Walker v. Pitts

ANDERSON, C. J. We, of course, agree to the general proposition asserted in brief of counsel for appellant to the effect that when property is acquired with partnership funds or upon partnership credit, it is subject to the payment of partnership debts; but this general rule does not prohibit partners from contracting between themselves as to the title or ownership of assets upon a termination or dissolution of the copartnership, as was expre’ssly done by the present parties in paragraph 8 of the partnership contract, which reads as follows: “If for any reason this partnership should terminate or be dissolved by death or otherwise, then each party, his heirs or representatives, shall own and retain unimpaired and unincumbered, his respective ferry franchise, that is, Walker shall own the franchise on Bank street in Decatur, Alabama, Pitts shall own the franchise at the Somerville and Decatur road at Albany, Alabama.” We therefore hold that the trial court properly held that, upon a dissolution and settlement of the partnership, the franchises should not, as between the parties, be regarded as partnership assets. Nor does the fact that paragraph 2 of the contract, authorizing the reimbursement of Pitts for the sum of $2,200 for expenses incurred in acquiring the franchise right out of the net proceeds derived from operating the ferries before there shall be any division between the parties, operate to constitute such sum or any part thereof such a partnership asset as to require Pitts to account to the complainant for one-half of the sum so received. The contract is couched in plain and unambiguous language, which seems to have been thoroughly understood by the trial court, and was properly construed and enforced. We are not impressed with the merit of the contention in brief of counsel that the bill claimed and the answer admitted that this item constituted a partnership asset. True, paragraph 3 of the answer admits that the complainant is entitled to have a sale of the partnership property as prayed; but we construe it to mean an admission merely of the equity of the bill and the right to sell the partnership property as prayed for, but not an admission of the averments of the bill that this particular item was partnership property. *519 It is next urged that the trial court erred in providing for the payment of the respondent’s mortgage out of the proceeds of the sale of the assets, for the reason that there was no cross-bill seeking a foreclosure of the mortgage; that is, affirmative relief as to same. It may be conceded that the respondent should have affirmatively sought a foreclosure, and in the absence of same the decree would have more properly been for a sale of the assets subject to said mortgage; but there was no decree of foreclosure, and the trial court merely directed a sale and fixed the amount of the mortgage as a prior claim, and we do not see how this appellant was injured because the trial court directed the sale of a good title rather than an incumbered one, and this, cloubtless, would benefit rather than injure the appellant. Moreover, the pleading and proof established the existence of said mortgage, and the payment of same was essential to an equitable settlement of the partnership. Upon an accounting a cross-bill was not necessary to establish respondent’s claim. O’Kelley v. Clark, 184 Ala. 391, 63 South. 948. The decree of the circuit court is affirmed. Affirmed. SOMERVILLE, THOMAS, and BOULDIN, JJ., concur.