Case ID: va_35/html/1039-01.html
Source: Caselaw Access Project
Author: {"author": "TUCKER, P.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

*Jackson v. King's Representatives.
    August, 1837,
    Lewisburg.
    (Absent Brooke, J.)
    Equity Jurisdiction — Suit to Subject Deceased Partner’s Estate to Payment oí Partnership Debt — Parties.— The creditor of a firm obtains judgment against the surviving partner, who dies, and whose administrators exhaust the personal assets in paying other claims. Then the creditor Kies a bill in equity sgain.st; those administrators and the heirs of the surviving partner, and the representatives of the deceased partner. The bill seeks a decree for the sale of the lands of which the surviving partner died possessed, some of which belonged to himself and some to the firm; and when the funds from this source shall be exhausted, then it seeks to charge the representatives of the deceased partner. Hkld, equity has jurisdiction of the case; and the representatives of the deceased partner are properly made defendants.
    Bolton Jackson recovered the following judgments in the court of the United States for the fifth circuit and eastern district of Virginia, to wit: on the 31st of May 1811, a judgment against Conally Findlay surviving partner of Conally Findlay & Company, and Richard Hazlerig and John Donahey the sureties for his appearance, for 1690 dollars 15 cents, together with 154 dollars 21 cents damages, and costs: on the same day, another judgment against the same persons for 1690 dollars 14 cents, and costs, to be discharged by the payment of 690 dollars 14 cents, together with 253 dollars 90 cents damages, and the costs: and on the 29th of May 1812, a judgment against Conally Find-lay surviving partner as aforesaid, and Richard Hazlerig and Benjamin Bstill the sureties for his appearance, for 1690 dollars 14 cents, together with 354 dollars 90 cents damages, and the costs.
    To obtain payment of these judgments, Jackson on the 3d of January 1825 instituted a suit in the superiour court of chancery then holden at Wythe courthouse, in which suit the bill set forth that Conally Findlay died *intestate without hav-_ing paid the amount due upon the judgments; that Alexander Findlay and Abraham B. Trigg administered upon his estate, but the plaintiff was informed that they had exhausted the whole amount of assets which had come to their hands, in the payment of other claims; that moreover they had been discharged from their office, and there being no other personal assets in Virginia, no person had been since appointed to represent the estate. It was then stated, that the plaintiff had been informed that Conally Findlay was at his death possessed of some real estate in the county of Washington in his own right, and some belonging to the firm of Conally Find-lay & Co. all of which was liable, as the plaintiff was advised, for the payment of his claims.
    The bill alleged that the firm of Conally Findlay & Co. was composed of Conally Findlay and William King ; that King died in 1808, and James King and William Trigg qualified as his executors, of whom Trigg was the survivor; that upon the death of Trigg, Lilburn L. Henderson became his executor, and consequently the representative of William King, a large part of whose estate was still unsettled; and that Henderson was afterwards displaced, and the estate of William King committed to the sheriff of Washington county. King’s estate, it was charged, was amply sufficient to have paid all his debts, and those for which he was liable; but it was stated to have been so managed by his executors, that very little had come to the hands of White the sheriff, as administrator. It was alleged, however, that there were ample funds in the hands of White, as a receiver, appointed by the court, of the rents and profits of the salt works belonging to the estates of James King and William Trigg, under the will of William King, which funds, it was charged, were liable for the plaintiff’s claim, inasmuch as the assets of William King’s estate were wasted by his executors.
    *After alleging that Donahey had gone to Ireland, and that Hazlerig resided in West Tennessee, the bill made defendants thereto the heirs of Conally Findlay, James White as the personal representative of William King and also as receiver, and the devisees of James King and William Trigg: and it prayed that the personal assets of the estates of Conally Findlay and William King, if any, might be subjected to the payment of the debts due the plaintiff, the real estate of Conally Findlay and of the firm sold for the payment of the same, and the profits of the salt works belonging to the estates of James King and William Trigg appropriated to the same purpose.
    At the time of filing this bill, writs of scire facias were pending to revive the judgments at law against Alexander Findlay and Abraham B. Trigg as administrators of Conally Findlay; and on the8th of June 1827, judgments were rendered upon these writs of scire facias, awarding executions on the original judgments.
    The representatives of William King referred, in their answers, to the writs of scire facias which were so pending, and insisted that the plaintiff could not come into equity against King’s estate until he had first exhausted the legal assets in the hands of Findlay’s administrators. They also relied upon the lapse of time, and upon other circumstances set forth in the answers.
    In the progress of the cause, the court directed a commissioner to settle the accounts, of Alexander Findlay and Abraham B. Trigg as administrators of Conally Find-lay"; and also to exhibit a statement shewing the quantity and description of lands-belonging to Findlay and to the firm, and how they had been disposed of, together with the kind of title Findlay had therefor. By the report of the commissioner it appeared that there was nothing due on the administration account from the administrators, but a small balance due to them; and the lands of Findlay and the firm, which could be subjected *to the debt due the plaintiff, appeared to be. of small value compared with the amount of the debt.
    The cause being transferred, by virtue of the act of assembly, to the circuit court of Wythe, that court declared its opinion to-be that the plaintiff, by his negligence, had lost his equitable claim against the representatives of William King, and decreed that his bill as to them be dismissed, and that, they recover from the plaintiff their costs. From this decree, on the petition of Jackson, an appeal was allowed.
    Baldwin, for the appellant.
    C. Johnson, B. R. Johnston and T. Preston, for the appellees.
    
