24 N.Y. 505, Collumb v. Read

Citation:24 N.Y. 505
Party Name:COLLUMB et al. v. READ et al.
Case Date:June 01, 1862
Court:New York Court of Appeals

Page 505

24 N.Y. 505

COLLUMB et al.

v.

READ et al.

New York Court of Appeal

June 1, 1862

Page 506

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Page 507

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Page 509

COUNSEL

William D. White, for the appellants.

Francis Kernan, for the respondents.

DENIO, J.

The most material question raised by this appeal is, whether the assignment made by the firm of G. & J. W. Caldwell was fraudulent and void on account of its embracing real estate the title to which was in the separate partners as tenants-in-common.If this real estate is to be considered as the individual property of the partners, and not as copartnership property, the assignment of it, to pay the partnership debts, with a reservation of the surplus to the assignors, who were, at the same time, insolvent as to their separate concerns, was fraudulent as against their creditors. This was the judgment of this court when the case came here after the first trial. (16 N.Y. 484.) But, upon the second trial, which eventuated in the judgment under review, evidence was given touching the manner in which this real estate was acquired, and was held; and the question is, whether, upon the finding of the referee upon these subjects, the case was such as to warrant the application of the equitable principle which permits the separate partners, or the creditors of the copartnership, to require the sale and appropriation of its real estate for the liquidation of its affairs. Where land is conveyed to two or more persons by a common deed of conveyance, they become tenants-in-common, and each is at law considered separately seised of his individual share, as fully as though they derived title under separate conveyances from different sources. But if the tenants-in-common are at the same time copartners, and the land was purchased with partnership funds, and for partnership purposes, it is deemed in equity converted into personal property, and is liable to be administered as such in winding up the affairs of the firm; and it goes, moreover, to

Page 510

the personal representative, and not to the heirs, of a deceased partner. ( Phillips v. Phillips, 1 Mylne & Keene, 649, 663; Broom v. Broom, 3 Id., 443; Bisset on Partnership, 56.)And I understand that the rule is the same as to the claims of creditors, if it be brought into the partnership by one of the partners for partnership use during the continuance of the concern, under an agreement that it should be considered partnership property; though, in this last case, the equitable conversion is not so absolute as that the personal representative would be entitled to the succession against the rights of the heir. ( Cookson v. Cookson, 8 Sim., 529.) But suppose it be purchased with partnership funds or taken in payment of a partnership debt, but not to be adapted for employment nor actually used in the business of the partnership, but is yet to be kept on hand until the failure of the firm: is it applicable to the payment of partnership debts, or must it be applied to the payment of the debts of the individual partners, supposing them also to be insolvent? In Randall v. Randall (7 Sim., 271), it is held that the conversion of real estate into personal property in such a case must not take place so as to give the succession to the personal representatives of one of the partners who had died. Whether, if the firm and the partners had become insolvent, the creditors of the copartnership could have invoked that fiction of a court of equity against the creditors of an individual partner, does not appear to be distinctly settled in England. There is a class of cases in which it had been agreed, upon the formation of the copartnership or subsequently, to the effect that the real estate brought into the concern should be considered as partnership property. There, though the conversion is not absolute so as to change the succession from the real to the personal representatives, yet there is a qualified conversion so far as may be necessary for partnership objects; and the payment of partnership debts being one of the purposes of the partnership, the joint creditors have a right to call for its appropriation for the satisfaction of their demands. Cookson v. Cookson, just referred to, contained that feature; and it was conceded that, if there had

Page 511

been partnership debts, the creditors could have subjected the land to their payment. Where the land was not purchased for partnership uses, and there was no agreement making it partnership property, and yet it was paid for out of the funds of the partnership or taken in the payment of debts due to it, the question between the two classes of creditors would be one of construction as to the intent of the partners in making the purchase. It might be that such a purchase would be made as an investment of realized profits. If, for instance, the purchase-price should be charged to the separate accounts of the partners, that would be an indication that it was considered by them an application of divided profits. If, on the other hand, the income should be carried into the books of the copartnership, or if the land itself should be included in the periodical inventories of stock in trade, there would be an inference, more or less strong, that it had been agreed to hold the estate as partnership property. Where neither of these features exist, I am of opinion that, according to the doctrine of the English courts, the land, though paid for out of partnership funds, would retain its original character of real estate, and would be considered as belonging to the several partners according to the legal title as determined by the conveyance. But, in a leading case in the late Court of Chancery, decided in 1847, the land was considered as converted for the purpose of subjecting it to the debts of the copartnership, upon the single fact that it had been conveyed to the copartners in payment of a firm debt. Lands were conveyed to the partners, Naylor & Sumner, by a debtor of the firm, in satisfaction of the debt. On winding up the affairs of the concern, Naylor was obliged to pay out of his own means to the creditors about five thousand dollars beyond his ratable proportion of the debts, and for this balance he recovered a judgment against Sumner in the Superior Court; but, by mistake, the judgment was never regularly docketed, as the Chancellor held. Subsequently, a judgment was recovered against Sumner by another party for an individual debt, and then the premises were sold upon a decree of foreclosure of a mortgage

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older than either of the judgments, and the money was brought into...

