Gregory v. Menefee

• Decision Date: 31 October 1884
• Citation: 83 Mo. 413
• Parties: GREGORY, Surviving Partner, v. MENEFEE, Administrator, et al., appellants.
• Court: Missouri Supreme Court

83 Mo. 413

GREGORY, Surviving Partner,

v.MENEFEE, Administrator, et al., appellants.

Supreme Court of Missouri.

October Term, 1884.

Appeal from Jackson Circuit Court.--HON. NELSON COBB, Special Judge.

REVERSED.

C. T. Garner & Son and Peak & Yeager for appellants.

The surviving partner was not entitled at common law to compensation for winding up the partnership estate. Story on Partnership, secs. 182 and 331; Collyer on Part., (Perkins Ed.) sec. 183; Parsons on Part., pp. 229, 230; Paine v. Thatcher, 25 Wend. 452; Brown v. McFarland, 41 Pa. St. 129; Johnson v. Harthouse, 52 N. Y. 173. Nor is there any statutory provision changing the common law rule. Denny v. Turner, 2 Mo. App. 52; Crow v. Weidner, 36 Mo. 416; Green's adm'r. v. Virden, 22 Mo. 506; Mutual Sav. Assoc. v. Enslin, 37 Mo. 453; Brown v. Mut. Sav. Ins., 28 Mo. 181; State v. Clinton, 67 Mo. 380. A surviving partner ought not to be charged with interest on the assets of the partnership in his hands while winding up the business of the firm. In re Davis, 62 Mo. 450; Madden v. Madden, 27 Mo 544; R. S., 1879, sec. 232.

Gage, Ladd & Small, and Lathrop & Smith for respondent.

(1) Our administration law has provided a full and complete system for the settlement of estates, both individual and partnership, and has superseded all other modes of settlement. Titterington v. Hooker, 58 Mo. 593; Pierce v. Calhoun, 59 Mo. 271; Ensworth v. Curd, 68 Mo. 282; Gray v. Clement, 12 Mo. App. 579. (2) The surviving partner, in charge of the partnership estate, is an administrator, subject to all the provisions of the administration law that are applicable, and entitled to compensation as allowed by that law. 1 Wagner's Missouri Statutes, secs. 52, 54, 56, 63, 66, pp. 78-81; sec. 9, p. 108; sec. 10, p. 120; Kelley's Probate Guide, page 320; Crow v. Weidner, 36 Mo. 412; The State v. Donegan, 12 Mo. App. 190; Bewley's Estate, 12 Phila. (Pa.) 56; Tiemann v. Molliter, 71 Mo. 512; Schouler's Executors and Administrators, p. 638, sec. 545; Schwecke v. Mathias, 8 Mo. App. 569. (3) The administrators of the individual estate of Lee H. Warinner are entitled to no commissions upon the funds received from the surviving partner. They have performed no services and have been put to no trouble on account of such funds. W. S., sec. 9., p. 108; Marvin's Estate, Myrick's Probate (Cal.) 168; Hawkins v. Cunningham, 67 Mo. 415. (4) The surviving partner was not properly chargeable with interest under the law upon the purchase money paid for the stock. The probate court had the power to make the order relieving the survivor from payment of interest, and that order not being appealed from is final. In any event, this court, except in an extreme case, would not undertake to review the action of the probate court in such a matter. Besides, there is no evidence whatever in the case that the surviving partners used any money belonging to the partnership estate for their own private purposes. Scott v. Crews, 72 Mo. 261; Henry v. McKerlie, 78 Mo. 416; Revised Statutes, 1879, secs. 231-2; Wagner's Missouri Statutes, sec. 1, p. 119; Madden v. Madden, 27 Mo. 544; In re Davis, 62 Mo. 450; Schofield's Estate, 99 Ill. 513; Peckens v. Miller, 83 N. C. 543.

NORTON, J.

