Ferris v. Van Ingen

• Decision Date: 01 March 1900
• Citation: 35 S.E. 347,110 Ga. 102
• Parties: FERRIS et al. v. VAN INGEN et al. (two cases).
• Court: Georgia Supreme Court

35 S.E. 347

110 Ga. 102

FERRIS et al. v. VAN INGEN et al. (two cases).

Supreme Court of Georgia

March 1, 1900

Syllabus by the Court.

1. Generally every partnership is dissolved by the death of one of the partners, where the partnership articles do not stipulate otherwise; yet any partner may by his will provide for the continuance of the partnership after his death, and in making this provision he may bind his whole estate, if the language of the will is clear and unambiguous that he intended to make his general assets liable for all debts contracted in continuing the trade after his death.

2. Where under such a will the sole surviving partner, who is also an executor, is authorized to carry on the business of the partnership in the firm name, "make sales and purchases of goods, negotiate loans, employ labor, renew and extend existing commercial obligations of the firm, make new notes and new contracts, and do and perform all other acts necessary to a successful carrying on of the business," and it is declared that the estate of the testator shall be chargeable with the liabilities of the firm and those of the survivor made in conducting and carrying on the business in the same manner and to the same extent as if he were in life and where in pursuance thereof the survivor contracts new debts, the assets of the partnership and the individual assets of the estate are bound therefor. (a) Under the power thus conferred, the surviving partner (he being one of the two executors), with the consent of his co-executor as provided in the will, had power and authority to make and execute a deed to the realty belonging to the partnership for the purpose of securing the debts contracted by him in continuing the business.

3. Where in such a case the firm, prior to the death of the testator, purchased a storehouse for the purpose of carrying on its business, and gave promissory notes for the purchase money, and a mortgage to secure the same, and where a creditor took up the mortgage to prevent its foreclosure, and had it transferred to him, and afterwards took the security deed above mentioned, the mortgage did not become merged in the deed; it expressly appearing from the writings that such was not the intention of the grantee in the deed.

4. Where, upon an equitable petition by creditors, other than the widow of the deceased, the personal property and the real estate belonging to the firm were taken possession of by the court through its receiver, and where she filed an intervention in behalf of herself and her minor son for a year's support, which was set apart jointly to her and her son by the ordinary, the trial judge did not err in holding that the judgment for the year's support had no lien upon the partnership assets until the partnership debts were paid. (a) Real property purchased by the firm, to be used in carrying on the partnership business, is in equity treated as personalty and assets of the firm.

5. There was therefore in the present case no error in holding that the widow was not entitled to dower in the real estate belonging to the firm.

6. Where, in a case like the present, the widow, after the death of her husband, the senior partner, paid off certain notes given for the purchase money of the storehouse, with the understanding among all the parties that she should be subrogated to that extent to the rights of the mortgagee, and where two years thereafter she joined with her co-executor the surviving partner, in executing a security deed to a creditor, reciting therein that it was given subject to the mortgage above mentioned, and reciting the amount then due on the mortgage (the amount so recited not including what she claims to have advanced), and where, in part consideration for such deed, the creditor agreed not to foreclose the mortgage within three years, and further agreed to reduce the rate of interest thereon, held that, even if the widow could be subrogated to the rights of the original mortgagee to the amount claimed by her, her right, under the facts above recited, was waived in favor of the creditor who had taken up the mortgage.

7. Where a year's support has been set aside jointly for a widow and her minor son out of the estate of the deceased husband and father, the widow represents the minor; and the latter cannot file an independent intervention for the purpose of securing the payment of the judgment for year's support, without showing that the widow had failed or neglected to intervene, or that she was in collusion with other creditors, or setting up some other equitable reason.

