Court Opinion

ID: 6512033
Source: CourtListenerOpinion
Date Created: 2022-07-19 18:23:15.757948+00
Date Added: 2024-06-11T15:54:54.651214
License: Public Domain

STONE, C. J.
— Partnerships are dissolved by the death of one of the members, unless there is a provision for its longer continuance, either in the agreement of partnership, or by *504some testamentary direction in the will of the deceased member. — Story on Part. §§ 317, et seq.; Parsons on Part. 438. After dissolution by the death of one of the partners, the survivors can not revive any debt of the firm, nor continue it in force, by any act of theirs, so as to bind the estate or effects of the deceased partner, if the debt be otherwise barred as to him. — ■ Wilson v. Torbert, 3 Stew. 296 ; Myatt v. Bell, 41 Ala. 222; Fontaine v. Lee, 6 Ala. 889; Lang v. Waring, 17 Ala. 145; s. c., 25 Ala. 625 ; Cunningham v. Bragg, 37 Ala. 436. It follows, that the acknowledgment of complainant’s claim, made in 1878, by Ilart, in the name of the firm of Clark, Hart & Co., did not bind the estate of Clark, who died in 1875, — much more than six years before this suit was brought.
The acknowledgment, however, bound Hart, for this suit was instituted much less than six years after it was given. It would seem, also, that according to the averments of the bill, it bound Drewry as well. He was the other surviving partner, and the bill avers Hart had authority to bind him, and did bind him by signing the partnership name. So, taking the averments of the bill as true, both ITart and Drewry had acknowledged the existence and amount of the debt to Espy. The demand asserted in the bill was not, therefore, barred as against the survivors, by any thing apparent on the face of the bilk
If Clark’s estate was discharged from liability, under the six years statute of limitations, that was a matter of personal discharge, which could be invoked alone in behalf of that estate, and could have no effect whatever on the liability of Hart; nor of Drewry, if Hart was authorized to acknowledge for him. Such defense is personal, and neither discharges other parties, nor changes the character of the debt. It still remained a partnership liability, so far as Hart was concerned, and, possibly, so far as the rights of Drewry were affected. Only Clark was relieved from liability.
How far Clark’s effects are relieved by such personal discharge, is a question not raised by this record. It would seem clear, that his individual property is exonorated. We need not now decide as to any interest he may have in the partnership effects. If the recitals in the mortgage are correct, it would seem that Clark’s estate liad no interest in the warehouse property. Hart, in the firm name, assumed to convey, and did convey, four-fifths of the property; Drewry owned one-fifth, and this leaves nothing for Clark’s estate. If Hart had purchased Clark’s fifth interest, by any proceedings after Clark’s death, it may be that he only did and could buy subject to the partnership liabilities resting upon it, as part of the partnership assets. Or, even if Clark’s estate still own an interest in *505the realty, it is not clear that that interest can not be utilized in paying the partnership liabilities, still resting on other members of the firm, even though Clark and his individual property may be discharged therefrom. — Hutchinson v. Smith, 7 Paige, 26 ; French v. Lovejoy, 12 N. H. 461; Gay v. Johnson, 32 N. H. 167; Ide v. Ingraham, 5 Gray, 106.
When lands are purchased with partnership funds, and used for partnership purposes — or when, as a means of collection, lands are taken in payment — such lands acquire many of the incidents of personal property, so far as an adjustment and settlement of the partnership accounts are concerned. This principle applies fully to the claims of creditors of the partnership, and to the adjustment and equalization of the benefits and burdens between the partners themselves. In other words, creditors, when necessary for the collection of their demands, may have the character of personalty stamped on real estate thus held. So, when necessary for an equal settlement between partners, may the same relief be obtained. And when lands are thus applied, they lose all the attributes of realty, such as liability for dower claim, tfcc. But this is purely an equitable doctrine, and the legal title, with all the characteristics of realty, attach to it, until it is so applied to partnership wants. If the title be in the firm name, it can not be conveyed away by any number of the members less than the whole. At law, a title thus made vests in all the members of the firm as tenants in common, and all must join to transfer the legal title. — Lang v. Waring, 25 Ala. 625; s. c., 17 Ala. 145; Davis v. Christian, 15 Grat. 11; Dillon v. Brown, 11 Gray, 179; Carlisle v. Mulhern, 19 Mo. 56; Duhring v. Duhring, 20 Mo. 174; Sumner v. Hampson, 8 Ohio, 328; Richardson v. Wyatt, 2 Dess. 471.
As a corollary of the above, the American doctrine is, that real estate, thus converted into personalty for partnership wants, only becomes personalty pro tanto. If there be a residuum. after satisfying partnership liabilities, and equalizing the interests, that residuum is not personalty, but retains all the attributes of realty. — Lang v. Waring, 25 Ala. 625 ; Pars. on Part. 371-2; Story on Part. §§ 93, et seg; 5 Wait’s Ac. & Def. 121.
The present case was submitted in the court below simply on a motion to dismiss for want of equity, without answer, demurrer, or plea. The motion was sustained, and the bill dismissed, but without prejudice. We are not informed on what ground the motion was sustained. The main argument made in this court in support of the decree is, that the claim was barred by the statute of limitations of six years. We will not gainsay that staleness proper — great lapse of time unexplained— *506may furnish a ground for dismissing a bill. It requires diligence, as well as good faith, to put the machinery of a chancery court in motion. But when, as in this case, the defense rests upon the statute of limitations alone — especially when that defense is available to only a part of the defendants — it should be presented by plea, or by demurrer if the averments of the bill present the requisite facts. — Thonpson v. Parker, 68 Ala. 387.
The present bill is defective. It was filed in January, 1884. The mortgage it seeks to have declared a general assignment was executed about three years before. The averment of the bill is, that the warehouse property it seeks to condemn “ is substantially all of the partnership property of Clark, Hart & Co.” This refers to the time the bill was filed. To come within the rule, the averment should have been that it was substantially all the property of the partnership at the time the mortgage was executed. — Donald v. Hewitt, 33 Ala. 534; Danner v. Brewer, 69 Ala. 191. There was no motion in the court below for leave to amend, and standing as it does, this defect is fatal. It presents the familiar case of a correct judgment, possibly for a faulty reason.
Another defect in the bill could not have been amended. The personal representative of Hart was a necessary party. — 1 Brick. Dig. 755, § 1727. This suit was instituted prematurely — too short a time after administration on his estate was granted, to authorize a suit against the administrator. The suit was abated as to him, on his plea, and any attempt that might be hereafter made to make him a party would fail on the same ground. This is fatal to the present bill.
The decree of the chancellor, dismissing the bill without prejudice, must be affirmed.