Loubat v. Nourse

THOMPSON, J.: It has been said by a distinguished jurist, and afterwards reiterated by others, that the claim of dower is highly favored in equity; that the right which a dowross has to her dower, is not only a legal right, and so adjudged at law but it is a moral right, and she is to be provided for and have a maintainance and sustenance out of her husband’s estate to live upon; that she is in the care of the law, and a favorite of the law. These observations have been most zealously and eloquently pressed upon the consideration of this Court by the able counsel for respondent, as landmarks and guides, and to be kept steadily in view in passing upon the questions involved in this controversy; and certainly we can have no disposition to depart from tlio liberal and generous views so expressed in regard to the sex, which is in every respect so justly entitled to the favorable consideration of individuals as well as Courts, or to withhold the application of the most liberal rules of equity to the claim here presented. But we have a duty to perforin, and that duty is a plain though stern one. We must separate the feelings and inclinations of the man from the office of the Judge. . The maxim of all the Courts is, jus dicere et non jus dare ; we are not authorized to — 355 — pronounce a new law, birt to ascertain and declare what the law is. If, as has been "justly remarked by Ld. Lough-borough, there is a general hardship affecting a general class of cases, it is a consideration for the Legislature, not for a Court of justice. If there is a particular hardship from the peculiar circumstances of the case, nothing can be more dangerous or mischievous than, upon these particular circumstances, to deviate from a general rule of law, for onisera servitus est, ubi ¿us est vcogum aut inom'tum. See Broom’s Max., 62. ¥e must confine our discretion, in every case, within those sound limits established by the rules and principles of equity. The liberality and favor with which the claim of a dowress is regarded in a court of equity, must not be understood as extending to the subversion of a settled rule of right or property, but rather to the extension of the peculiar process and powers of the Court in ascertaining and enforcing her right, whenever it is equitable and proper it should be done; and perhaps going to the length of enforcing discovery and relief in her favor, against a purchaser for value, who is also a favorite in this Court. Within these limits of equity, there is no disposition to regard her claim otherwise than with favor. In the case before the Court, the property in which dower is claimed by Mrs. Nourse, is a wliarf-lot in the City of Apalachicola, which, as she alleges, was owned by her said husband, and one Hiram W. Brooks, as tenants in common, and which was, in the life-time of Mr. Nourse, conveyed by them, and the title to which, by various mesne conveyances, is now vested in the appellant, Alphonse Loubat. The claim is resisted on the ground that the husband of respondent and Brooks were partners ; that the property was owned and held by them as partnership property, and was convoyed by them in satisfaction and dis — 356 — charge of a partnership debt, they having become insolvent. However distressing the doubts may be whether real estate, held as part of the partnership funds or stock, ought to devolve upon, or descend as real estate to, the heirs or devisees, or ought to belong as personalty to the executor or administrator’, upon the death of the partner, in cases where it is not required for the payment of the joint debts, yet, so far as partners and their creditors are concerned, we are satisfied that the rule is clear and free from doubt, and that such real estate, belonging to the partnership, is, in equity, to be considered as mere personalty, and is to be governed by the general doctrines applicable to it in the latter character. Story on Part., §§ 92, 9B, cases cited in the margin $ also Coll, on Part., p. 117, 141, (Perkin’s Ed.) The cases decided in the English Courts of Equity, as to the character of real estate held as partnership property, have mainly arisen from a contest between the heir and the personal representative, in consequence of the difference in the English law between the canons of descent and the law of distribution, and they have all turned upon the actual or presumed intention of the party, whether the real estate was to preserve its specific and legal character, or an equitable conversion into personalty was intended. When, however, the question has been as to the applicability of such real estate to the payment of the partnership debts, we do not understand that there is any conflict of judicial decision, but that the courts of equity have been consistent in holding that, for this purpose, the equitable conversion into personalty is complete; and this is founded, not upon any actual or presumed intention of the party, but upon the equities between the partners, that all the joint stock or fund shall be applied to the purposes of the partnership. Ibid. — 357 — In the United States, the Supreme Court of Massachusetts held, in the case of Dyer vs. Clark, that when real estate is purchased by partners, with the partnership funds, for partnership use and convenience, although it is conveyed to them in such a manner as to make them tenants in common, yet, in the absence of an express agreement, of of circumstances, showing an intent that such estate shall be held for their separate Use, it will be considered and treated in equity as vesting in them in their partnership capacity, clothed with an implied trust that they should hold it until the purposes for which it Was so purchased shall be accomplished, and that it shall be applied, if necessary, to the payment of the partnership debts. Upon the dissolution of the partnership, by the death of one of the partners, the survivor has an equitable lien on such real estate for his indemnity against the debts of the firm, and for securing the balance that may be due to him from the deceased partner, on settlement of the partnership accounts between them, and the widow and heirs of such deceased partner have no beneficial interest in such real estate, nor in the rents received therefrom, after his death, until the surviving partner is so indemnified. 