Farrand v. Gleason

The opinion of the court was delivered by Koss, J. I. Was the relation between the orator’s intestate and defendant that of partners or of tenants in common % This is the first question to be determined. The orator contends that it was that of partners, and the defendant, that of joint tenants or tenants in common. The defendant does not seriously insist that they were joint tenants. Their relation is manifestly to be determined from the contracts of March 1, 1876, and of July 17, 1877, and their dealings with each other in regard to the subject matter of said contracts. The subject of the contracts was real estate. Doubtless a partnership might exist for dealing in real estate. Such partnerships are, however, unusual. One of the usual elements of a partnership consists in clothing each partner with full power to buy and sell the partnership property. A perfected sale implies that which alone in real estate transactions can make the sale effective — a conveyance. It is evident that each partner in a partnership in regard to real estate cannot be clothed with the power of making a perfected sale thereof. Erom the nature of the property, the title must be vested either in one or more or all the partners. Those holding the title alone can convey real estate. Erom its nature, and the legal requirements in regard to conveying title to it, real estate alone has rarely been the sole subject-matter of a partnership. It is frequently held l)3r the partners as partnership property, when necessary for the proper transaction of the 'partnership business, or when taken in payment of partnership debts, or purchased with partnership funds. Then, for the purpose of closing the partnership or paying partnership debts, it is frequently treated as personal property. 1 Pars. Con., chap. 12, sec. 2. Mr. Washburn, in his work on Keal Property, vol. 1, p. 422, says: “Independent of the rights of creditors, such estate will — 637 — be held by the owners as tenants in common, with all the incidents of such estates.” The partners were at common law never treated as joint tenants of such real estate. It partook of the character of stock in trade, held subject to the hazard of profit or loss. By the law merchant, the right of survivorship, or jus accrescendi, did not attach to such real estate. Co. Lit. 182, a. Hence, from the nature of the property, the limitations of the agency of each partner in making a perfected sale, courts are not inclined to imply a partnership where the subject-matter is real estate alone. Looking into, the contracts of March 1, 1876, and July 17, 1877, nothing is found indicative of a clear intention to form a partnership. No partnership, nor partnership name, nor partnership business, nor capital is agreed upon. The parties agree to purchase certain property and fit it up for certain purposes, and to be at equal expense in doing it, and to share equally the profits that may arise from selling or leasing the property. They do not contemplate the carrying on of any business upon, or in connection with, the property so to be purchased. Each was in his own way to furnish his share of the funds necessary to accomplish the purposes of the contracts. In fitting up the property, as required and contemplated by the contract of March 1, 1876, each bought upon his individual credit. He had no right to pledge, and did not attempt to pledge, the credit of the three for such purchases. The contract of July 17,1877, recognizes the fact, that they have not contributed equally to the purchase and fitting up of the property, that their contributions have been made as individuals, and gives the larger contributor or contributors thereto, a lien upon the share of smaller contributor or contributors, and provides that the first profits shall be applied to equalizing the several shares. It speaks of the several owners as shareholders and not as partners. All the provisions of these contracts, as well as all the conduct of the parties, are consistent with a tenancy in common in the property, while they lack many of the distinctive elements and characteristics of a partnership therein, if not absolutely inconsistent therewith. We think that the defendant’s contention — 638 — must prevail in regard to tlie relation of tlie orator’s intestate to the defendant and the property in question, under these contracts, and the interpretation put upon them by the conduct of the parties. II. The general doctrine is, that one tenant in common can compel his co-tenant to share in the expense of necessary repairs to the common property, by requesting him so to do. If the co-tenant refuse to join in making such repairs, he may, after such request and refusal, make them and recover of the co-tenant for his proportioiiate share. But he cannot, without the consent of his co-tenant, make permanent improvements upon the common property at the expense of the tenants in common. If he desires to improve his share of the common property beyond what his co-tenants will consent to, he must resort to a petition for partition, so that he can own his share in severalty. 4 Kent Com 420 to 423 (*370. 