Court Opinion

ID: 3679732
Source: CourtListenerOpinion
Date Created: 2016-07-06 06:25:23.085389+00
Date Added: 2024-06-11T15:27:44.454051
License: Public Domain

The certification in this case is, in effect, a certification of the entire record for purposes of reviewing the two determinative legal questions involved. The facts are not disputed. The trial court has made its findings and order for judgment *Page 438 
quieting title in the plaintiff. The two ultimate legal questions involved are:
First: Did the deed of the surviving partner convey upon this record a good title to the plaintiff?
Second: Did the court have jurisdiction in an action to determine adverse claims over the title of the minor heir of the deceased partner?
I am of the opinion that these questions are to be answered in the affirmative, and that the order of the trial court directing title to be quieted in the plaintiff is correct. It is fundamental that, upon the conveyance of real estate purchased with partnership funds and for partnership purposes, such real estate, in equity, is treated as personalty, and is subject, so treated, to disposition for partnership purposes. Betts v. Letcher, 1 S. D. 182, 46 N.W. 193; Brady v. Kreuger,8 S. D. 464, 59 Am. St. Rep. 771, 66 N.W. 1083; 30 Cyc. 430. In such case it is immaterial whether the title be taken in the name of all of the partners, one of the partners, or even in the name of a person who is not a partner. Notes in 37 L.R.A.(N.S.) 892, and 27 L.R.A. 463; Johnson v. Hogan, 158 Mich. 655, 37 L.R.A.(N.S.) 889, 123 N.W. 891; Hardin v. Hardin, 26 S. D. 601, 129 N.W. 112; Devlin, Deeds, 3d ed. §§ 208, 209. The status of the realty in any event remains the same for partnership purposes. Owing to the distinction, however, that exists concerning the application of principles of law to realty and personalty, the legal title in such partnership real estate resides and remains in the grantee or grantees named in the deed. Note in 27 L.R.A. 462; Spaulding Mfg. Co. v. Godbold, 92 Ark. 63, 29 L.R.A.(N.S.) 282, 135 Am. St. Rep. 168, 121 S.W. 1063, 19 Ann. Cas. 947; Tidd v. Rines,26 Minn. 201, 2 N.W. 497; Gille v. Hunt, 35 Minn. 357, 29 N.W. 2; note in 48 Am. St. Rep. 65; Riffel v. Ozark Land  Lumber Co. 81 Mo. App. 177. In such case the grantee in such deed holds such legal title as a trustee for partnership purposes. In law a partnership has no status as a person, the title to real estate therefore must rest in some person who holds the same as trustee for the partnership purposes. 30 Cyc. 430. In the instant case the legal title to the realty involved was in C. A. Bowers and J. H. Bowers. Upon the decease of the latter, his legal title devolved upon his widow, Catherine, and his minor child, Helen. This real estate was bought with partnership funds and for partnership *Page 439 
purposes. In equity, it was partnership real estate; it was personalty for purposes of the partnership. Upon the decease of one of the partners, the surviving partner succeeded to the partnership property, including this real estate, in trust for purposes of liquidation. Comp. Laws 1913, § 6425. As such trustee, the surviving partner had the same power for purposes of liquidation as the partners would have had as a partnership. The surviving partner accordingly was authorized as such trustee to make a contract for the sale of the real estate, and to sell it for purposes of liquidation. Comp. Laws 1913, § 6423, note in Ann. Cas. 1912D, 1222; Frost v. Wolf, 77 Tex. 455, 19 Am. St. Rep. 761, 14 S.W. 440; Hanson v. Metcalf, 46 Minn. 25,48 N.W. 441; Burchinell v. Koon, 8 Colo. App. 463, 46 P. 932. In this case, for purposes of liquidation, it does appear that the surviving partner did enter into a contract to sell this real estate, and did sell and convey the same, the widow of the deceased partner joining in the conveyance to the plaintiff. This deed clearly conveyed the legal title of the surviving partners and of the widow of the deceased partner. It clearly conveyed the full equitable title in such real estate for the reason that the record discloses that such conveyance was made for purposes of liquidation, pursuant to a holding of such real estate for partnership purposes. The decease of the one partner, however, did not operate to transfer the legal title from the deceased partner