Bank of Southwestern Georgia v. McGarrah

• Decision Date: 12 August 1904
• Citation: 48 S.E. 393,120 Ga. 944
• Parties: BANK OF SOUTHWESTERN GEORGIA et al. v. McGARRAH et al.
• Court: Georgia Supreme Court

48 S.E. 393

120 Ga. 944

BANK OF SOUTHWESTERN GEORGIA et al. v. McGARRAH et al.

Supreme Court of Georgia

August 12, 1904

Syllabus by the Court.

1. Where real estate is purchased by a partnership with partnership funds, or is acquired as the result of a partnership transaction, and is used by the firm solely for the purpose of partnership profit, it is, in a legal sense partnership property.

2. Under such circumstances, the fact that the partnership was originally formed for the purpose of carrying on a warehouse and commission business (without any limitation, however upon its power to extend its operations to other lines of business), and that the real estate was devoted to a farming venture, does not deprive the land of its character as partnership property.

3. The legal title to real estate can never vest in a partnership as such, but is in the partners as tenants in common. Upon the dissolution of an insolvent partnership, however, by the death of one of the partners, the survivor may convey such an equitable interest in the entire property as will enable his vendee to compel a conveyance by the heirs of the deceased partner of the legal title to the interest of their decedent.

4. An assignment of error in a bill of exceptions complaining that the decree rendered by the court did not follow the verdict of the jury is without merit, when it appears that, had the decree been rendered as urged, it would have been contrary to law.

5. One whose only interest in the litigation is as stockholder of a corporation which is a party thereto is not thereby incompetent to testify as to transactions and communications with a deceased opposite party at interest.

6. A witness is not incompetent to testify by reason of the provisions of Civ. Code 1895, § 5269, when his evidence does not relate to transactions or communications with the deceased opposite party at interest.

Error from Superior Court, Sumter County; Z. A. Littlejohn, Judge.

Action by J. M. McGarrah and others against the Bank of Southwestern Georgia and others. Judgment for plaintiffs, and defendants bring error, and plaintiffs assign cross-error. Judgment on main bill of exceptions reversed; on cross-bill, affirmed.

E. A Hawkins and W. A. Dodson, for plaintiffs.

J. H. Lumpkin and W. P. Wallis, for defendants.

CANDLER J.

We quote from the statement of facts made by Mr. Justice COBB when this case was before this court on a former occasion (117 Ga. 556, 43 S.E. 987) so much as is pertinent to the decision now to be rendered: "The decedent, Samuel McGarrah, and the defendant M. B. Council entered into a partnership in 1887 for the purpose of engaging in the warehouse and commission business; the partners taking an equal interest in the business. In 1890 the tract of land which forms the principal subject-matter of the controversy together with its appurtenances, was conveyed to the partnership." The land was cultivated by the partnership until 1899, when McGarrah rented it from the firm of which he was a member, giving his note to the firm for the amount of the rent. At the same time, Council & McGarrah gave to the Bank of Southwestern Georgia their promissory note for $4,624.58, depositing as collateral security therefor the rent note of Samuel McGarrah. A few days subsequently they also gave the bank a mortgage on the land to secure the note referred to, "and all other notes or drafts which the grantor may execute to the grantee within twelve months." "The defendant Council also gave to the bank his individual obligation for a specified sum of money, as security for the payment of the debts due it by the partnership. Samuel McGarrah died on December 6, 1901. On December 30, 1901, the bank rented to E. Ross McGarrah and John M. McGarrah, two of the plaintiffs, the land which had been mortgaged to it by the partnership, together with certain personal property described in the rent contract, which was to expire on December 15, 1902. In August, 1902, M. B. Council, as surviving partner of the firm of Council & McGarrah, executed to the bank a deed to the land in controversy in payment of the debt due the bank by the partnership; and upon the execution of this deed the bank canceled the mortgage given by the partnership, and surrendered it to Council. When the rent contract made by the two McGarrahs with the bank expired, the bank sent its agent to take possession of the property. Much controversy and negotiation resulted from the effort made by the bank to acquire possession; and finally E. Ross McGarrah, who was in possession under the rent contract, moved away, and M. P. Pickett, one of the plaintiffs, entered into possession, and claimed to hold the property as agent for the executors of Samuel McGarrah. After this the plaintiffs' petition was filed." It claimed that the deed from Council to the bank was collusive and fraudulent, and conveyed no title as against the interest of the estate of Samuel McGarrah, and prayed that the bank be enjoined from dispossessing petitioners from the land in dispute; that the deed from Council to the bank be set aside as null and void; and that title to the property be decreed to be in them as executors of Samuel McGarrah, upon the payment by them of a named sum of money. The defendants duly answered, and also filed a cross-petition in which they prayed that the plaintiffs, as executors of Samuel McGarrah, if permissible under his will, or as his heirs at law, "be required and compelled to convey unto the Bank of Southwestern Georgia the legal title to said real estate in said petition mentioned, and that a decree be had decreeing the legal title to be in the defendant the Bank of Southwestern Georgia, to said real estate." The case came on for trial, when, after the introduction of evidence and argument by counsel, the court charged the jury, restricting their finding to two questions, viz., did the real estate in dispute constitute "assets of the partnership, in the meaning of the law in reference to real estate being the assets of a partnership?" and, if not, "then what amount was due upon that mortgage to the Bank of Southwestern Georgia at the time of this conveyance on the part of M. B. Council, as surviving partner, to the Bank of Southwestern Georgia?" The verdict was as follows: "We, the jury, find for the plaintiff. Also that the deed made by M. B. Council to Bank of Southwestern Georgia be canceled, and that balance on mortgage at time of tender was $2,398.17." The judge thereupon passed an order making the verdict of the jury the judgment of the court, and decreeing, further, that the deed from Council to the bank conveyed only a half interest in the land in controversy, and that the legal effect of the conveyance was to discharge only one-half of the indebtedness due the bank; that title to the remaining half interest was in the estate of Samuel McGarrah, chargeable, however, with one-half of the debt mentioned, against which certain credits were to be set off, reducing the amount due the bank by the estate to a sum...