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61 practice notes
  • 111 N.Y. 423, Greenwood v. Marvin
    • United States
    • New York New York Court of Appeals
    • 27 Noviembre 1888
    ...funds, it was not firm property, and Le Grand Marvin had no interest in it. (Buckner v. Summer, 2 Barb. Ch. 165; Collumb v. Read, 24 N.Y. 505; Fairchild v. Fairchild, 64 id. 471; Buckley v. Buckley, 11 Barb. 43; Thompson v. Bowman, 6 Wall. 317) The copartnership agreement of August 6, 1852,......
  • 154 N.Y. 503, Darrow v. Calkins
    • United States
    • New York New York Court of Appeals
    • 17 Diciembre 1897
    ...to maintain what has been called the American rule. We refer to a very few of them. (Buchan v. Sumner, 2 Barb. Ch. 167; Collumb v. Read, 24 N.Y. 505; Fairchild v. Fairchild, supra; Shearer v. Shearer, supra; Shanks v. Klein, 104 U.S. 18.) If, as sometimes happens, the title to partnership r......
  • 63 P. 589 (Utah 1900), McLaughlin v. Park City Bank
    • United States
    • Utah Supreme Court of Utah
    • 10 Diciembre 1900
    ...488] the building, etc., in repair, nor has he any right to recover the insurance money claimed in this case. As said in Collumb v. Read, 24 N.Y. 505, "If the plaintiff and the other creditors had affirmed the assignment, the trustee would have been compelled to account for these rents......
  • 115 N.Y. 586, Moore v. Williams
    • United States
    • New York New York Court of Appeals
    • 8 Octubre 1889
    ...Patrick, 6 Paige, 310; Wright v. Douglass, 10 Barb. 97; Thomas v. Kelsey, 30 id. 278; Buchan v. Sumner, 2 Barb. Ch. 165; Columb v. Read, 24 N.Y. 505; Siemon v. Schurck, 29 id. 598; Kraemer v. Arthurs, 7 Barr. 165; Erwin's Appeal, 39 Penn. St. 535; Page v. Thomas, 43 Ohio St. 38; Delmonico v......
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61 cases
  • 111 N.Y. 423, Greenwood v. Marvin
    • United States
    • New York New York Court of Appeals
    • 27 Noviembre 1888
    ...funds, it was not firm property, and Le Grand Marvin had no interest in it. (Buckner v. Summer, 2 Barb. Ch. 165; Collumb v. Read, 24 N.Y. 505; Fairchild v. Fairchild, 64 id. 471; Buckley v. Buckley, 11 Barb. 43; Thompson v. Bowman, 6 Wall. 317) The copartnership agreement of August 6, 1852,......
  • 154 N.Y. 503, Darrow v. Calkins
    • United States
    • New York New York Court of Appeals
    • 17 Diciembre 1897
    ...to maintain what has been called the American rule. We refer to a very few of them. (Buchan v. Sumner, 2 Barb. Ch. 167; Collumb v. Read, 24 N.Y. 505; Fairchild v. Fairchild, supra; Shearer v. Shearer, supra; Shanks v. Klein, 104 U.S. 18.) If, as sometimes happens, the title to partnership r......
  • 63 P. 589 (Utah 1900), McLaughlin v. Park City Bank
    • United States
    • Utah Supreme Court of Utah
    • 10 Diciembre 1900
    ...488] the building, etc., in repair, nor has he any right to recover the insurance money claimed in this case. As said in Collumb v. Read, 24 N.Y. 505, "If the plaintiff and the other creditors had affirmed the assignment, the trustee would have been compelled to account for these rents......
  • 115 N.Y. 586, Moore v. Williams
    • United States
    • New York New York Court of Appeals
    • 8 Octubre 1889
    ...Patrick, 6 Paige, 310; Wright v. Douglass, 10 Barb. 97; Thomas v. Kelsey, 30 id. 278; Buchan v. Sumner, 2 Barb. Ch. 165; Columb v. Read, 24 N.Y. 505; Siemon v. Schurck, 29 id. 598; Kraemer v. Arthurs, 7 Barr. 165; Erwin's Appeal, 39 Penn. St. 535; Page v. Thomas, 43 Ohio St. 38; Delmonico v......
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