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which came to him by the will of his testator.

A decree was rendered in con

formity with the prayer of the bill, and Shanks appealed.

Being satisfied, as already stated, of the fairness and honesty of the proceedings of Brown and Klein and of the purchasers from them, and waiving as of no consequence, in regard to the principal point in the case, the allegation of Shanks' concurrence in or ratification of Brown's action, we proceed to consider the question as to the power or authority of Brown, the surviving partner, to bind Shanks by the conveyance to Klein, and by the sales thereunder made.

67. Contention of counsel.

There is no doubt that in the present case all the real estate which is the subject of this controversy is to be treated as partnership property, bought and held for partnership purposes within the rule of equity on that subject. Nor is it denied by the counsel who have so ably argued the case for the appellant that the equity of the creditors of the partnership to have their debts paid out of this property is superior to that of the devisee of Johnston. Their contention is that this right could only be enforced by proceedings in a court of justice, and that no power existed in Brown, the surviving partner, to convey the legal title yested in Shanks by the will of Johnston, nor even to make a contract for the sale of the real estate which a court will enforce against Shanks as the holder of that title.

Counsel for the appellees, while conceding that neither the deed of Brown to Klein, nor of Klein to his vendees, conveyed the legal title of the undivided moiety which was originally in Johnston, maintain that Brown, as surviving partner, had, for the purpose of paying the debts of the partnership, power to sell and transfer the equitable interest or right of the partnership, and of both partners, in the real estate; that the trust deed which he made to Klein was effectual for that purpose, and that by Klein's sales to the other appellees they became invested with this equitable title and the right to compel Shanks to convey the legal title.

One of the learned counsel for the appellant concedes that at the present day the doctrine of the English court of chancery "extends to the treating of the realty as personalty for all purposes, and gives the personal representatives of the deceased partner the land as personalty, to the exclusion of the heir," and that the principle has "acquired a firm foothold in English equity jurisprudence, that partnership real estate is in fact in all cases, and to all intents and purposes, personalty." He maintains, however, that the principle has not been carried so far in the courts of America; that the extent of the doctrine is that the creditors of the partnership and the surviving partner have a lien on the real estate of the partnership for debts due by the firm, and for any balance found due to either partner on a final settlement of the partnership transactions; and that the right of the surviving partner, and of the creditors through him, is no more than a lien, which cannot be asserted by a sale, as if the property were personal, but to the enforcement of which a resort to a court of equity is necessary.

68. The equitable right of the surviving partner in partnership real estate is something more than a lien. It is an interest in the property, giving him the right to sell it to pay partnership debts, and the purchaser the right to enforce a conveyance of the legal title from the holder thereof. Authorities reviewed. We think that the error which lies at the foundation of this argument is in

the assumption that the equitable right of the surviving partner and the creditors is nothing but a lien.

It is not necessary to decide here that it is not a lien in the strict sense of that word, for if it be a lien in any sense it is also something more.

It is an equitable right accompanied by an equitable title. It is an interest in the property which courts of chancery will recognize and support. What is that right? Not only that the court will, when necessary, see that the real estate so situated is appropriated to the satisfaction of the partnership debts, but that for that purpose, and to that extent, it shall be treated as personal property of the partnership, and like other personal property pass under the control of the surviving partner. This control extends to the right to sell it, or so much of it as may be necessary to pay the partnership debts, or to satisfy the just claims of the surviving partner.

It is beyond question that such is the doctrine of the English court of chancery, as stated by counsel for appellant. As this result was reached in that court without the aid of any statute, it is authority of very great weight in the inquiry as to the true equity doctrine on the subject. We think, also, that the preponderance of authority in the American courts is on the same side of the question.

In the case of Dyer v. Clark, 5 Metc. (Mass.), 562, that eminent jurist, Chief Justice Shaw, while using the word "lien" in reference to the rights now in controversy, asks, "What are the true equitable rights of the partners as resulting from their presumed intentions in such real estate? Is not the share of each pledged to the other, and has not each an equitable lien on the estate, requiring that it shall be held and appropriated, first, to pay the joint debts, then to repay the partner who advanced the capital, before it shall be applied to the separate use of either of the partners? The creditors have an interest indirectly in the same appropriation; not because they have any lien, legal or equitable (2 Story, Eq., sec. 1253), upon the property itself; but on the equitable principle that the real estate so held shall be deemed to constitute a part of the fund from which their debts are to be paid before it can be legally or honestly diverted to the private use of the parties. Suppose this trust is not implied, what would be the condition of the parties?" etc. "But treating it as a trust, the rights of all the parties will be preserved." It is clear that in the view thus announced the right of the creditors is something more than an ordinary lien.

