Majority
Headnote
Partnership—Purchase and Sale oe Land—Dissolution and Accounting—Land in Name oe One Partner—Encumbrances—Sale—Belief. In an action to dissolve a partnership for the purchase and sale of real estate, and for an accounting and settlement thereof, real estate shown to belong to the partnership should be treated as personal property, and sold to pay debts, and the residue distributed; and it is improper for the court to decree that the plaintiff recover from the other partner and from codefendants an undivided half of real property which stood in the other partner’s name, and was encumbered or conveyed while in his name for the payment of partnership and private debts.The action was brought against defendant Mclnemey to dissolve a copartnership, and for an accounting. Plaintiff also asked that certain property be declared to be partnership property, and be distributed between plaintiff and defendant as partners. Mclnemey answered and denied the existence of the partnership and all allegations made by plaintiff in respect thereto. In this state of the pleadings a trial was had and an interlocutory decree was entered. Ho findings were made, but it was decreed that plaintiff and defendant did prior to May, 1870, enter into and form a copartnership for the purpose of buying and selling real estate, and subsequently did buy and sell real estate in pursuance of the partnership agreement, and that plaintiff was entitled to have said partnership dissolved, and a referee was appointed to state an. account. This decree bears date May 3, 1889. Subsequently, January 9, 1891, plaintiff filed a supplemental complaint, bringing in and
Later other supplemental complaints were filed charging that Mclnerney had conveyed since the commencement of the action other interests in the land, and, among others, that M. C. Has-sett had acquired an interest by conveyance from Mclnerney, and that Hassett acquired such interest with full notice of the rights of plaintiff in respect to the land. Answers were interposed to these supplemental complaints, a trial had, findings made, and a decree was entered.
The first objection to the judgment is that .the court erred in decreeing that plaintiff have and recover from Thomas Mclnerney and the other defendants an rmdivided one-half of the property (describing it). 'Supposing Mclnerney to be merely the trustee of plaintiff, this certainly was a very unusual form for a decree. The title was left in Mclnerney, but by the judgment plaintiff would be let into joint possession with the defendants. This is a proper form of a judgment in ejectment, but not in an action by a cestui que trust to get the title from his trustee. But the action was for a dissolution of a copartnership. In such case the real estate should he treated as'personal property and sold to pay debts, if there are any, and the residue distributed. (Coward v. Clanton, 79 Cal. 23 ; Bates v. Babcock, 95 Cal. 479 .[1] )
1 29 Am. St. Rep. 133 .
But the court has no power to declare that certain debts, and especially costs, shall constitute liens upon the partnership property. If the costs or indebtedness was properly payable out of the partnership assets, the' court could and should have caused a sale to be made of the assets, and could have ordered such claims paid from the proceeds; but a lien cannot be created by the court upon the partnership property or upon the portions assigned to the parties.
Cahill filed no cross-complaint. He asked for affirmative relief in his answer, but this was not served on McInerney, nor did McInerney answer it as a cross-complaint. Ho issue was made between Cahill and McInerney, and no judgment could have been rendered establishing as against McInerney a money demand.
Hassett, having been made a defendant by a supplemental complaint, answered admitting that he had acquired an interest in the property described in the complaint since the commencement of the action, but denied that plaintiff had any title to or interest in the property as partner or otherwise. In the findings the court finds that several judgments were rendered against McInerney under which execution sales were made; that Has-sett succeeded to the interests of the purchasers, and that sheriff’s deeds, in pursuance of the sales, were made to Hassett or his grantors. It does not find what interest Hassett has in the property, or whether he has any, but that he has none except “in the share or. portion thereof belonging to the defendant Mc-Inerney.” Supposing this to be intelligible language, it is yet a failure to define either the interest of Hassett or McInerney. In the decree, as stated, nothing is adjudged to either McInerney or Hassett. The plaintiff merely recovers from them and the other defendants an undivided one-half of the property. In the conclusion of the decree, however, it is provided, referring to a possible sale of the property and the payment of certain de
The judgment in favor of Burnett is also erroneous, as it is not supported by the findings.
The judgment is reversed, and the cause remanded for a new trial.
Henshaw, J., and McFarland, J., concurred.
Hearing in Bank denied.
Cases cited
- Coward v. Clanton 79 Cal. 23 p. 31
- Bates v. Babcock 95 Cal. 479 p. 31