Stout v. Fortner

Wright, C. J. These cases relate to the same transaction — have been argued together and will be so decided. Counsel have presented various considerations for and against the correctness of the ruling of the court below. We shall direct our attention to but one. The proof leaves it doubtful whether any partnership existed between Eortner & Stout. If it did exist, however, the cases at the time the decrees were made, were in no situation to entitle complainants to the relief asked. Stout, by his bill, seeks a dissolution of the partnership, and a settlement of its affairs. Before this could possibly be decreed, or any final order made, that Stout had an interest in the property, Eortner should have been served, or in some manner brought before the court. This was never done. It is true that the bill prays that he may be made a party, but no steps were ever taken to serve him, nor did .the court ever have any jurisdiction, so as to make any decree touching the partnership or its assets. Stout makes . S. C. & Co. parties and they answer, and they are the only respondents in court. The same is true as to the bill filed by the Whites. They seek to make Fortner & Stout parties, but have never taken any steps to bring them into court. Until this was done, there could be no decree subjecting the property in controversy, to the payment of their debt. While the joint property'is treated as a' trust estate, which is primarily to be applied to the partnership debts, against all persons not having a higher equity, yet this equity the creditors 'work out through the medium of the partners. They have no lien upon the partnership property. They may at law recover judgment, issue execution, and obtain possession of it, but before levy there is nothing to prevent the partners from transferring it, by a bona fide sale. In equity, in case of insolvency, they are treated as the ultimate eest/uis que trust of the joint fund, to the extent of their debt; but this right or this equity, they can only work out [186] through the partners. The partners have a right in equity to have the property so applied, and to this right, under a proper bill, with proper parties, the creditors may be substituted. Story’s Eq. Jur., 1253; Collyer on Part., sec. 361 and 322, Note 2; Story’s Eq. Pleadings, sec. 135, b, Note 1, 166, 167 and 168 a. It seems inexplicable that complainants should have submitted their cases to the court, in such a condition. Testimony was taken, and the cause prepared as for final hearing, and still the most essential parties were not before the court. Under such circumstances, we think the chancellor was fully justified in dissolving the injunction.' He might well conclude, that there was no serious intention to have the rights of the parties properly adjudicated. Since the decree below, an affidavit has been filed by an attorney, stating that he was employed by Eortner & Stout, to appear for them as respondents ; and that he did make an appearance, and supposed, until since the decree, that this appeared from the record. Wq need do no more than say, that this affidavit cannot be noticed at this time. ¥e take the case as it stood when appealed, and not as it may have been made by depositions and affidavits filed since that time. Perkins v. Testement, 3 G. Greene, 207; Pilkey v. Gleason et al.. 1 Iowa. 85. Decree affirmed.