Bradbury v. Barnes

Baldwin, J. delivered the opinion of the Court Cope, J. concurring. There can be no doubt that one partner may purchase with his own funds and on his own account the interest of his copartner in [123] real estate at public sale, if there be no circumstances of fraud or of a trust, apart from this relation, and so purchasing hold the property as a stranger might. It is true, that partners occupy confidential relations towards each other, but this is in respect to the firm business; but this relation does not forbid one from buying of another, when both have an equal opportunity and means of knowing the value of the property and its condition. The fact that the Sheriff’s sale is public and open, is itself prima facie proof that no advantage is taken; and no reasons of policy exist to restrain bidding by other partners than the defendant, and who would be more disposed to bid, probably, than strangers. If associates in a mining claim are to be regarded as general partners, a point which we do not decide, still we do not think the rule applicable to trustees and cestuis que trust, guardian and ward, which qualifies the right of purchase by the trustee of the cestui que trust can he held to apply. Generally, one partner has a right to buy the whole or a portion of the interest of his associate at private sale as he might purchase of a stranger, and we can see nothing which should deny or qualify this right in the fact that the sale is made through the instrumentality of the officer acting in this respect for the partner. (Gunter v. Laffan, 7 Cal. 588.) But this record presents a different case. The findings of the Court are that the plaintiff received some $7,000 of money belonging to the company, and wt ‘ e he had this money in his hands, bought up some judgments agmnst the company, using the name of another party, and also a tax title in the same way. This conduct would be grossly inequitable. The charitable inference would seem to be that he made this purchase for the benefit of the company, and therefore, if the company is willing to affirm it as done for the benefit of the concern, the amount of the money paid should be credited to Barnes, on his indebtedness, and the title go to or remain in the company, unaffected by this arrangement. If Barnes paid the judgment against the company, he being one, he would be entitled to recover of his associates contribution for their proportion, but he could not make this payment through the process of an assignment and then enforce the judgment against the company by selling out the property and buying it in—especially if he had in [124] his hands at this time money of the company to a larger amount than that paid by him to take up the judgment. We have looked over the proofs, and do not feel disposed to disturb the finding. The decree for the sale of the property seems premature. It is more regular and better that the account should be first taken, showing how the concern stands, what is due and what the assets, before the property is ordered to be sold. The decree will be modified in this respect, and is affirmed otherwise. The cause is remanded for further proceedings. Each party to pay his own costs in this Court.