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agreement upon the subject such trust is implied, and, in such event, it may, if necessary, be subject to the satisfaction of the partnership obliga tions; Shanks v. Klein, 104 U. 8. 18; Nicoll v Ogden, 29 Ill. 323; 81 Am. Dec. 311; Uhler v. Semple, 20 N. J. Eq. 288; Diggs v. Brown, 78 Va. 295; Wiegand v. Copeland, 7 Saw. 442.
Without attempting to further pursne the inquiry, what is partnership realty, we proceed to consider the rights of the creditors of the partnership in such realty as has been impressed wish the quality of partnership assets. In proceeding by attachment or execution against such realty the partner. ship creditors may, of course, levy upon and sell it, and thereby acquire the legal title standing in the name of the partners, or of either of them, at the date of the levy. If, however, they rest upon the levy and sale, and take no proceedings in equity for the protection of their interests, the title acquired by them must remain subject to the claim of dower on the part of the wives of the partuers, or of either of them, and to all transfers made or liens created by or against either of the partners. In equity the partner. ship realty will, in all cases, be treated as partnership assets so far as may be necessary to do complete equity between the partnership and its creditors, and between the several members of the firin. Hence, each of the partners has a lien thereon to secure the payment of any balance which may remain due hun
upon the final settlement of the partnership affairs: Roberts v. McCarty, 9 Ind. 16; 68 Am. Dec. 604; and neither can avoid this lien by compelling the partition of the property: Baird v. Baird, 1 Dev. & B. Eq. 524; 31 Am. Dec. 329; Flinner v. Moore, 2 Jones, 120. The rule prevailing as to per. sonalty, that even at law neither partner has any specific interest in the firm property, but only a right to share in the surplus after the debts are paid, does not apply with respect to realty. Therefore, if there be a levy upon the interest of a member of the firm in real property belonging to it, and a subsequent levy under a writ against the partnership, and sales thereunder, and the title of the different purchasers thereat is drawn in question in an action of ejectment or other proceeding at law, the writ first levied must be conceded precedence: Peck v. Fisher, 7 Cush. 356; Golden Stute etc. Works v. Davidson, 73 Cal. 389. In equity the rule is otherwise. “It is a well-known rule, governing the relation of partnership, that parte nership property must first be applied to the payment of partnership debts, and that the true and only interest of each member in the personal stock is the balance found due to him after payment of all the partnership debts, and the adjustment of the partnership accounts between himself and his copartners. And in equity, real estate forms no exception, but stands on the same footing in this respect with personal property, no matter in whom the legal title may be vested": Bopp v. Fox, 63 Ill. 540; Price v. Hicks, 14 Fla. 565. “Without entering at much length npon an examination of the English and American authorities upon the subject we may say that the doctrine is well established in Ainerica that real estate purchased by partners with partnership funds for partnership purposes is at law hold by them as tenants in common, but in equity is deemed as held in trust as a part of the partnership property applicable in the first place exclusively to paying the partnership debts": Duryea v. Burt, 28 Cal. 580; Jones v. Par. 8018, 25 Cal. 105; Hoxie v. Carr, 1 Sum. 173; Pierce v. Trigg, 10 Leigh, 406; Sigourney v. Munn, 7 Conn. 11; Divine v. Mitchum, 4 B. Mon. 488; 41 Am. Dec. 241; Pratt v. Oliver, 3 McLean, 27; Buffum v. Buffum, 49 Me. 108; 77 Am. Dec. 249; Hill v. Beach, 12 N. J. Eq. 31; Cilley v. Huse, 40 N. H. 338; Gordon v. Kennedy, 36 Iowa, 167; Lime Rock Bunk v. Phetteplace, 8 R. L
56. This rule prevails at law in some of the states. Thus, in New Hampshire, it has been held that an attachment of the firm realty at the suit of firm creditors takes precedence over a prior attachment at the suit of the individual creditors: Jarvis v. Brooks, 27 N. H. 37; 59 Am. Dec. 359.
