Court Opinion

ID: 7985741
Source: CourtListenerOpinion
Date Created: 2022-09-09 01:25:19.799095+00
Date Added: 2024-06-11T16:35:11.766984
License: Public Domain

Cooper, J.,
delivered the opinion of the court.
The testator, by directing the continuance of the business of banking, in which he had been interested during his life, did not render liable to the subsequent creditors of the bank the general assets of his estate. It may be true, as urged by counsel for the appellants, that the principal object which the testator had in view in making his will was to provide for the continued prosecution of the business, and that he looked to the property therein invested, and the profits to be therefrom derived, as the principal source whence the legacies given by him were to be realized; and that the provisions of his will were such that the estate could not be finally administered even as to the property not embarked in the banking house of Adams, Spratt & Co., until the business of that firm should be finally settled ; and yet the intention may not have existed to charge his whole estate with the hazard incident to its prosecution. The rule is, that where one, by his will, directs the continuance of his trade, only such portion of his estate as is at the time of his death invested in the business is to be considered as pledged to its subsequent creditors, unless it is *637unequivocally shown that the general estate, or some part of it, is intended to be bound. One may by will direct his whole estate to be devoted to the purposes of trade, or make it responsible for the debts subsequently to be contracted in a business to be carried on either by his executor alone, or by the surviving members of his firm, or by both such survivors and his executor; but his intention so to do is not sufficiently shown by a simple direction that the trade carried on by him individually, or that of a firm in which he is a member, shall be continued after his death. It is true, that whether the general estate is or is not bound, is to be determined by the intention of the testator as expressed in the will, and that this intention, if disclosed by an examination of the will, as a whole, will be enforced just as it would have been if positively declared, but we do not think the intention of the testator to charge bis general estate is shown by the analysis of his will as presented by the counsel for the appellants.
He first directs that the business shall be continued under the supervision of his partner, Spratt, and then unnecessarily proceeds to give him authority to sign the company’s name “ to any instrument binding or releasing said company to any and all contracts, within the scope of said banking business, as if I were still living.” But who and what is Spratt authorized to bind ? It is the company, not the general estate of the testator, the company, composed of Spratt and so much of the estate of the testator as by his will he has devoted to the enterprise. What this is is shown by the succeeding paragraph of the will. In the clause just quoted, the testator is intent only on conferring upon his surviving partner the power which he deemed it necessary he should have for carrying on the business, evidently impressed with the idea that a mere direction to carry it on did not confer the power necessary to its prosecution. In the next paragraph, however, he proceeds to indicate the property devoted to the business, the time it shall continue, the division of the profits and losses, the compensation to be allowed to the surviving partner for his services, and the extent to which his interest in the firm shall be bound for the hire of a clerk in excess of the interest of Spratt. This clause is, “ that the capital of said company remain and be *638used as heretofore by said firm until the expiration of two years, or such farther'time as may be necessary to close up the business of said firm without injury to either party; that the profits and losses shall be shared as heretofore, and that said Henry D. Spratt shall receive from said company $2,000 annually, and the said executrix shall pay the salary of John C. Wicks, $2,000 annually, or some other efficient person to be approved of by said H. D. Spratt.” It is the interest of the testator in the capital of said firm that is to be continued in it, to “ remain and be used as heretofore,” and this declaration of what was to “ remain ” in said business excludes the idea that it was intended by the testator to invest therein any other portion of his estate. Smith v. Ayer, 101 U. S. 320 ; Ex parte Garland, 10 Ves. 110; M’Neillie v. Acton, 4 De Gex, M. & G. 744 ; Burwell v. Mandeville, 2 How. (U. S.) 560.
The power of the surviving partner to charge the interest of the testator in said firm did not cease at the expiration of two years after the death of the testator. The will directs that the capital stock of said company shall “ remain and be used as heretofore by said firm, until the expiration of two years, or, such further time as may be necessary to close up the business of said firm without injury to either party.” The creditors of the testator might have insisted upon an immediate settlement of the business, and an appropriation of the interest of the testator therein to the payment of their demands against him; and the parties to whom special legacies were given by his will might have proceeded at the expiration of two years to enforce its discontinuance, by showing that further time was not necessary; but, in the absence of any such objections, it was left by the will to the discretion of the executrix and the surviving partner to determine how much-longer time than two years was needed to enable them to wind up the business so as to conserve the interest of both parties in the mean time. It was not required that at the expiration of two years all business should be suspended, except the collection of the debts due the firm, for the will expressly provides that the^capital shall remain and be used as heretofore, “ until the expiration of two years, or such further time,” &c. The