Currier v. Studley

33 N.E. 709, 159 Mass. 17, 1893 Mass. LEXIS 74
Massachusetts Supreme Judicial Court·Decided April 8, 1893·Published·Cited by 34 cases

Opinion

Knowlton, J.

Although the seat in the Stock Exchange at the time it was bought, and for a long time after the dissolution of the partnership, was not transferable, and could not be used [19] or in any way made available except by the defendant’s personal occupation of it, the plaintiff contends that it was property in which the firm had a beneficial interest that continued after the dissolution, and that when it was sold the proceeds were assets to be divided between the copartners. The defendant contends that it was a mere personal privilege, which could not be the subject of legal or equitable ownership in another, and that there was no resulting trust in favor of the firm. He also argues, that, if there was a resulting trust, from the nature of the right and the use for which the seat was bought the trust which would be implied would be an obligation to use it for the benefit of the firm during the life of the firm, and not an undertaking to continue to use it for the benefit of his co-partner after the dissolution of the partnership.

We do not deem it necessary to decide the questions arising in this part of the case, which are not free from difficulty, for we are of opinion that, if there was a trust enforceable in favor of the firm after its dissolution, this action is barred by the statute of limitations. The firm failed, and ceased to do business in April, 1873. Although there was no formal settlement of the accounts between the partners, the report states that the determination of the matter in suit will settle the partnership affairs, and it fairly appears that for nearly seventeen years from the close of the partnership business in April, 1873, until the last part of 1889, everything else relating to the partnership had been closed and treated as settled, and there had been no attempt by the plaintiff to have this seat disposed of or accounted for as a part of the firm’s assets.

It is well settled that suits between partners to obtain an account and settlement of the affairs of the partnership are subject to the statute of limitations. It is a general rule in such cases that, in the absence of an express contract in regard to the matter, or of conduct of the parties which works an extension of the time for bringing a suit, the statute begins to run at the date of the dissolution. This is established in England as well as in Massachusetts and in most of the other American States. Knox v. Gye, L. R. 5 H. L. 656. Noyes v. Crawley, 10 Ch. D. 31, 39. Farnam v. Brooks, 9 Pick. 212, 242, 247. Johnson v. Ames, 11 Pick. 173, 182. Allen v. Woonsocket Co. 11 R. I. [20]*20288, 295. McKelvy’s appeal, 72 Penn. St. 409. Gray v. Kerr, 46 Ohio St. 652. Richardson v. Gregory, 126 Ill. 166. King v. Wartelle, 14 La. An. 740. It is clear that, if this had been a suit to obtain the proceeds of this seat through an account and a settlement of the partnership affairs, it would have been barred at the expiration of six years from the termination of the partnership, or more than eleven years before this action was brought.

If it had been a suit to establish against the defendant a resulting trust for the benefit of the plaintiff, it would equally have been barred. Where a trust results by implication of law from the payment of the consideration for property conveyed to another, the statute begins to run in favor of the holder of the legal title against the equitable owner at the time of the conveyance if there is no recognition of the rights of the cestui que trust, and if his rights are recognized, then at the time when the holder of the title begins to hold adversely. Against an express trust the statdte ordinarily does not run until there is an open disavowal of the trust, or some other breach of faith which may give rise to an action. There is a well recognized distinction between express trusts and resulting or constructive trusts in this particular. Beckford v. Wade, 17 Ves. 87. Farnam v. Brooks, 9 Pick. 212. Ripley v. Bates, 110 Mass. 161. Harlow v. Dehon, 111 Mass. 195. Davis v. Coburn, 128 Mass. 377. Kane v. Bloodgood, 7 Johns. Ch. 90. Speidel v. Henrici, 120 U. S. 377, 386. Baxter v. Moses, 77 Maine, 465, 481. McClane v. Shepherd, 6 C. E. Green, 76. Prewett v. Buckingham, 28 Miss. 92, 99.

On a question arising under the statute of limitations, the burden of proof is on the plaintiff. Pond v. Gibson, 5 Allen, 19. There is no evidence of any fact or circumstance in the case which tends affirmatively to show that an express trust was ever created, and there was no question for the jury on that part of the case. Even if there had been an express trust, the defendant’s conduct after the termination of the partnership was equivalent to a repudiation of it which gave a cause of action.

If the right acquired by the defendant was of such a kind that a trust in favor of the firm as owners would result, by operation of law, from the payment of the consideration for it by the copartners in equal shares, it might be argued with much [21] force that there is no evidence of recognition by the defendant of the equitable title of the firm, inasmuch as the ownership and possession and use of the seat in the Exchange — which under the rules of the Exchange then existing could never be anything more than a privilege pertaining to. the person of the member — merely enabled him better to do his duty in buying and selling stock as a member of the firm, and he only gave the firm the benefit of his personal privilege for the time being, just as in other ways he tried to promote the firm’s interests.

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Currier v. Studley, 33 N.E. 709, 159 Mass. 17, 1893 Mass. LEXIS 74 (Mass. 1893).

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