McGrath v. Sinclair

Simrall, C. J., delivered the opinion of the court. Both parties to the appeal seem to concur that .the only question involved is whether the house and lot, the subject im litigation, was partnership property in such sense as to defeat the homestead claim of A. G. Sinclair. The history of the property is about this : In 1870, or 1871,, the house and lot was purchased by Ferguson, Sinclair & Co.,, a commercial firm composed of E. Y. Ferguson and A. M. and [92] A. G. Sinclair. .This copartnership was dissolved sometime in ■1873. On January 6th of that year, E. Y. Ferguson conveyed his interest in the property to A. G. Sinclair and A. M. Sinclair. The money, $500, was paid out of the funds of A. G. Sinclair &' Co. a new firm, composed of A. G. and A. M. Sinclair. It is to be inferred that the property was adapted to no -other use than á residence. At the date of its purchase by Ferguson & Co., it had been used as a Methodist parsonage. After its purchase by A. G. and A. M. Sinclair, A. G. ’Sinclair moved into the house and occupied it as a residence. In his deposition he says that, when the firm of A. G. Sinclair & Go. was formed, ‘ ‘ there was an understanding between himself and partner that the house and lot should be his.” If the house and lot was partnership property in such sense as that the social creditors could subject it to their debts, then it would be dealt with as assets of the firm in a court of equity, .and A. G. Sinclair and wife could not successfully hold it, or any part of it, as a homestead, against the mortgagees, Pristidge, Graham & Co. Robertshaw v. Hanway, 52 Miss. 713. In Alexander v. Kimbro., 49 Miss. 537, it was said to be the doctrine of the American cases generally, “ that real estate not purchased with partnership funds' does not become partnership property,- though used for joint purposes, unless there is some .agreement that it shall bo so considered.” If real estate be acquired with partnership funds, for partnership purposes, or is put into the company as stock, by agreement, then it will be considered as joint property. Finch v. Branch, 16 Conn. 270; Dyer v. Clark, Admr., 5 Metc. 573; Scruggs v. Blair, 44 Miss. 411, 412. It might be true, under the facts disclosed in the record, that ■the property would have been liable to the creditors of T. Y. Ferguson & Co. But that firm ceased to exist in 1873, and ■this property remained, and whatever may have been its liabilities to the creditors of the old firm, as between the members [93] of that firm it became subject to a complete legal ownership,. and the constituent members of that firm were tenants in common. When A. G. Sinclair and A. M. Sinclair bought the interest <?f Ferguson, they took a deed to themselves individually, and became tenants in common. These purchasers were such tenants of two-thirds of the property when they formed the new partnership. There is no agreement that it. should be contributed or held as joint stock in the new firm ; nor has it been shown that it was purchased for partnership, purposes. The business of the firm was not conducted on the premises — it would appear to be unsuitable for such uses. The mortgage or trust deed, to the extent that it incumbered the property, operated upon the individual property of' the grantors. It would follow that the homestead might be claimed by A. G. Sinclair, as occupant with his family of the premises, unless the fact that he was a tenant in common with his. brother defeated it. In several of the states — California, Indiana, Massachusetts, New Hampshire, and Wisconsin — in such state of title the homestead exemption is denied. In Illinois, Iowa, Arkansas, Texas, and Vermont it is allowed. See cases cited in Smith on Homest. & Exempt., sec. 120. Perhaps the better rule is laid down in Smith v. Deschaumes, 37 Texas, 420, that the homestead may be acquired in the common property with the consent of the co-tenant — which will be good against all other persons. The policy of' the statute is to secure to the debtor a home for himself and family; whether that home is upon land to which the debtor-had an estate in fee-simple, or one of less dignity, or a merepossessory interest, it is the occupancy as a residence which the statute had in view, and intended to protect, rather than the title by which he held. The substance thereof is that the creditor shall not break- up the home and residence, by a. sale of such title as the debtor had. If the debtor refers his possession.to a tenancy in common with another, and enjoys, the occupancy in that right, it'is no reason that he should [94] lose Ms home because as against his co-tenant he has not an •exclusive right, and couM be compelled to make partition. 'Those are matters between himself and his co-tenant. The 'decree of the chancellor was framed in accordance with these views, and it is affirmed.