      
      Partnership Liability of Estate of Deceased IPiri ner. — As showing that the liability of the estate of a deceased partner for partnership debt in any case is not absolute and immediate, but contingent merely, depending upon the result of proper efforts to collect the debt from the surviving partner or his ascertained insolvency, the principal case, Lin-nev v. Dare, a Leigh 588, Sale v. Dishman, S Leigh 548, and Galt v. Calland, 7 Leigh 594, are cited in Jackson v. King, 12 Gratt. 505. See further, mono-graphic note on “Partnership’' appended to Scott v. Trent, 1 wash. 77.
      Por the sequel of the principal case, see J ackson v. King, 13 Gratt. 499.
    
   TUCKER, P.

The first question presented to the court in this case was whether the court has jurisdiction over the subject; and this must be ascertained by adverting to-the pretensions of the plaintiff as set out in the bill itself.

The plaintiff, as creditor by three judgments against the estate of Conally Findlay & Co. comes into equity, alleging that Findlay had departed this life without paying the debt, and that his administrators had exhausted the whole amount of assets in paying other claims, without having discharged his. He then proceeds to state that Findlay at his death was in possession of some social real estate, which, was liable for his debt, and also of real-estate in his own right, which was also-liable, and he prays that it may be sold for the payment of his demand. Thus far it is clear, though the bill is inartificially drawn, that the plaintiff had a right to> come into equity against Conally Find-lay’s representatives, to enforce his demand against the social real estate, if he-could shew that it was chargeable; because it is very certain he could not reach that estate at law. The bill, then, is properly in court; and the true question *is, whether the plaintiff had a right to make the representatives of William King parties in the suit, he being the deceased partner, and not liable to be-charged until the remedies against the-surviving partner have been exhausted. The bill charges that Willia.m King was a partner in the concern of Conally Findlay & Co. and that his estate was amply sufficient to have paid all his debts, and those: for which he was liable, but that only a small portion had come to the hands of "White his administrator, though he had received ample funds from the profits of the salt works, which the plaintiff seeks to charge. Now here, I imagine, are ample grounds for bringing King’s representatives into court; it being conceded or shewn that those of Findlay are properly here. For, in the first place, as King’s liability will depend upon the exhaustion of the funds which were in the hands of the surviving partner of Conally Findlay & Co. real as well as personal, and as the bill against the Findlays necessarily involved a settlement of the personal estate, it was right and proper that the representatives of King, who were the parties most interested in that question, should be before the court, to afford them an opportunity of contesting the settlement of the accounts of Findlay’s administrators. For if they would be bound by that settlement, it would be unreasonable that they should have no opportunity of contesting it; and if they would not be" bound, it would be equally unreasonable to require the plaintiff to proceed with a settlement against the surviving partner, which would not avail him as evidence against the deceased partner. It is like a bill in equity to fix a dev-astavit on an executor. His sureties are proper parties, though they are not chargeable until his default has been established. Yet equity has never refused to convene them also, in a suit against the executor, on the ground that the default must be established before they can be *sued; because it is obviously for their benefit to have an opportunity of being parties to the audit of the accounts. So here, the deceased partner’s estate stands as surety for the