McKinnon v. McKinnon

• Decision Date: 20 July 1891
• Citation: 46 F. 713
• Parties: McKINNON v. McKINNON et al.
• Court: U.S. District Court — Western District of Missouri

46 F. 713

McKINNON v. McKINNON et al.

United States Circuit Court, W.D. Missouri, Saint Joseph Division.

July 20, 1891

This is a bill for specific performance. The bill in substance recites that on the 1st day of January, 1882, one Malcolm McKinnon, (who was the uncle of complainant, John A McKinnon, and then engaged in the practice of medicine at Maysville, Mo.,) formed a copartnership with the complainant at said place in the practice of medicine; that at said time Malcolm owned in fee a certain parcel of land as residence property, of the value of $1,000; that it was agreed at the time of the formation of the partnership that this real estate should be the property of the partnership, and that the profits arising from the business and practice of the firm should be from time to time invested in real estate, to be used for the purposes of the partnership; that in 1882 they purchased a farm known as the 'Watts Farm,' which was paid for out of the earnings of the partnership business, although the deed of conveyance thereto was taken in the name of the uncle. It is further alleged that, both parties being unmarried, it was agreed between them, 'for certain valuable considerations in said agreement expressed that, should the said Malcolm die during the continuance of said partnership without leaving a family of his own, then all the property of the partnership, of every kind, should go to and become the property of the complainant. ' That on January 1, 1884, the parties concluded to put their agreement in writing, which was accordingly done. The important parts of this agreement are as follows: First. It recites that this agreement is made on 'this the 1st day of January, 1884. ' They agree 'to enter into partnership, for the purpose of practicing the arts of medicine and surgery, in the town of Maysville and vicinity, from the 1st day of January, 1884, until the 1st day of January, 1890, inclusive. ' Second. They were to share equally the profits, as also the expenses and losses. At the end of the partnership, at the request of either, they were to take account of stock and all profits in money, or any other property of which they were in possession, 'and, after deducting therefrom all expenses of the firm, and allowing for the differences in stock furnished at the commencement of the partnership, equally divide all profits, which we will consider due to ourselves our heirs, or executors. ' Third. The junior member, at the end of the partnership, agreed to relinquish the right to practice at Maysville without the consent of the senior member. Fourth. 'And it is further agreed upon that, should the senior member die, or become incapable of practicing his profession, the right to continue the business should devolve upon the junior member; and, in the event of the death of the senior member, all his property, personal and otherwise, which he held in partnership at the time of his death, should go to the junior partner, provided the senior member leaves no family of his own to which it might recur. ' Fifth. Makes provision concerning the matter of administering the property in case of the death of the junior member. This partnership continued until the death of the uncle, which occurred on the 14th day of May, 1886. He was 44 years old at the time of his decease. On March 23, 1885, another piece of real estate was acquired, as is alleged, with the partnership funds, known as the 'Meyers Lots.' The deed to this property was also taken in the name of the uncle. The uncle died unmarried, leaving the respondents, and others, not parties to this action, his heirs at law. The respondents having brought action of ejectment against the complainant for the recovery of their interest in the property,-- the real estate,-- the complainant filed this bill in equity in the nature of a cross-bill to enjoin the prosecution of the action at law, claiming that by the terms of the agreements aforesaid he was the absolute owner in equity of the entire property, and praying for the specific performance of the contracts, and the divestiture of the legal title of the heirs of Malcolm McKinnon in and to the said real estate, and the vesting of the same in him, etc. The evidence showed that the uncle had long been established in the practice of his profession at Maysville, Mo., prior to 1881. At that time the complainant was a young man, just graduated in medicine, and had been practicing in the state of Massachusetts about one year. He had no property, save his medical instruments, and perhaps a few books. At that time the uncle wrote him respecting his practice in Missouri, which was promising, suggesting to the nephew the advisability of his coming to Missouri and engaging with him. He concluded to do so, and arrived at the uncle's home in the fall of 1881. At that time the uncle had in bank about $1,200 in money, a large amount of outstanding accounts, and an equipment of horses, buggies, and other vehicles, in addition to the residence property above named. Their card for the practice of medicine appeared in the newspaper about the 1st of January, 1882. What the terms of their co-operation were we are left alone to ascertain from the statement of the nephew made on this trial. His claim is that all the uncle had of real estate, money, and other property went into the partnership business as a common fund, and that all the property acquired after that time took the same direction and character, with the agreement that on the death of the uncle during the continuance of the partnership the entire property should go to the nephew by survivorship. The personal estate amounted to about $3,500, which was administered upon and appropriated by the complainant. Other evidence will appear from the opinion.

Steven S. Brown, for complainant.

Lancaster, Hall & Pike, for respondents.

PHILIPS J., (after stating the facts as above.)

This is what may not inaptly be termed a many-sided case. There are however, a few contolling principles of law which so far determine the case as to render, in my opinion, an extended review of the evidence unnecessary. There are involved three pieces of real estate. One is known as the 'Residence Property,' acquired and owned by the uncle, Dr. McKinnon, Sr., long prior to the complainant's coming to Missouri; the farm known as the 'Watts Farm,' acquired in 1882, after the formation of the partnership by parol; and the Meyers lots, acquired on the 23d day of March, 1885, after the formation of the partnership, under written articles of agreement of January, 1884. As to the lot known as the 'Residence Property,' it may as well be said here as elsewhere that there is no foundation for the suggestion that the claim made to that by complainant can be supported upon the consideration that the complainant left his home in the east and moved to Missouri on the faith of the assurance that he was to have this property. The bill itself makes no such claim. The only negotiation between the parties was by letters, as claimed by complainant; and, accepting his own version of their contents, (the letters not being produced,) there was no reference made to this real estate. The only thing named was the extent and character of the professional practice of the uncle. It was on the faith of that alone he come to Missouri. He made up his mind to come solely on account of the proffered interest in the practice of medicine. He did not, so far as his testimony discloses, even know of the existence of this property until after his arrival here. The bill is framed for and on the theory of a specific performance. He must, therefore, show a parol contract, clear, explicit, and indubitable in its terms, based upon a valuable consideration, fully performed or paid by him. Without objection to his competency, the complainant was introduced as a witness in his own behalf. Justice to the dead demands not only that the complainant be held rigidly to his own version of the terms of the verbal agreement, but, as he is attempting to affect the title to real estate by the uncertainty of parol proof and his rehearsal in his own behalf of the words and conduct of a dead man, every reasonable intendment of fact, in the forum of conscience, should be indulged against him. The very utmost that can be predicated of his testimony respecting the home property is that it was understood it was to go into the partnership arrangement. On what basis of valuation, as between partners, it was to be estimated, is not apparent, from the vague and general terms testified to by the complainant. As already suggested, the bill is framed on the theory of specific performance, as if the complainant were entitled in equity to the entire property, whereas the complainant's testimony only tends to show that this property constituted a partnership asset. On the theory of partnership, no matter in whose name the legal title stood, in equity the realty would be treated as a partnership fund, 'disposable and distributable accordingly.' And in case of the death of one of the partners there is no right of survivorship; but, after payment of debts, his share would go, according to a strong line of authorities, to his legal representative, or, according to the better rule, to his heirs at law. The right of the heirs and distributees would be postponed to that of the partnership creditors, and where there are no partnership debts such property would be held in equity for the adjustment of balances on an accounting between the partners. The residuum would go to the administrator or the heirs at law. 1 Story, Partn. §§ 92, 93; 1 Woerner, Adm'n § 126; Buchan v. Sumner, 2 Barb.Ch. 167. The administration of the partnership estate having been concluded, the surviving partner is not entitled to hold...