5 Metc. R., 562; see also to the same ffect, Howard vs. Priest, 5 Metc. R., 582, 585; Burnside vs. Merrick, 4 Metc. R., 527; Sigourney vs. Munn, 7 Conn. R., 11; Pierce vs. Trigg, 10 Leigh R., 406; Winslow vs. Chiffelle, 1 Harper Eq. R., 25; Divine vs. Mitchum, 4 B. Monr. R., 489; 1 Sumn. R., 180, 181. There is some diversity in the decisions of the American Courts upon the point, but the current of decisions may very certainly be considered as in accordance with the doctrine laid down in Dyer vs. Clark, above quo* tedj-and which, in our opinion, is in strict conformity with She principles of equity and justice. The cases of Thornton vs. Dixon, (3 Bro. c. c., 166,) Bell — 358 — vs. Phynn, (7 Vesey R., 453,) and Balmain vs. Shore, (9 Vesey, 500,) cited and relied upon by counsel for respondent, do not conflict with the rule thus laid down. The rights of creditors of the partnership were not involved in any of them. Indeed, in the case of Bell vs. Phynn, Sir Wm. Grant, M. R., puts his doubt whether the consequence of the estate being partnership property was a •conversion, on the ground that there was no occasion to call for it for any of the purposes of the partnership, but that it remained clear. And so the case of Smith vs. Smith, (5 Vesey R., 190,) is upon its own peculiar circumstances. The estate in that case, though purchased with partnership ■funds, was conveyed to one of the partners, under a specific agreement that it should be his, and heBbe a debtor for the money, and therefore the claim off the widow for dower therein was allowed. It was argued that the rule was established in England because the partners .held in joint tenancy, and therefore could have no application here, where the distinguishing property of that estate, the jus aoereseendi had been abolished by our statute ; but it will be seen from a reference to the authorities that this is founded in a mistake, for though conveyances of real estate to partners, in England, are generally to hold as tenants in common, yet that if it be conveyed to them as joint tenants expressly, in equity there will be no survivorship in such property, notwithstanding the form of the conveyance and the rule of law. In all cases the legal estate descends to the heir and he becomes tenant in common with the survivor ; but equity, regarding the substance rather than the form, declares that he holds subject to a trust in favor of the surviving partner, for the application of the joint property to the purposes and uses of the partnership. Becurring now to the facts of this case, the question is whether it is within the rule. It appears that Nourse & — 359 — Brooks were in partnership together, and were engaged in business in the city of Apalachicola, as commission and forwarding merchants ; that they entered into a contract with the Apalachicola Land Company for the purchase of the Wharf-lot in question, went into possession thereof, erected a Wharf, the cost of which erection, and the subsequent repairs thereof, together with all the income and profiits arising therefrom, were regularly entered on the books of the firm, to the account of the Wharf; and the firm becoming embarrassed and insolvent, discharged a debt due tbe Southern Life Insurance and Trust Company, of upwards of sis thousand dollars, by tbe conveyance of this property to Mr. Branch, tbe assignee or trustee of said creditor. It further appears from the evidence, that the Apalachicola Land Company, being indebted to Nourse, one of the partners, and tbe husband of respondent, the debt due the Company for the purchase of the Wharf-lot was discharged, either in whole or in part, by using the notes or debts due Nourse, and a conveyance in fee was made to the two partners, in conformity with the previous contract. Upon these facts it is denied that the property was bought with the funds of the partnership, but with the private funds of Nourse, having been paid for with the debt which he held against the Land Company. The firm might have preferred to use the debt, and pay tbe money to the partner, or it may have been a loan of tbe debt by Nourse to tbe firm, for which he was to have credit, and did receive such credit, upon the partnership books, and tbis would seem to bo tbe true state of the case from the statement 1;hat the notes were charged to the account of “ bills payable” on the books of tbe firm. The testimony is evidently not as full and perfect as it might have been, but we must infer from the statement, that the notes received from Nourse were charged to bills payable and credit — 360 — ed to Nourse, thus cancelling so much of the former account as represented the notes given for the purchase money of the wharf-lot, and placing the same to the credit of Nourse. At all events, he accepted a conveyance from the Land Company to himself and partner, in conformity with the original contract of purchase, and the rents and profits of the wharf were carried into the accounts of the partnership as part of its assets. All this is wholly inconsistent with any pretence of a sale or exclusive ownership, or indeed any claim of right adversely to the partnership, and indeed it does not appear that any such was ever asserted by him in his life-time. -Nor is there sufficient evidence frqm which a resulting trust can be raised in favor of Nourse individually. It is also contended upon the evidence, that because the conveyance is to the partners as tenants in common, although the property was paid for out of the joint fund, yet it would be, in effect, a division of the joint-stock pro tan-to, and therefore not partnership property, and Goodwin vs. Richardson, 11 Mass. R., 469, is cited in support of the position. It will be a sufficient answer to this case to quote the remarks of Shaw, O. J., in relation thereto, made in Dyer vs. Clark, before cited. “ The Court,” says the learned Judge, “ were dealing solely with a question of law in determining a legal estate, and intimate that a court of equity might make joint real estate applicable as personal to the payment of partnership debts ;” and he does not consider