Court Opinion

ID: 6807189
Source: CourtListenerOpinion
Date Created: 2022-07-23 18:48:46.627527+00
Date Added: 2024-06-11T16:03:15.973099
License: Public Domain

Lewis, P.,
after stating the case, delivered the opinion of the court. •
In equity real estate purchased with partnership funds for partnership purposes is treated as personalty, and not as realty, and is held liable to the satisfaction of the debts of the co-partnership, including debts due to any one or more members of the firm, in preference to the individual debts of the partners. And it matters not in whose name the property may stand, as the owner of the legal title; the party in whose name it stands being treated as a trustee of the partnership, and accountable accordingly. Pierce's Adm'r v. Trigg's Heirs, 10 Leigh, 406; Wheatley's Heirs v. Calhoun, 12 Id. 264; Christian v. Ellis, &c., 1 Gratt. 402; Story on Partnership (Bennett’s ed.), 138, 157. In the present case it sufficiently appears that the real estate conveyed by the deed of Bell and wife, of the 28th October, 1869, was purchased with partnership funds for partnership purposes. It must therefore be held as first liable to the payment of the debts of the firm of Henry Bell & Co., before it can be applied to the payment of the individual debts of the partners.
And it is equally clear that the judgments sought to be enforced must be held to be the individual debts of Henry Bell. There is nothing to show that in contracting any of the debts for which the judgments were obtained, credit *296was not given to Bell alone. The existence of the co-partnership was a fact well known in the community where the debts were contracted, and at the time they were contracted Bell- was in good standing and credit. The bonds and the draft upon which the judgments were recovered were signed by him alone, and the judgments are against him individually. The'indebtedness was contracted before the outbreak of the late war, a part of it as early as the year 1856, and it was not until after the judgments had been obtained, and Bell had become insolvent, after the war, that the appellants asserted any claim whatever against the firm of Henry Bell & Company. Moreover, it is not shown by the record that the transactions out of which the indebtedness grew in any way enured to the benefit of the firm. By the articles of co-partnership Bell was to receive an amount sufficient to defray his ordinary household expenses, which was to be taken out of the partnership funds- and included in his annual settlements. But it does not appear with sufficient certainty that any of the articles furnished Bell, and for which he executed his bonds, were purchased by him as part of his necessary household expenses; nor does it appear for what purpose the draft drawn-by him on Brown, and afterwards protested, was given.
The charge that the indebtedness, for which the judgments were rendered, was contracted for the benefit of the firm, is denied in the answer, and in the absence of sufficient proof to the contrary, the responsive averments of the answer must be taken as true.
This being so, and it appearing that the property conveyed by the deed of October 28th, 1869, was not more than sufficient to discharge the indebtedness of the firm ta the appellee, and that it was accepted by him in full discharge of that indebtedness, it follows that the decree of the circuit court must be affirmed.
Decree affirmed.