McKee v. Covalt

The opinion of the court was delivered by Smith, J.: The undisputed evidence in this case shows that defendants Bucher and Mark were copartners prior to the purchase of the land in question; that the land was purchased in a partnership transaction, and, so far as paid for; payment was made by an exchange of partnership property; that the firm continued doing an active business until about 1893 or 1894, when it ceased, but there was no formal dissolution of the firm, and no accounting or settlement of the partnership affairs; that the firm property, including the land in question, was responsible for the debts of the firm and was turned over to Bucher, who was to settle and adjust matters.* Bucher leased the land for a time, and applied the rent on the firm’s indebtedness; and when Covalt took the quitclaim deed from Mark he had knowledge of the fact that the land was partnership assets, or, at least, sufficient information to put him upon inquiry, and he was bound to take notice of the rights of the parties as well as of the rights of the creditors of the firm. The partners jointly held the land in trust for the firm, and individually neither owned an undivided one-half interest therein nor had a right to sell the land or his interest, except for the purpose of paying the obligations of the firm, until all of the firm debts had been paid and the [776] affairs of the copartnership wound up. The firm, as such, assumed and agreed to pay the mortgage on the land, and by a part payment of that debt either member of the firm could start anew the running of the statute of limitations, at least so far as the mortgage was concerned. (Fuller v. McMahan, 64 Kan. 441, 67 Pac. 828; Jackson v. Longwell, 63 id. 93, 64 Pac. 991; Perry v. Horack, 63 id. 88, 64 Pac. 990, 88 Am. St. Rep. 225; 22 A. & E. Encycl. of L. 211.) We have examined the answer and the showing made by defendant Bucher on his application to have the judgment opened and to be allowed to come in and defend, and we think that, under the provisions of section 4511 of the General Statutes of 1901, it is sufficient. Since there must be a new trial, we also think the plaintiff should be allowed to amend his petition so as to allege an additional payment on the note and mortgage. The judgment of the district court is reversed and the case remanded, with instructions to allow the defendant Bucher to' come in and defend, and to proceed with a new trial in accordance with the views herein expressed. All the Justices concurring.