Rose v. Gunn , 79 Ala. 411 ( 1885 )

CLOPTON, J.

The partnership of Gunn & Watts was dissolved by the death of Gunn, which occurred about April, 1873. After dissolution by death, the surviving partner has no authority to make any note, acknowledgment or admission, that will bind the estate of the deceased partner. Having the title and the management of the partnership effects, for the purpose of settling its affairs, the surviving partner may make an admission which will bind him individually, and authorize the admitted creditor to pursue the partnership property in his hands. But, in a settlement with the personal representative of the deceased partner, it is incumbent upon the survivor to show that the debts, to the payment of which he has applied the assets, are proper debts of the partnership; and if the creditor seeks to subject the estate of the deceased partner, he must establish a debt contracted by the partnership during its existence.—Cunningham v. Bragg, 37 Ala. 436; Myatt v. Bell, 41 Ala. 222; Jeffries v. Castleman, 75 Ala. 262.

The evidence offered to prove the claim of complainant consists of a written acknowledgment of the surviving partner, the suit instituted against him as such, the award of the arbitrators to whom the matter of indebtedness was referred pending the suit, and the subsequent judgment against the personal representative, the surviving partner having died during the pendency of the suit. The evidence may be sufficient to establish a claim, binding on the surviving partner; but the present is a new, distinct, and original proceeding against a new party, and, as against such new party, the complainant’s debt must be proved in the same manner as if there had been no admissions by the surviving partner, nor judgment against him.—Moore v. Southwick, 2 Por. 351.

It appears that the surviving partner, during his life-time, turned over a portion of the partnership assets to the administrator of Gunn, as the amount to which his estate was entitled. It is insisted, that the complainant, having established his debt against the surviving partner, is entitled to subject the effects thus turned over, to its payment. The title to such relief can be based only on the theory, that the complainant has a lien, which a court of equity will enforce. Though the lien, which the partners themselves have, may be made available in favor of a creditor, in a proper case, a partnership creditor, as such, has no lien. One partner may sell the firm property to his co-partner, and the sale, if tona fide, vests the exclusive title in him. If, in settlement of the partnership matters, and of his liability to account, the surviving partner transfers partnership effects to the administrator of the deceased partner, his lien is extinguished, and there is none to which a creditor can be subrogated.—Mayer v. Clark, 40 Ala. 259; Reese & Heylin v. Bradford, 13 Ala. 837. While the assets remain undisposed of by the surviving partner, they may be utilized in paying the partnership debts; but, when he has disposed of them, whether to a third person, or to the representative of the deceased partner'in satisfaction of his liability, the exclusive title vests in his transferree. An execution, issued on ajudgment against the personal representative of the surviving partner, acquires no lien on partnership effects disposed of by him in his life-time.

The complainant having no lien, either as a partnership creditor, or by virtue of his execution, his remedy is a suit at law against the personal representative of the deceased partner, as authorized by statute, or a bill invoking the exercise of the original jurisdiction of a court of equity, to enforce the payment of a partnership debt out of the estate of a deceased partner.—Waldron v. Simmons, 28 Ala. 629. In either case, the title to a recovery must be founded on the personal liability of the deceased partner, and an original indebtedness, contracted by the partnership during its existence, must be proved. The court will not pursue partnership effects, turned over to the administrator of the deceased partner as his share thereof, and subject them to the payment of a debt, only established by the admissions of the surviving partner after the dissolution. Though a surviving partner may, by force of his title and right to possession, recover from the administrator of a deceased partner partnership property, which was in the hands of the decedent at the time of his death ; when a creditor seeks to subject such property, by direct proceeding against the personal representative, he must prove his debt by the same kind of evidence necessary to subject the individual estate of the deceased partner. The proof, shown by the record, did not authorize a recovery against the administrator or heirs of the deceased partner.

The store-house and lot was partnership property. The complainant having established his debt as against the surviving partner, and having reduced it to judgment against his personal representative, and his estate being insolvent, is entitled to subject Watts’ share of the undistributed proceeds of the sale of the store-house and lot.

The decree of the chancellor is reversed, and a decree will be here rendered, dismissing the bill as to the administrator and heirs and distributees of G-unn, and ordering a reference to the register to ascertain tire amount of the proceeds of the sale of the store-house and lot undistributed, and W. T. Watts’ share thereof.

Reversed and rendered.