Court Opinion

ID: 6951728
Source: CourtListenerOpinion
Date Created: 2022-07-24 01:32:43.209408+00
Date Added: 2024-06-11T16:08:06.292189
License: Public Domain

Mr. Justice Lawrence delivered the opinion of the Court: This was a bill in chancery filed by Jones, as administrator of John Adams, against Miller and Nimrod Adams, surviving partners of the deceased, in a steam saw and grist-mill. The bill set forth that partnership claims to the amount of $1,987.88 had been allowed against the estate of John Adams; that assets to over that amount, had come to the hands of the surviving partners, and that they refused to settle for the same or apply them in payment of the partnership liabilities. The bill prayed an account under oath, and the appointment of a receiver. The defendants answered under oath, and filed accounts as exhibits, setting forth the condition of the partnership affairs. A replication was filed, and the case was heard on bill, answer and replication, without proof, except that furnished by the answer. The court rendered a decree charging the defendants personally with the total amount of the partnership sales, although the amount due for a portion of these sales had never been received by them, and also requiring them to pay to the administrator two-thirds of the amount of partnership debts allowed against the estate, with interest, although it does not apjiear that any portion of these debts has ever been paid by the administrator. In this there is manifest error. The law governing the relations of the administrator of a deceased partner to the surviving partners, so far as concerns any questions involved in this case, is well settled. Primarily, the administrator has nothing to do with either the partnership assets or the partnership debts. The surviving partners take the exclusive legal title to the former for the payment of the latter. If any assets remain in their hands after payment of all liabilities, they should account to the administrator for the distributive share of the deceased, which then becomes, for the first time, assets in his hands as administrator. If, however, there is an unreasonable delay on the part of the surviving partners in closing the affairs of the partnership, or if they are wasting the partnership property, it is then the right and duty of the administrator, if the partnership creditors remain inactive, to file a bill, as in the present instance, calling the survivors to account and praying for an appointment of a receiver and the complete adjustment of tlie partnership affairs. The administrator himself, if a proper person, may be made receiver, bnt in that event the court should require him to give a new bond as such. People v. White, 11 Ill. 350; Talcott v. Dudley, 4 Scam. 457. In the case before us there seems to have been such delay on the part of the surviving partners as to justify the administrator in filing this bill. But in the absence of any proof of bad faith, or such degree of negligence as would render the survivors personally liable for all the lumber sold, the complainant could only require them to account personally for the actual proceeds of the sales. The debts due for unpaid sales would pass to the receiver to be collected by him. So also it was error to decree that the defendants should pay the complainant from their private funds two-tliirds of the total amount of partnership debts allowed against the estate. There is no proof that the administrator has ever paid one dollar of these debts, nor is there the slightest evidence that the estate is able to pay them. "Why, then, should the defendants be required to pay from their private means two-thirds of these debts to the administrator, to be held by him for the benefit of the estate, when, after making such payment, they may be called upon to pay to the partnership creditors the full amount of these same debts ? The administrator has no claim against the surviving partners for the benefit of the estate, except for the distributive share thereof after the payment of partnership debts. They are to be first paid out of the partnership assets, to the exclusion of private debts allowed against the estate. The proper decree in this case will be that a receiver, who may be the administrator upon his giving an additional bond with security, be appointed, and that the surviving partners pay over to him whatever money the court may find has come to their hands, and has not been expended by them in the payment of partnership debts, or in the legitimate expenses of the mill, and that they deliver over to the receiver all evidences of debt and ehoses in action against the debtors of the firm, as also all personal property, if any, belonging to the firm, and that they be enjoined from collecting any debts due the firm. The court will keep the case on its docket and require a report from the receive^1 at each term, and if the partnership assets shall be exhausted before the payment of the partnership debts, the administrator, if the estate -of John Adams is solvent, will be at liberty to pay the partnership debts allowed against the estate, and to take a decree against the defendants for contribution. The court will ascertain in its decree the amount of partnership money, if any, in the hands of the defendants, and also ascertain specifically the assets of the firm to be delivered to the receiver, and will enforce its decree, if necessary, by the ordinary process of attachment. Decree reversed.