Adams v. Blumenshine.

• Decision Date: 13 January 1922
• Docket Number: No. 2646.,2646.
• Citation: 204 P. 66,27 N.M. 643
• Parties: ADAMS ET AL.v.BLUMENSHINE.
• Court: New Mexico Supreme Court

27 N.M. 643

204 P. 66

ADAMS ET AL.

v.BLUMENSHINE.

No. 2646.

Supreme Court of New Mexico.

Jan. 13, 1922.

Syllabus by the Court.

Real estate, acquired by two husbands by deed to them as individuals, but who are at the time engaged in a partnership business in which the real estate is used, is nevertheless community property and subject to the rights of their respective wives therein, in the absence of evidence that the real estate was acquired as a firm asset, and that the same was required to pay off firm debts or to adjust equities between the partners. A contract to convey such land by the two husbands alone, and in which the two wives did not join, will not be specifically enforced.

Appeal from District Court, Bernalillo County; Hickey, Judge.

Suit for specific performance by George H. Blumenshine against William H. Adams and others. Decree for plaintiff, and defendants appeal. Reversed and remanded, with directions.

Where real estate acquired by two husbands as individuals, but used by them in a business wherein they are partners, is nevertheless community property, a contract to convey such land by the husbands alone, and in which their wives did not join, as required by Laws 1915, c. 84, will not be specifically enforced.

Thos. J. Mabry, of Albuquerque, for appellants.

A. B. Stroup, of Albuquerque, for appellee.

PARKER, J.

This is a suit for specific performance of a contract for the sale of real estate. The facts are all stipulated, and may be briefly stated as follows:

W. H. Adams and Mrs. W. H. Adams were husband and wife on April 15, 1916. James L. Curd and Annie B. Curd were husband and wife on said April 15, 1916. In the year 1910 Curd and Adams began the operation of a dairy business as copartners under the firm name of Curd & Adams. There was no written partnership agreement, but they divided the profits and shared the losses equally. In 1912 the property involved was conveyed by one Ferguson and wife to the said James L. Curd and W. H. Adams as individuals, $600 of the purchase price of the land being paid; each of the said vendees contributing one-half thereof. They thereupon borrowed $2,000 with which they completed the payment of the purchase price, and this loan was afterwards paid in due course out of the income of the dairy business. From the time of the purchase of this property until the 15th day of April, 1916, the firm of Curd & Adams operated their dairy business on the premises, and the two Adamses and the two Curds used the premises for their homes, neither family having any other homestead during all that time. On April 15, 1916, Curd and Adams, “doing business as Curd & Adams,” leased to one Miller and one Blumenshine, a partnership under the name of Miller & Blumenshine, the premises involved for a period of five years from that date, and covenanted with said Miller and Blumenshine that, upon the payment of $3,000 at any time within the term of the lease, they would execute and deliver a warranty deed for the premises. This lease and contract to sell was not signed by the wives of said Curd and said Adams, and the women protested against the making of the said lease, and especially as to giving the option to buy the property, but no notice of said protest was ever brought home to said lessees. About April 1, 1916, the said Curd and Adams negotiated with said Miller and Blumenshine to sell their partnership dairy business, cows, equipment, and all personal property connected with said business, and also to lease the premises with an option to buy as heretofore mentioned. Curd and Adams remained in possession of all of said personal property and said real estate until April 15, 1916, when the lease was executed and possession delivered to the said Miller and Blumenshine. On said date the firm of Curd and Adams ceased to exist, except for the purpose of collecting the accounts due it. The rent under said lease was thereafter paid and divided between the said Adams and Curd until the time of Curd's death in 1919, since which time Curd's share has been paid to his widow, the said Annie B. Curd. The said sale of the partnership property and the lease and covenant to sell the real estate in question was not made for the purpose of paying partnership debts, but was done simply in the course and at the time of closing out the partnership business.

It is stipulated by counsel that there is but one question to be considered, and that is whether the real estate in question was partnership property, or whether it was the community property of the two families mentioned. The judgment of the court below was for specific performance of the contract to sell and convey, and the correctness of this judgment will turn upon the question, among other things, as to whether this real estate was partnership property or was community property.

In determining the question involved some general considerations will be first stated.

It may be said generally that a partnership, unaided by statute, cannot hold title to real estate. It is said by Mr. Parsons and others that the reason for this is that a partnership is not a person, and is consequently incapable of taking by deed. Parsons on Partnership (2d Ed.) p. 370.

Partners ordinarily hold real estate as tenants in common under a conveyance to them by name. 20 R. C. L., Partnership, § 56; Rowley, Mod. Law of Partnership, § 283.

The presumption is always against the inclusion in the firm assets of real estate held by the partners as tenants in common, and the presumption is that the ownership is where the muniments of title place it. 20 R. C. L. § 61; Goldthwaite v. Janney, 102 Ala. 431, 15 South. 560, 28 L. R. A. 161, 48 Am. St. Rep. 56, and note.

Real estate, however, may in equity be considered firm property, and will be so considered when such is the intention and agreement of the partners at the time of its acquisition. 20 R. C. L. § 61; Page v. Thomas, 43 Ohio St. 38, 1 N. E. 79, 54 Am. Rep. 788, and note; Goldthwaite v. Janney, 102 Ala. 431, 15 South. 560, 28 L. R. A. 161, 48 Am. St. Rep. 56, and note.

There need be no express agreement to that effect, it may be implied, but in every case there must be such an agreement. The intention or agreement of the partners may be evidenced by parol proof, and need not be in writing. 20 R. C. L. § 62; Goldthwaite v. Janney, 102 Ala. 431, 15 South. 560, 28 L. R. A. 161, 48 Am. St. Rep. 56, and note; Robinson Bank v. Miller, 153 Ill. 244, 38 N. E. 1078, 27 L. R. A. 449, 46 Am. St. Rep. 883, and notes; ...