the decision as opposed to the conclusion of the Court in the said case of Dyer vs. Clark, on the equitable principles there laid down. And so it is contended that the property not being absolutely necessary for the partnership purposes, but only used incidentally in the prosecution of their business, the consequences of the rule do not flow therefrom, We are — 361 — not aware of any such limitation. The rule applies whenever thejointfundshavebeen applied in thepurchase for the use or convenience of the partnership, and there is no express agreement that the property shall be the individual property of the partners, each standing as a debtor to the joint fund for the cost, but it remains as part of the joint stock or fund, whether absolutely necessary to carry on the business or purposes of the partnership or not. We do not attach any importance in this case to the fact of the admission of Howell into the partnership, subsequent to the acquisition of the property ; or that the debt, to discharge which it was conveyed, was contracted after he came into the concern. The witness who was examined says that Howell was admitted as a partner in the firm on his promise to bring money and business, and that no change was made except in the style of the firm, to that of Nourse, Brooks & Co. No settlement oí the previous business took place, and the same books of account were continued. Now, although Howell may have failed in the performance of his promise to bring money and business to the concern, as it is stated he did fail, and while it might furnish a ground for the senior partners to rescind their agreement, yet having been admitted as such partner, during the time he continued a member of the firm, the real estate standing in the names of the two senior partners, became subject to a trust for. the new partnership, consisting of themselves and the incoming partner. It-is never necessary that the conveyance should be taken in the names of all the partners. It is sufficient if it be in tbe name of one, or more, or in tbe name of a stranger. Hoxie vs. Carr, 1 Sumn. R., 173, 182, 183. Tbe facts of this case bring it witbin tbe equitable rule before laid down. Tbe Wbarf-lot was purchased, and tbe Wharf erected thereon, out of the° joint or partnership — 362 — funds; it was held and owned as joint property, for the use and convenience of the partnership, the partnership alone having the perception of the rents and profits issuing therefrom ; and therefore the application of it to partnership purposes, such as the satisfaction of creditors, against the dower of the widows of the partners and the claims of the heirs at law, is clear beyond a doubt. Tbe remaining point to be considered is as to the effect of tbe act of November 7, 1828, entitled an act concerning dower, (Thotnp. Dig.,) which provides that when one dies intestate, or testate, without making provision for the wife which shall be satisfactory to her, she shall be entitled to be endowed of “ one third part of all the lands, tenements “ and hereditaments of which her husband died seized and u possessed, or had before conveyed, whereof said widow “ had not relinquished her right of dower, as heretofore “ provided by law, which third part shall be and enure to “ her proper use and behoof, in and during the term of her “ natural life.”' This act is in affirmance of the common law, and indeed, from the use of the terms “ as heretofore provided ly law,” it is evident the Legislature designed to exclude the idea of any new law, or to make any change in the quality or quantity of interest which a dowress would take in the estate of her deceased husband. As a statute, we do not think it has any greater effect upon the equitable rule laid down herein, than it had standing as a rule of common,law. She is to be endowed as theretofore provided by law, and no new right or interest is created. In other words, the old law is simply ro-onactcd. But we are not dealing with a question at law in determining a legal estate. We are deciding how far a Court of Equity will control a legal estate for the purpose of doing equity. As upon the death of one member of a partnership, his share or interest in the real estate held and own — 363 — cd by the partnership, as a part of the joint stock or fund, is, at and by the strict rulo of law, cast by descent upon the heirs at law, and such heir at law becomes tenant in common of such property with the surviving partner, so the widow of a deceased partner may at law be endowed of one third of bis interest; yet in both cases, though seized at law, they will hold the lauds precisely as the ancestor and husband held them, clothed with the same trust, ' and they will, in a Court of Equity, be deemed to be trustees for those who, in equity and conscience, are entitled to the beneiieial interest — the surviving partner, or creditors, or both. And such must be the case here. If Mrs. Nourse had preferred her claim at law, and dower had been assigned her, a Court of Equity, on the complaint of the parties beneficially interested, would cause her to execute the trust. But she having sought the aid of a Court of Equity to enforce a supposed legal right to dower, although she may have had that right, yet the -Court, finding it subject to a trust for the surviving partners or creditors of the partnership, and finding also that the property has in fact been used and applied to tlie purposes of the trust, namely, the satisfaction of a partnership debt, her application must be denied. The creditor took the property conveyed, in the consideration of a Court of Equity, free from claim of dower. The conclusions wo have arrived at, show that the Court below erred in the decree rendered in this cause on the 9th February, If-ofc, and the same should be and is hereby reversed and set aside; and proceeding to render such decree as the Court below should have rendered, we order and decree that the respondent’s bill of complaint, as against the appellants, and seeking to he endowed of the Wharf-lot ■mentioned in the proceedings, he and the same is hereby 'dismissed, with all costs. — 364 — Per totam Curiam. Decree reversed and bill dismissed, so far as it seeks dower of the Wharf-lot. y-