In Delmonico v. Guillaume, 2 Sandf. (N. Y.) Ch., 366, where the precise question arose which we have in the present case, the vice chancellor held that "Peter A. Delmonico, as the surviving partner, became entitled to the Brooklyn farm, and as between himself and the heir of John he had an absolute right to dispose of it, for the payment of the debts of the firm, in the same manner as if it had been personal estate." In so deciding he followed the English authorities, and cited Fereday v. Wightwick, 1 Russ. & M., 45; Phillips v. Phillips, 1 Myl. & K., 649; Brown v. Brown, 3 id., 443; Cookson v. Cookson, 8 Sim., 529; Townshend v. Devaynes, 11 id., 498, note.

In Andrews' Heirs v. Brown's Adm'r, 21 Ala., 437, the supreme court said that, "inasmuch as the real estate is considered as personal for the purpose of paying the debts of the firm, and the surviving partner is charged with the duty of paying these debts, it must of necessity follow that he has the right in equity to dispose of the real estate for this purpose, for it would never do to charge him with the duty of paying the debts and at the same time take from

him the means of doing it. Therefore, although he cannot by his deed pass the legal title which descended to the heir of the deceased partner, yet as the heir holds the title in trust to pay the debts and the survivor is charged with this duty, his deed will convey the equity to the purchaser, and through it he may call on the heir for the legal title and compel him to convey it."

In Dupuy v. Leavenworth, 17 Cal., 262, Chief Justice Field, in the name of the court, said: "In the view of equity it is immaterial in whose name the legal title of the property stands,— whether in the individual name of the copartner or in the joint names of all; it is first subject to the payment of the partnership debts, and is then to be distributed among the copartners according to their respective rights. The possessor of the legal title in such case holds the property in trust for the purposes of the copartnership. Each partner has an equitable interest in the property until such purposes are accomplished. Upon dissolution of the copartnership by the death of one of its members, the surviving partner, who is charged with the duty of paying the debts, can dispose of this equitable interest, and the purchaser can compel the heirs at law of the deceased partner to perfect the purchase by conveyance of the legal title."

If the case could be held to be one which should be governed by the decisions of the courts of Mississippi because the principle is to be regarded as a rule of property, which we neither admit nor deny, the result would still be the same.

In one of the earliest cases on that subject in the high court of errors and appeals of that state (Markham v. Merritt, 8 Miss., 437), Chief Justice Sharkey, in delivering the opinion of the court, concurs in the general doctrine that "when land is held by a firm, and is essential to the purposes and objects of the partnership, then it is regarded as a part of the joint stock, and will be regarded in equity as a chattel." A careful examination of the Mississippi cases cited by counsel has disclosed nothing in contravention of this doctrine or in denial of the authority of the surviving partner to dispose of such property for the payment of the debts of the partnership.

We are of opinion, therefore, that the purchasers from Klein acquired the equitable title of the real estate conveyed to him by Brown; that they had a right to the aid of a court of chancery to compel Shanks to convey the legal title to the undivided half of the land, vested in him by the will of Johnston. Decree affirmed.

§ 69. In general. The interest of a partner in a trade-mark is of too intangible and shadowy a character to be the subject of sale under a decree of a court of chancery. Taylor v. Bemis, 4 Biss., 406.

§ 70. A court of equity should know, before making a decree for the sale of the interest of a partner, that there is some tangible interest which can be sold, which will be of some value. Ibid.

§ 71. Where a partnership has been proved to exist, oral evidence may be admitted to prove that the factory in which the partners carried on their business, and upon which they expended their money, was a part of the capital stock contributed by them; and the oral evidence being clear and undisputed, and admitted to be true, the property in question is to be treated in bankruptcy as the property of the firm; if on no other ground, then clearly on that of part performance. In re Farmer,* 18 N. B. R., 207.

