Court Opinion

ID: 3541676
Source: CourtListenerOpinion
Date Created: 2016-07-05 22:53:09.268715+00
Date Added: 2024-06-11T13:42:46.057368
License: Public Domain

I dissent. The deed from Holt to Reinbold was absolute upon its face, and was given for the purpose of avoiding dissolution of the partnership. There is nothing whatever in the record to indicate that Holt had in mind any such trusteeship as that indicated by the majority opinion. He and his associates sought to continue the partnership in the event of Holt's death. Whether Holt's intention was to place his interest in the partnership under the control of his wife and leave it to her to look after the welfare of the children, or whether it was to be held for the benefit of both wife and children with the children's interest held separate and distinct from that of the wife cannot be determined from anything alleged to have been said by Holt at the time nor from anything in the record. Any conclusion as to that question can have no foundation other than surmise and speculation. When Reinbold later gave Mrs. Holt a deed to the property conveyed to him by Holt, if any title was vested in Mrs. Holt by that deed, it vested in her the same kind of title that existed in Holt — title in trust. The *Page 473 
property did not lose its character as trust property by that conveyance. Trust property improperly conveyed may be followed and recovered, and does not lose its character of trust property. (65 C.J. 963).
Contrary to the holding of the lower court the deed to Mrs. Holt was delivered. It was repossessed by Reinbold but only by "borrowing" it; his trust title was not revived by the borrowing. If the conveyance to Mrs. Holt is upheld, she, holding it in trust, could not turn it into the corporation and receive stock for it. She might be estopped as to her own one-third interest to which she is entitled under sections 7072, Revised Codes, but she could not turn into the corporation the two-third interest of the five minors. No decree of court could deprive the minors of their interest in the father's estate and on that ground alone the plaintiff's title to the property could not be quieted in any action in which they were not represented by a duly appointed guardian.
In the agreement made and entered into September 7, 1939, plaintiff's Exhibit 23, Mrs. Holt as an individual, and as a member of the partnership of Bell  Reinbold, and the partnership of Bell  Holt, joined with the other members of the partnership in conveying all the Holt interest to the corporation of Bell, Holt, McCall Company, and received in lieu of the trust property thus conveyed an amount of stock in the corporation assumed to be of the approximate value of the interest of the deceased husband and father in the partnership assets. She had no power to make the conveyance, and was not entitled to have stock issued to her for the trust property.
In this action Bell, Holt, McCall Company seeks to quiet title to parcels of property described as parcels 2 to 14. H.C. Bell seeks to quiet title to parcel 1, the Hamilton station, in the partnership. The trial court, by its conclusion 1, held that Bell, Holt, McCall Company has an 80% interest in parcels 2 to 14 and Reinbold has a 20% interest in the same property in trust for the five minors. I do not agree with either of these holdings. The trial court appears to have based this division *Page 474 
on the assumption that Holt's 24% interest in the partnership assets, other than the Hamilton station, should be divided into six equal parts, among Mrs. Holt and the five children, and, as Mrs. Holt had received 155.7 shares of stock in the corporation, her interest in the assets of her deceased husband was represented by the stock. I find nothing in the record or the law to support the trial court in making a distribution as above. I can find no basis for such percentage of distribution. The entire interest of Holt was accounted for when Mrs. Holt received 155.7 shares of stock in the corporation in lieu of all the Holt interest in the partnership assets, and the five minors were entitled to two-thirds of the stock or its value under the provisions of section 7073, Revised Codes, as amended by Chapter 140 of the 1941 session laws. Under section 7073 Mrs. Holt is entitled to one-third and the five minors to two-thirds of the deceased husband and father's estate. There is nothing in the record relative to anything that Holt is alleged to have said or done to indicate that he had any intention of having his estate divided between his wife and children in any manner other than according to the law of succession — section 7073, supra, as amended. I agree with the majority that adjudication of the relative rights of the parties cannot be adjusted until the indebtedness of the respective members of the partnership has been determined, and that the partnership has a lien on each partner's share in the partnership assets to secure the payment of all advances made to each respectively. Unless an accounting is had for the purpose, it is my opinion that the court should accept the agreement of October 21, 1940, defendants' Exhibit 33, as to the percentage of the interest of H.O. Bell and Theodore Reinbold and the Holt Estate respectively, in all the assets of the partnership except parcel 1, the Hamilton station. All persons to that agreement who were sui juris should be held bound thereby as to the facts set down therein.
During the trial a number of questions were asked Bell and other witnesses which appeared to be inspired by the apparent suspicion that H.O. Bell had not dealt fairly with his business *Page 475 
associates. Nothing in the record sustains such suspicion if, in fact, that was the reason for the questions. On the contrary, Bell appears to have been something of a Santa Claus in his relations with his business associates. True he was exacting in his business practices, and reprimanded his partner in charge of the Hamilton station for diverting funds from the partnership business into a mining adventure in which none of the other partners had any financial interest, and told that partner he would better get out of the mining business or out of the gasoline business. Bell was fully justified in his attitude in that matter, and the incident furnished ample grounds for liquidating the partnership, but it appears that after that disagreement was adjusted, Bell generously allowed the money that had been diverted into the mining venture and lost, to be carried in the Accounts Receivable account on the partnership books. It further appears that that item in the Accounts Receivable must have been taken into account and charged to the partner when the percentage of Reinbold was fixed when the respective interests of the partners were determiend at the time the agreements looking to incorporation of the business and the partnership for the Hamilton unit, were entered into.
In my opinion the judgment of the lower court should be reversed and the cause remanded with instruction for further proceedings, and, pursuant to section 8805, Revised Codes, this court should advise the trial court as to our views on the questions hereinbefore mentioned, but that the trial court should first direct an accounting by competent accountants, one nominated by each of the contending parties, and appointed by the court; further direct that the court should not proceed until a guardian is appointed to represent such of the Holt children as are minors at the time, and also direct that an administrator be appointed to administer the Harold L. Holt estate, and, after the debts are paid or settled, distribute the proceeds of the estate according to law.
Rehearing denied January 3, 1947. *Page 476