Pkacuce—Repebence.—When the Court has decided the principles upon wMch an account should be taken and settled, upon an order of reference, it is not competent for the referee to review the action of the Court; but it is his duty to take the account in pursuance of the principles thus settled.
Idem.—If errors occur in determining these principles, the party which seeks to have them corrected by the appellate Court must do so by some proceeding addressed directly to that end; they cannot be reviewed in this Court on an application for a new trial, on the ground that the referee adopted and applied those principles in the adjustment of the accounts.
Sobvivxng Pabtneb in Real Pbopebti-__The surviving member of a partnersMp owning real property is something more than a mere tenant in common with the representative of the estate of the deceased partner. He is a trustee for the purpose of winding up the affairs of the firm, and is accountable for ilic value of the use and occupation of the landed estate of the partnership.
Surviving Partner and Administrator of Deceased Partner—The surviving partner is bound to account and pay over to the administrator of the deceased-partner all the profits of the realty, as well as that of the personalty that rightfully belong to the estate, notwithstanding he may have purchased the interest of the heirs in the estate, or of the community interest of the surviving wife of the deceased partner; and it is for the Probate Court to distribute the estate to the. parties entitled.
Sawteb, C. J., delivered the opinion of the Court •. The issues in the case on the complaint and cross-complaint of defendant, Walker, were tried by the Court, and the Court found, among other things, that plaintiff and one John Wall were partners in the business of farming, under the firm-name of Smith & Wall, until the death of the latter. “Fourth-—-That at the time of the said Wall’s death, said Wall and the said plaintiff were tenants in common of a tract of land in Alameda County of one hundred and sixty-one and forty one-hundredths acres, and were, as partners, the owners of said land and a large amount of personal property.” * * * “Tenth—That the plaintiff has been in the possession, and had the exclusive use of the one hundred and sixty-one and forty one-hundredths acres of land mentioned in the complaint, and in the fourth finding of fact, and of all and singular the entire property, real and personal, belonging to the said copartnership of Smith & Wall, since the death of said Wall, and has taken the rents, issues and profits thereof; that the partnership business had never been settled, nor. any account rendered by the surviving partner to the legal representatives of Wall ; that defendant, Walker, is the legal representative of Wall, entitled to the possession of his estate, and to have the accounting de[388]manded of plaintiff in his cross-complaint, and the payment of such sums of money as should be found due from the plaintiff as surviving partner to the estate. It was adjudged accordingly, and referred to S. F. Reynolds to take testimony, state the account and report to the Court. In pursuance of the interlocutory judgment, the referee took testimony, stated the account and reported the sum of $4,890 85 due from Smith to the estate. Plaintiff moved for a new trial of the matters tried by the referee. The Court found an error in one item, and required the amount of this item to be remitted by defendant, Walker, which condition being accepted, and the amount remitted, the motion was denied, and plaintiff appeals from the order denying a new trial. ” The first "point made is, that the referee erred in charging the plaintiff, Smith, with the rents and use of the one hundred and sixty-one and forty one-hundredths acres of land owned by Smith & Wall, on the ground that one tenant in common is not liable to account to his co-tenant. But the Court had already settled the character in which this land was held. It was not for the referee to review the action of the Court. His duty was to take the account in pursuance of the principles already settled. If there was any error in these particulars, it occurred in the finding of the Court, and no new trial of the issues upon the pleadings had been asked. The Court, as we have seen in the fourth finding, found that the plaintiff and Wall “were, as partners, owners of said land;" and in the tenth finding, that plaintiff had been “in the possession and had the exclusive use of the one hundred and sixty-one and forty one-hundredths acres of land mentioned in complaint, and the fourth finding of fact, and all and singular, the entire property, real and personal, belonging to the said copartnership of Smith & Wall, since the death of said Wall, and has taken the rents, issues and profits thereof. ” This settled the facts on this point for the purposes of the accounting, and there was nothing left for the referee but to ascertain what the value of the “rents and use ” was. Under this finding the plaintiff stood in the same relation to the realty that he did to the personalty of the firm. He was something more than a mere tenant in com
mon, as to both. He was in possession of the whole property of the firm, real and personal, as partnership property, by virtue of his right as surviving partner under Section 198 of the Probate Act. He was a trustee for the purposes of winding up the affairs of the firm, and accountable for the profits of the realty, as well as the personalty, or the value of the use and occupation. It does not fall within the principle of the cases cited with reference to mere tenancies in common. Besides, no question was made upon the correctness of the findings of the Court. No new trial was moved for, or question raised, as to the second point. There is no inconsistency between the finding of the Court and referee. The Court held the action of Mrs. Cochran “utterly null and void,” so far as it assumed to affect “heirs and creditors ” only. But so far as there was a contract between the plaintiff and Mrs. Cochran, affecting