82 Iowa 256 | Iowa | 1891
The material facts shown by the pleadings are substantially as follows: Thomas Hill died testate in the year 1885. By his will he devised and bequeathed all his property to his wife, Eliza D. Hill. Mrs. Hill died intestate in the year 1886, leaving the plaintiffs and others as heirs. John N. Coldren qualified as executor of the estate of Thomas Hill, and entered upon the discharge of the duties of the office about the eighteenth day of February, 1888. On the third day of the next month he filed an application for the appointment of a special administrator. The grounds alleged for the application were that during the lifetime of the testator he was a member of a copartnership composed of himself, Ezetiel Clark and the applicant Coldren; that the copartnership was known as the Iowa City Bank, and commenced business in 1875; that Clark owned one-half of the bank, and each of the other partners one-fourth; that the assets of the bank consisted of moneys and credits and certain real estate in Iowa City, for which the firm was indebted in a large amount; that in December, 1882, Hill checked out all his money in the business of the firm, and withdrew from the firm, relinquishing all his interest in its property, the remaining partners agreeing to pay all its outstanding obligations; that no formal settlement or release in writing was made by the parties ; that to prevent claims being made by persons not acquainted with the facts, and to close the business of the copartnership in due form, and save the expense of litigation, the appointment of a special administrator was asked to investigate, settle and close all unsettled matters, if any, of the Iowa City Bank; and such orders
In May, 1888, Koontz filed a report which showed the following: Originally the partnership existed between E. Clark and Thomas Hill only. They acquired the title to lot 4, block 82, in Iowa City, at different times, and of different parties, a part of the title being in the name of Thomas Hill and a part in the name of E. Clark and Thomas Hill. The original consideration paid for all the property was eighteen thousand, six hundred and ninety-two dollars. Of that amount Clark paid fourteen thousand, eight hundred and ninety-two dollars and Hill eighteen hundred dollars. In 1875 the Iowa City Bank, a copartnership,. was organized. The capital stock of the bank was twenty thousand dollars, of which Clark paid • one-half, HiU one-fourth and Coldren one-fourth; and the interest of each partner was in proportion to the amount he so paid. The bank ceased to do business, in 1882. In 1880, Clark and Hill conveyed the title to the lot aforesaid to the copartnership, the Iowa City Bank. At that time there was an indebtedness created in erecting buildings on the lot to the amount of fifty-two thousand, five hundred and forty dollars. The entire expense of the buildings known as the “ Opera-House block” had been advanced by the bank. None of the personal funds of the partners were used in constructing the block. In 1882 the Iowa City Bank closed its business, and the Iowa City National Bank was organized. Hill withdrew his interest from the Iowa City Bank, and invested it in stock in the Iowa City National Bank. The old bank transferred to the new a part of the Opera-House block, the safes, fixtures and good will of the old bank, for 'thirty-five thousand dollars. That amount was applied upon the indebtedness existing for constructing the building, leaving still due an indebtedness of twenty-eight thousand, nine hundred and eighty dollars, which included the remainder of the cost of
The petition in this case alleges that the application •of the executor for the appointment of a special administrator, its approval, the order for and execution of the release, were all made without notice to or the knowledge of the plaintiffs ; that there never was in fact any sale made of the property of Thomas Hill, nor of his interest in the property of the Iowa City Bank; that there was never any transfer or release of title from Hill to Clark and Coldren ; that it was not necessary to sell the- interest of Hill in the property described to :pay the debts of the partnership, nor to pay the debts of Hill; that the value of the interest of Hill in said property .greatly exceeded the amount alleged to have been jpaid
I. The averments of the petition in regard to the condition of the Iowa City Bank and the interest of
The pleadings show that the district court, on the report of the special administrator, found that Hill had, in fact, sold his interest in the property of the firm tó the defendants, and that they had assumed to pay certain indebtedness, but that the agreements of sale and to assume the indebtedness were verbal. Conceding that the facts were as found, the court had ample power to direct the execution of a release, and to authorize the execution of such papers as would show that the affairs of thé copartnership were fully settled, and that the estate of Hill was not liable for any of the partnership debts. Such an exercise of judicial power was demanded by the interests of the estate of Hill and of the defendants.
