Kyle v. Carpenter

Cassoday, C. J. The facts alleged in the complaint are-of course admittéd by the demurrer. From such facts it appears that after the defendant Curtiss had been in partnership with the plaintiffs about three and one-half years under-the firm name of Kyle Bros. & Co., conducting the business-mentioned upon the premises described, the firm was dissolved by mutual consent, Curtiss retiring from the firm and selling to the plaintiffs all his right, title, and interest in and [315] to the assets and property of tbe firm, including said real estate, and in consideration tberefor tbe plaintiffs, in and by tbe agreement of dissolution, assumed all obligations against tbe firm and released tbe said Curtiss from any and all obligations to tbe firm, including bis indebtedness mentioned, wbicb was thereupon credited to bim on tbe books of tbe firm, and tbe plaintiffs also paid to said Curtiss tbe balance due bim on sucb dissolution; and said Curtiss received sucb release, agreements, and payment in full satisfaction for bis undivided one-tbird interest in and to tbe assets and property of said firm of every kind, including said real estate, but said Curtiss failed to make any conveyance of said real estate to plaintiffs. It further appears that ever since May 25, lS97j tbe plaintiffs have carried on sucb business under tbe firm name of Kyle Bros., upon and in tbe. actual and open possession and occupancy of said real estate, without any objection or question from said Curtiss, and that for tbe purpose of defrauding tbe plaintiffs tbe said Curtiss on October 9, 1905, wilfully and wrongfully and in violation of tbe trust reposed in bim conveyed tbe legal title to tbe undivided one-tbird interest in said real estate to tbe defendant Cwi'penter, who wil-fully and wrongfully, and with full knowledge of tbe facts stated, accepted such conveyance for tbe purpose of defrauding tbe plaintiffs. Upon tbe facts stated it s difficult to perceive upon wbat theory tbe defendants can withhold from tbe plaintiffs the legal title to tbe lands in question. They were property which belonged to tbe partnership up to tbe time of its dissolution. Tbe terms of dissolution were mutually agreed upon. In sucb mutual agreement tbe plaintiffs assumed all obligations against tbe firm and released Curtiss from any and all his indebtedness to tbe firm. By sucb agreement the plaintiffs were to' have all tbe right, title, and interest of Curtiss in tbe partnership property, including tbe real estate, for which the plaintiffs paid him the agreed price, wbicb Curtiss received in full [316] payment and satisfaction for such right, title, and interest. True, the complaint does not in express terms allege that Cur-tiss agreed to convey to the plaintiffs such legal title, but it does allege that the plaintiffs purchased the real estate from Curtiss and paid him in full the agreed purchase price, and this necessarily implied an agreement to so convey. The agreement thus made between the parties was fully executed, except that Curtiss failed to convey such legal title to the plaintiffs. The prayer of the complaint is that the judgment shall declare and establish that the respective defendants held and hold the legal title to the undivided one-third of said real estate in trust for the firm of which Curtiss was a member and for these plaintiffs. It is true, as argued by counsel for the defendants, the transaction did not create an express trust within the meaning of the statutes. Sec. 2081, Stats. 1898. The chapter in which that section is found abolishes “uses and trusts, except as authorized and modified” therein, but declares that the sections of that chapter shall “not extend to trusts arising or resulting by inrplication of law.” Sec. 2076, Stats. 1898. Such resulting trusts have frequently been recognized and enforced by this court. Whiting v. Gould, 2 Wis. 552; Orton v. Knab, 3 Wis. 576; Martin v. Morris, 62 Wis. 418, 22 N. W. 525; Davenport v. Stephens, 95 Wis. 456, 458, 70 N. W. 661. It is elementary that “real estate purchased for partnership purposes and appropriated to those purposes, paid for by partnership funds and necessary for partnership purposes,, always becomes partnership property. Nor does it seem to be material in what manner, or by what agency, the land is bought, or in what name it stands.” Parsons, Partn. (4th ed.) § 265. In the same section it is said: “We consider it an established rule in equity that any party holding the legal title to land, however it may have come to him, will be held as trustee for the partnership, if it be certain that the land was in fact a part of their joint property as partners.” [317] Another text-writer says: “Where a partnership holds land not as the chief purpose of its existence, but as an incident to its business, the statute of frauds does not apply, and the land may be shown to be part of the partnership stock and affected with partnership equities by oral evidence.” 1 Bates, Partn. § 301. Such statements are amply supported by adjudged cases. Among others, see Fairchild v. Fairchild, 64 N. Y. 471; Greenwood v. Marvin, 111 N. Y. 423, 19 N. E. 228; Sherwood v. St. P. & C. R. Co. 21 Minn. 127; Marsh v. Davis, 33 Kan. 326, 6 Pac. 612. Such real estate, so purchased and held, is in equity not only considered as the property of the-firm for the payment of its debts, but also “for the purpose-of adjusting the equitable claims of the copartners as between themselves.” Smith v. Tarlton, 2 Barb. Ch. 336. Here, upon the dissolution of the firm and in the adjustment of such equitable claims between the partners, Gurtiss was to convey, his legal title to the lands to plaintiffs; and his refusal to do so' and his conveyance to Carpenter was a breach of trust and fraud', on the plaintiffs. In the opinion of the trial court the facts, alleged entitled the plaintiffs to a specific performance of the-contract to convey to them the legal title to the real estate. Of course the power of courts to compel specific performance-is not abridged by the statute of frauds. Sec. 2305, Stats. 1898. The complaint does not in terms pray for such specific-performance, and so we refrain from further considering the question here. We perceive no ground for claiming that the cause of action alleged is barred by the statutes of limitation. By the Court. — Both orders of the circuit court appealed: from are affirmed.