Court Opinion

ID: 6243971
Source: CourtListenerOpinion
Date Created: 2022-02-17 20:52:48.523748+00
Date Added: 2024-06-11T08:59:14.475840
License: Public Domain

Opinion by
Me. Justice Williams,
Sheldon B. Hayes and Charles Hayes were brothers and partners in business. The time when the partnership was entered *322into does not appear but it seems to have been in existence and to have been successfully conducted for many years prior to 1873. In that year they entered into an agreement as partners for the purchase from Mrs. Martha B. Montgomery of the lot of land in the borough of Washington now in controversy, for the price of $3,100. The purchase money was paid out of partnership funds. They entered into possession as partners and conducted a partnership business upon it. The deed was made to them in 1874, and names the individual partners, S. B. Hayes and Challes Hayes, as the grantees. S. B. Hayes died in 1879, but his son Marshall took his place in the firm, and the business was continued for the .benefit of the surviving partner, Charles Haj^es, and the family of his deceased brother, no settlement having been made. Charles died in 1886, but the firm business was continued under the same firm name and without settlement until the death of Marshall Hayes in 1891. After his death his executors and the executors of Charles Hayes joined in a sale of the lot in controversy to the defendants for the sum of $6,300, treating it as a part of the property of the partnership. The purchasers paid $4,300 in hand upon the contract, of which $4,000 was at once applied to the payment of a partnership debt contracted in 1884, some two years before the death of Charles Hayes. For this debt the estate of Charles was liable, and the payment made upon it, at least to the extent of half of the amount, was in relief of the estate of Charles Hayes. The plaintiffs are the widow and heirs at law of Charles, and their claim in this case rests on the position that S. B. and Charles Hayes were tenants in common in this lot, and that the undivided one half of the title descended to them at the death of Charles Hayes as a part of his individual estate. The controlling question upon the trial in the court below was therefore whether this lot of land was held by S. B. Hayes and Charles Hayes as partnership property or as their individual property. This in.the absence of any written declaration upon the subject by the grantees named in the deed was to be determined by their conduct and the ownership of the fund out of which the purchase money was paid. The question is not raised by creditors of either the firm or the individual members of it, but by the heirs at law of one of the partners against the executors of their ancestor. There is therefore no question of priority, or of no*323tice, to be considered, but simply one of ownership. What was the fact as to the ownership as between these brothers, S. B. and Charles Hayes ?
The general rule is that if the real estate is bought witli partnership funds and for partnership purposes it is partnership property notwithstanding the deed may be made to the individuals of whom the firm is composed. Bates on the Law of Partnership, par. 280. Our own cases holding this general doctrine are numerous and consistent. In Erwin’s Appeal, 39 Pa. 535, the title was in the name of one of the partners, but the lot had been bought for partnership purposes and paid for out of partnership moneys. For some reason it had not been used by the firm, but it was held to be partnership property, and its proceeds were distributed among partnership creditors in prefence to the creditors of the grantee, named in the deed. So in Abbott’s Appeal, 50 Pa. 234, this was the only question raised, and we said that the presumption arising from the fact that the deed was to the individual partners was rebutted by the facts that the land was bought for partnership purposes and paid for with partnership funds. Under such a state of facts the grantees named in the deed take the legal title in trust for their firm which pays the purchase money and for whose use the purchase is made. To the same effect are Meason v. Kaine, 63 Pa. 335. West Hickory Mining Association v. Reed, 80 Pa. 38. Shafer’s Appeal, 106 Pa. 49, states the rule very fully, and that payment of the purchase money out of the partnership funds for property bought for firm uses rebuts the presumption arising from a deed to the individual members of the firm. Warriner v. Mitchell et al, 128 Pa. 153, takes the distinction between a contest made by creditors and one made by the partners with each other. In the latter case it was held that land bought with partnership funds, used for partnership purposes, and treated as partnership property, is partnership assets notwithstanding the title may be held by the individual partners. The same rule was stated in Collner v. Greig, et al., 137 Pa. 606. The importance to be given to the fact that the property had been bought for some partnership purpose is illustrated by Coder et al. v. Huling, 27 Pa. 84, where it was held that if the property had not been purchased for the use of the firm the payment of the purchase money, standing alone, would not rebut *324the presumption arising from a deed made to the individual partners. In this case therefore we are of opinion that, as the plaintiff relied upon the presumption arising from the deed, the learned judge would have been warranted in telling the jury that if satisfied that the land in controversy had been bought for the use of the firm of S. B. and Charles Hayes, had been paid for with partnership moneys, and treated by them during their lives as partnership property, the presumption arising from the deed was fully rebutted, and the plaintiffs could not recover against the vendee of the representatives of the partnership. This view of the main question presented on this record makes the treatment of the several assignments of error separately a matter of little importance, but as the case goes back it may be best briefly to consider them. The first assignment is sustained. It relates to an effort to show notice to the trustees of the Baptist church. Proof of a conversation between one of the plaintiffs and a woman who was not even a member of the church, but whose husband was, although he was not one of the trustees, is wholly incompetent for the purpose of showing notice. The assignments numbers two to eleven inclusive are to the admission of deeds for other property having no relation to the property in controversy, but purchased at various times by the firm or one of its members for purposes not disclosed by the testimony. These assignments are sustained. Numbers twelve, thirteen and fourteen are to the admission of the testimony, of the several plaintiffs to show that they had not assented directly or indirectly to the sale of the property to the trustees of the Baptist church. This could only be competent in case their assent had been alleged by the defendant. It is wholly immaterial whether they gave or withheld their assent if this was partnership property. The twenty-first and twenty-third assignments relate to the character of the proof required in cases where a written instrument is alleged to be different from the agreement actually made by the parties, and its reformation is s ought. The general rule in such cases is as stated, but the simple affirmance of the points embodied in these assignments was upon the .evidence in this case calculated to mislead the jury. The evidence of the plaintiff was the deed from Montgomery and wife and the presumption arising upon it. The proofs of the defendant showed the facts necessary to rebut that *325presumption and establish the title of the partnership. This evidence was clear and precise, and, as we understand, no effort was made to reply to it, or throw doubt upon it. If so it may be said that, subject to the credibility of the witnesses, it was indubitable. If the jury were satisfied by it that the partners bought the lot for partnership uses, with partnership money and treated it as partnership property, then the prima facies of the deed was successfully overcome and the title of the partnership established. It was not error to affirm these points, as we have already said, but it would have been better to have explained the extent of the application of the rule invoked in this case upon the evidence that was before the jury.
The remaining assignments of error relate to some phase of the general question which we have already considered and do not require to be separately treated.
The judgment is reversed and a venire facias de novo awarded.