Roy E. Hays & Co. v. Pierson

Citation234 P. 494,32 Wyo. 416
Decision Date24 March 1925
Docket Number1167
PartiesROY E. HAYS & CO. v. PIERSON [*]
CourtUnited States State Supreme Court of Wyoming

ERROR to District Court, Fremont County; CYRUS O. BROWN, Judge.

Action by W. S. Pierson and another against Roy E. Hays and Co. &amp others to cancel certain mortgages given by Fred Primm to defendants in error, enjoin foreclosure thereof, have the mortgage property decreed to be the property of a partnership, and made subject to the payment of debts of said partnership. There was a judgment for plaintiffs and certain defendants bring error.

Reversed and Remanded.

George H. Paul, Hagens & Murane and S. S. Combs for plaintiffs in error.

The common law does not recognize community interests in real estate through partnerships; 20 R. C. L. 56; Riddle v Whitehill, 135 U.S. 621; Adams v. Church (Ore.) 70 P. 1037. In Wyoming the right is conferred by statute, 4179 C. S. where purchased with partnership assets; Arnold v. Wainright, 6 Minn. 538. Title held in joint names of several owners is neither notice nor evidence of the partnership between them; Thompson v. Bowman, 18 L. ed. 736; joint tenancy is presumed; Alkire v. Kahla, (Ill.) 17 N.E. 693, 20 R. C. L. 855; 1 Lindley 329; unless the deed indicates other wise; Wheatley v. Calhoun, (Va.) 37 Am. Dec. 656, 30 Cyc. 433. Declarations of an owner before obtaining title are inadmissible against the subsequent owner; Wallace v. Miner, 6 Ohio 366; Gilbert v. Odum, (Tex.) 7 S.W. 510; Harrell v. Culpepper, 47 Ga. 635; Noyes v. Moriss, 108 Mass. 396. Primm held under an Indian patent; conveyance of homestead prior to final proof is void. Waisner v. Waisner, (Wyo.) 89 P. 580. A conveyance received without notice of partnership interests is superior to claims of partnership creditors, 30 Cyc. 537; Mayer v. Clark, 40 Ala. 259; Sickman v. Abernathy, (Colo.) 231 P. 447; Thorpe v. Co., (Minn.) 108 N.W. 940; Fairbanks v. Welshans, (Neb.) 75 N.W. 865, 20 R. C. L. 278. Members of a partnership have a right to have firm assets applied to firm debts, 28 R. C. L. 273. Upon dissolution of partnership, creditors have a lien on the firm's assets; Menough v. Whitehill, 52 N.Y. 146; Rainey v. Nance, 54 Ill. 29, 30 Cyc. 538; unless the record shows interest of a partnership in land a purchaser from a member holding title, requires title good as against partnership creditors seeking the cancellation of the transfer; 2 Pom. Eq. 592, even if issued by a partnership; McCarthy v. Nicrosi, 47 Am. Rep. 418; O'Neal v. Prestwood, (Ala. ) 45 So. 251; King v. Porter, (W. Va.) 71 S.E. 202; Roussain v. Norton, (Minn.) 55 N.W. 747. The rule as to constructive notice is stated by 2 Pm. Eq. 671-2. As to notice by agent see Constant v. Univ., (N. Y.) 19 N.E. 631; Story on Agency 140; Thompson v. Swan, (Tex.) 35 S.W. 828; Algier v. Keith, 105 F. 105; Ins. Co. v. Halsey, (N. Y.) 59 Am. Dec. 478; Kirklin v. Ass'n., (Tenn.) 60 S.W. 149, 31 Cyc. 1593. Plaintiffs took the mortgage in good faith, 12 R. C. L. 576; plaintiffs were creditors of Primm. An extension of time on an antecedent debt is good consideration, 27 Cyc. 1192; Watts v. Corner, (Tex.) 27 S.W. 1087; DeMey v. Defer, (Mich.) 61 N.W. 524; Alston v. Marshall, (Ala.) 20 So. 850. A simple contract creditor cannot maintain a creditor's bill, 5 Pom. Eq. 305; 39 Cyc. 537, 23 R. C. L. 278; if a counter claim be founded on a written instrument, it must be annexed, 5675 C. S.; a judgment is a written instrument, 23 Cyc. 1516. Jurisdictional facts must be pleaded to maintain a creditor's bill; Young v. Wright, 52 Cal. 410; State v. Lagoni, (Mont.) 76 P. 1044; allegations of the existing debt must show its existence at the time of the alleged fraudulent conveyance, 20 Cyc. 729, if conveyance antedates judgment, judgment is not prima facie evidence of antecedent debt, 20 Cyc. 2087, and cases cited. The transcript of testimony taken in a former action was not admissible, nor was judge's notes, McGeoch v. Carlson, (Wis.) 71 N.W. 116; Elberfeldt v. Waite, (Wis.) 48 N.W. 525, 5 Enc. of Ev. 950; extrinsic evidence of the correctness of the testimony is necessary; People v. Carty, (Cal.) 19 P. 491. The testimony of Longnecker was inadmissible as a deposition 5844-46 C. S., it must be shown that the testimony was read over to the witness after being transcribed; L. & N. R. Co. v. Carter, 66 S.W. 508; Mauler v. U.S. 57 F. 490. The issues and parties must be the same in both cases, Madden v. Stegman, (Kan.) 127 P. 524; Eesley Co. v. Co., (Mich.) 137 N.W. 663; London Co. v. Cereal Co., (Ill.) 195 N.E. 1064; Pattie v. Co., (Ore.) 96 P. 1106. The Longnecker evidence did not show a partnership, nor that Lawrence was a privy in estate with Primm; it was inadmissible, 15 R. C. L. 503; Schuler v. Ford, (Ida.) 80 P. 219; the Court erred in nullifying plaintiff's mortgages, 20 Cyc. 819; Coons v. Lemieu, (Minn.) 59 N.W. 977; Printup v. Turner, 65 Ga. 71; Baker v. Lee, (La.) 21 So. 588; Weeks v. Mascoma, 58 N.H. 101.

