Court Opinion

ID: 4896068
Source: CourtListenerOpinion
Date Created: 2021-09-02 23:57:40.656658+00
Date Added: 2024-06-11T08:12:45.009928
License: Public Domain

Acker, Presiding Judge.—
P. B. Watson and appellee were partners in the saw mill and lumber business, under the firm name of John McKinnon & Co. The firm owned four acres of land within the corporate limits of the town of Orange, upon which their saw mill and machinerg were situated. Appellee resided upon this four acres with his family up to December, 1881, when he moved into a rented house and occupied 'that for a time, and had not returned to the residence on the land at the time of the trial. On December 26, 1881, the firm purchased four and a quarter acres of land adjoining the four acres already owned, and erected a shingle mill and other machinery thereon.
Appellee was the active managing member of the firm, and controlled and directed its business. In December, 1883, the firm became indebted to appellant P. B. Watson in the sum of about $25,000. In March, 1884, P. B. Watson conveyed to his wife, appellant E. R. Watson, an undivided half of the eight and a quarter acres of land, with the mills, etc., situated thereon, after which the mills were operated and the business conducted in the firm name of John McKinnon & Co. as before. The debt *214due Watson by the firm was not paid, and he and his wife brought this, suit April 9, 1887, for dissolution of the partnership, the appointment of an auditor to state the accounts, the appointment of a receiver to take charge of the partnership property, collect the outstanding claims, pay all the indebtedness, including the indebtedness due Watson, and to sell so much of the partnership property as was necessary to pay the indebtedness, and to distribute the balance among the partners. The wife by the petition submits whatever interest she acquired by the conveyance from her husband to the judgment of the court, as though the conveyance to her had not been made.
Appellee answered, alleging that the partnership was dissolved by the-conveyance of Watson to his wife in March, 1884; that he and Mrs. Watson owned the property as tenants in common, and that he was willing to partition with her; admitting Watson's debt, but claiming that he was-liable for only half of it; denying mismanagement; alleging the machinery to be part of the realty; that the undivided half of the eight and a quarter acres is his homestead, resident and business, and that the-partnership during its existence was solvent.
By supplemental petition appellant alleged that at the time of his conveyance to his wife the partnership had ample lumber and products of the mill to pay all other creditors; that Watson’s debt was for saw-logs-furnished the partnershije; that the partnership did not owe appellee anything; that appellee knew of the conveyance to the wife, made no objection thereto, and continued the partnership thereafter as before; that appellee was insolvent and in possession of all the partnership property, appropriating the proceeds, and refused to account; denying appellee's homestead right in the land; praying for decree dissolving the partnership, in favor of Walton establishing his claim, appointing receiver with power to collect claims, sell property, pay debts, etc.; and in the alternative that plaintiff's debt be established and decreed to be alien on the property. <
The trial was by the court without a jury, and resulted in judgment, dissolving the partnership; in favor of Watson against the partnership• for $25,257, and over against McKinnon personally for one-half that-amount; establishing Mrs. Watson's right to an undivided half of the eight and a quarter acres of land, machinery, etc.; and that there are no • equities against said interest in favor of the partnership or partnership-creditors, but denying her partition in this suit; decreeing the other half' interest in the land and machinery to be the homestead of McKinnon, not subject to forced sale on the equitable lien claimed by Watson; establishing Watson's lien on another tract of land, the accounts, and personal property belonging to the firm; refusing to apj>oint a receiver, and placing the accounts and property in the hands of appellee with power to collect the accounts, sell the personal property at private or public sale *215as he thought best; requiring him to give bond in the sum of 11000. The accounts and personal property aggregated about $32,000.
Under proper assignments of error it is contended that the court erred in the following particulars:
1. In adjudging to appellee a homestead in the land upon which the mills were located, together with the improvements thereon, and that the same was not subject to the equitable lien-claimed by AVatson.
2. In refusing to appoint a receiver, and in decreeing the custody, control, and disposition of the partnership assets to appellee.
Whether there was error in the judgment upon the first point raised we think depends very largely on the legal effect of the conveyance from Watson to his wife, made in March, 1884. If the land was partnership property and not held by the partners as tenants in common, and if that conveyance dissolved the partnership of John McKinnon & Co., then McKinnon and Mrs. AVatson became tenants in common in the land, it was no longer partnership property, and appellee was entitled to hold his half under the facts of this case as a business homestead. It seems that the conveyance from AVatson to his wife was for not only AVatson’s half interest in the land but also for his interest in the personal property belonging to the firm. He seems to have disposed of his entire interest in the partnership property except claims due to it, and we think the effect of this conveyance as between the partners, McKinnon consenting, was to destroy the partnership interest in the property, if it ever existed, notwithstanding the business may have been continued and carried on after, just as before the conveyance was made. Story on Part., secs. 307, 358; Hindi, on Part., mar. pp. 230, 698, 700; Carroll v. Evans, 27 Texas, 262; Eogers v. Hiehols, 20 Texas, 724. Appellee had not resided on the land since the purchase of the four and a quarter acres in December, 1881, upon which the firm erected a shingle mill and other machinery, but it clearly appears that his business was confined to operating the mills and machinery situated upon the eight and a quarter acres, all of which was situated within the corporate limits of the town of Orange and of less value than one thousand dollars exclusive of improvements. We think as owner in his individual right he was entitled to have his half interest in the land set apart to him and protected as his business homestead, and that the court did not err in so ruling.
We think the second point is well taken. As a creditor of the firm of McKinnon & Co. appellant was interested in the assets of the firm, and entitled to have those assets applied to the payment of firm debts. Mc-Kinnon was indebted to the partnership, and had possession and control of all of its property. The claims due the partnership amounted to about $30,000, the personal property about $2000. Besides the debt due Watson the partnership owed $4000, all of which was adjudged to be a lien on the partnership property, including 320 acres of land. The evidence *216tended strongly to show that McKinnon was insolvent. Under this state of facts, the court having adjudged the partnership dissolved should have appointed a receiver. We know of no authority that supports that part of the judgment which in effect makes McKinnon, one of the partners, the receiver for the partnership assets after dissolution of the partnership, and gives to him the possession, control, and right to collect the assets to the exclusion of the other partner.
For this error we are of opinion that the judgment of the court below should be reversed and the cause remanded.

Reversed and remanded.

Adopted March 5, 1889.