II. But it is said that appellants had an apparent, if npt a real, interest in the Opera-House block, and
“Sec. 2487. When a person under such obligation to convey real estate as might have been enforced against him, if living, dies before making such conveyance,, the court may enforce a specific performance of such contract by the executor, and require him to execute the conveyance accordingly.
“Sec. 2488. It is not necessary to make any other than the executor party defendant to such proceedings in the first instance ; but the court, in its discretion, may direct other persons interested to be made parties, and may cause them to be notified thereof in such manner as the court may deem expedient. Heirs and devisees may, on their own motion, at any time be made defendants.”
It is said that, so far as these sections authorize the conveyance of property without notice to the heirs of an intestate, they are unconstitutional, as seeking to deprive a person of his property without due process of law. It is true, as a general rule, that the title to the real property of one who dies intestate vests immediately in his heirs, and not in the administrator of his-estate. But the descent of real property is regulated by statute ; and it is competent for the legislative power to impose upon property inherited such conditions as it shall deem proper to enact. In this case the sections, of the Code under consideration were in force when I-Iill died. The alleged interests of plaintiffs were acquired subject to their provisions. They provided a method for securing a conveyance, which the defendants were entitled to adopt. The plaintiffs were not deprived of their right to appear and contest the claims of the defendants, but were required to take notice of the proceedings, and appear and contest such claims and the right of the executor to execute a conveyance, or thereafter remain silent. We are of the opinion that the sections in question are not unconstitutional, as applied to the facts in this case. Mining Ass’n v. Reed, 80 Pa. St. 38. No fraud on the part of anyone is suggested,
III. The petition alleges that there never was in fact any sale made by Hill of the property in contro
As already stated, the petition, fairly interpreted, shows that the firm of which Hill was a member had not been dissolved at the time of his death ; its affairs had not been settled ; its debts were unpaid, and its assets had not been distributed. The real estate, which is the chief subject of controversy, was procured with partnership assets for the use of the firm in the prosecution of its business. It was held and used for that purpose, and was in all respects treated as partnership stock. That such was the intention of the firm in procuring it is shown in part by the fact that the title thereto was taken in the firm-name. It is the general rule, which has been frequently approved by this court, that in equity real property owned by a partnership will be treated as personalty, subject to the rules which usually govern that species of property. Paige v. Paige, 71 Iowa, 318; Hewitt v. Rankin, 41 Iowa, 35 ; Evans v. Hawley, 35 Iowa, 83 ; 1 Lindley, Part., star p.. 331, and notes; Parsons, Prin. Part., sec. 109, and notes ; Parsons, Part. 371.
But the death of Hill operated to dissolve the partnership. What effect did the dissolution have upon the title to the real estate ? It was impressed with the character of personalty for the purposes of the partnership, and the appellants contend that it ceased to have that character when the partnership was dissolved. It
It appears that the executor has made his final report, but it is not shown that he has been discharged. Before he was entitled to a discharge he was required to give notice of his application for that purpose. Van Aken v. Coldren, 80. Iowa, 254. Prom the similarity of names and facts stated in the case cited it may' be inferred that the report of the executor was approved, •and that he was discharged; but, if that be the case, the order affirming the report as final, under the facts stated in the petition in this case, was improperly .granted, and parties adversely interested should have made known their objections at the time and in the \manner provided by statute. See Code, secs. 2474, .2475; Van Akin v. Welch, 80 Iowa, 114. We must presume, in the absence of a showing to the contrary, that they had due notice of the application of the executor for a discharge. But it appears that the interest of the estate of Thomas Hill in the partnership business of the Iowa City Bank was, in fact, settled. It was the •duty of the executor to procure a settlement of that
The conclusions announced dispose of all questions in the case which we are required to consider. The= judgment of the district court is abeibmed.