Case ID: va-patt-heath_2/html/0766-01.html
Source: Caselaw Access Project
Author: {"author": "EIELD, P.,", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

*Jones et als. v. Neale et als.
    January Term, 1856,
    Richmond.
    Absent, Gilmeb, J., (wlio bad been counsel in tbe case in tbe court below.)
    1. Deeds — Redelivery to Grantor for Cancellation-Effect — Where land has been conveyed by deed of bargain and sale, tbe legal title of tbe grantee is not divested by tbe return of tbe deed to tbe grantor to be cancelled. (Grayson v. Richards, 10 Leigh 57, accord.)
    2. Partnership Realty — Interest of Partners. — Where real estate is purchased for partnership purposes and a conveyance is made to tbe partners in tbe name of tbe firm, tbe partners are tenants in common of tbe estate, and bold tbe legal estate subject to tbe equities of tbe partnership.
    3. Same — Conveyance by One Partner — Effect.—A conveyance by one partner of the entire property so purchased, passes to tbe grantee tbe legal title to an undivided moiety, subject to a trust in favor of tbe partnership creditors upon a settlement of tbe partnership accounts, and is void as to the residue.
    4. Same — Conveyance by One Partner to Secure Partnership Creditor — To Secure Individual Creditor— Effect. — a conveyance by one partner of an undivided moiety of real estate owned by tbe partnership, in trust to secure a creditor of tbe partnership, passes a good title both at law and in equity to such moiety, and such creditor is entitled to priority over all other creditors of the Arm: but when such property is coriveyed by one partner in trust to secure his individual creditors, the property remains subject to the payment of the partnership debts.
    5. Partnership Property — Conversion into Separate Property. — In order to convert partnership property _ into separate próperty, every requisite of transfer must be complied with according to the nature of the property assigned.
    
