Harrington v. Johnson

The opinion of the court was delivered by Hoyt, J. From 1880 until 1892, W. A. Harrington and Andrew Smith were partners. During that time they acquired title to certain real estate in the city of Seattle with partnership funds and for the purposes of the partnership, and erected thereon, also for the purposes of the partnership, a certain brick and stone building. The defendant, F. W. Johnson, furnished material to be used in the building, and not having been paid therefor, filed a notice of lien, and sought to secure payment by a suit to foreclose the same. In such suit the members of the partnership were made parties defendant, but their wives were not. The result was a decree of foreclosure against the defendants named and an order that the building and the land upon which it stood should be sold in satisfaction thereof. This action was brought to restrain a sale of the property upon process issued to enforce said decree. The claim of the plaintiffs and appellants is that the decree is void for the reason that the wives of the partners were not made parties to the foreclosure proceeding. It is contended that under the rule established by this court in the case of Littell & Smythe Manufacturing Co. v. Miller, 3 Wash. 480 (28 Pac. 1035), the wives were necessary parties. If they had any interest in the property, which could be asserted in a court of equity against the rights of the creditors of the partnership, this contention must be sustained. Under the circumstances did they have any such interest ? [544] We have carefully examined the question as to the effect of the partnership relation upon the status of real estate held by one or all of its members for the use of the partnership, and have sought to ascertain to what extent, if at all, the common law rule upon this question has been changed by conditions existing in this country, or by express statutory enactment. Such examination has led us to believe that,, so far as the application of such real estate to the satisfaction of partnership debts, there has been little or no change in the common law rule. In most, if not all, of the states it is-the settled doctrine that the property of the partnership, including its real estate, is in equity a fund for the payment of the indebtedness of the partnership, and the adjustment of its affairs between the partners, and that the right of the partnership to use all of its property for that purpose is m no manner affected by any contingent rights which the wives-of the respective partners may have in the property after the settlement of the partnership affairs. Shanks v. Klein, 104 U. S. 18; Bopp v. Fox, 63 Ill. 540; Logan v. Greenlaw, 25 Fed. 299; Lenow v. Fones (Ark.) 4 S. W. 56; Malory v. Russell, 71 Iowa, 63 (32 N. W. 102, 60 Am. Rep. 776); 1 Lindley, Partnership (Swell’s 2d ed.), p. 755, note. Nothing in our statute has been called to our attention; which authorizes a departure from the rule above announced. It follows that the property in question could have been applied to the payment of partnership debts by the action of the several partners without any action on the part of their wives. Hence the wives were not necessary parties to a suit in equity waged by á creditor for the purpose of subjecting-such property to the payment of the partnership indebtedness. It follows that the decree in question was not void, and that the equities to be enforced thereunder were superior to those of the plaintiffs. The judgment will be affirmed. Dunbar, C. J., and Scott, J., concur.