bill without prejudice to the extent above stated by Judge Parsons, but I arrive at my conclusion from the record. Whether the affidavit submitted can be regarded for any purpose — Quere ?