      6. Same — Same—Unsealed, Unrecorded Written Agreement between Partners — Effect.—A written agreement, not under seal and unrecorded, between two partners, that certain real estate belonging to the concern, shall be assigned to one of the partners as his separate property, is merely executory, and does not pass the legal title to such property.
    7. Same — Same—Same—How Annulled. — And if the partners subsequently divest themselves of their title to such property bythe execution of deeds to third persons, and thus disqualify themselves from executing the agreement, it is thereby annulled.
    *8. Equity Jurisdiction — Removal of Cloud on Title to Realty. — A court of equity will interfere in behalf of the holder of the legal title to real estate, to remove a cloud on the title, or any impediment or obstacle to the effectual assertion of his rights at law.
    9. Equitable Relief — Sale by Trustee — Inadequacy of Price. — A court of equity will not set aside a sale made by a trustee, on the ground of inadequacy of price, occasioned by the acts of the complainant at the sale.
    The facts of this case are fully stated in the opinion of the court.
    Stanard, for the appellants :
    The lot in controversy was purchased for partnership purposes, and the conveyance made to Neale & Bennett, who were tenants in common thereof. Brooke v. Washington, 8 Grat. 248.
    The surrender of the deed to Neale & Bennett to Rawlings by Neale, did not divest the title of Neale & Bennett. Grayson v. Richards, 10 Heigh, 57.
    Even if Neale & Bennett had .both surrendered that deed to Rawlings for the purpose of cancelling it and enabling him to execute another conveyance, their joint act would not have divested their legal title.
    A fortiori, could not one of them effect that object, in fraud of the rights of the creditors of the partnership and of the other partner.
    At the date of Neale’s conveyance for the benefit of the Messrs. James, the 10th July, 1840, the deed from Rawlings and wife to Neale & Bennett was in the hands of Hagood with the assent of Neale, and the legal title was in Neale & Bennett. The Messrs. James must have known, if they had inquired, as they were bound to do, that the title was not in Neale individually. Sugden on Vendors, 544.
    But the deed shews on its face, that the property conveyed was the property purchased of Rawlings by Neale & Bennett, and the Messrs. James therefore had actual notice that it was partnership property.
    1 A person dealing with a partner as to the Si social property is held to the same account as if he were dealing *with (, an executor or other fiduciary. Jack-áon v. Updegraffe, 1 Rob. 120.
    *' Each partner is a trustee for the other as to the partnership property. French v. Lovejoy, 12 New Hampshire R. 458. And an assignment of partnership property by one partner to secure separate individual debts is invalid as to partnership creditors. Vale v. Yale, 13 Conn. R.. 185.
    To claim the advantage of a purchase without notice, the purchase money must have been paid before notice. Wilcox v. Calloway, 1 Wash. R. 41.
    The Messrs. James were mere incum-brancers and paid nothing. This distinction between purchasers and incumbrancers was taken in the unreported case of Price v. Morris, decided by Judge Robertson, whose judgment was confirmed by the former Special Court of Appeals.
    As to the alleged division of property between the partners, no arrangement between them could deprive either of the right to dedicate the social property to the pay ■ ment of the partnership debts. And Neale himself, shortly before the conveyance by Bennett, under which the appellants claim, had attempted to convey the property, which had been assigned to Bennett in the alleged division, for the benefit of the partnership creditors. It is not for the appellees to complain of the inadequate price for which the lot sold, for it was the result of their conduct at the sale. Eorde v. Herron, 4 Munf. 316. The case would be different if the creditors of Neale & Bennett were here objecting to the fairness of the sale.
    As to the relief sought by the appellants, the deed from Rawlings and wife to Neale & Bennett should be set up and ordered to be recorded. Beverly v. Ellis & Allen, 1 Rand. 102.
    Grattan, for the appellees:
    The evidence in the record does not establish, that the deed from Rawlings and wife to the firm of Neale *& Bennett was ever delivered to the firm, or to any one for them. It was retained by Hagood for his own security, and was not delivered at all until 1841, when, after the payment of the purchase money by Neale, Hagood delivered it to him individually. There can be no doubt, upon the evidence, that certain property had been divided between the partners on the 17th September, 1838, and this house and lot set apart to Neale, as separate property. The agreements do not purport to be a complete and final division of the social property. Neale commenced business immediately after the dissolution on his own account, and it is very probable that he improved the lot out of means derived from the sale of goods purchased from the appellees. The house was not completed until some time after the dissolution.
    