her own individual rights, we see no reason why it is not valid. And, so far as the conveyance is concerned, such was the character of the contract. Upon an examination of all the papers executed by the parties plaintiff and Cochran and wife, at that time, it is evident that both Mrs. Cochran and plaintiff only supposed that she had conveyed her own individual interest in the property. She nowhere purports to contract as administratrix. She contracts in her individual character only. In the contract designated “Exhibit A," she contracts individually and not as administratrix. So, also, in contract designated “Exhibit C,” where she recites that she had granted, bargained and sold “ all the right, title and interest of said Lucy H. Cochran, as the surviving widoio of John Wall, deceased, in and to certain lands and premises, consisting of one hundred and sixty-one and forty one-hundredths acres of land,” etc., not as administratrix. The property was common property, and she had an individual, personal interest in the land as widow, which is here appropriately described for the purpose of designating that interest. There is nothing in this instrument indicating an intention to contract in any other character. The deed of conveyance, ‘ ‘ Exhibit L, ” purports only to be the personal contract of Mrs. Cochran, not a contract in the character of
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administratrix, although it purports to convey the land without stating her interest in it, as is often the case in conveyances where parties do not own the whole. But this is the instrument referred to in “Exhibit 0,” which was executed at the same time and as a part of the same act, where she recites it as conveying her interest as surviving widow. So, also, plaintiff understood that its effect was to convey her personal interest only; for, in the instrument designated “Exhibit B,” executed by himself as a part of the same transaction, and in which he agrees to pay the Borel note of $4,000, in consideration of the conveyance, he recites : “Whereas, said Lucy H. Cochran * * * has this day conveyed her separate interest and estate in and to certain lands and premises in said Alameda County, containing one hundred and sixty-one and forty one-hundredths acres,” etc. So “Exhibit C,” also a part of the same transaction, recites that the infant children of John Wall, deceased, have an interest in the land, and the instrument itself is a bond in the penal sum of $2,000, executed by Mrs. Cochran and her husband, by which they obligate themselves to said plaintiff to take certain proceedings in the Probate Court by which he would be able to acquire the interests of said minor children. Thus it was contemplated by both parties that the conveyance from Mrs. Cochran and her husband only passed her individual, separate interest, and that other proceedings should be taken by means of which the interest of the infant heirs, in whom the remaining interest was vested, should be acquired. Plaintiff obtained theconsideration for his contract. It was the conveyance of Mrs. Cochran’s interest, and the bond of $2,000 to secure her efforts to procure the interest of the minor heirs. The bond he received, and this personal obligation he relied on. He had no idea that he had procured the title of the infant heirs. If he fails to get the title of the heirs he has the remedy for which he stipulated—his bond. He has, therefore, got his consideration for the payments which he agreed to make in this instrument, including the Borel note of $4,000, and he was not entitled to have it allowed again by
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the referee in the settlement of his partnership accounts. The referee, therefore, properly refused to allow it.
As to the fifth point, the judgment for one half of the net proceeds in favor of the administrator is correct. He represents the entire estate. When recovered, the Probate Court, after paying the expenses of administration and the debts of the estate, if any there are, will distribute the estate to the parties entitled. If plaintiff has acquired Mrs. Cochran’s interest in the property, by virtue of the contract with her, as respondent concedes that he has, it will doubtless be distributed to him, upon a proper showing, under the direction of the Probate Court, when the amount of that interest is finally ascertained. Till then, the administrator is entitled [393]to the possession and control of the entire estate. Till he recovers the whole estate, the amount to be distributed cannot be known.
Although, from the loose manner in which the evidence is presented in the record, the exact amount which should bo credited to plaintiff as paid on partnership account, does not very clearly appear otherwise than by the findings of the referee, we find nothing to justify us in disturbing the account as stated by him.
Judgment and order affirmed
AI Brief
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Holding. A surviving partner acts as a trustee for the purpose of winding up firm affairs and is accountable for the profits of partnership realty and personalty, regardless of whether the property was held as a tenancy in common. The surviving partner bears the burden of proving that expenditures made from firm assets were applied to legitimate partnership debts.
Issues
Whether a surviving partner is liable to account for the rents and profits of land held as partnership property.
Whether a surviving partner may claim credit for individual payments made to a widow for her personal interest in land as a partnership expense.
Whether the referee correctly charged the surviving partner for firm assets sold by commission merchants.
Disposition. affirmed
Quotations verified verbatim against the opinion
“He was a trustee for the purposes of winding up the affairs of the firm, and accountable for the profits of the realty, as well as the personalty, or the value of the use and occupation.”
“It was for him to show that they, in fact, did pertain to the business of the firm.”