Court Opinion

ID: 6501888
Source: CourtListenerOpinion
Date Created: 2022-07-19 18:14:41.379624+00
Date Added: 2024-06-11T15:54:38.077986
License: Public Domain

COLLIER, C. J.
It has been frequently said that the death, of one partner, terminates the partnership as to future dealings; yet the rights, duties, powers and authorities of the survivors remain, so far as may be necessary to enable them to wind up and settle the firm. One of the consequences of a dissolution thus effected is, that the personal representatives of the deceased become tenants in common with the survivors of the partnership property and effects in possession. As to the dioses in action, and other rights of action, at law they belong to the survivors, who possess the exclusive right to reduce them into possession; but when recovered, the survivors are regarded as trustees thereof, for the benefit of the partnership; and the representatives of the deceased partner possess in equity the same right of sharing and participating in them, which the deceased partner would have possessed if he had been living. [Story on Part, and citations in the notes, 493-3-4.] So it is laid down, *691that independent of any special covenant, or distinct several contract, one partner cannot maintain a suit at law against the ocher partners, for money paid or advanced, or liabilities incurred on account of the partnership. First, because in such a suit all the partners, including himself, must be made defendants. Second, because it is impossible to know, until all the partnership concerns are ascertained and adjusted, whether a particular partner be a debtor or a creditor of the firm ; for although he may have made large advances on account thereof, he may be indebted to the firm in a much larger amount. If one partner could recover of the other for his advances, they in turn might maintain a cross action, the determination of which would not adjust the respective rights and liabilities of the parties. To prevent litigation so profitless and inconclusive, a Court of Equity will afford the appropriate remedy, wherever extcquo et bono it is necessary and proper; and that tribunal will finally settle the accounts of the partnership and award to each member of the concern the measure of justice to which he is entitled. [Story on Part. 318 to 326; 513 to 515, and citations in notes. Grigsby’s Ex’ors. v. Nance, 3 Ala. Rep. 347.
In Marr’s Ex’or. v. Southwick, Cannon & Warren, 2 Porter’s Rep. 351, it was held, that a creditor of a partnership could not recover in equity against the representatives of one of the partners who was dead, the surviving partner not being shown to be insolvent. Mr. Justice Story says such was the doctrine formerly held on this subject, but continues, “ it is now held, that in equity all partnership debts are to be deemed joint and several; and consequently the joint creditors have in all cases a right to proceed at law against the survivors, and an election also to proceed in equity against the estate of the deceased partner, whether the survivors be insolvent, or bankrupt.,.or not.” [Story on Part. 514, and citations in notes.] — > After the decision of the case in 2 Porter’s Rep., a statute was enacted, which gives an action at law in such case, against the representatives of the deceased partner, subject to the following provisos: “Provided,the plaintiff shall, before instituting such suit, make affidavit in writing before the Clerk of the proper Court, or Court itself, to be filed with the papers, that the survivor is insolvent or unable to pay the amount of the debt, or is beyond the jurisdiction of the Court. Provided, hawever, *692that when any . such representative is sued separately, which may be done without such affidavit, no execution shall issue against such representative, until an execution is bona fide run and returned nulla bona as to the survivors.” [Bartlett & Waring v. Lang’s Administratrix, 2 Ala. Rep. N. S. 404.]
We have been thus particular in stating the foregoing principles, as they seem to us to point to a conclusion in the case before us.
Now, although the death of Willis Lang dissolved, ipso fac-to, the partnership between himself and the defendant, as to all. future operations, yet we have seen that the dissolution did not exclude his representative from all interest in the assets of the firm. As to those in possession, she was a tenant in common, and as to those in action, she was a cestui qxie trust with the defendant, who was a trustee, for their joint benefit. The defendant’s liability for the payment of the debts of the firm, was absolute, and at law primary, yet the administratrix’ might also be sued at law, under the statute, or in equity, for the recovery of the same right. So that, notwithstanding the death of one of the partners, the debts owing at the occurrence of that event, are a several charge on the administratrix and the survivor. This being the case, the satisfaction of the judgment against either, must be regarded an extinguishment of the right against both. Upon principles of analogy, as well as direct reasoning this roust be so.
The payment of the judgment recovered against Mrs. Lang, did not give her a right of action against the defendant, but her remedy, as we have seen in such ca.se, would be in equity, where the Chancellor would adjust the accounts of the parties, and ascertain the balance between them. A satisfaction of that judgment would, we have already said, inure to the discharge of the judgment against the defendant, and leave nothing due which the plaintiff could assign. What would have been the effect if Mrs. Lang had, with her own . means, have paid the judgment against her, and taken an assignment to herself, individually, it is unnecessary to consider; in the entire transaction she seems to have represented her intestate’s estate.
■ The consequence is, the judgment of the Circuit Court is affirmed.