A. C. Allen and M. C. Burk for defendants in error.

This is an action to set aside a conveyance of property which belonged to a partnership and embraced in a trust for a specific purpose. A judgment is merely incidental, but not an instrument upon which the action is based, and it is unnecessary to set it out or annex it to the pleading. Defendants took the property with knowledge that it was partnership property. Under this theory of the case which is supported by the evidence, it is needless to discuss the question of constructive notice, or of pleading a judgment. Whenever a party has obtained knowledge, it is unnecessary to invoke the legal conception of notice; 1 Pom. Eq. 1136; Cleveland Co. v. Moore, 82 N.E. 52-84 N.E. 540. A purchaser of partnership property with knowledge of its character takes it on the responsibility of the seller; Whitney v. Dewey, 158 F. 385. When a partnership is dissolved and the equity of a partner remains, creditors are recognized as having an equitable lien on firm assets. Williams v. Louis, 17 N.E. 262, 20 R. C. L. 1083; 4179 C. S. does not alter the rule; it was unnecessary to set out the judgment 10 Std. Enc. Pro. 92; Eller v. Lacey, 36 N.E. 1088; a surviving partner is obligated to carry out contracts of the firm; 20 R. C. L. 1002; Primm's attempt to convey while a bankrupt was a nullity; 4206 C. S. Plaintiffs in error assume that the admission of the record of the hearing where Primm testified, was upon the proposition that it was in the nature of a deposition taken in a former case, which is error; it was admitted upon the ground that it contained declarations and admissions tending to prove the partnership of Lawrence & Primm, which was one of the issues in this case, and also that plaintiff in error had knowledge of such partnership, and that the property here involved was partnership property; also that the partnership and the creditor were both insolvent; it was properly admitted; Benjamin v. Richards Co., 37 N.E. 362; Huntsinger v. Hoffer, 11 N.E. 463; a surviving partner of an insolvent firm has no power to dispose of partnership property, nor bind the firm to pay a personal debt with partnership property; Clift v. Moses, 20 N.E. 392; 4206 C. S.; Sweet v. Morrison, 8 N.E. 396; 20 R. C. L. 998; after dissolution a partner has no authority to bind the partnership, even for a pre-existing debt; 20 R. C. L. 973; Wilson v. Forder, 20 O. St. 89; Palmer v. Dodge, 4 O. St. 21; 4206 C. S. a partnership is not bound by the act of a surviving partner in the disposition of partnership; Page v. Thomas, 1 N.E. 79; Lee v. Suller, 1 N.E. 854; Rausboth v. Baily, 56 P. 1036, a mortgage made without consideration is void; Clift v. Moses, supra; 20 R. C. L. 972; 4206 C. S. Land purchased for and treated as partnership property will be treated as belonging to the partnership irrespective of the character of the conveyance, 20 R. C. L. 854; 4179 C. S.; a finding on conflicting evidence thereto will not be disturbed; Van Sickle v. Schenck, 20 N.E. 381; Baum v. Thomas, 50 N.E. 357; 2 Pom. Eq. 762. One claiming to be a bona fide purchaser must come into equity with clean hands, 2 Pom. Eq. 753; notice sufficient to prevent the purchase from being bona fide may inhere in the very form and kind of conveyance, thus one taking under a quit-claim deed, but this conclusion is rejected by other authorities; Peck v. Ayres, 100 P. 283; Knox v. Doughty, 81 Kans. 138; 105 P. 537; Hudson v. Herman, 107 P. 35.