      The deed to Neale & Bennett was not perfected so long as it remained in the hands of Hagood, who retained it for his own purposes. It was never delivered to Bennett or to any one for him. Before Hagood gave it up, Neale had become entitled to the property, and only received the deed from Hagood in order- to return it to Raw-lings to take a new one to himself. The case cited of Grayson v. -Richards, 10 Leigh 57, is wholly different from this. There the deed had been delivered, the grantee was in possession of the property, and the rights of his creditors had intervened.
    It is clear, upon authority, that so soon as, by an agreement inter se social property is assigned to one partner as separate property, it becomes liable for separate debts, and may be subjected to the debts of the individual partner, even though the firm becomes bankrupt. Collyer on Partnership, M 174, 223, 894, 903-4-5; Ex parte Ruffin, 6 Vesey, 119; Ex parte Eell, 10 Vesej', 347; Ex parte Williams, 11 Ves. 3; Jones v. Gibbons, 9 Ves. 407; Campbell v. Mullett, 2 Swanston, 575; Ex parte Peake, 1 Mad-docks, 346.
    The appellees, the Messrs. James, had no notice that this was partnership property, at the time they took their deed ..of trust.. There was no deed to the firm on ^'record. It is true the property was described as the lot purchased by Neale & Bennett of Rawlings, but they learned at the same time from the same party, who furnished the description, that the property had been assigned to Neale. Por the deed was written in the city of Richmond, and the description was furnished by Neale.
    An incumbrancer is a purchaser for valuable consideration. Jones v. Powles, 10 Cond. Eng. Ch. R. 310; Willoughby v. Willoughby, 1 T. R. 763, 767.
    A creditor of the partnership has no lien upon the partnership property, but a mere equity, which is derived through the equities of the partners. Unless Bennett had some equity, the appellants, who claim under the social creditors through him, can have none. Ex parte Ruffin, 6 Ves. 123. Ex parte Williams, 11 Ves. 3.
    Bennett had no interest remaining in this property, but.had transferred his rights to Neale in exchange for property in North Carolina.
    These appellants do not claim through Bennett’s equity, as a partner, but claim under Bennett as the legal owner of a moiety. Bennett had no authority to convey a moiety of the property belonging to Neale & Bennett, even for the benefit of a partnership creditor. In equity, his interest was merely what might remain after the payment of partnership debts.
    The appellants had full notice of the prior deeds from Rawlings and wife to Neale individually, and the deed from Neale for the benefit of the appellees.
    The appellants acquired nothing by their deed from Bennett, because the. possession | of Neale was adversary. Hopkins v. Ward, 6 Munf. 38. If anything passed under the deed from Bennett, the appellants have a. legal title, which should be asserted at law.
    It was improper for the trustee to sell, while the title was in doubt. Eisher v. Bassett, 9 Leigh, 119.
    *Patton, on the same side:
    There is no ground for asserting, that there was any fraudulent combination between Neale and the Messrs. James to defraud Bennett of his share of this property. There is no room to suspect any .fraud on the part of of the Messrs. James.
    The case of Grayson v. Richards, 10 Leigh, is no authority unless in a case presenting precisely the same circumstances. It is unsustained by any authority.
    That case can only be sustained upon the ground, that the conveyance attempted by the son to the father was voluntary and for that reason fraudulent as to creditors. The legal title to the lot in controversy here was intercepted from the firm by Hagood. Neale paid for the house b3 his individual means, and the lot had been set apart to him by agreement with his partner on the 17th September, 1838.
    At the.time of Neale’s conveyance for the benefit of the Messrs. James, he had a complete equitable title and a right to call for the legal title. What did the deed from Bennett to Tunstall pass. What is the interest of a partner in a specific piece of social property. His interest is nothing more than a lien for his indemnity, and a share of the surplus after the debts are paid. Such a deed could add nothing to the rights of social creditors. The rights of a social creditor are superior and paramount to those of a partner, whose interest is in the surplus merely. Collyer on Partnership, § 135, note, and pp. 117, 119.