debt, and those who are interested in it have a corresponding interest in being parties to the settlement; in having a chance to contest the alleged payments of the administrator, and to surcharge his credits. Nay more, they have an interest in seeing that there is a due account of the real funds of a social character; and it is proper, for ail these purposes, that they should be parties. The creditor may be uninformed; he may be ignorant of the existence of an available fund; and if he proceeds against the deceased partner’s estate, he will, according to the doctrine contended for, be dismissed from this forum, provided the defendants can find some fragment of the surviving partner’s estate, of which he knew nothing. Indeed, as they are ultimately liable to the creditor, he has a right to demand their assistance in discovering and charging the funds of the surviving partner. But secondlj', as the object of this bill is to charge the social real funds, the representatives of the deceased partner are necessary parties. The legal title is presumed to be in them; and if it be not, still they have a right to assert their equity to the real estate as their ancestor’s separate property, and to contest the allegation of its social character. And both the creditor and the representatives of the surviving partner are interested in those rights being settled and adjusted, since the social funds must encounter sacrifice, if they are outstanding and unascertained. Indeed, as it is in equity only that the social real estate is considered as personalty, and can be sold as such, it would seem essential that the heirs at law should be made parties to any proceeding, the object of which is to fix that character upon it, and to subject it to sale. The court then having jurisdiction of the case *against King’s representatives, as dependant upon the proceeding against Findlay’s representatives, it was premature to hear the cause and to dismiss the bill as to the former, before it was ready as to the latter.

The opinion of the court of appeals was in the following terms.

‘ ‘The court is of opinion that there is error in dismissing the bill of the complainant as to King’s representatives. The court of chancery having complete jurisdiclion of the cause as against Conally Findlay’s representatives, the pending proceedings upon the scire facias being no bar to the bill in equity (2 Mad. Ch. 315, Mitf. Plead. 204), and the plaintiff coming into that court for a settlement of the account of assets, for a discovery of the social real estate, and for the purpose of subjecting the real estate proper of the said Findlay to sale, as the value of it is so disproportionate to the demand, this court is of opinion that the representatives of William King the deceased partner were properly made parties, because they were ultimately chargeable in the event of Findlay’s funds proving inadequate, unless the equitable rights of the plaintiff against them were lost by his neglect or misconduct; and also because they were interested in the settlement of the administration account of Conally Findlay, and in surcharging and falsifying the same; and also because the plaintiff has a right to demand of them, as parties in interest, their aid in discovering and subjecting to payment the social fund, whether real or personal; and lastly because the real funds of the said firms could not properly be treated as personalty, without making the heirs of King parties, for the purpose of contesting the right to do so. The court is further of opinion that King’s representatives being properly before the court, and their liability being dependant upon *the issue of the proceedings, and the result of the enquiries, in relation to Findlay the surviving partner, it was premature to proceed to hear and dismiss the bill as to them, before it was matured as to Findlay’s representatives; and that such dismission was therefore erroneous.”

Decree reversed, and cause remanded for further proceedings.