Opinion
12-17-1823
Deloney v. Hutcheson, & c
Gilmer, for the appellant. Leigh, for the appellee.
[Syllabus Material]
This was an appeal from the Richmond Chancery Court.
Deloney and Ferrell, entered into a mercantile partnership; and purchased together a small tract of land in Mecklenburg county, on which their store was kept. Some years afterwards, Ferrell died, intestate, leaving a widow and four children; and Deloney became administrator on his estate. The widow of Ferrell, the four children, by their mother, as their guardian, and Deloney, united in petitioning Mecklenburg Court, to have one moiety of the land aforesaid sold; as the land, when divided among the representatives and heirs of Ferrell, would not amount to one hundred dollars each, if sold in separate parcels.
The Court accordingly granted the petition, and appointed commissioners to sell the land. Deloney became the purchaser, and executed his bond for the purchase money.
The bond not being paid when it became due, suit was brought on it by Hutcheson, surviving commissioner, and judgment obtained.
Deloney then filed a bill of injunction, stating the foregoing facts, and that he had administered all the personal estate of the said Ferrell: that the estate is indebted to him, in his character of surviving partner, and administrator, in the sum of several thousand dollars: that, the debt aforesaid is the only estate, real or personal, which then remained; and that if it should be paid over to the widow and heirs of Ferrell, he would never receive any portion of the debts due to him; that, the debts due to him, as administrator, are of such dignity as to subject the real estate, and bind the heirs of his intestate; and the debt due to him as surviving partner, ought to charge this particular property, " which was bought for partnership purposes, and was held as joint stock." He therefore prayed, that the judgment might be injoined, and made Hutcheson, Mary Ferrell, and the infants, defendants.
The injunction was awarded.
Hutcheson answered, that he was ignorant of the various matters alleged in the bill: that he only acted as commissioner to sell the land, under the order of Court; and that he is entitled, at all events, to the amount of his account, for expenses in carrying the order of the Court into effect, for prosecuting the suit at law, and for his personal trouble in attending to, and defending this suit.
The answer of Mary Ferrell states, that her husband was possessed of a considerable estate in lands, slaves, and other personal property, at the time that he entered into the partnership mentioned in the bill, when he sold his land, as she believed, to set up the store, and commence business: that, she understood, that her husband advanced £ 500, and the complainant, £ 800; and their proportion of profit or loss was to be in the same proportion; and her husband was to receive wages for his personal services in conducting the business: that, some time afterwards, a dissolution of their partnership took place; upon which event, she understood, that the complainant kept them on his own account, and that the complainant was on that account indebted to him in £ 700, or upwards: that, upon her husband's death, (who died intestate, possessed of a tract of land, several slaves, and other personal estate,) the slaves and personal estate, as well as all the personal estate and all the remaining debts and subjects due the concern, came into the hands of the complainant: that all the estate of slaves and personal property was sold by him, and the proceeds thereof have come to his hands: that, whether the defendant has applied the whole proceeds of the estate to the payment of his intestate's debts, she cannot say; but, she thinks it strange, if it be true that he had expended more than the estate, in the payment of his intestate's debts, and the subjects of the partnership transactions, that he should omit to return an inventory, and account of sales to Court, and should so long have delayed a settlement of his accounts: that, it is highly improbable that the complainant is in advance to his intestate's estate, as he could have had no hope of reimbursement, after the assets were exhausted, and he was always embarrassed in his own affairs, and frequently compelled to sell his own property to meet his engagements. She, therefore, calls upon him for a close of his administration, and a settlement of his partnership transactions, & c.
On motion, the Court of Chancery dissolved the injunction, and ordered that the plaintiff render an account of his administration of the estate of Ferrell, deceased, before a commissioner of the Court, who was also to state and settle the accounts of the copartnership of Ferrell, Deloney, & c.
Deloney obtained an appeal from a Judge of this Court.
Decree affirmed.
Gilmer, for the appellant.
Leigh, for the appellee.
The case was submitted.