    When real property is purchased with partnership funds for partnership purposes, no matter where the legal title is, the equitable title is in the partnership, and in a court of equity the title must be derived from the partnership. Pierce’s adm’r v. Trigg’s heirs, 10 Leigh, 422. Neither partner can sell or convey his moiety, or convey to secure a debt. The rights of the grantee of one partner could only be asserted by a '^settlement of the partnership transactions to ascertain the surplus, and if he were a creditor of the firm, his debt could have been first paid and the deed would have become mere waste paper. But this lot was not the property of the firm at the time of Bennett’s conveyance.
    It is well settled, that during the continuance of a partnership or at its dissolution, one partner may sell to the other any .portion of the social property, and such bona fide appropriation of the property is good. If there was such an agreement in this case, of which there can be no doubt, then it makes no difference in this court, where the legal title was. The agreement passed a complete equitable title to Neale. The firm was dissolved by consent, and there is no suggestion of its insolvency. Neale took and held possession of the lot, under the agreement, and it became a part of his commercial stock. He could not have repudiated the division of property made between himself and his partner, if he would.
    Bouldin, for the appellants,
    in reply:
    The first point controverted is, when the deed from Rawlings and his wife to Neale & Bennett was perfected. The evidence is conclusive that Rawlings delivered the deed to Hagood as the agent of Neale & Bennett, and afterwards Hagood retained it, with the assent of Neale, acting for Neale & Bennett, by way of equitable mortgage, to secure the purchase money which he had paid. In Virginia, so soon as a deed passes from the hands of the grantee, and he has relinquished all control over it, the assent of the grantee is presumed. Roanes v. Archer, 4 Leigh, SSO; Skipwith v. Cunningham, 8 Leigh, 271. While the deed remained in the hands of Hagood, where was the legal title, if not in Neale & Bennett?
    It was clearly not delivered by Rawlings as an escrow, for he had received the whole purchase money, and had no farther interest in the matter. Neale & Bennett were then tenants in common *of the lot, and each the owner of an undivided moiety. How and when was their title divested? Not by the surrender of Neale & Bennett’s deed to Rawlings. The case of Grayson v. Richards, 10 Leigh, is conclusive on this point. It is to be presumed, that the learned court decided that the case upon the one point solemnly discussed by the very able counsel who argued it.
    Was there then a legal conversion of social into individual effects, as to this property? It was not sufficient, that there was an agreement to do so, it should have been done. There should have been a conveyance and actual transfer of the property. The paper exhibited in this cause only shows a scheme of division, not perfected. In the face of this scheme was the conveyance by Neale of property set apart to Bennett. The agreement, if intended for a division, was merely executory. There should have been mutual conveyances in order to complete it. “Every requisite of transmission should have been observed according to the nature of the property.” Collyer on Partnership, 'i 8%. The property in controversy could not have been assigned to one partner except by deed. It therefore, notwithstanding the agreement, even if the partners intended it to continue in force, remained liable to the debts of the partnership. Anderson & Wilkins v. Tompkins, 1 Brock. 457-463.
    While, then, the legal title remained in the partnership, Bennett conveyed his undivided moiety for the benefit of a highly confidential creditor of the partnership, and the appellants purchased under that deed, and therefore claim under a partnership creditor.
    Compare the equities of those claiming under the respective partners. What title have the Messrs. James in this court? It has been shewn that, when in 1840, Neale executed the deed for their benefit, he had nothing more than an undivided moiety of the lot. Sommerville v. McCullough, 8 Leigh, 415.
    The subsequent deed from Rawlings to Neale individually had no effect by relation. It only operated as an *es-toppel against Neale and those claiming under him; but could not affect those claiming under Bennett. The Messrs. James had actual notice that it was partnership property by the description of the property in their deed.
    The appellants come into equity to set up a muniment of title, the deed to Neale & Bennett, which had been returned to Raw-lings, and to have the subsequent deed vacated.
    The parties who beclouded the title cannot complain of the inadequacy of price at the sale by the trustees. Even if the sale should be vacated, the appellants have a right to their purchase money, which should be returned to them.
    
