Bell v. McCoy
| Decision Date | 23 December 1896 |
| Citation | 38 S.W. 329,136 Mo. 552 |
| Parties | Bell et al. v. McCoy, Appellant |
| Court | Missouri Supreme Court |
Appeal from Jasper Circuit Court. -- Howard Gray, Esq., Special Judge.
Affirmed.
E. O Brown for appellant.
(1) The evidence did not warrant the action of the court in finding that the lease from Clark, Cochran & Phelps to J. P. McCoy and the royalties derived therefrom were partnership property, and as result thereof decreeing that the administratrix of the partnership estate of Bell & McCoy was entitled to said leasehold interest, and the rents and royalties arising therefrom. No aspect of this finding is based upon any allegation of the petition on which this case was tried. Newhouse v. Kenton, 79 Mo. 382; Ross v. Ross, 81 Mo. 84; Reed v. Bott, 100 Mo. 62. (2) Assuming there was a partnership at one time between Bell & McCoy, it was brought to an end by the death of Bell in December, 1889. There was no express trust here and the law will not imply one; the parties stand upon legal rights alone. There are no fiduciary relations or obligations imposed upon the surviving partner; he is liable to make good his legal obligations and no more. There is nothing which affects him in the character of a trust. It is a mistake to apply the term trust to the legal relation existing between a surviving partner and the estate of a deceased partner. Chittenden v. Witbeck, 50 Mich. 401; Knox v Gye, L. R., 5 H. L. 656; Taylor v. Hutchinson, 25 Gratt. 536; 2 Bates on Partnership, sec. 798. (3) Death operates as a dissolution of a partnership. The law has never been otherwise. Bank v. Tracy, 77 Mo. 594; Weise v. Moore, 22 Mo.App. 530. (4) Ordinarily the heirs of a deceased partner can not maintain an action to compel the surviving partner to account. The accounting can only be brought about by the personal representatives of the deceased. Beach on Mod. Eq. Jur., sec. 877; Valentine v Wysor, 123 Ind. 47; 2 Am. and Eng. Ency. Law, sec. 1277. See, also, 2 Bates on Partnership, sec. 924.
J. T. James, McReynolds & Halliburton, and Theodore Lawrence for respondent.
(1) Persons jointly conducting a mining venture are partners though there is no agreement for a partnership. Snyder v. Burnham, 77 Mo. 52; Priest v. Chouteau, 85 Mo. 398. (2) An agreement to prospect land and, in case coal or other mineral is found, the mine to be worked by the respective parties each bearing proportionate expenses and receiving proportionate share of profits, constitutes the parties thereto a mining partnership. Henderson v. Allen, 23 Cal. (1863) 519; Nolan v. Lovelock, 1 Mon. (1870) 224; Durgea v. Burt, 28 Cal. (1865) 569. (3) Real estate belonging to a partnership will in equity be treated like its personal funds and distributed accordingly and if the title stands in the name of one of the partners he will be held as a trustee of the partnership and be made to account to the other partners. Faulds v. Yates, 57 Ill. 416; Godfrey v. White, 11 Morrison's Mining Reports, 562. (4) A lease upon lands for any unexpired term of three years or more becomes real property. R. S. 1889, sec. 4916; Guinn v. Sinclair, 52 Mo. 327. (5) A leasehold upon real estate held for the use of a firm business is partnership property. Carlisle v. Mulhern, 19 Mo. 56; Priest v. Chouteau, 85 Mo. 398. (6) While the legal title to real estate belonging to a partnership is held in common and not in joint tenancy the beneficial interest is held in trust, each partner holding his portion in trust, until the partnership accounts are settled and the partnership debts are paid. Willet v. Brown, 65 Mo. 138. (7) Real estate belonging to a partnership will be treated like personal property, chargeable with the debts of the firm, and with any balance due from one partner to the other upon winding up the affairs of the partnership. Carlisle v. Mulhern, 19 Mo. 56; During v. During, 20 Mo. 174; Holmes v. McGee, 27 Mo. 597; Young v. Thrasher, 115 Mo. 222. (8) If all partnership debts have been paid and the equitable claims of partners adjusted, there is no reason why the land, though originally partnership property, should not be treated as real estate, and be subject to all the ordinary incidents of land held by tenants in common. Holmes v. McGee, 27 Mo. 597; Young v. Thrasher, 115 Mo. 222.
Robinson, J., does not take part.
