State ex rel. Taylor v. Woods

Lovelace, Judge, delivered the opinion of the court. This case having been disposed of on demurrer in the court below, the question to be determined is whether the plaintiff states sufficient facts in her petition to constitute a cause of action. The petition shows the execution of a promissory note for one hundred and thirty-one dollars and [77] twenty-five cents, by J. H. '& W. C. Woods, a firm composed of James H. Woods and William C. Woods ; that said note was executed sometime in the year 1860, and was payable on or before the 25th day of December, 1860, with interest from maturity at the rate of ten per cent, per annum; that there was a credit of five dollars endorsed upon said note on the 1st day of May, 1861, and afterwards on the-day of --, there was paid the further sum of thirty dollars ; that the balance of the note and interest remains due and unpaid ; that in the year 1861 William C. Woods departed this life, and James H. Woods as surviving partner undertook to settle up the estate of the partnership, and, in pursuance of the fifty-fifth section of the first article of the statute respecting executors and administrators, he, as principal, together with the other defendants, as securities, executed a bond to the State of Missouri, conditioned that if the said James H. Woods (of the late firm of J. JET. & W. C. Woods) should use due diligence and fidelity in closing up the affairs of the late firm or copartnership, apply the property thereof toward the payment of the late partnership debts, render an account annually to the probate court of Saline county of all the partnership affairs, including the property owned by the late firm, and the debts due thereto, as well what may have been paid by the survivor towards the partnership debts as well as what may be still due and owing therefor, and pay over within two years (unless longer time be granted by the probate court) to the executor or administrator the excess, if any there be, beyond satisfying the partnership debts and costs and expenses in closing affairs of the copartnership, — then said bond to be void. Plaintiff then avers that James II. Woods, as surviving partner, took possession of a large amount of goods,' chattels and personal property belonging to said partnership estate, to wit, goods, chattels and personal property to the amount of six thousand dollars; but that said James H. Woods entirely failed to use diligence and fidelity in closing the affairs [78] of the late partnership ; that he failed to apply the property of said partnership to the payment of the partnership debts ; that he failed to render an account annually upon oath 1o the probate. court of Saline county, and that he entirely failed to comply with the conditions of said bond; and, by reason of the said failures to comply with the conditions, the said bond has become forfeit, and defendants have become liable to pay all damages which have accrued to any persons by reason of said failures; and that Mildred E. Taylor has been damaged by reason of said failures to the amount of the balance due on her said note and the interest thereon, for which amount the plaintiff asks judgment. To this petition defendants demurred for the reasons — 1. The petition does not show that said Mildred E. Taylor has been damaged by the alleged breaches of said bond. 2. The petition does not show that plaintiff, to the use of Mildred E. Taylor, has any right of action against defendants. 8. It does not appear from the petition that the alleged demands of said Mildred E. Taylor have been allowed against said partnership estate, or in any way legally established against said estate. 4. It does not appear from the petition that said Mildred E. Taylor is entitled to have any portion of the. assets of said partnership estate applied to the payment of her claim. 5. The petition does not show any legally established right of said Mildred E. Taylor in the assets of said partnership estate, and the assignment of the breaches of said bond is not sufficient. The demurrer was sustained by the Circuit Court and judgment entered up against the plaintiff, and the case is brought here by writ of error. It is certainly difficult to see how the breaches assigned in the petition can affect Mildred E. Taylor. It is entirely possible for every assignment of breaches to be true without any damage whatever resulting to Mildred E. Taylor. It may be that the estate was not administered with diligence and fidelity; that the property was not properly applied to the payment of debts ; that accounts were not properly and [79] annually rendered; in short, every act complained of may have been done without in the least affecting the payment of: the promissory note belonging to Mildred E. Taylor. To entitle the plaintiff to recover on this bond, it was ’necessary to show some specific breach by which she was specially damaged. The breach complained of — that the defendant James H. Woods had failed to apply the property of the partnership to the payment of the partnership debts — can result in no injury to the plaintiff until she first puts herself in a condition to receive the partnership estate. But it is said that these debts against partnership estates need not be allowed by the probate court, but may be paid by the surviving partner without an allowance. That is true if the surviving partner will pay them without an allowance. But suppose he refuses to pay ; then the statute expressly provides that they shall be exhibited to the county court for allowance and classification. (R. C. 1855, p. 125, § 62.) The surviving partner and his securities are only liable upon this bond when the surviving partner has failed to apply the partnership funds to the payment of the partnership debts. What are the partnership debts to which this fund must be applied ? Evidently the debts that are recognized as such by the surviving partner and those that have been allowed by the probate court. The 63d section of the 1st article of the administration act provides that “all demands presented for allowance or payment against the partnership effects within the first year of the grant of administration thereon shall be placed in the first class, and all other demands presented or paid within two years after such grant shall be placed in the second class, and all demands not presented or paid within such two years shall be forever barred against the partnership effects administered.” There is no allegation that this claim was ever presented to the survivor for payment, or to the probate court for allowance. Suppose claims enough had been presented during the first and second years to have consumed the partnership estate, and the survivor had fail [80] ed, as alleged, to apply the partnership effects to the payment of the partnership debts; this claimant would not have suffered by it, for the partnership estate would then have belonged wholly to claimants who had presented their claims. She would have still had, as she has now, her right of action against the estate of the deceased partner, and also against the surviving partner; but no right of action against the partnership effects, and consequently no right of action against the securities on the official bond of the surviving partner. To establish a cause of action on the official bond of the surviving partner, it is necessary that the plaintiff’s claim should be classified under the statute so as to give an interest in the partnership estate, otherwise the partnership estate will belong to those who do establish their- claims, and all others will be cut out from its benefit. And in this case the plaintiff’s petition fails to show any interest that she has in the partnership effects. The other judges concurring, the judgment is affirmed.