If a widow of a deceased partner applies for an assignment of dower in the lands of the partnership it must be granted to her, unless withholding it is necessary to protect the other partners or the partnership creditors: Markham v. Merrett, 7 How. (Miss.) 437; 40 Am. Dec. 76. If, on the other hand, she cannot be assigned snch dower without prejudicing the surviving partner, or the partnership creditors, it may, if the proceeding is in equity, be denied her for that reason: Greene v. Greene, 1 Ohio, 535; 13 Am. Dec. 642; Sumner v. Hampson, 8 Ohio, 328; 32 Am. Dec. 722; Johns v. Johns, 1 Ohio St. 357; Loubat v. Nourse, 5 Fla. 350; Bopp v. Fox, 63 Ill. 540; Mat. lock v. Matlock, 5 Ind. 403; or the surviving partner or the firm creditors may resort to proceedings in equity to have the land sold free of the widow's right of dower: Dyer v. Clark, 5 Met. 562; 39 Am. Dec. 697; Andrews V. Brown, 21 Ala. 437; 56 Am. Dec. 252. The title to partnership realty, whether it remains in the partners in whose name it was originally taken, or has descended to their heirs at law, or remains partly in the surviving partners and partly in the heirs at law or other successors in interest of a deceased partner, or has been transferred, whether by voluntary or invol. untary transfer to some third person having notice that it was partnership property, is held in trust for partnership purposes, and due respect for and execution of that trust may be compelled at the instance of any person whose equities are dependent upon the faithful execution of the trust. The inost usual procedure is by bill in equity, against all the persons in whom the legal title is vested, to have the realty in question decreed to be part. nership assets, and that through the intervention of a receiver or otherwise it be taken possession of, and so much thereof sold as may prove necessary to sati-fy the partnership obligations, including any sum that may be due from the partnership to any of the partners: Buffum v. Buffum, 49 Me. 108; 77 Ain. Dec. 249; Murphy v. Abrams, 50 Ala. 293. If an attachment has been taken out against a member of the firm for his separate debt a suit may Be maintained to declare that his lien is subordinate to the claims of the partnership creditors, or of the surviving partner, and he may be restrained from proceeding until the partnership obligations shall first be discharged: Crooker v. Crooker, 46 Me. 250; Buchan v. Sumner, 2 Barb. Ch. 165; 47 Am. Dec. 305; Willis v. Freeman, 35 Vt. 44; 82 Am. Dec. 619; Bowen v. Billings, 13 Neb. 439; Conroy v. Woods, 13 Cal. 626; 73 Am. Dec. 603; Schuster v. Rader, 13 Col. 329. If the lien has been created by one of the partners, as by giving a 'mortgage on his interest, and proceedings are instituted in equity for the foreclosure of such lien, the defense may be therein interposed that the property is partnership estate, and the foreclosure of the lien be refused or made subject to the equities of the partnership or of its creditors: Conant v. Frary, 49 Ind. 530; Jones v. Pursons, 25 Cal. 100.
It is, as we have already indicated, necessary, before subjecting a pur chaser or mortgagee from one of the partners, to partnership equities, that he purchased with notice thereof. Whether the notice with which he must be affected must include not only knowledge that the property is partnere ship assets, but also that it will be needed to satisfy partnership obliga. tiong, is perhaps not entirely free from doubt. It would seem that if he purchasedl or acquired his lien with notice that the property in question was, as between the partners, partnership assets, he should be deemed to have accepted the title subject to the hazard of its being required to sat isly partnership indebtedness: Jones v. Parsons, 25 Cal. 100; Cavandar y. Bultul, 29 L. T., N. S., 710; 'illinghast r. Champlin, 4 R. I. 173; 67 Am. Dec. 510.
If partnership realty has by any means been sold, and the proceeds brought before the court for distribution, and the court is either a court of chancery or a court which in the matter before it is entitled to be controlled by the principles of courts of equity, as where it is a court having jurisdiction of the estate of insolvents and bankrupts, it will, as in the case of partnership realty, give a preference to partnership creditors: Fall River W. Co. v. Borden, 10 Cush. 458.
Form of Relief. It is not necessary to consider in detail the form of re. lief which may be granted in equity, for it is one of the most beneficial features of equity jurisprudence that it is but little restricted in the form or mode of adıninistering relief, and that, when the existence of an equitable cause of action in favor of the complainant is established, the court is rarely, if ever, when applied to in due time, unable to give him some adequate relief, either preventive or remedial. If a partnership creditor has an equity against its assets which is about to be endangered by a sale of the property by one of its partners, or under an execution or other writ against him, the court may enjoin such sale or disposition, or restrict its operation to the interest which may remain in the partner after the adjustment and settlement of the partnership affairs: Hubbard v. Curtis, 8 Iowa, 1; 74 Am. Dec. 283. If, on the other hand, preventive relief is not essential to the complainant, he may, on bringing before the court all the parties in whom the legal title is vested, have a decree for its sale and the application of the proceeds to the discharge of the partnership obligations, and, as incident to the relief granted, may have a receiver appointed, if necessary, either for the preservation or disposition of the property, and such conveyances made as may be required to vest in the purchasers at such sale the legal as well as equitable title to the property sold.