Judge Green. Judge Coalter. Judge Brooke. The Judges delivered their opinions. [*]
OPINION
GREEN, JUDGE
In England, when partners purchase an estate jointly for the purposes of their trade, although at law, upon the death of one, the estate survives to the other; yet, in equity, it is considered as an estate in common. If the representatives of the deceased partner claim this equity, they must submit to the rule, that he who will have equity must do equity, and pay to the surviving partner whatever may be due to him on their partnership transactions. In Virginia, the jus accrescendi is abolished, and the representatives of a deceased partner, claiming the legal title, can be put under no conditions. The surviving partner, if he be a creditor, can have no other remedy against the real estate, than any other creditor can have. There is, possibly, another ground, on which one partner may have a lien for any balance due upon the partnership transactions, upon real property purchased with the partnership funds. If one purchases, and pays for land, and causes it to be conveyed to another, there is a resulting trust for the purchaser. If a purchase be made with the funds, and for the purposes of the partnership, there may be a trust, although the conveyance be to the partners in their individual characters, for them in their characters as partners, and for the purposes of the partnership; and the consequence may be, that each partner may have a lien upon it, for the balance due to him, from the concern; or, rather an interest in it, proportioned to his interest in the partnership funds. Sugd. Law of Vend. ch. 15. This resulting trust can only arise upon the original payment being made with the partnership funds; not from a subsequent agreement to hold the property as partnership stock; for, such an agreement would be void under the statute of frauds. But, however this may be, the plaintiff has not brought his case within this principle; for, he does not alledge that the property in question was purchased with the partnership funds. I do not think, that the statement that he and Ferrell purchased the land on which their store was kept, and that it was bought for partnership purposes, and was held as joint stock, is equivalent to such an allegation; for, all this is consistent with the fact of each partner paying his proportion of the purchase out of his individual funds.
If the appellant was a creditor, and had, as administrator, paid debts which bound the heirs, he might, upon the principle of marshaling assets, reach the fund in question. But, he should have been prepared, at the time the motion was made to dissolve, to shew, at least, that he had paid such debts, and have exhibited the accounts of his administration, on oath; otherwise, the consequence would be, that a most expensive litigation might have continued in vain, for several years. The conduct of the appellant raises a strong presumption against him. He united with the widow and children of Ferrell, in the petition for the sale of the property in 1809, and never asserted the claim he now sets up, until 1818.
I think the order appealed from is right, and should be affirmed; especially, as he is not precluded from moving to reinstate the injunction, upon shewing, by the deed, or otherwise, that the land was purchased with the partnership funds, and making a proper case in other respects.
JUDGE COALTER.
If it was not wrong to grant the injunction in this case, because the complainant did not file with his bill his administration and the partnership accounts, so as to shew precisely how, and to what extent, he claimed a credit under each, then it was wrong, in my opinion, to dissolve the injunction before taking those accounts, or at least apprising the party, that it was necessary to exhibit them, and his vouchers, in the cause. This could easily have been done, by dissolving the injunction, unless they were filed a given day. The affidavit of the party to his bill, is always taken as a sufficient verification of it, to authorise an injunction; and, I believe, the usual practice is, especially in cases of executors or administrators, where accounts necessarily exist, to refer them to a commissioner, and not to burthen the record, in the first instance, with voluminous accounts and vouchers; and this reason would also apply to partnership accounts, which are, generally, not only intricate, but voluminous. It is not denied, that the appellant was administrator, and also surviving partner; and, if the appellees really believed they had claims against him, in either character, to the amount now to be recovered, it is strange that no attempts had been made to bring him to a settlement. Besides, it is stated, that these parties will be unable, if the money goes into their hands, to refund it. This makes the case, in this respect, stronger than that of Miller's executors v. Rice, and others, 1 438.
If, however, the Chancellor thought, from the allegations in the answer, that there were reasons to suspect that no such accounts existed, he could have given the party an opportunity to file them, by a nisi decree, as above stated, or, at farthest, by directing the money to be paid into Court, or to be placed there by the officer, after it should be made on the execution, so as finally to have it within his power.
For these reasons, I am for reversing so much of the decree as dissolves the injunction, and for affirming the residue.
JUDGE BROOKE.
The appellant was in the County Court of Mecklenburg, upon a petition, with the widow and children of his intestate, to sell the land of his deceased partner, when he applied for the injunction. The equity which he alledges in his bill, was a proper subject for that Court in which he had taken administration of the estate of his partner. His equity is in hostility to the decree he asked for in that Court. If there is any foundation for it, upon a bill filed there, he would have been relieved, and the account of his administration would have been taken there, instead of the Chancery, Court at Lynchburg; but, he has furnished no proof in that Court, in support of his bill, the allegations in which being denied by the answer, the injunction was properly dissolved. I am, therefore, of opinion, that the decree ought to be affirmed.
Decree affirmed.
[*]Judge Cabell, absent.