Opinion
December Term, 1854.
Property held by copartners in a trading firm, is not the subject of suit for partition under the Act of 1829. Nor will it become so by the rights of the copartners passing into other hands. Such rights can only be, with propriety, dealt with in a Court of Equity.
A dissolution of a copartnership without a settlement of its affairs, does not convert the members of the firm, or the purchasers of the partnership effects under them, into tenants in common, so as to authorise a proceeding under the Act of 1829.
PETITION for the sale of a slave, for partition, tried before his Honor Judge CALDWELL, at the Fall Term, 1854, of Craven Superior Court.
J. W. Bryan, for plaintiffs.
Donnell, for defendant.
The slave in question had belonged to the defendant, and by him sold to one Prentiss, who was a partner with one Masters in a tannery, called the Linden tannery, and there was evidence that he had been put to work at that business, and had been treated by both the partners, in some respects, as copartnership property. The plaintiffs allege in their petition, that Prentiss and Masters were tenants in common of the slave Daniel, that they purchased, under a deed in trust made by Prentiss, in September, 1848, his half of the property; and that the defendant having purchased that of Masters, they became tenants in common likewise; and they pray a sale and division of the proceeds.
The defendant denied in his answer that he held as tenant in common with the plaintiffs, or that they have any interest in the slave Daniel. He avers that the slave was partnership property, and that as such, any sale made by Prentiss for his own emolument, was a fraud on the rights of the firm, and therefore void: that Prentiss' interest in the said slave had been sold by executions against him and purchased by the defendant before any assignment or transfer of his rights in the same to the plaintiffs. He alleges further, that he purchased Masters' interest in the slave in question, and afterwards finding that the firm was largely in debt, and that this property was still subject to these debts, in order to remove the incumbrance, he paid off and discharged the debts of the copartnership, and that this was done before the filing of this petition. He also avers in his answer, that the interest of the said Prentiss in the slave Daniel, had been conveyed by a deed in trust to one Bishop, dated November, 1848; and that he had purchased under the sale of Bishop, and held Prentiss' interest in Daniel by this title also.
Upon the plea of the defendant, that he was not a tenant in common with the plaintiffs, of the slave Daniel, there was an issue taken, and was submitted to the jury on the trial of the cause.
Upon the trial of the issue, his Honor held "that the defendant acquired no interest in said Daniel by the sheriff's sale, and that none was conveyed by the deed from Prentiss to the said Bishop: that it was not important whether the said Daniel was held by the original owners as tenants in common or copartners, that the deed of September, 1848, operated as a dissolution, and that the equity insisted on did not appear; and if it did, it could not be noticed in this Court." To these instructions defendant excepted.
Verdict for the plaintiffs.
Judgment and appeal.
The Act of 1829, chap. 17, re-enacted in 1836, 1 Rev. Stat. chap. 85, sec. 18, authorises one tenant in common of slaves to file a petition, either in the County or Superior Court against his co-tenant for the purpose of obtaining a partition of such slaves either specifically, or if necessary, by a sale of them. The present suit is a proceeding under that Act, but the defendant in his answer, denies that the plaintiffs have any interest in the slave in question; and, if that be not so, he insists that plaintiffs' interest is that of copartners, and not that of tenants in common with him. The testimony given on the trial shows, or at least tends to show, that the original owners from whom the present parties claim, stood towards each other, with regard to the ownership of the slave, in the relation of copartners, instead of tenants in common. His Honor in the Court below, held that it made no difference whether the original owners as copartners or as tenants in common, for that the partnership had been dissolved, and that the equity which one of the partners might have had against the other as to the settlement of the partnership and the disposition of its effects, could not be noticed in a court of law. The questions then are 1st. Whether the present parties have become tenants in common by their purchases respectively from the original partners? and 2ndly, if they have not, but have become themselves copartners of the slave, whether as such, one of the parties can sustain this proceeding against the other for a partition?
We think that both questions must be decided against the plaintiffs, upon principles which have received the sanction of this Court. In Treadwell v. Roscoe, 3 Dev. Rep. 50, HENDERSON, C. J. said, "It is true that the purchaser of partnership property under a fi. fa. against one of the partners, stands in the place of such partner, and can only claim so far as the article purchased extends, what that partner could claim, that is, a share in the profits, or rather surplus, after the payment of the debts of the firm." So of a sale by one of the partners of an article belonging to the partnership for the payment of his own separate debt, RUFFIN, C. J. said, "that as respects the right to the thing sold, the assignee stands in the shoes of his assignor," Wells v. Mitchell, 1 Ire. Rep. 484. Both these cases have been referred to, and recognized as authority in the very recent ones, Blevins v. Baker, 11 Ire. Rep. 291, and Vann v. Hussey, 1 Jones' Rep. 381. As the plaintiffs and defendant then, upon their respective purchases from the original owners, who, in this argument, are to be taken as partners, stood respectively in the place of their assignors, they must stand towards each other as partners, and not as tenants in common. If this be so, then it is said by RUFFIN, C. J., in Baird v. Baird, 1st Dev. and Bat. Eq. 539, that "there can be no division of partnership property until all the accounts of the partnership have been taken and the clear interest of each partner ascertained." The reason of this is stated very fully and clearly by the same eminent Judge, in Wells v. Mitchell, ubi supra, "The difference between tenants in common and partners, is exhibited more plainly, when it is considered what remedies persons standing in those relations respectively have against each other. If a tenant in common destroys the chattel, or, as some think, if he sell the whole, his fellow may have trover or trespass against him; but it is clear between partners, those actions do not lie: nor indeed, any others at law. Every thing rests in confidence between partners, and lies in account while the partnership continues, and if one of them sell, or take, or destroy the joint effects, all that can be done is to charge to him the value in account. The interest of partners in particular chattels cannot be determined by the number of the partners, or their shares of the profits, nor can any one of them claim a division of specific articles: an account must be taken of the whole partnership, so as to ascertain the clear interest of each partner: until such account be taken, it cannot be told whether the partner, who for his benefit sold or consumed the partnership property was not justifiable, in as much as his interest in the joint stock may have exceeded the value of the property." After some remarks about the difficulty of settling controversies between partners in a court of law, he concludes thus: "As a court of law thus finds itself incapable of ascertaining the rights of the parties and doing justice between them, it ought not to assume the jurisdiction for any purpose, but leave the whole subject to that tribunal which can administer exact justice in the premises."
It is very clear from these authorities which are founded in reason and good sense, that Prentiss could not have sustained this proceeding against Masters, for the sale and partition of of the slave Daniel, provided they held him as partners; and it seems to us equally clear, that those who purchased their interests respectively in the said slave, must be governed by the same rule. The Judge erred in charging otherwise, and there must be a venire de novo.
PER CURIAM. Judgment reversed.