Case ID: ad_91/html/0197-01.html
Source: Caselaw Access Project
Author: {"author": "O’Brien, J. :", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Johanna Hauptmann, Respondent, v. William Hauptmann and John Bottomley, Appellants, Impleaded with Susanna Bottomley.
    
      Dower interest in partnership realty — it should not. be adjudged to exist until the dissolution of the firm, and, the payment of Us debts — such a right affords no basis for an additional allowance.
    
    A partner’s interest in the partnership realty stands upon the same footing with his interest in the partnership personalty, and is simply a right to share in what may remain after adjusting the partnership affairs.
    There is no right of dower, inchoate or absolute, in the copartnership real estate during the continuance of the partnership, nor, after its dissolution, while the firm creditors remain unpaid and the equities of the partners remain unadjusted.
    In an action brought by the wife of a partner, before the dissolution of the copartnership and before the payment of the partnership debts, to secure an adjudication that she is entitled to an inchoate right of dower in the partnership property, it is error to grant the wife the relief asked for, as her inchoate right of dower only extends to the interest which her husband has left in the real estate after the dissolution of the copartnership and the payment of the partnership debts.
    In such a case it is improper to grant the wife an extra allowance based on the value of the dower interest, as such interest cannot be determined at the time of the trial.
    Appeal by the defendants, William Hauptmann ■ and another, from a judgment of the Supreme Court in favor of the plaintiff, entered in the office of the clerk of the county of New York on the 5th day of May, 1903, upon the decision of the court rendered after a trial at the New York Special Term, and also from an order entered in said clerk’s office on the 5th day of June, 1903, granting the plaintiff an extra allowance.
    This action is brought to set aside a separation agreement made between the ■ plaintiff and her husband, the defendant William. Hauptmann, by the terms of which they agreed to live apart. At the time of the execution of the separation agreement Thomas Brady, and wife and the defendant William Hauptmann and wife executed and delivered to the defendant John Bottomley a conveyance of five parcels of real estate which, upon the trial, it was'conceded were bought with partnership moneys and belonged to the firm, of Brady & Hauptmann. The next day John Bottomley and wife conveyed to said Thomas Brady an undivided one-half interest in the said five parcels of property. It is conceded that Bottomley paid no consideration and the conveyance to him by the copartners and their wives was made so that the firm real estate could be deeded free from any objections or obstructions on the part of the plaintiff, and that 'he took the title as an accommodation to the firm and was to hold it Until the firm could sell -it for the copartnership account, and that these conveyances were made in accordance with the separation agreement which had been entered into between the plaintiff and her husband.
    Upon the trial it was further conceded that the separation agreement was invalid ; and with the fall of that instrument the deed to Bottomley necessarily fell. The Special Term decided that the real estate involved was copartnership property and that the plaintiff was entitled to an inchoate right of dower therein, subject to the primary claims growing out of the copartnership relations; and it is from this latter part of the decision and the order granting the extra allowance that certain of the defendants appeal.
    
      William J. Leitch, for the appellants.
    
      Michael Schaap, for the respondent.
   O’Brien, J. :

It was decided by the learned judge at Special Term that the several parcels of land involved in this action were copartnership property. As the plaintiff did not appeal from this decision, she cannot contend in this court that some of the property was not partnership property. The relief which she obtained was upon an adjudication that it was all partnership property. The judge correctly said in his opinion that partnership real estate retains its character as realty with all the incidents of that species of property, except that ■each share is impressed with a trust implied by law in favor of the ether partner, that so far as is necessary it shall be first applied to the adjustment of partnership debts and the payment of what may be found due from one partner to tlie other. To that extent only is the character of the property deemed to be changed into personalty.” (Darrow v. Calkins, 154 N. Y. 503.) Hence the learned judge concludes that plaintiff is entitled to “ an inchoate right of •dower in the property in question, subject only to the primary ■claims growing out of the partnership relation.” This legal conclusion we do not regard as sound.

The learned judge overlooked the facts here shown to exist, viz., ■that prior to the 31st of July, 1901, when the agreement between plaintiff and her husband was made, and down to the time of the •trial, the partnership affairs had not been settled, the partnership was still existing, and there were claims of creditors to be paid out of the partnership assets.

The decisions are uniform in holding that a partner’s interest in the firm realty stands upon the same footing with his interest in the personalty, and is simply the right in what may remain after adjusting the partnership affairs. There seems to be a uniform line of decisions and text writers in favor of the proposition that there is no right of dower, inchoate or absolute, in the copartnership real estate during the continuance of the copartnership, nor after its dissolution, while the firm creditors remain unpaid and the equities of the partners unadjusted. (Delmonico v. Guillaume, 2 Sandf. Ch. 366 ; Coster v. Clarke, 3 Edw. Ch. 428, 438 ; Sage v. Sherman, 2 N. Y. 417 ; Riddell v. Riddell, 85 Hun, 482 ; Dawson v. Parsons, 10 Misc. Rep. 428 ; 2 Kerr Real Prop. §§ 952, 986 ; 1 Scribner Dower [2d ed.], 575 ; 1 Bates Part. § 290 ; Pars. Part. [4th ed.] 359, 362, note.)

The Special Term, therefore, went too far in adjudging that plaintiff was entitled to an inchoate right of dower in this partnership property.

Whether she will or will not have any dower right in any of this property will depend on whether or not, at the dissolution of the copartnership and after the payment of the partnership debts, her husband has any interest left in the real estate, and to that extent, and to that extent only, she will have a dower interest in these lands. In setting aside, therefore, the agreement of separation and the deed to Bottomley as null and void, the Special Term gave to plaintiff all the relief to which she was entitled, because it placed her in the same position she was in when these instruments were executed by her, and will leave her ultimate rights in the real estate to be determined by the final outcome of the copartnership dealings."

We think, too, that the granting of an extra allowance was error, because there was no basis for it. The subject-matter of the action, as bearing upon the question of an extra allowance, was the value of plaintiff’s dower right. An allowance can only be granted where the subject-matter of the action has a value and such value is shown. (Heilman v. Lazarus, 90 N. Y. 672, 674 ; Conaughty v. Saratoga County Bank, 92 id. 401, 406.) As the value of the dower interest could not at the time of the trial be determined, because the property was subject to unascertained claims against the partnership, there was not, as stated, any basis for the extra allowance.

The judgment should accordingly be modified by striking out the provisions awarding plaintiff an inchoate right of dower and an extra allowance, and as so modified it should be affirmed, with costs and disbursements of this appeal to the appellants.

Van Brunt, P. J., Ingraham, McLaughlin and Laughlin, JJ., concurred.

Judgment modified as directed in opinion, and as modified affirmed with costs and disbursements of appeal to appellants.