transactions of ordinary business were to be carried on. If *639the business was to be conducted as usual for the term of two years, then the giving of further time in which to wind up the unsettled affairs of the company was wholly unnecessary, as without such express delegation of authority it would have existed in the surviving partner ex necessitate rei. If any effect is to be given to this clause of the will, it must be construed as conferring permission on the executrix and surviving partner to continue the business of the firm, if at the expiration of the two years it should seem to them advisable so to do, to advance the interest of the partners; and, certainly, if this power existed at all the executrix, who is residuary legatee under the will, cannot now assert that she abused the confidence reposed in her, when called to account by persons who dealt with the firm after the expiration of two years, and who had the right to believe that further time was necessary, because she and the surviving partner by continuing the business had in effect declared that it was.
It is charged in the bill that the executrix shared in the profits of the business, and thus became personally liable to the creditors of the firm as a partner. In England, the rule first enunciated in Grace v. Smith, 2 Wm. Black. 998, that a person sharing in the profits of a firm became liable as a partner to its creditors, has been to some extent modified by the cases of Cox v. Hickman, 8 H. L. Cas. 268; Kilshaw v. Jukes, 3 B. & S. 847, and other cases cited and discussed in Bindley on Partnership, 39. A consideration of the question is unnecessary here, because we are of opinion that as to the claim asserted by the complainants, Mrs. French is not liable as a partner, because she was a feme covert at the time the money sued for was received by the firm of Adams, Spratt & Co. Code 1871, § 1780, provides that “any married woman may rent her lands, or make any contract for the use thereof, and may loan her money, and take securities therefor, in her own name, and employ it in trade or business. . . . And when a married woman engages in trade or business as a feme sole, she shall be bound by her contracts, made in the course of such trade or business, in the same manner as if she was unmarried.” Under this statute we have held that a married woman may become a partner in a firm. Newman v. Morris, 52 Miss. 402. *640In Netterville v. Barber, 52 Miss. 168, it was said that the effect of the statute is, “ that a married woman may engage in trade in the commercial sense, and in other employments which require time, labor, and skill, and shall be bound by her contracts made in the course of such business.” It may therefore be conceded that since the adoption of the Code of 1871, a married woman has been so far emancipated from the disabilities of coverture as to enable her to engage in any enterprise of a commercial or other character, in which she either invests her separate estate, or her time, labor or skill, and that for contracts made in such business, whether prosecuted by herself alone, or by a firm in which she is a member, she would be liable as would be a feme sole. There is, however, no allegation in the bill in this cause, that Mrs. French contributed either her time, labor or skill to the business of the firm of Adams, Spratt & Co., and it is evident that the capital of said business was exclusively contributed by Spratt and the estate of Adams. The profits arising from the business which were paid over to her did not thereby become a part of her separate estate, for until the settlement of the estate of Adams it was in her hands as the executrix of his will, and whether or not any part of it, or if any part, how much of it would become hers as residuary legatee, was dependent both upon the value of the estate and the amount of the debts and legacies with which it was chargeable. Receiving these profits as executrix was not such engaging in trade or business as was contemplated by the statute, and she is protected by her coverture from the demand made against her by the complainants as a partner in the firm.
The complainants are not affected by the decree of the Chancery Court discharging Mrs. French on her petition from her office of executrix. As to them the order is a nullity, and they may proceed against her as if the estate was still open in the court granting the administration of the will. Pollock v. Buie, 43 Miss. 140. The Chancery Court has jurisdiction because this is a proceeding against the estate of a deceased person being administered. Hunt v. Potter, 58 Miss. 96.
Though, as we have said, Mrs. French is not liable as a creditor to the demand asserted by the complainants, she can*641not interpose her coverture as a defence, if it shall appear that trusting to the decree discharging her, she lias converted the assets of the estate liable to their claim to her own use. As to these creditors she is still executrix of the estate of Adams, and liable to account to them as such for any devastavit she has committed. If the assets received by her from the firm of Adams, Spratt & Co. are still in her hands, they are subject to the complainants’ claim, and if she has converted them to her own use she is guilty of a devastavit, and is liable notwithstanding her coverture. 3 Williams on Executors, 1840; Adair v. Shaw, 1 Sch. & Lef. 243; Clough v. Dixon, 8 Sim. 594; Soady v. Turnbull, L. R. 1 Ch. 494; Bellew v. Scott, 1 Strange, 440.
The fact that the Chancellor, on overruling the demurrer, gave to the complainants leave to amend their bill, did not preclude them from prosecuting an appeal. They had the right if they desired so to do, to stand upon the bill as originally drawn, and were not bound to accept the leave to amend. It may be that by prosecuting an appeal they have waived the right to amend; but, as the demurrer was improperly sustained and the leave to amend was unnecessary, we need not determine what result would have followed the affirmance of the decree of the lower court on the demurrer.

Decree reversed.