Loftin v. Dooley , 68 Ga. App. 203 ( 1942 )

The widow of a deceased partner is not entitled to a year's support out of the partnership assets until the partnership liabilities are paid.

DECIDED OCTOBER 22, 1942. Mrs. C. W. Dooley, trading as Macon Casket Company, foreclosed a bill of sale to secure a debt against Missie Darby Barrow Loftin. During the lifetime of the husband of defendant he was engaged in a partnership with Dr. M. C. Mitchell, under the name of Independent Funeral Home. The partnership became indebted to the plaintiff in the sum of $1016. Upon the death of the husband the defendant, being the sole beneficiary of her husband, qualified as executrix. She and Mitchell became involved in litigation concerning the partnership property. The husband of plaintiff was general manager of her business. The defendant and plaintiff (through plaintiff's husband) entered into a contract under seal to the following effect: It was agreed that at the time of the death of the defendant's husband the partnership was indebted to plaintiff in the sum of $1016; that defendant and Mitchell were endeavoring to settle the litigation between them for a certain amount of money, to be paid to defendant by Mitchell, Mitchell retiring from the Independent Funeral Home and the defendant acquiring his interest; that upon the settlement the defendant was to pay plaintiff $450 on the indebtedness which the partnership owed. The defendant was to apply for a year's support on the fixtures and stock in trade and a Buick automobile of the Independent Funeral Home, and after the setting aside of the personality as a year's support defendant was to execute a bill of sale to the property thus set aside to secure the difference between $1016 and the $450 cash payment which she received from Mitchell, the difference being $566.

Under this arrangement, and in order to perfect the settlement, the plaintiff released Mitchell from the partnership debt. The plaintiff's name was signed to this contract by her husband, C. W. Dooley. The contract was dated May 2, 1938. The settlement between Mitchell and defendant was perfected. The property was set aside to defendant as a year's support, the $450 cash was paid, and a bill of sale was executed by the defendant to the plaintiff, all as specified in and contemplated by the contract. The bill of sale was duly executed by the defendant on July 7, 1938, for the principal sum of $566.75. The defendant paid nothing on the indebtedness and the bill of sale was foreclosed on June 23, 1941, instituting the present litigation. To this foreclosure the defendant filed her affidavit of illegality based on a number of grounds. The plaintiff filed demurrers, general and special, which were overruled in part and sustained in part. No exceptions pendente lite were filed by the defendant to the order striking certain grounds of the affidavit of illegality on demurrer. The plaintiff filed exceptions pendente lite to the order overruling certain grounds of her demurrer. There are three paragraphs in the affidavit of illegality concerning which the demurrer was overruled. In substance they are to the effect that the bill of sale was void for lack of consideration for the reason that the property conveyed in the bill of sale was property set aside to defendant as a year's support and could not be subjected to the payment of the debt of her deceased husband.

The case went to trial on this issue. The contract mentioned hereinbefore was introduced in evidence, also the bill of sale declared upon, and the order setting aside the property as a year's support. During the trial the defendant offered an amendment to her affidavit of illegality, alleging, first, that since the law allowed her in any event $500 as a year's support, and since the appraised value of the property of her husband's estate was only $1051, and since she had already paid $450 to plaintiff, if entitled to recover at all plaintiff was not entitled to recover in excess of $100; and, second, that during the negotiations with plaintiff she was under the mistaken impression as to the solvency of her husband's estate and believed that he was solvent in a substantial amount, whereas in truth and in fact she received nothing except the year's support, which would not be subject to the payment of the indebtedness evidenced by the bill of sale. The judge allowed this amendment subject to demurrer, and on demurrer struck it. After passing on the demurrer a verdict was directed for the plaintiff. The defendant assigns error, first, on striking the amendment to her affidavit of illegality, second, in directing the verdict, and third, (a) in excluding testimony over objection and (b) on admitting testimony over objection.

The plaintiff filed a cross-bill of exceptions to the order overruling her general demurrer and certain grounds of her special demurrer. It is unnecessary to enlarge further on the cross-bill. When this case is stripped of all collateral issues there remains only one issue which is controlling. It is undisputed that the debt in question is the remainder of a partnership liability. It is well established that a year's support can only be set aside from partnership assets after the partnership liabilities are paid. In Wood v. Brown, 121 Ga. 471 (2) (49 S.E. 295), the court held: "The widow and minor children of a deceased partner are entitled to a year's support only in what remains of the deceased partner's interest after payment of partnership liabilities." See Sellers v. Shore,89 Ga. 416 (15 S.E. 494); Boone v. Sirrine, 38 Ga. 121;American Surety Co. v. Wood, 2 Ga. App. 641 (3) (58 S.E. 1116). According to the pleadings and the testimony of the defendant, as well as the undisputed evidence of the plaintiff, the $1016 indebtedness was a partnership liability. The properties included in the bill of sale and levied on were partnership assets. The credit of $450 represented proceeds admittedly derived from a settlement of litigation involving, so far as the record goes, partnership assets. Upon the death of her husband the defendant, as the sole beneficiary and executrix of the will of her deceased husband, qualified and took possession of the interest of her deceased husband in the partnership business. With the assistance of able counsel, she procured the settlement as set forth in the contract of May 2, 1938. She then compromised the litigation with the surviving partner of her deceased husband and obtained complete possession of all of her deceased husband's estate, including the partnership assets. She was then instrumental in causing the plaintiff to release the surviving partner.

After having for several years conducted the business formerly owned by the partnership, she will now not be heard to complain of a situation which she herself conceived and created. The entire record reveals that defendant extended to plaintiff advantages and concessions which the law does not require. The court did not err in directing a verdict.

In view of what has been said, there is no merit in any of the other assignments of error.

Judgment affirmed on the main bill of exceptions; cross-billdismissed. Broyles, C. J., and MacIntyre, J., concur.