George H. Paul, Hagens & Murane and S. S. Combs in reply.

The Primm testimony was inadmissible, 1st because Primm had parted with his interests; 2nd it was not properly authenticated. We admitted the exceptions to the rule requiring a judgment as a pre-requisite to action to conceal a fraudulent conveyance, but the exceptions do not apply here, 12 R. C. L. 614; the creditor must allege and show that he was a creditor at the time the conveyance was made and that he was injured. A mere allegation of judgment without setting out or annexing a copy is insufficient. If the Primm evidence was admitted on the ground of admissions or declarations against interests, such were incompetent and inadmissible being made at a time when declarant had no interest.

BLUME, Justice. POTTER, Ch. J., and KIMBALL, J., concur.

OPINION

BLUME, Justice.

This is an action brought by W. S. Pierson and Dorothy Pierson plaintiffs below and defendants in error here, against Roy E. Hays & Co., The Riverton State Bank, and another. The object of the action was, in brief, to have the court cancel certain mortgages given by Fred Primm to defendants in error on Lot 16 in Sec. 2 and Lots 13 and 14 in Section 10, T. 1 S. of R. 4e, Fremont County, Wyoming, to enjoin the attempted foreclosure under one of said mortgages, to declare said land to be the property of the partnership of Lawrence & Primm, and...

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5 cases
  • Warwick v. Accessible Space, Inc., S-18-0219
    • United States
    • United States State Supreme Court of Wyoming
    • September 3, 2019
    ...and the scope of Mr. Wilson’s authority. See 3 Fletcher Cycolopedia of the Law of Corporations § 807 (2018); Roy E. Hays & Co. v. Pierson, 32 Wyo. 416, 234 P. 494 (1925). We note some of the cases discussed above indicated the building manager’s knowledge was imputed to the owner. See, e.g.......
  • Hanna State & Savings Bank v. Matson, 2018
    • United States
    • United States State Supreme Court of Wyoming
    • March 22, 1938
    ...... 1317. The instrument was not filed for record as required by. Section 98-1901, R. S. Martin's knowledge was not. imputable to the bank. Hays Co. v. Pierson, 32 Wyo. 416. No renewal affidavits were ever filed. Graham v. Blinn, 3 Wyo. 746; Harle-Haas Drug Co. v. Rogers. Drug Co., 19 Wyo. ......
  • Casper National Bank v. Swanson
    • United States
    • United States State Supreme Court of Wyoming
    • September 23, 1930
    ...evidence of title. Bentley v. Jenne, 33 Wyo. 1; Allen v. Houn, 30 Wyo. 186. A mortgagee of realty is a bona fide purchaser. Hays & Co. v. Pierson, 32 Wyo. 416; Kesner v. Trigg, 25 L.Ed. 83. Appellant was without notice sufficient to remove it from the status of a bona fide purchaser. The en......
  • Choman v. Epperley
    • United States
    • United States State Supreme Court of Wyoming
    • March 30, 1979
    ...was accomplished by the courts without statutory aid." Powell on Real Property, Vol. 4A, P 602, p. 601. In Roy E. Hays & Co. v. Pierson, 32 Wyo. 416, 234 P. 494 (1925) the estate created by a deed of land to a partnership was held to be that of tenancy in common. The court said at p. 497 of......
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