      
      Deeds — Destruction by Grantor — Effect.—It was held in Vaughn v. Moore, 89 Va. 925, 927, 17 S. E. Rep. 326, that the destruction by the grantor of a deed conveying land, after its complete execution, delivery, and lodgment with tbe clerk for recordation, could not divest tbe title of tbe land thereby conveyed from tbe grantee. The principal case, Seibel v. Rapp, 85 Va. 28, 6 S. E. Rep. 478, and Graysons v. Richards, 10 Leigh 57, are cited as authority for the decision.
    
    
      
      Equity Jurisdiction — Removal of Cloud on Title to Realty. — To the point that, where the holder of the legal title to land is in actual possession, he may resort to a court of equity to have a cloud removed from his title, the principal case, Carrington v. Otis, 4 Gratt. 235, 252; United States v. Wilson, 118 U. S. 86, 6 Sup. Ct. Rep. 991; Allen v. Hanks, 186 U. S. 301, 311, 10 Sup. Ct. 961, are cited in Miller v. Lorentz, 39 W. Va. 178, 19 S. E. Rep. 397.
    
   EIELD, P.,

delivered the opinion of the court.

Stephen R. Neale and John H. Bennett, on the 12th day of January, 1833, entered into articles of partnership, to carry on the mercantile business in the town of Danville, Virginia, under the name of 1 ‘Neale & Bennett,” and in the county of Guilford, North Carolina, under the firm of “Bennett & Neale.” Neale to conduct the business at Danville, and Bennett at Guilford county. This partnership continued until about September 17th, 1838, when it was dissolved. On the 27th October, 1836, they purchased of Thomas Rawlings a lot of ground in the town of Danville, on which they erected a large brick house for the use of the concern, in which, after the dissolution of the partnership, Neale carried on business in his own name. The contract with Rawlings for the purchase of the property, made by Wm. R. Hagood, on behalf of himself and Neale & Bennett, embraced two lots, one for Hagood, and the other for Neale & Bennett. Hagood, as well as Neale & Bennett, were bound for their compliance with the terms of the contract. On the 30th May, 1837, Rawlings and wife, by their deed of that date, conveyed the lot which had been purchased for Neale & Bennett to them by their partnership name. The deed *was duly executed by Rawlings and wife, acknowledged by them before two justices of the peace, who certified the same to the county court of Pittsylvania for record. The deed was delivered to Hagood. He presented it to Neale. Neale accepted it, but as Hagood was bound for the payment of the purchase money, then not due, Neale left the deed with Hagood as collateral security for its payment. When the purchase money became due it was paid by Hagood to Rawlings. Neale & Bennett- re-paid to Hagood $150, August 11th,, 1838, and $930.05, 21st March, 1839, leaving.' a balance due of $456.20, besides interest. This was paid about the 1st of February, 1841, and then Hagood surrendered-, the-deeddo Neale. Prior to this date,, the partnership had been dissolved, and Neale was carrying on mercantile business in the house, and having become largely indebted.-to the Messrs. James for goods, he did, by-his deed of the 17th January, 1840, convey the house and lot to-John Dickinson, John Ross, John N. Gordon and Peachy R. Grattan, in trust, to secure the payment of.the debt due the Messrs. James. In this deed of trust the property is described as “the lot purchased by Neale & Bennett of Rawlings.” At the time of making this deed of trust, Neale claimed the house and lot as his individual property, under an agreement of partition between him and Bennett, manifested by two written memo-randa, bearing date September 17th, 1838. One is a,list ofpropérty, embracing, among other things, the house and lot in question, at the foot of which is a memorandum in these words: “The above to be charged to the account of Stephen R. Neale on the books of Neale & Bennett, Danville, Virginia,” signed, “J. H. Bennett.” The other is a list of property, embracing four tracts of. land in North Carolina, amongst other, things, at the foot of which is a memorandum in these words: “The above to be charged to the account of John H. Bennett,” signed, “Stephen R. Neale.” The execution of these papers respectively by the two parties, was duly proved. During *all this time the deed from Rawlings and wife to Neale & Bennett was in the hands of Hagood as collateral security, or equitable mortgage, to secure the payment of the purchase money, and remained so until about the 1st February, 1841, wh.en Hagood acknowledged full payment and delivered up the deed to Neale.

