Court Opinion

ID: 3679733
Source: CourtListenerOpinion
Date Created: 2016-07-06 06:25:23.092683+00
Date Added: 2024-06-11T15:27:44.456192
License: Public Domain

There is no room for argument as to the status of partnership property; or as to the duty and authority of the surviving partner with respect thereto. Our statute provides: "On the death of a partner the surviving partners succeed to all the partnership property, whether real or personal, in trust for the purposes of liquidation, even though the deceased was appointed by agreement sole liquidator; and the interest of the deceased in the ultimate distribution of the partnership assets passes to those who succeed to his other personal property." Comp. Laws 1913, § 6425. The rule announced by this statute is merely a statutory declaration of the common law, see De Auerbach, 23 Utah, 529,65 P. 490; Shanks v. Klein, 104 U.S. 18, 26 L. ed. 635; 20 Rawle C. L. p. 993 et seq. The real question in controversy here is whether the surviving partner has any authority to dispose of the partnership property until he has qualified by making an inventory and giving a bond as prescribed by § 8711, Comp. Laws 1913, which section reads: "In case of the death of one partner, the surviving partner or partners must make a full, true, and complete inventory of the property of the copartnership, with a list of all the liabilities thereof at the time of the death of the deceased partner, and deliver the same to the executor or administrator of such deceased partner, or to the county court, and must give a good and sufficient bond to such executor or administrator to be approved by the county court. Such surviving partner or partners *Page 442 
have the right to continue in possession of the effects of the partnership, pay its debts out of the same, and settle its business; but must proceed thereto without delay, and account with the executor or administrator, and pay over such balance as may from time to time be payable to him in the right of the decedent. Upon the application of the administrator or executor, the county court may, whenever it appears necessary after citation, order such surviving partner to deliver an inventory or render an account, and may enforce the order as in other cases."
I have found this question one of some difficulty. But a careful consideration thereof has led me to the conclusion that the making of the inventory and the giving of the bond is not a condition precedent to the exercise by the surviving partner of those powers which the law requires him to exercise with respect to the partnership property. The surviving partner is not appointed by any court to take charge of or exercise control over the partnership property. He is appointed for that purpose by operation of law. The appointment becomes effective immediately upon the death of the other partner. It will take some time before either an executor or an administrator can be appointed. Until such appointment is made there is no way in which the surviving partner can either furnish an inventory or give a bond to the executor or administrator; yet there can be no question but that in the meantime the surviving partner is charged with the duty to carry out the trust which the law has placed upon him with respect to the partnership property. It will be noted that our laws make no provision for the appointment of some one else to take charge of the partnership property in event the surviving partner fails to give a bond or make an inventory; nor does it provide that in event of such failure or refusal the executor or administrator may take charge of such property. The statute provides "that the surviving partners succeed to all the partnership property, whether real or personal, in trust for the purposes of liquidation." Comp. Laws 1913, § 6425. The duty of making proper disposition of the property and applying the proceeds to the proper uses in liquidation of the partnership affairs rests upon the surviving partner, and not upon the executor or administrator. Of course the condition of the partnership affairs is of importance — it might be of vital importance — to those who are entitled *Page 443 
to share in the distribution of the dead partner's estate. And in order that the estate may be intelligently administered, it is highly desirable that the administrator or executor be informed of the assets and liabilities of the partnership. "The interest of the decedent in an unsettled partnership must be included in the inventory and appraised upon the statement rendered by the surviving partner or otherwise, like other property." Comp. Laws 1913, § 8717. If the surviving partner fails to deliver an inventory or render an account, the county court may order him to do so, upon the application of the administrator or executor; and such order may be enforced as in other cases. Section 8711, supra.' The surviving partner is, also, required to give a bond to the executor or administrator. This bond is for the protection of those entitled to share in and receive the interest of the deceased (after all partnership debts and obligations have been discharged), in the ultimate distribution of the partnership assets. It would seem that the power vested in the county court to require the surviving partner to do what § 8711, supra, says he should do, implies, rather than denies, that the surviving partner has authority to perform the duties which the law imposes upon him with respect to such property, even though he has not made the inventory or furnished the bond required by that section. It seems, also, that the power vested in the administrator or executor to apply for an order to compel, and the power on the part of the county court to require, the surviving partner to do the acts which this section requires him to do, furnishes adequate protection against any misconduct on the part of the surviving partner. And inasmuch as the surviving partner sells and conveys only the equitable title, a court of equity would not compel the heirs of the deceased partner to convey the legal title where it would be unjust or inequitable to do so, — as, for instance, where the sale was made for an inadequate consideration or was in other ways unfair. 20 Rawle C. L. 995.