It appears from the record in this case that in August, 1877, L. H. Warinner, a member of the partnership of Warinner, Gregory & Co., a firm composed of L. H. Warinner, W. S. Gregory and James H. Beckham, departed this life; that after his decease W. S. Gregory and James H. Beckham, surviving partners, in August, 1877, filed their bond in pursuance of the statute, took charge of the assets of the partnership and proceeded to wind up its affairs. The record shows that two annual settlements were made in the probate court, in each of which the surviving partners took credit for five per cent. commission on the assets passing through their hands. It also shows that on the 26th day of November, 1880, James H. Beckham in the meantime having resigned or withdrawn from the firm, W. S. Gregory filed in the probate court of Jackson county his final settlement in which he, also, took credit for five per cent. commission on the assets which had passed through his hands since his second annual settlement. It appears that B. I. Menifee, administrator of the estate of said Warinner, deceased, appeared in said court and filed exceptions to said settlement, objecting to the credit in the various settlements of five per cent. commission; and also objecting to the settlement on the ground that said Gregory had failed to charge himself with interest on amounts in his hands, especially so upon $64,000, the amount of the proceeds of the sale of stock in trade belonging to said firm. In passing on the exception to commissions the probate court found an excess in the commissions charged by Gregory of $3,358.08, and to that extent sustained the exception--overruled the exceptions as to the failure of Gregory to charge himself with interest, and rendered judgment accordingly. From this judgment an appeal was taken to the circuit court, where on trial had before Nelson Cobb, special judge, the exceptions were overruled, the final settlement as presented to the probate court adjudged to be correct and judgment entered confirming the same. From this judgment the administrator of the estate of Warinner has appealed to this court, and his appeal presents and calls for the determination of two questions: 1. Was Gregory, who as surviving partner gave bond and administered the partnership effects, entitled under the law to five per cent. or other commission, on the amount of the partnership assets which passed through his hands in winding up the partnership affairs? 2. Ought he to have been charged in his settlements with interest on such assets?

Although it appears in the case of Crow v. Weidner, 36 Mo. 412, that a surviving partner who had given the statutory bond and administered the partnership took credit for commissions, the right to take such credit was in no way considered or passed upon by the court, and hence, it may be safely said that the question raised on this appeal as to the right of a surviving partner to commission by way of compensation is one of first impression in this court. If the first question propounded is to be determined by the rule prevailing at common law a negative answer must be returned to it, for the authorities cited by counsel for appellant abundantly establish the following proposition: “That at common law, when any member of a partnership died, such death operated as a dissolution of the partnership, and in that event it was the right as well as the duty of the surviving partner to settle and wind up the partnership affairs.” For the performance of such duty the surviving partner was not entitled to compensation, unless it was otherwise stipulated in the articles of partnership. If, therefore, Gregory is entitled to the credits claimed for commission, it is not in virtue of the common law, but by reason of some statutory regulation changing the common law in that respect, and if such change exists it is for him to show it.

Counsel for respondent claim that such change has been effected, and base their claim on section 9, 1 Wag. Stat., p. 108, which is as follows: “In all settlements of executors or administrators, the court shall settle the same according to law, allow all disbursements and appropriations made by order of the court; * * * and as full compensation for their services and trouble a commission of five per cent. on personal estate and on money arising from the sale of real estate.” Before this section can be held to sustain the claim laid upon it, it must be made clearly to appear that a surviving partner who gives the statutory bond and proceeds to wind up the partnership affairs is an administrator in the sense in which that word is used in the section above quoted. It is plausibly argued that such surviving partner is an administrator in the sense of the statute, and that this is shown by such phrases occurring in the statute as the following: “The condition of the bond required to be given by the surviving partner desiring to administer upon the partnership effects;” “if the surviving partner shall not have administered on the partnership estate;” “in all cases where the surviving partner administers on the partnership estate;” “the administration upon the partnership effects shall be, etc.” The argument based on these phrases is, that as the surviving partner is said “to administer,” and his management and control of the assets in winding up the partnership is said to be “an administration of the partnership effects,” that it, therefore, necessarily follows that he is an administrator in the sense of that word in section 9, supra. This, we think, is a non sequitur, for nothing is more common in the books where, in speaking of trustees, they are said to administer the trust property, and their manner of doing it is spoken of as an administration of the trust funds or property, and yet it would not follow from this that they would cease to be trustees and become administrators.

The conclusion arrived at by counsel by no means follows from the premises on which it is based. Besides this it is to be observed that the surviving partner is neither designated nor spoken of in any section of the administration law as an administrator, but always and invariably as surviving partner and if he brings suit to recover a debt of the firm he cannot sue as administrator but must sue as surviving partner, and if he be sued it must be as survivor and not as administrator. No letters of administration are required to be issued to him as the basis of his authority to manage the partnership property. The common law vests in him the authority to act, and his duty to act arises out of the relation which, as a partner, he sustains to the partnership property. An administrator under our statute is one who derives his authority from letters of...