On. the 10th of February, 1841, Neale through the agency of Hagood returned the deed to Rawlings, and obtained in place of it a deed from Rawlings and wife, by which they undertook to convey the house and lot to Neale. This deed was acknowledged, certified, and admitted to record in the County County of Pittsylvania on the 29th March, 1841. On the 22d March, 1841, Neale by deed of that date conveyed one moiety of the four tracts of land lying in N orth Carolina, and mentioned in the above rqemo-randum.-of partition, signed by Neale, to Hagood in trust for the payment of sundry debts due from the firm of Neale & Bennett. This deed was duly executed, acknowledged,' certified and admitted to record in the court of Guilford county, North Carolina, on the 27th March, 1841. After all these things had transpired, Bennett and wife, b.y. their deed of the 2d April,. 1841, conveyed one-half of the house and lot in question, to William H. Tunstall and Thomas S. Jones in trust to secure the payment of a: partnership debt due from Neale & Bennett. This deed was admitted to record in the County Court of Pittsylvania April 5th, 1841. Under this deed the moiety of the house and lot was sold to the appellants on the 11th August, 1841, at the price of $800, and the legal title thereto conveyed to them by deed of- that date, which was admitted to record in the proper court the 23d June, 1842. The purchasers not being able to get possession of their moiety of the house and lot, filed their bill in the Circuit Superior Court of Law and Chancery of Pittsylvania county, to set aside the deed from Rawlings and wife to Neale, and to set up the deed from Rawlings and wife to Neale & Bennett, and. for general relief. The defendants, Stephen R. Neale and the *Messrs. James filed their answers, insisting on the validity of the deeds from Rawlings and wife to Neale, and from Neale to the trustees, for the benefit of the Messrs. James; that the deed from Rawlings and wife to Neale & Bennett had not been delivered, and was therefore void, ahd that the deed from Bennett to Tunstall & Jones was void and ineffectual for passing title to the trustees, because the possession of the land under the deed to the. trustees for the Messrs. James was adversary. On the hearing the bill was dismissed with costs against the complainants, who appealed to .this court. I have deemed it necessary to be thus particular in setting forth the prominent features of this case to shew how the various questions so well discussed at the bar, and upon which an opinion is to be expressed, arise in-this cause.

In the first place, I will notice the questions that arise on the deed of the 30th May, 1837, from Rawlings to Neale & Bennett, as to the validity of the deed and the nature of the estate conveyed thereby to Neale & Bennett.

This deed appears to have been duly executed, acknowledged and certified for record. It was delivered to Hagood. He carried it to Neale for Neale & Bennett. Neale accepted it. It was afterwards held by Hagood at the instance of Neale for several years as an equitable mortgage to secure the payment of the purchase money. After the money was paid, it was returned to Neale by Hagood. Under these circumstances, I think we are bound to regard the deed as.having been signed, sealed and delivered and as effectual for passing title to the property to the partnership, Neale & Bennett, each of the partners being seized of an undivided moiety thereof as tenants in common, subject to the equities of the partnership. The title to the property remained in this condition until the partners, by virtue of the deeds herein before referred to, conveyed away their interest therein, notwithstanding the division agreed upon on the 17th September 1838, for reasons hereinafter, ^assigned, and notwithstanding the return of the deed by Neale to Rawlings in 1841. In the case of Grayson v. Richards, 10 Leigh, 57, in which a father, by deed of gift, conveys lands to his son, and shortly after the son voluntarily surrenders the deed to the father to be can-celled, with a design to divest the title out ■of himself and restore it to the father, and the deed is cancelled, the Court of Appeals held, that the son’s title is not divested by the cancellation of the deed. Under the authority, as well as reason, of this case, w e must hold that the surrendering of the ■deed by Neale to Rawlings did not divest Neale & Bennett of their title to the land. They could not divest themselves of their title to the land otherwise than by a written ■conveyance.

It appears from the written memorandums above referred to, dated Sept. 17th, 1838, that the two partners had agreed upon a partial division of their partnership prop-ertj', under which, if it had been perfected, Neale would have been entitled to the house and lot in question as his separate property. This agreement gave to each partner a right to call upon the other for the legal title to his moiety of the property. This was not ■done, nor can it be done now. The partners have conveyed away all interest they had in the property at the date of the agreement; and it is therefore impossible for ■either to perfect the agreement by conveying his half of the land to the other; and by this act they have abrogated the agreement ■of partition. That agreement was an ex-ecutory agreement only until the property was actually converted into separate property. In order to make the conversion of joint property into separate, every requisite of transmission must be attended to according to the nature of the property assigned. Debts due to a partnership, whether by bond or simple contract, will not be converted into sepai'ate property of one of the partners, unless due notice be given to the debtor of the conversion; for until notice be given, the debt remains in the order and disposition of the creditor, and is still payable to him. Collyer on *Partnership, sec. 896; Ryall v. Rowles, 1 Ves. 367; Jones v. Gibbons, 9 Ves. 410; Ex parte Williams, 11 Ves. 3. This being the rule as to debts, it applies with much more reason to the conversion of joint real estate to separate, the title to which can be conveyed only by deed. On this ground the agreement of partition as to the land was inoperative; and when each of the partners disqualified himself from conveying to the other the legal title to his half of the property, the agreement became null and void, and can therefore have no sort of influence upon the decision to be made in this case. Being stripped of this feature, what is the law of the case as it now remains?