§ 72. When deemed individual and when firm property.- Property purchased by a member of a firm for his own account, and not claimed by the other partners, is individual and not firm property. Sedgwick v. Place, 12 Blatch., 163.

$73. In the absence of fraud and breach of trust, property purchased with partnership funds does not of necessity become partnership property, if that is not the intention of the parties. Hoxie v. Carr,* 1 Sumn.. 173.

§ 74. But, in the absence of controlling circumstances, the fact that payment for property purchased is made out of partnership funds, especially if the property is needed for the use of the partnership and is so used, will be decisive that it was intended as partnership property. Ibid.

$75. Premises used by partners for the purpose of carrying on their trade prima facie form part of the partnership property. But this presumption may be rebutted. Osborn v. McBride, 16 N. B. R., 22.

§ 76. Real property purchased with money belonging to a firm is in equity prima facie firm property. Patrick v. Central Bank, 1 Dill., 303.

§ 77. In the absence of proof of its purchase with partnership funds for partnership purposes, real property standing in the names of several persons is deemed to be held by them as joint tenants or as tenants in common, and none of the several owners possesses authority to sell or bind the interest of his co-owners. Thompson v. Bowman,* 6 Wall., 316.

§ 78. Where a complainant files a bill, claiming for himself and others certain tracts of land purchased in partnership, to sustain the suit it is enough to show that the land was purchased by the partnership funds, without specifying the amount contributed by each partner. Piatt v. Oliver, 2 McL., 267.

$ 79. purchased by partner with funds of firm.- Where land is purchased by one partner in his own name with the partnership funds and is used for partnership purposes, the law raises an implied trust in favor of the firm, and parol evidence is admissible to establish such a trust. Scruggs v. Russell,* McCahon, 39.

§ 80. Real estate, settled by a partner on his wife, is liable to the debts of the firm, when it appears that it was improperly purchased with the assets of the firm. But neither the wife, nor her executors if she be dead, can be sued in personam for the value of such property. Phipps v. Sedgwick, 5 Otto, 3.

§ 81. A resulting trust will arise where lands have been purchased by one partner and paid for out of the funds of the partnership. Philips v. Crammond, 2 Wash., 441.

§ 82. If a partner fraudulently or improperly, without the consent of his copartners, applies partnership funds to the purchase of real estate or other property, taken in his own name and for his own use, his copartners may, if they can distinctly trace the investment, follow it, and treat it as trust property held for the benefit of the firm by the partner or any one in whose hands it may be, except a bona fide purchaser for value. Kelley v. Greenleaf,* 3 Story, 93.

§ 83. Where partnership funds were thus invested by one of the partners in mortgaged real estate, and such partner subsequently died, held, that the real estate would be sold at the suit of the surviving partner, and the proceeds be applied first to the discharge of the mortgage and the residue to the discharge of the debt due from the partner to the firm. Ibid.

$ 84. - considered as personalty.— Real estate held by partners, either as capital stock for partnership purposes or as purchased with partnership means, is for the purpose of paying the debts due by the partnership, or the balance due its members, considered as personal assets of the partnership, the legal title being vested in the partners as tenants in common, in trust for the creditors and members of the firm as stated in the articles of copartnership. And upon the death of one of the members, the legal title descends to his heirs or devisees as tenants in common with the survivors upon the same trusts. Kleine v. Shanks,* 3 Cent. L. J., 799.

§ 85. When real estate is purchased for partnership purposes and on partnership account, it will be regarded as partnership property, no matter in whose name the title may stand, and will be treated for most purposes as personalty in equity. Hoxie v. Carr,* 1 Sumn., 173.

§ 86. It seems that it will be considered in equity as personalty, as between the personal representatives of a deceased partner and his heir or devisee. Ibid.

§ 87. Lands bought and held for partnership purposes, whether standing in the name of one or both partners, are considered in equity as partnership property, and stand on the same footing as personal property. Lyman v. Lyman,* 2 Paine, 11.

§ 88. Real estate may be purchased with partnership funds for the individual account of the partners, but if the intention was to hold it as partnership property equity treats it as personalty of the partnership, and as against a judgment creditor of one member of the firm, it is first subject to the payment of the firm debts. Marrett v. Murphy,* 1 Cent. L. J., 554; 11 N. B. R., 131.