8. Where a mortgagee pays off state, county, or municipal tax fi. fas. issued against property covered by his mortgage, the fi. fas. being transferred to him, he has the same rights and priority of payment as had the state, county, or city. Where after he has paid such fi. fas. the property is seized by a court of equity through its receiver, and the transferee is enjoined from foreclosing his mortgage or asserting his lien it is not error for the court, before final decree and in vacation, to order its receiver to pay off the tax fi. fas out of the income received by him from the rent of the mortgaged property.

9. Where property is in the hands of the receiver, and there are several creditors claiming priority as to their liens, it is not error for the court to render a final decree fixing the rights and priorities of the different creditors before the sale of the property.

Error from superior court, Richmond county; E. L. Brinson, Judge.

Action by Mrs. Potter against Ferris & Son, in which interventions were filed by E. H. Van Ingen & Co., Elizabeth Ferris, and Frank Ferris. From the decree, Elizabeth Ferris and Frank Ferris bring error. Affirmed.

It appears from the record that John C. Ferris and Charles H Ferris, father and son, were partners in a mercantile business in the city of Augusta, Ga., and that in the year 1888 they purchased from Harris a storehouse on Broad street, in that city, known as "No. 818," at a cost of some $18,000; paying part in cash, and giving for the balance promissory notes payable one each quarter. Whether Harris made them a bond for titles does not appear, but it does appear that in 1891 he executed a deed to the property to Ferris & Son, while they made to him a mortgage for about $13,784, with a power of sale to Harris and his assignees in the event of a default in the payment of the purchase-money notes. It was also stipulated that, if there was a failure to pay any note falling due after the date of the mortgage, the whole debt would become due, unless the note was renewed by consent of Harris; that in case of such failure to pay, without renewal, Harris could sell the property and make title thereto. In July, 1892, J. C. Ferris, the father and senior partner, died, leaving a will in which he directed that the business of Ferris & Son should be continued until his youngest child, Frank, became of age. In this will, in the first item, his personal representative was authorized "to sell, exchange, mortgage, lease, or otherwise dispose of, privately or publicly, any portion or all of [his] estate, for cash or on credit, without the order of the court of ordinary or any other court." The second item was in part as follows: "Being engaged in carrying on business with my son Charles H. Ferris under the name and style of Ferris & Son, my interest therein being one-half and my said son one-half, and having also in the firm name purchased the realty where we are now carrying on business, and being desirous of having this business continued, to promote the welfare of my family and the interest of my partner, it is my will, and I so direct, that all of my estate, of every kind and description,--not only the capital employed in this business, but all other property,--shall from the date hereof be chargeable for the liabilities of said firm and the survivor thereof, made in conducting and carrying on the business, in the same manner and to the same extent as if I was in life, and he (the survivor) is authorized to make sales and purchases of goods, negotiate loans, employ labor, renew and extend existing commercial obligations of the firm, make new notes and new contracts, and do and perform all other acts necessary to a successful carrying on of the business; and it is my will, and I so direct, that my said son *** shall continue the business, and is authorized to use the firm name and to carry it on for such time and period," etc. In the fifth item his wife, Elizabeth Ferris, and his son Charles H. Ferris were nominated as executrix and executor. It further provided "that the survivor or the one that may qualify is authorized to exercise all the authority set forth in item first, and to consent in writing or otherwise to any contract which may be entered into in the name of Ferris & Son, so as to make the same obligatory in every way known to the law upon my entire estate, as if I was in life." Elizabeth and Charles H. Ferris, named in the will as executrix and executor, qualified as such under the will. The will further provided that the wife and minor son should receive a monthly allowance for their support; the allowance being such as was agreed upon by the wife and the surviving partner, C. H. Ferris, and being paid out of the profits of the business. At the time of the death of the elder Ferris the partnership was indebted to the firm of Van Ingen & Co., of New York, in the sum of about $6,100. The partnership was also indebted to Harris upon five past-due promissory notes for the purchase money of the store; each note being for about $770, with accrued interest. There was a policy of life insurance, payable to the widow, Elizabeth Ferris, which she collected, and with the proceeds of...