The suit is in equity for a partnership accounting and other relief. The trial court found for plaintiffs, and defendant brought the case to the supreme court for review.
The parties to the suit were at the outset as follows:
Mary C. Bell, administratrix of the estate of Isaiah A. Bell, deceased; Mary C. Bell, administratrix of the partnership estate of Bell & McCoy; Mary C. Bell, guardian of Leroy Bell and Fred Bell, minors, heirs at law of Isaiah A. Bell, deceased; Mary C. Bell, widow of Isaiah A. Bell, deceased, in her own right and Leroy Bell, plaintiffs, against Margeretta McCoy, administratrix of the estate of John P. McCoy, deceased; Margeretta McCoy, Mary A. Spires and Jesse Spires, her husband, Fred G. McCoy, a minor, and Nora E. McCoy, a minor, defendants.
The petition demanded an account to ascertain Bell's share of the partnership property of Bell & McCoy, alleged to be in possession of the estate of McCoy, and to belong to plaintiff, Mrs. Bell, as administratrix of the partnership estate.
All of the defendants, except Mrs. McCoy, as administratrix of the estate of J. P. McCoy, demurred to plaintiffs' petition on the ground that they were neither proper nor necessary parties defendant. The court sustained the demurrer, and the widow and heirs (as such) were "eliminated" from the case, leaving Mrs. McCoy, as administratrix, the sole defendant. The case proceeded to trial upon the original petition and the answer and reply, the general nature of which will sufficiently appear in the course of the opinion.
The following dates will aid to an understanding of our outline of the case:
July 28, 1888. Mining lease by Hilliard and Brewster estate to McCoy.
May 1, 1889. Transfer of half interest in the lease by McCoy to Bell.
Oct. 3, 1889. Deed of Hilliard and Brewster heirs to Murphy and Brewster.
Oct. 24, 1889. Last named deed recorded.
Dec. 9, 1889. Bell died.
Dec. 18, 1889. Mrs. Bell appointed administratrix of his estate.
Jan. 15, 1890. Quit-claim by Hilliard to Murphy and Brewster.
Feb. 20, 1890. Deed of Murphy and Brewster to Clark & Co.
July 20, 1890. New lease by Clark & Co. to McCoy.
Jan. 30, 1892. Mrs. Bell qualified as administratrix of Bell & McCoy partnership estate.
May 3, 1892. McCoy died.
May 9, 1892. Mrs. McCoy appointed administratrix of his estate.
May 26, 1892. This suit was begun.
At the time of the first lease above mentioned, the east half of the southeast quarter of section thirty-three, described therein, was owned by Mr. Hilliard and the estate of Mr. Brewster, deceased, in equal parts. The lease was for ten years. It was executed to McCoy by Hilliard in his own right and as administrator of the estate of Brewster, although no order of the probate court had authorized it. All parties, however, acted on it as valid. It was mentioned expressly as a subsisting term when the owners transferred the paramount freehold to Murphy & Brewster, October 3, 1889.
When McCoy sold the half interest to Bell in May, 1889, they formed a partnership to develop the mineral resources of the land. Their agreement was, in substance, that McCoy should superintend the active mining operations, purchase the necessary machinery and materials, employ and manage the required labor; keep the books; sell the product; pay all expenses, including the royalty (as provided by the lease) to the owners, and render periodical statements to Bell, who was not expected to give personal attention to the work. McCoy was to receive a certain sum per day for his services; Bell was to furnish funds as needed to carry on the project, upon statements of account by McCoy.
The firm (under the management of McCoy) put up machinery of various kinds on the leased property and went forward to carry out the objects of the venture, until the death of Bell. After that event, and the appointment of Mrs. Bell as administratrix of the estate, McCoy had several interviews with her (and also with her attorney) in which he (McCoy) acknowledged the partnership relation as subsisting in regard to the property. McCoy had then possession of the tract of eighty acres to which the first lease applied, and also of the machinery and other assets of the old firm. In July, 1890, the lessors of the property, Messrs. Clark, Cochran, and Phelps, proposed to McCoy that if he would surrender one half of the firm tract, they would make a new lease for another term of ten years for the remaining half. This proposition McCoy accepted. He then took a new lease in his own name. Afterwards valuable mineral developments were made on the land, so that the share due the Bell & McCoy partnership estate was found by the trial court to be $ 2,781.50 at the time of the decree on the circuit.
The trial court found that the firm was the equitable owner of the lease to McCoy of date, July 20, 1890, and gave judgment for the profits arising...
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