to the surviving partner. For instance, if, upon the decease of the partner named, there had existed no partnership debts and no reasons for liquidation of this partnership real estate, such real estate, being freed of its partnership status, would have been held by the surviving partner with the heirs of the deceased partner, as tenants in common. In such case manifestly a conveyance of such real estate by surviving partner would have served to have conveyed no title other than that possessed by himself. In the instant case the minor heir of the deceased partner held merely the legal title of the real estate in trust for partnership purposes. Note in Ann. Cas. 1912D, 1213; Woodward-Holmes Co. v. Nudd, 58 Minn. 236, 27 L.R.A. 340, 49 Am. St. Rep. 503, 59 N.W. 1010. Upon conveyance made by the surviving partner, for purposes of liquidation, pursuant to his trust, the grantee received full equitable title, and was entitled to receive and have the full legal title. *Page 440 
Section 8711, Comp. Laws 1913, requires the surviving partner to make an inventory of the partnership property, and to give a good and sufficient bond, approved by the county court to the personal representative of the deceased. Section 8717, Comp. Laws 1913, provides that the interest of the deceased in an unsettled partnership must be included in the inventory, and appraised upon the statement rendered by the surviving partner like other property. Sec. 8711, Comp. Laws 1913, was enacted in its present form in 1897, chap. 111, § 23. Prior to that time the surviving partner was not required by statute to give such bond. Section 6425, Comp. Laws 1913, has existed as the law since territorial days. See § 1442, Civ. Code 1877. This statute ( § 6425) specifically grants the right of disposition of partnership property for partnership purposes. The statutes, §§ 8711 and 8717, quoted do not pretend, by their terms, to affect the nature and extent of the interest possessed by the surviving partner in partnership property. Such statutes, by their terms, do not prescribe conditions precedent for the exercise of the right of a surviving partner to execute his trust powers. Courtland Forging Co. v. First Nat. Bank, 141 Ind. 518,40 N.E. 1070; Havens  G. Co. v. Harris, 140 Ind. 387, 39 N.E. 49; First Nat. Bank v. Parsons, 128 Ind. 147, 27 N.E. 486; McIntosh v. Zaring,150 Ind. 301, 49 N.E. 164; Silver v. Eakins, 55 Mont. 210, 175 P. 876; Caughan v. Brown, 76 Miss. 496, 25 So. 155. Such statutes differ from certain statutes in other states requiring such bond to be given, and, upon failure, for administration of a partnership estate by the probate court. See Cook v. Lewis, 36 Me. 340; Shattuck v. Chandler, 40 Kan. 516, 10 Am. St. Rep. 227, 20 P. 225; State ex rel. Richardson v. Withrow,141 Mo. 69, 41 S.W. 980. Accordingly the deed of the surviving partner was not made void through the failure to make and file the inventory and bond required.
Section 8768, Comp. Laws 1913, providing for the sale of a partnership interest, belonging to any estate, through probate court proceedings, refers necessarily to the interest of the estate in the ultimate distribution of the partnership assets pursuant to § 6425, Comp. Laws 1913. It manifestly has no reference to the sale of a specific partnership interest in specific partnership real estate or personalty. See Brown v. Farnham, 55 Minn. 27, 35, 56 N.W. 352.
The district court had jurisdiction to order the transfer of this *Page 441 
bare legal title from the minor heir to the owner and holder of the full beneficial and equitable title. Bates, Partn. § 294. Upon this record the estate of the deceased partner had no interest in this real estate, its sole interest being in the ultimate distribution of the partnership assets. Comp. Laws 1913, § 6425. Determination of the party who was the holder of this bare legal title and of her rights and duties as such holder were within the jurisdiction of the district court. Barton v. Lovejoy, 56 Minn. 380, 45 Am. St. Rep. 482, 57 N.W. 935; Shanks v. Klein, 104 U.S. 18, 26 L. ed. 635; Tillinghast v. Champlin,4 Rawle I. 173, 67 Am. Dec. 510.
The foregoing determinations dispose of the questions certified, and the cause is remanded for further proceedings, consonant with this opinion, without costs to either party.
BIRDZELL, J., concurs.