The legal and equitable effect and operation of the deed from Rawlings to Neale & Bennett, can be clearly perceived by the application of a few general principles. When real estate is purchased by partners with partnership funds, to be used for partnership purposes, and considered and treated by the partners as partnership stock, it is to be deemed, so far as the legal title is concerned, as an estate held in common by the partners; but as to the beneficial interest, it is to be considered in equity as effected with a trust for the benefit of the partnership until the accounts are settled and the debts paid. Holding as tenants in common, each partner may sell his individual interest in the land to whomsoever, and for what purposes he pleases, subject to the equity of the partnership. He may give a preference to a partnership creditor, and make a deed conveying his share of the land as tenant in common to secure the payment of the debt of the preferred creditor. And this conveyance will be good and valid both at law and in equity, and will have priority over the claims of all other creditors. These principles are fully sustained by the cases of M’Cullough v. Sommerville, 8 Leigh, 415; Anderson & Wilkins v. Tompkins, 1 Brock. R. 457; Coles adm’x v. Coles, 15 John. R. 159; and Dyer v. Clark, adm’r et als., 5 Metcalf, 562.

If we apply these principles and the provisions of the *act of Assembly (ch. 99, sec. 20, page 388, of the Code of 1819) in relation to conveyances, it will be found that the deed of trust from Neale to Dickinson and others, for the benefit of the Messrs. James, was valid by law, as to half of the house and lot, subject to the equitable trust of the partnership until the accounts were settled and the debts paid, but void as to the other half. If we apply them to the deed of trust from Bennett to Tunstall and Jones, for the benefit of Coleman D. Bennett, a partnership creditor, we shall find that by that deed the trustees acquired a good and valid title to the extent of the purposes of the deed, which is good both at law and in equity, and gave priority over the claims of all other creditors of the concern. In the first case, the deed has been made for the payment of the individual or separate debt of the partners; in the second, for the payment of the social debt of the partnership, and hence the very . great difference in the effect and operation of the two deeds. In both cases, however, the trustees acquired at law a perfect title to one-half of the property, which could be effectually asserted in a court of law, except from some circumstances peculiar to the second deed hereinafter noticed.

The defendant Neale, in his answer, insists that at the time when the deed from Tunstall to the appellants was executed, he held the possession of the house and lot for the trustees of the Messrs. James by an adverse title to that of Bennett, and that the deed from Tunstall to the appellants is void on that ground. The same objection is made by the Messrs. James in their answer. The possession was not adversary. It was the possession of a co-tenant in common of the whole estate, and was in fact' the possession of Neale & Bennett, and the effect of the deed-to James’s trustees was to transfer to them this social possession of the property, and not to produce an eviction of Neale the co-tenant.

The Messrs. James say they are purchasers without notice for valuable consideration. They must have a ^singular idea of what constitutes notice, when it appears upon the face of the deeds under which they claim, that the property is described as “being the property- purchased by Neale & Bennett of Thomas Rawlings.’’ But no notice of such case is necessary, unless the terms of the deed to partners be of a character to deceive and mislead the mind by inducing the belief that the conveyance had been made for the separate and individual benefit of the members of the firm. See the case of Forde, v. Herron, 4 Mun. 316. In such a case a notice would no doubt be necessary.