371); 1 Wash R. P. 420, 421; Kidder v. Rixford, 16 Vt. 169. By necessary repairs is meant such as are needful for the proper preservation of the property. The contracts show that the parties bound themselves, and so consented, to rebuild the mill and motive power and keep it in proper condition for sale or rent. Subsequently they decided to rent the property. By the contracts, and their action thereunder, each party consented to do whatever was necessary to put the property in the condition contemplated by the contract of March 1st, 1876, and to keep the same in a state of repair suitable for renting. To this extent the parties have consented to be bound in regard to fitting up and keeping the common property in repair. Each might make outlays on the common property to this extent, but not beyond, without the special consent of the others, and be allowed therefor in the final accounting. It is also well settled, as shown by the authorities before cited, that if one tenant in common has made permanent improvements upon the common property, which have not been consented to by the others, on a division of the property, he shall be allowed therefor so much as the same have enhanced the value of the common property, so far as the same shall be set to — 639 — sucb others in the division. It is also settled that unless one tenant in common has become the bailiff of the common property for the others, he can be made accountable for only so much as he lias received more than his share of rents and profits arising from the use of the common property. Applying these well, settled principles of the common law in regard to the rights and liabilities of tenants in common for outlays upon the common property, to the exceptions taken by the respective parties to the master’s reports, and it results that the estate of the intestate, which now represents the share originially owned by Bishop, as well as" the share owned by himself, cannot be allowed for the expense of double boarding the mill, nor of putting in the tank and inspirator, nor of putting in the platform, nor of putting in the new boiler, including the setting. But, inasmuch as the bill prays for a final accounting, and charging whatever may be found due the estate upon the one-tliird share of which the defendant holds the legal title, unless the defendant elects to allow the orator to remove some or all of these, so far as they are capable of being-removed without substantial injury to the common property, he should be charged with such of these, as cannot be so removed, or such as he shall elect not to have removed, at such a sum as they now enhance the value of the common property; and the estate and orator should be charged with such rent as the property used'by it and the orator was fairly worth without these additions or improvements. The insurance, so far as appears, was wholly for the benefit of the intestate and administrator, and there is no good reason shown for charging the defendant with any portion of the same. The rent paid for the use of the rails for the side track was properly allowed. The original contract contemplates putting in the side track. The exceptions in regard to allowances not charged on the intestate’s book are not well taken. Such charges would be but evidence bearing upon whether the outlays were made, and, if made, whether with the expectation of charging the same against the common property. The failure to charge did not conclude — 640 — the right to have an allowance made, if brought within the principles already announced. The exception for the allowance to the estate for furnishing the motive power to Eastman is not well taken. Under his lease the intestate was obliged to furnish only power enough to run Ids own machinery. It is evident that he was to additional expense in furnishing power for Eastman, which by the terms of the lease the three tenants in common were to furnish ; and he should be allowed therefor in determining the sum for which the estate should account as rent received from Eastman. The findings of the master with reference to the term of the Eastman lease, which the intestate purchased in, appear inconsistent and irreconcilable. He refers to the lease, which gives the time as three years, with the right to extend it to five years, but finds “ and the term was to begin from the time Eastman got his machinery in, and to run for one year, with the privilege of three.” How the written lease came to be thus changed, if changed, is wholly unexplained. The intestate having purchased the lease of Eastman, assumed his liabilities in regard to payment of rent. If the lease was for a term of three years, the orator should account for the rent for that time whether he occupied and operated that portion of the premises leased to Eastman or not. If, however, the term was legally changed to one year, the allowance of the master in regard to this is correct. We cannot determine as to the exceptions on this point, covered as it is by apparently contradictory findings of the master. As the case must go to a master for further findings, and for making up the general balance, what has been said on this subject will be a sufficient guide for the chancellor. We think the orator’s exception was well taken. He had no use for the mill, and it is not shown that he could have had any without .stocking the mill. As administrator he was under no duty to do so. The master has negatived that he had an opportunity to rent before he rented to Learnerd. As we understand the facts as finally found by the master, the orator, during the period for which the master has charged him with rent, when — 641 — the mill was not operated, from March to October, 1882, did not deny the defendant’s right in the common property, nor his right to occupy it if he chose. The orator was Under no more obligation to put the common property to use than was the defendant, and neither should be charged with its use when it stood unoccupied without the fault of either, or with the common fault of both. This disposes of the exceptions of both parties to the master’s report. The result is that the pro forma decree of the Court .of Chancery is reversed and the cause remanded with a mandate to that court to proceed with the accounting according to the views herein expressed; and if the same shall result in a balance due from the defendant to the orator in his capacity of administrator, to make the same a charge upon the defendant’s share, and fix a time in which the defendant shall pay the same ’ or be foreclosed, or to render such a decree as the facts as finally established shall require.