37 Ind. 526 | Ind. | 1871
The appellant sued Nathan Sohl and his wife, Catharine Bockman, guardian of Frank Gerstner, an infant, Walter N. Evans, and John F. McClellan, alleging in his complaint that Sohl and wife executed a mortgage to him of certain real estate as security for the payment of the purchase-money due therefor, evidenced by a promissory note, a copy of each of which was filed with the complaint, and alleging, further, that by mistake the mortgage embraced the whole, when it should have embraced only the undivided óne-third thereof; that said other defendants claim
At the first appearance of the parties in court, the plaintiff dismissed the action as to Catharine Bockman, Walter N. Evans, and John F. McClellan, but on their motion, Evans and McClellan were again made parties to the action, ^ohl and wife made default, and judgment was rendered for the amount due the plaintiff, and for the sale of the mortgaged premises, subject to any interest of Evans and McClellan therein.
At this point, McClellan filed a paper, stating that he had sold his interest in the mortgaged premises to James L. Evans; and he went out of the case, and James L. Evans came in as the successor to his interest in the controversy.
For an answer and cross complaint, Walter N. Evans and James L. Evans alleged against Smith and Sohl and wife that on the 22d day of February, 1868, Walter N. Evans purchased all the property described in the complaint at a judicial sale, made by James L. Evans, as a commissioner of the Hamilton Common Pleas, for eleven thousand two hundred dollars, subject to liens thereon amounting to eight thousand five hundred -dollars, making nineteen-thousand seven hundred dollars, and received a certificate for a deed if the sale should be apprbved by the court; that the said eleven thousand two hundred dollars was found by the court to be due to A. J. and L. Sohl and William Spotts, one-half to- Spotts and the other to A. J. and L. Sohl. But the defendants allege'the truth to be that one-half of said eleven thousand two hundred dollars, ordered to be paid as aforesaid to said A. J. and L. Sohl, was in reality due to, and was the property of, the said Nathan Sohl; that within less than one week after said Walter N. Evans became the owner of said property as aforesaid, he sold the same to the firm of Walter N. Evans, Nathan Sohl, and William Spotts for the same sum which he agreed to pay for the same at said commissioner’s sale; and the said firm agreed to take said prop
The prayer is, that the court will order, first,- that an account be taken of the partnership business at the time when the first firm, that of Evans, Sohl, and Spotts, was dissolved, finding the value of the partnership property and the amount of the indebtedness.of the said firm at that time; and in the event that the allegation above be found true, that the amount of the said-debts was in excess of the value of the property, that the property be declared to be holden liable for the payment of the said partnership debts, and that the said Nathan Sohl had no interest in the said mortgaged premises which hé could mortgage, or at least that the said property is not liable to the plaintiff’s mortgage; second, that a like account be taken of the condition of the said firm of Evans, Sohl, and McClellan at the time when said Nathan Sohl finally withdrew from all connection with.'
Several errors are assigned, but we shall consider only one of them; that is, that the court improperly overruled the demurrer to the cross complaint.
The mortgage executed by Sohl, according to the allegations of the cross complaint, was given to secure his individual debt to Smith. The court adjudged a. foreclosure -of the mortgage, in this action, and a sale of ¡the mortgaged premises, subject to any interest of Evans and McClellan. A sale made under this judgment would confer upon the purchaser whatever interest Sohl had in the property at the time when the mortgage was'executed. That interest consisted not of one-third of the partnership property, but of one-third of whatever might be the ultimate balance after payment of the partnership debts and the settlement of the accounts between thepartners. This interest, we think, Smith, the mortgagee, had a right to sell. We do not think that it is competent for the owners of the property to set up the existence of partnership debts, which they allege to be equal' to, or greater in amount, than the partnership property, and, on this ground, claim that the property shall not be ■ sold.
On a dissolution, each partner has the right to insist upon a sale of the partnership property, as the proper mode of ascertaining its value; and one or more of them cannot, in the absence of an agreement to that effect, retain the property at a valuation. Lindley Partnership, 1023, et seq.; Story Partnership, sec, 207,
One succeeding to the interest of a partner in the concern, by purchase or assignment from him, or by sale on execution against him, or on a mortgage of his share (any one of which operates as a dissolution of the partnership), has the right to insist upon an account and sale. Lindley Partnership, 95 7; 1 Story Eq. Jur., sec, 677.
When the mortgage in question was executed by Sohl to Smith, May 20th, 1868, Walter N. Evans, Nathan Sohl, and William Spotts were the members of the firm then existing. On the 13th of October, 1868, this firm was dissolved, as shown by the cross complaint. It is not easy to see how the rights of Smith, under his mortgage, could be-affected by the formation of the various new firms which were afterward constituted, or by their subsequent management of the property in which he had thus become interested.
We are quite clear that Smith had a right to foreclose his mortgage, and sell whatever ultimate interest of Sohl he acquired by virtue of the mortgage, notwithstanding the existence of partnership debts. A sale under the judgment, as entered, will not affect the right of his co-partners, if any they have, to insist upon the application of the joint property to the payment of the firm debts, and to the payment of any balance due to them.
As bearing more or less directly upon this question, we refer to the following additional authorities: Taylor v. Fields, 4 Ves. 396, and n. 1; Conwell v. Sandidge’s Adm’r, 8 Dana, Ky. 273; Hodges v. Holeman, 1 Dana, Ky. 50; Wilson v. Bowden, 8 Rich. 9; Horton’s Appeal, 13 Pa. St. 67; Murray v. Murray, 5 Johns. Ch. 60; Mathewson v. Clarke, 6 How. U. S.
The cross complaint in this case is not adapted to a settlement of the affairs of the firm, which was dissolved the 15th ■of October, 1868, and cannot be sustained as a complaint for that purpose. Whether the facts alleged in the pleadings, and adduced in evidence, show .that the debt due to Smith was or was not an individual debt of Sohl, we do not decide. Nor do we decide anything with reference to the question of estoppel, presented by the pleadings.
The court should have sustained, instead of overruling, the demurrer to the cross complaint.
The judgment Is reversed, with costs; and the cause is remanded.