The Messrs. James in their answer say, that if the appellants’ title be a good title to a moiety of the property, it is a legal title over which a court of equity had no jurisdiction. It is true, that the deed from Bennett to Tunstall and Jones gave them a legal title to half of the house and lot, which was held in common with the trustees for the Messrs. James. Yet there are several good reasons or grounds upon which the exercise of jurisdiction by a court of equit3 can be sustained. 1st. The appellants had a right to go into equity to have partition made of the property. 2dly. To have the deed from Rawlings to Neale set aside. And 3dly, to set up, establish and have recorded, the deed from Rawlings to Neale & Bennett. So long as the first mentioned deed existed, and the last mentioned remained in obscurity, there was a cloud over the appellants’ title, and an impediment and difficulty in the way of an effectual assertion of their rights in a court of law, which rendered it proper in them to apply to a court of equity for relief.

I believe there is but one more point to be noticed. This is an objection raised not by the pleadings, but in the testimony of the witnesses, to the validity of the sale by Tunstall to the appellants, on the score of inadequacy of price. The half of the house and lot was purchased by the appellants at $800. One of the witnesses thinks if the property were sold free from incumbrances and objections, it would bring from twelve *to fourteen hundred dollars. Who was it that interfered on that occasion and caused a sacrifice of the property, if indeed a sacrifice was made? They were the trustees of the Messrs. James who stepped forward in their behalf and forbade the sale. Dickinson & Ross were there claiming title to the property and giving notice to the bidders that the trustees under the deed for the benefit of the Messrs. James were in possession of the property, and would not surrender possession to the purchaser at that sale. Upon this point the case of Borde v. Herron, before referred to, is a conclusive authority to shew that the sale should not be set aside at the instance of the Messrs. James, because the property had not been sold for a full price. In that case the appellant sought to set aside a sale which had been made to the appellee, on the ground of its having been made at a sacrifice. The appellant had previously purchased the property himself, under a decree of the Hustings Court of Norfolk. He was present, asserted his claim, and forbade others to purchase, which caused the smallness of the price produced at the sale to the appellee. The Court of Appeals holding “that a sale ought not to be set aside on the ground of smallness of price, if that was occasioned by the acts of the complainant,” sustained the sale to the appellee against the claim of the appellant.

For these reasons, I think the decree should be reversed and relief given to the appellants.

DECREE.

The court is of opinion that the said decree is erroneous; therefore, it is decreed and ordered, that the same be reversed and annulled, and that the appellees Stephen R. Neale, Fleming James, Edwin James and Henry James, surviving partners of the firm of Fleming James and Joseph S. James & Co., and of F. & J. S. James & Co. do pay unto the appellants their costs by them expended in the prosecution of their ^appeal aforesaid here; and this court proceeding to pronounce in part such decree as the said circuit superior court ought to have pronounced, doth further adjudge, order and decree, that the deed from Rawlings and wife to Stephen R. Neale, bearing date May the 30th, 1837, and recorded in the County Court of Pittsyl-vania the 29th March, 1841, be revoked and annulled, and that the deed of the 30th May, 1837, from Rawlings and wife to Neale & Bennett, conveying the lot of ground therein mentioned, be set up and established as a good and valid conveyance from the former to the latter; and it is ordered that the cause be remanded to the Circuit Court of Pittsylvania county, with directions to cause the last mentioned deed to be delivered to the appellants to be recorded according to law, and also to cause partition of the property embraced in the said deed to be made if practicable, and to assign one-half to the appellants, and the other Jialf to John Dickinson, John Ross, John N. Gordon and Peachy R. Grattan, trustees in the deed made by Stephen R. Neale for the benefit of the Messrs. James. But if such partition cannot be made, then to cause the property to be sold and divide the net proceeds of sale equally between the appellants and the said trustees, giving to the appellants one-half, and the said trustees the other half.

And on motion of the appellants, a supplemental order was entered, directing a reference • to a commissioner by the court below, to take an account of the rents of the house and lot from the 11th August, 1841, until the property should be surrendered under the decree, for division or sale, for one moiety of which the appellees, Stephen R. Neale, and the Messrs. James should be held responsible to the appellants.

Decree reversed.