Court Opinion

ID: 8267766
Source: CourtListenerOpinion
Date Created: 2022-10-16 19:13:08.30956+00
Date Added: 2024-06-11T16:43:25.570430
License: Public Domain

The opinion of the court was delivered by
Scudder, J.
This suit is an amicable action brought for the protection of the executors and trustees in the last will of Peter Ballantine, deceased, in carrying out the provisions of his will, and of the codicil of September 21st, 1882, which provides for the continuance of the business of the firms of P. Ballantine & Sons and Ballantine & Company, and of the codicil of September 26th, 1882, and in the formation of a joint stock company or joint stock companies for that purpose. It was supposed that there might be some limitation in the words used in the first codicil that would make the intention of the testator uncertain whenever it was thought desirable to form such company or companies. The words that caused the doubt were that the stock to be received and held was to be “ in place of my interest or interests therein; ” that is, in either or both of the aforesaid firms which were to be formed into a joint stock company or companies. It is said that this* may mean only his actual investment in the property, real and personal, held in the name of either or both of said firms, and may not include the real estate of the testator which has been used and occupied by these firms. It has also been questioned whether all of the real estate standing in the name of Peter Ballantine has not become copartnership property. It was the manifest purpose of the testator to continue and promote the business which he had begun — which he and his sons had so great-ly enlarged — and not to destroy it. Very large and costly buildings have been placed on his lands and on the lands of Ballantine & Company, and these are so connected in use as to be inseparable. In one case, twelve *271feet of a large brick building has been extended over the line of land owned by him separately, and all of it used together. Take, as an instance of such use, the testimony of Mu Robert E. Ballantine concerning two others of these buildings thus connected:
“ Q- Was the building put on that lot purchased by P. Ballantine & Sons connected in its use with the building which had been previously erected by Peter Ballantine on the leasehold premises ?
“ A. It is indissolubly connected.
“ Q. So that it is impossible for the two to be used separately ?
“ A. It is impossible so to use them.
“ Q. Just explain to the court how that is ?
“ A. At the eastern end of the building the process of malting is begun and is carried on to a point where it is necessary to place the malt in kilns, which are between these two lines — between the lines marked A D and the do.tted red lines; the malt, in its progress from the time of steeping, reaches finally the kilns where it is to be dried; after it is properly dried in these kilns, it is discharged into the store-house end of the building, as we call it, and there is no other place to put it, so that it is impossible to carry on the business of malting in that building, the original malt-house building, without the use of the store-end of the building.”
It is also testified that the attempt to separate the malting and brewing, which would occur if the land of Peter Ballantine occupied' by the firm were taken from them, would damage the business forty per cent. In view of such facts as these, and the close relationship of these copartners, we must conclude that when the testator spoke in his will and codicils of continuing this business, he intended it to be done as it was then conducted, with all its advantages for profitable use and production, and that the malting should be used in connection with the brewing, both of the ale and beer. His interest in these firms was not represented alone by the investment in the lands and improvements, of which the title was held in the names of the firms, but by the entire plant of land and buildings, with all the machinery and appliances by which they were enabled to carry on the business successfully. These portions of the testator’s lands occupied by buildings and used in connection with other buildings on the lands of the firm, had become part of his interest in the firm, and their chief value to him was their connection with the firm busi*272ness. They had become so substantially involved in the business that they would be naturally spoken of as part of the interest of each partner in the firm.
While it is said in McNeillie v. Acton, 4 De G., M. & G. 744, 753, that a direction in the will that the testator’s trade shall be carried on, does not of itself authorize the employment in the trade of more of the testator’s property than was employed in it at the time of his decease, it does authorize the executors to continue it by means of the property, capital,'stock and effects which were embarked and employed therein at the time of the death of the testator. That part of the testator’s property, both real and personal, which is engaged in the business and which is reasonably and fairly necessary to the full accomplishment of his scheme, must be intended when he speaks of the continuance of the business and of his interest in the firm. Ferry v. Laible, 4 Stew. Eq. 566; S. C., 5 Stew. Eq. 791.
The proposed change of the form of business from a copartnership to a corporation carries with it all the property and incidents of the business unless otherwise expressed.
As to the leasehold lands conveyed by the Trinity church corporation to Peter Ballantine, these having been purchased with the partnership funds, became in equity part of the partnership property. Smith v. Smith, 5 Ves. 189 ; Dyer v. Clark, 5 Metc. 562.
In Bank of England Case, 3 De G., F. & J. 645, 659, it is said that where land purchased is not merely paid for out of the partnership assets, but is bought for the purpose of being used and employed in the partnership trade, it is scarcely possible to conceive a ease in which there could be sufficient evidence to rebut the trust, and accordingly in those cases we find the decisions almost, if not entirely, uniform, that the purchased land forms part of the joint estate of-the partnership.
The lands and buildings owned by Peter Ballantine before either firm was founded, known as malt-houses Nos. 1 and 2, together with the lots of land whereon the same are erected, were not bought for the partnership, nor with partnership funds. He was not credited in the books of the firm with the value of these *273buildings and land as part of his capital contributed to the firm and invested in the business, but he was paid rent for their use as his own individual property. This continued until his death, and fixes the character of this property. For this his estate should be allowed its fair present value in stock whenever the change is made from the co-partnership to a corporation.
In Robinson v. Ashton, L. R. (20 Eq.) 25, on the formation of a partnership it was agreed that the business should be carried on at a mill belonging to one of the partners, and he was credited in the books of the partnership with the value of the mill. In the absence of any special agreement, the mill was held to be an asset of the partnership. Here a different intention is shown by the acts of the parties in the payment and receipt of rent.
As to the portion of the real estate standing in the name of Peter Ballantine, deceased, upon which a portion of the malt-house called Ho. 4 was built by the firm of P. Ballantine & Sons, being about twelve feet on the southerly portion of the same, the building and improvements put thereon with the money of the firm greatly increasing its value, and devoting it to the business of the firm, show an intention at that time to make it partnership property. In making a division of the partnership property, the estate of Peter Ballantine should be allowed the value of the land at the time of its appropriation by building thereon, but the increased value will be divisible among the co-partners in proportion to their respective interests in the profits of the business from which the funds for the improvements were taken.
The decree is in all points affirmed.
Decree unanimously affirmed.