Court Opinion

ID: 3679730
Source: CourtListenerOpinion
Date Created: 2016-07-06 06:25:23.073214+00
Date Added: 2024-06-11T15:27:44.438266
License: Public Domain

Partnership — realty purchased with partnership funds and forpartnership purposes treated in equity as "personalty."
1. Real estate purchased with partnership funds and for partnership purposes in equity is treated as personalty, and is subject to disposition for partnership purposes.
Partnership — in conveyance to partners legal title remains ingrantees in trust for partnership purposes.
2. In a conveyance to partners, the legal title remains in the grantees named in the deed, who hold the same as trustees for partnership purposes.
Partnership — on decease of partner holding legal title in partnershipreal estate, title passes to heirs, and surviving partner succeeds topartnership property in trust for liquidation.
3. Upon the decease of a partner holding a legal title in partnership real estate, his legal title passes to his heirs. The surviving partner succeeds to the partnership property in trust for purposes of liquidation, and is authorized to make a contract for the sale of, and to sell, the partnership real estate for purposes of liquidation.
Partnership — deed by surviving partner for purposes of liquidationunder trust passes full equitable title to grantee; transfer of barelegal title from minor heir of deceased father may be compelled.
4. A deed of partnership real estate made by the surviving partner for purposes of liquidation pursuant to the trust passes the full equitable title to the grantee, and the district court has jurisdiction to compel the transfer of the bare legal title to such grantee from a minor heir of the deceased partner. *Page 435 
Partnership — requirement of inventory and bond by surviving partnerheld not to affect interest of survivor, and are not conditionsprecedent to his rights.
5. The provisions of § 8711, Comp. Laws 1913, which require the making of an inventory and the filing of a bond by the surviving partner in the county court does not affect the nature and extent of the interest possessed by the surviving partner or partnership property, and are not conditions precedent for the exercise of such right by the surviving partner.
NOTE. — The general doctrine as drawn from the cases, with regard to the ownership of real estate by a partnership, is that where real estate is purchased with partnership funds, for partnership purposes, and is appropriated to partnership uses, or taken and treated as partnership property, equity regards it as partnership property no matter in whose name the legal title is taken; and it is regarded as personal estate so far as it is required for the payment of the debts and liabilities of the partnership, as will be found by an examination of the cases collated in notes in 27 L.R.A. 449, and 37 L.R.A.(N.S.) 889, as to when real estate will be considered partnership property.
On rights of partners in partnership real property, see note in 48 Am. St. Rep. 62.
On right of partners to convey partnership real property, see note in 26 L. ed. U. S. 635.
This is a suit to quiet title to certain property *Page 436 
adjacent to the Gardner Hotel in Fargo, North Dakota. It was the partnership property of C. A. Bowers and J. H. Bowers. In 1917 the latter died leaving a widow, Catherine, and daughter, Helen, ten years old. The surviving partner contracted to sell the property to the Gardner Hotel Company, and on receipt of $40,000 made to the hotel company a conveyance whereby for himself, individually and as surviving partner, he conveyed the property to the Gardner Hotel Company. Catherine Bowers joined in the deed. The surviving partner did not make to the administrator of the deceased an inventory of the partnership property, with a bond, as provided by statute. Comp. Laws, § 8771. The court gave judgment sustaining the deed as a valid conveyance and quieting title under the deed. And to remove all doubts on the matter the case has been duly certified to this court pursuant to the statute.
The question is on the power of the surviving partner to sell and convey the partnership property regardless of any inventory or bond. and on the jurisdiction of the court to quiet title. Doubtless the heirs of the deceased might have obtained an order from the probate court requiring the filing of an inventory and bond, but the surviving partner is so amply responsible and so far above suspicion that the filing of a bond and inventory would be an idle act. It would have made expense for no purpose. And such filing is not made a condition precedent to the power to sell and convey the partnership property of the vesting of title in the surviving partner.
By statute, "on the death of a partner the surviving partners succeed to all the partnership property, whether real or personal, in trust for the purpose of liquidation, even though the deceased was appointed by agreement sole liquidator; and the interest of the deceased in the ultimate distribution of the partnership assets passes to those who succeed to his other personal property." Comp. Laws, § 6425. The term "other personal property" indicates that the partnership assets are classed as personal property. The statute contemplates no procedure in probate. It vests in the surviving partner the title to all partnership property in trust for the purpose of liquidation, — for the purpose of selling the property, paying the debts, winding up and closing the affairs of the partnership. When that is done the interest of the deceased in the distribution of the partnership assets passes to *Page 437 
the heirs the same as "other personal property." On the plain words of the statute it is entirely clear that the surviving partner had full power to sell and convey the property in question. His deed gives a good title to his own and to the partnership estate. There is no good reason for reviewing the numerous authorities cited by counsel.
Objection is made to the jurisdiction of the court on the ground that this is a probate matter, in which the Constitution gives to the county court exclusive original jurisdiction. Constitution, § 111. The answer is that the liquidation of a partnership estate is not a probate matter. County courts have no jurisdiction of actions to quiet title, and in such actions the district courts have original jurisdiction. The district court, with few exceptions, has original jurisdiction of all cases, both at law and in equity. Const. § 103. In the district court actions to quiet title and determine adverse claims to real estate are a common and every-day occurrence. By statute any person having an estate or interest in land may maintain an action to quiet his title against any person claiming an adverse estate or interest. Comp. Laws, § 8441.
"To quiet title to real property or to remove an existing cloud and to prevent a threatened cloud is an ancient and well-established head of equity cognizance."
"The broad grounds on which equity intervenes to remove a cloud on title are the prevention of litigation, the protection of the true title and possession, and because it is the real interest of both parties and promotive of right and justice that the precise state of the title should be known if all are acting bona fide." 32 Cyc. 1305, 1306.
Accordingly this court does hold and determine:
(1) That the district court has power to quiet title in the plaintiff as to any possible estate Helen Bowers may have in such real estate.
(2) That the deed made by the surviving partner of Bowers Brothers and the widow of J. H. Bowers conveyed the entire legal and equitable title to the property.