Court Opinion

ID: 8634303
Source: CourtListenerOpinion
Date Created: 2022-11-24 19:42:39.874785+00
Date Added: 2024-06-11T16:55:52.724584
License: Public Domain

NELSON, District Judge.
The rule in relation to real property purchased with partnership funds, at least, so far as the partners and their creditors are concerned, is pretty well settled. Equity treats such real estate, without reference to the situation of the record title, as the personalty of the partnership. The tenure of real estate, applied to partners, is that they become tenants in common, and each partner can only convey his- own share, but the general current of authority, although there is some conflict, in equity, charges such real estate with the debts of the partnership. It’ there is a survivor, the share of the deceased partner in the surplus of the partnership real estate remaining after the payment of the partnership debts, and the adjustment of claims between the individual members of the firm, is considered as real estate only, in any controversy between the heirs-at-law and the personal representatives of the deceased. Story, Partn. (3d Ed.) pp. 136, 137, § 93; 2 Barb. Ch. 165. The doctrine establishing by an equitable fiction partnership real estate as personalty, is in favor of trade, and for *783the benefit of surviving. partners and firm creditors. I do not understand, or so interpret, the statutes of Minnesota that they change in any respect the equitable doctrine aboye stated. The claim here is not a secret trust, or secret equitable right. If it exists at all, it is the result of the operation of law, and nothing in the statutes of this state defeats it. I do not mean to assert that, as an abstract proposition, partners cannot with partnership funds purchase real estate, and hold it otherwise than as partnership property. If it was not the intention of the partners to so purchase and hold it, there can be no objection to a purchase, in good faith, for their individual account. In this case, however, the testimony shows that it was the intention to hold it as partnership property. The surviving partner so states in his evidence, and has so returned it in the schedules. It must, therefore, as against this judgment-creditor, be first subject to the payment of the firm debts.
[This case was again heard in the district court upon motion of assignee to strike out claim of E. J. C. Atterbury as fraudulent. A part of the claim was allowed. Upon appeal to the circuit court, however, the entire claim was stricken out. Case No. 9,102.]
Decree will be entered for the complainant.