Creditors of the partuership seeking relief of any character in equity are sulyject to the rules applicable to creditors' bills. In the first place, it is essential to a creditor's bill that the complainant be without adequate rem. edy at law, and that he show either that he has exhausted his legal rem. edies or that further pursuit of them must necessarily be unavailing: Case v. Beauregud, 1 Woods C. C. 125; 101 U. S. 688; Smith v. Railroad Co., 99 U. S. 398. It is not sufficient that he is a creditor at large, for, as such, he has no lien on the property of the partnership. He must either by at. tachment, execution, or some other process, have acquired a lien on the property, or he must have recovered judgment at law upon his debt: Greenwood v. Broadheid, 8 Barb. 593; Rice v. Barnard, 20 Vt. 479; 50 Am. Dec. 54; Clement v. Foster, 3 Ireil. Eq. 213; Reere v. Bradford, 13 Ala. $37; or tho equities of his case must be such as to bring him within the exceptions to the general rule upon the subject. As, however, a creditor's bill, to reach either the assets of the partnership or other property which a partnership creditor is entitled to have applied to the satisfaction of his deinand, does not as to the stuns required of the complainant differ essentially from other creditors' suits, we forbear to discuss the snbject further here, and refer the reader to note to Massry v. Gorton, 90 Am. Dec. 288-300; Quarl v. Abbeti, 102 In. 233; 52 Am. Rep. 662, and note; Freeman on Executions, secs. 426-430.
RUSSELL v. POLK COUNTY ABSTRACT COMPANY.
[87 Iowa, 233.1 TORT, BREACH OF CONTRACT WHEN MAY AMOUNT TO.-If one person
owes another a duty the breach of which is a tort, the fact that the former has expressly contracted with the latter for the performance of such duty does not render its breach any the less a tort, but, if the duty is imposed or created by the contract and otherwise did not exist, its
breach is not a tort. Tort, ACTION FOR, WHAT 18 not.-— The fact that a person negligently per
formed a duty which he imposed upon himself by contract cannot entitle another contracting party to sustain an action of tort for such negligence, and thereiore any action coinmenced to recover damages for the failure to perform such duty is an action upon a contract, and the statute of limitations applicable thereto is not that designating the time within which actions may be brought for torts, but is that declar.
ing the time within which actions may be prosecuted upon contracts. STATUTE OF LIMITATIONS.—CAUSE OF ACTION FOR MISTAKE IN AN AB.
STRACT WHEN A RISES. - If a searcher of records employed to make a correct abstract of public records affecting the title to real property, through his negligence or mistake omits an instrument from such abstract, a cause of action against him is at once created, and the stat. ute of limitations commences to run in his favor, and cannot be made to commence at a later day by proving that the mistake was not dis. covered until such later day. That the party for whom it was made, subsequently acting in reliance on its correctness, paid out money which he would not have paid had it been correct, does not constitute any new cause of action. Action to recover damages resulting to plaintiff from an error or mistake in making and certifying to an abstract of title in the month of December, 1884. This abstract showed a certain mortgage to be a first lien on the land described therein. Relying on the abstract the plaintiff purchased the mortgage and subsequently foreclosed it, buying in the property at the sale. A judgment lien had been omitted from the abstract, and therefrom plaintiff suffered damages. The complaint was demurred to on the ground that plaintiff's cause of action was barred by the statute of limitations, and, the demurrer having been sustained, the plaintiff appealed.
Cole, McVey & Cheshire, for the appellant.
237 GRANGER, J. 1, The statute of limitations commences to run from the time a cause of action accrues: Code, sec. 2529. By section 2530 it is provided that in actions for relief on the ground of fraud or mistake the cause shall not be deemed to have accrued until the fraud or mistake has
been discovered. The petition is without allegations to bring the case within the provisions of the latter section, and hence we are to inquire when the cause of action accrued without reference to its being grounded on fraud or mistake. The pith of the contention by counsel is whether the action is one ex contractu, so that the cause of action accrues with the actual breach of the contract, or ex delicto, so that the action accrues whenever consequential damages result because of the tort. We are directed especially to the averments of the petition wherein recovery is sought because of negligence in preparing the abstract, and for the money expended in the purchase of the mortgage because of such negligence; and it is said that "no legal damage was sustained on the part of the plaintiff until the purchase of the Kellogg mortgage.” We may not correctly apprehend what is meant by the term “legal damage.” If it means special damage, such as that alleged, the proposition is correct. If it means general damage, such as the law infers because of the breach, without its being specified, it is not correct. Of course, a cause of action does not accrue in such a case until damages are recoverable, and hence 288 the statute does not commence to run until there is damage to constitute a basis for an action. The further discussion of the case will indicate our view as to when such damage first arose.
The appellant, in support of its theory, that the action is ex delicto, cites the following from Angell on Limitations, section 71: "The action of assumpsit lies to recover damages for consequential wrongs or torts, which, though they are er delicto, are quasi ex contractu; and they arise from malfeasance, or doing what the defendant ought not to do; non feasance, or not doing what he ought to do; and misfeasance, or doing what he ought to do improperly.” It also cites the following from Addison on Torts, page 13: "A tort may be dependent upon, or independent of, contract. If a contract imposed a legal duty upon a person the neglect of that duty is a tort founded on contract, so that an action et contractu for the breach of contract, or an action ex delicto for the breach of duty, may be brought at the option of the plaintiff.” It is then urged that this is “an action for misfeasance," and hence based upon tort. A few considerations will lead to a correct conclusion on this particular proposition, and aid much toward a solution of the entire case. We get the spirit of the rule to be deduced from the above citations,