85 Ky. 508 | Ky. Ct. App. | 1887
delivered the opinion of the court.
We can not review the accounts between the appellant, E. B. Seeley, and D. B. Campbell, as partners composing the firm of Campbell & Seeley, because Cámpbell is not a party to this appeal. They are, therefore, not now involved.
,The deed of Campbell to Seeley to an undivided one
It is not contended that the partnership existed prior to the time of the conveyance by Campbell' to Seeley. It is not shown that any firm indebtedness was created, or any firm business transacted, prior to the time when the mortgages were executed, unless in a single instance ; and the debt which may then have been created was, some time after its inception, embraced with other debts in a joint note, nearly all of which was subsequently paid off with firm means; and in any event it does not appear that the mortgagees, when they became such, knew of the existence of the firm, if, indeed, it was then in being.
In Jones on Mortgages, volume 1, sections 119 and 120, it is said: “Land conveyed to members of a co-partnership as tenants in common, but purchased with copartnership funds and used for copartnership purposes, is treated in equity as copartnership property. The creditors of the copartnership are in such case entitled to priority of payment out of it in preference to the creditors of individual members of the firm. But if one member of the copartnership mortgages his apparent interest as tenant in common of such
* A mortgage made by a partner of his interest in partnership real estate, to one who knows it to be such, is not a mortgage of the partner’s undivided interest in such real estate, but of his interest in the . portion mortgaged after the payment of the firm debts upon a settlement of the partnership accounts.” Boone on the Law of Mortgages, section 26, is to the .•same effect.
If a mortgagee fakes a mortgage with knowledge of facts which make the property in equity assets of a firm, then he can not ask to stand in front of those who have a right to' have it applied as partnership assets. He, however, holds as a purchaser, and if he had no notice that it was partnership real estate, then there is no prevailing equity in favor of the partnership or its creditors. It might properly be held, perhaps, that the continued use of the property by the partnership is notice of its equitable right in it; but in the case now presented, it does not appear that the mortgagees knew, when their mortgages were executed, that the firm of Campbell & Seeley was using the property, or even that such a firm existed.
This is not all, however. It is not averred in the pleadings that it was then in existence even. The appellant, Seeley (a defendant below), in his amended
The judgment giving the mortgagees priority as to the mill property is correct.
One other question remains to be considered. The mortgage to Mitchell also embraced a tract of land known as “Kopley Knob.” In his petition, however, he did not describe it, or ask that his lien be enforced against it. The answer of Seeley, however, and which
It also averred that one Rodes had a mortgage lien upon the “Knob,” then in the form of a judgment; and that “ said Rodes has assigned and transferred said lien, or will assign and transfer said lien judgment to this defendant,” and claimed that it was superior-to- the mortgage liens of Mitchell and Mrs. Whitehead, and asked its enforcement and the sale of the “Knob” to pay it. This pleading was filed on June 19,1882. Subsequently the Mitchell'lien was set up as to the “Knob,” and its enforcement asked, subject, however, to the lien of Seeley for the Rodes judgment.
He, however, in response to it, claimed the property absolutely by reason of the following facts :
The Rodes judgment was rendered on February 12, 1878. A supplemental judgment, directing the execution of the first one, was entered on October 29, 1880. Seeley appears to have purchased it prior to the filing of his answer on June 19, 1882, in this suit, but it was not assigned to him until August 1, 1882. Neither Mitchell or the party to whom he has assigned his debt were parties to it. After Seeley had thus set up his lien for it in this suit and asked a sale of the property to pay it, and while it was pending, and on August 28,' 1882, he had the “Knob” land sold under the Rodes judgment; purchased it; had the sale confirmed, and a deed made to himself. He, therefore, now claims it absolutely, and resists a sale of it in this action.
It is true that the Mitchell mortgage was executed
The parties had a right to believe that the question of lien would be settled in this suit. The appellant Seeley had asked this very thing. To say now that he is entitled in equity to hold the property as the owner by virtue of his purchase under the Rodes judgment would allow him to profit by his own conduct, which was at least misleading to the other party. The latter had a right to believe, from the conduct of the appellant, that he had abandoned the enforcement of the Rodes judgment, save in this action. The supplemental judgment in the Rodes case was entered prior to the assertion by Seeley of his lien in this suit; and the conduct of the latter in thus asserting it deprives him of the right to. say that the other lien-holder acquired his claim while there was a lis pendens, and must be held as to such
The lower court correctly held that the appellant as to Mitchell’s assignee had a lien only upon “Kopley Knob, ’ ’ and properly ordered its sale to satisfy the liens, giving the appellant the priority.
Judgment affirmed.