§ 89. Real property belonging to a partnership is treated in equity as part of the partnership fund, and is disposed of and distributed the same as, personal assets. Clagett v. Kilbourne,* 1 Black, 346.

§ 90. Real estate of a partnership, although considered in equity as personal property for

most purposes, cannot be transferred by one of the partners the same as personalty. The mode of conveyance of real estate is not affected by the general law of partnership. Piatt v. Oliver,* 3 McL., 27.

§ 91. — bona fide purchaser of— If a purchaser of real estate has actual or constructive notice at the time of the purchase that it is partnership property, it will be chargeable in his hands with the payment of the partnership debts, even though he has no notice of the existence of the debts. If the purchaser has no notice that it is partnership property, he will be exonerated to the extent of the purchase money already paid, and the balance unpaid will be chargeable the same as the real estate itself would be. Hoxie v. Carr,* 1 Sumn., 173.

§ 92. Where the deed under which purchasers of real estate derived title described the property as "heretofore owned by " a certain company, and one of the members of that company was at the time of the purchase in possession of the property and holding out the other, held, that the purchasers were put upon inquiry as to whether it was not partnership property. Ibid.

III. POWER OF PARTNER TO BIND THE FIRM.

SUMMARY - In general; dormant partners, § 93.— Misapplication of funds, § 94.— Signing in individual name, §§ 95, 96.— Application of funds to separate debt, § 97.— Assignment for creditors, §§ 98, 99.— By deed, § 100.— Real property, § 101.— Assignment of debts, § 102.— Act in violation of law, § 103.- Conversion, §§ 104-107.— Use of name after dissolution, § 108.— Admissions after dissolution, § 109.— Appearance to suit, § 110.

§ 93. An active partner binds the firm by transactions within the ordinary scope of the partnership business, such as, in case of an ordinary mercantile partnership, signing and indorsing notes and bills in the name of the firm and obtaining discounts, notwithstanding any private restrictions on his powers, which are unknown to those dealing with him; and this principle applies as well to dormant as to ostensible partnerships. Winship v. United States Bank, SS 111-118.

§ 94. The fact that the partner misapplies funds so procured by him will not defeat a recovery unless the plaintiffs were parties or privy to the misapplication. Ibid.

§ 95. Generally, if one member of a firm draws a bill or a note in his own name, he only will be bound and not the firm, although it is a partnership transaction; but this rule does not hold where there is a dormant partner, unknown to the creditor, nor when such bills or notes have been customarily drawn as firm paper and the other partners have so treated them. In re Warren, SS 119-124.

§ 96. When partners sign a bill or note in their several names and not in that of the firm, it seems that it will be treated as partnership paper, if it is in fact on partnership account. Ibid. 97. The funds of a partnership cannot be applied by one partner to the discharge of his separate debt without the assent, express or implied, of the other partner. In such case it makes no difference that the separate creditor had no knowledge, at the time, that the fund was partnership property; the partnership may, nevertheless, reassert its claim to it. Rogers . Batchelor, §§ 125, 126.

§ 98. A partner has power to bind his copartners by a general conveyance of the effects of the partnership, not including real estate, for the benefit of the firm creditors, whether the conveyance be made directly or through the intervention of trustees. Anderson v. Tompkins, $127-131.

§ 99. An objection to such conveyance that it prefers certain creditors, and that the copartner had a right to be consulted about that matter, is not available, if the latter was absent in a foreign country and the business was being conducted by the partner who made the conveyance. Ibid.

§ 100. The rule that one partner cannot bind another by deed does not go so far as to vitiate a conveyance by deed of property which is transferable by delivery without deed. Ibid.

§ 101. Real property conveyed to a firm, or to partners in trust for a firm, is held by them as tenants in common, and neither party can convey more than his undivided interest. Ibid. § 102. An assignment by one partner of debts which are assignable at law is valid, and is not vitiated by being made under seal. As to book accounts (which are not assignable at law, but are so in equity), if successive assignments are made by each of the partners separately, the prior equity should prevail, and the accounts will therefore pass by the first deed. Ibid.

$103. A tort or an act in violation of a particular statute law, and attended with a forfeiture, is not within the proper scope and business of a partnership entered into for lawful purposes. Where, therefore, one of two partners, in the absence and without the knowledge of

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