Hargadine v. Gibbons

45 Mo. App. 460, 1891 Mo. App. LEXIS 283
CourtMissouri Court of Appeals
DecidedMay 12, 1891
StatusPublished
Cited by6 cases

This text of 45 Mo. App. 460 (Hargadine v. Gibbons) is published on Counsel Stack Legal Research, covering Missouri Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Hargadine v. Gibbons, 45 Mo. App. 460, 1891 Mo. App. LEXIS 283 (Mo. Ct. App. 1891).

Opinion

Thompson,-J.-

— This action was brought by the surviving partners of the late firm of Crow, McCreery & Co., on a judgment recovered by that firm against the defendant in the year 1876, some fourteen years before the commencement of the present action. The only, defense is that the right of action upon the judgment is not in the surviving partners, but that it is in the surviving partners and the executors of the deceased partners, and that they must all join in the action. The partnership firm of Crow, McCreery & Co. expired by limitation prior to the recovery of the judgment, and was in process of liquidation when the judgment w7as recovered. At the date, wdien the firm expired by limitation and went into liquidation, all the partners were alive, and so they were at the date of the recovery of the judgment; but since that time, and before the commencement of the present action, two of the partners have died, and executors have been appointed upon their estates.

The view urged upon us on behalf of the defendant is that, as the partnership was not dissolved by the death of any of its members, but was dissolved by the expiration of the period of limitation prescribed in its articles, the subsequent death of two of its members did not leave the survivors in the status of surviving partners in the sense which enables them to sue upon this judgment. This view seems to us to proceed upon a misconception of the effect produced by the dissolution of a partnership. The dissolution of a partnership, whether it takes place by the death of a member, or by the expiration of the period of limitation named in the partnership articles, does-not produce a cesser of the partnership relation for all purposes, but only for the purposes of continuing the partnership business and [462]*462incurring new liabilities. The partnership still continues for the purposes of liquidation, — that is to say, for the purposes of collecting the assets, and of paying the debts. If some of the partners die, this power to collect the assets and pay the debts of the partnership vests in the survivors; and in principle and in practical .sense it can make no difference whether the partners, who die, die before the expiration of the firm by limitation, or afterwards. The surviving partners may decline this office by refusing to give bond and to proceed as required by the statute relating to administration, in which case the executors of the deceased partners may assume it. But there is no such principle known to the law, as that the surviving partners and the executors of the deceased partner can continue the partnership together for the purposes of liquidation, unless the partnership articles so provide. The office and duties of collecting its assets and paying its debts must devolve upon the one party or the other, and cannot be devolved upon them in common.

In respect of dioses in action, the law has been stated to.be that, whenever a partnership is dissolved by death, although the personal representatives of the deceased partner become tenants in common with, the survivor of all the partnership property and effects in possession, they do not become tenants in common of the dioses in action belonging to the partnership, for they belong to the survivor. The legal title to them by operation of law is cast upon the survivor, and he must sue upon them in his own name without joining the representatives of the deceased partner, and he will be accountable to the partnership for whatever he collects. Bredow v. Savings Inst., 28 Mo. 181, citing Story on Partnership, sec. 346.

A judgment recovered by a partnership, when used as the foundation of another action, is a mere chose in action, the same as a bond, note or other paper evidence of indebtedness. The right to sue upon it vests in the [463]*463surviving partners, and it makes no difference whether the deceased partners died before or after the partnership entered upon the period of liquidation.

In the case of Ober v. Railroad, 13 Mo. App. 81, this court held that the surviving member of a partnership succeeds to the rights of action of the firm, notwithstanding the dissolution may have taken place prior to the death of the other partner, and while the business of the partnership was in liquidation. In that case the right of action was for damages against a common carrier for delay in making a shipment of goods. But the principle must be the same in application to all rights of action. It is true that that case was decided in accordance with the law of Arkansas, and that this court cited and relied on the decision of the supreme court of Arkansas in Stillwell v. Gray, 17 Ark. 473. But Arkansas was once a part of the territory of Missouri ; a considerable portion of its statute law and of its judiciary system was inherited from us ; and there is no reason to believe that in this particular the law of Arkansas is different from the law of Missouri, or from the general law.

We would stop here, and our decision would rest upon elementary principles in the law of partnership, which every well-informed lawyer is presumed to understand, were it not for the decision of our supreme court in Mutual Savings Inst. v. Enslin, 37 Mo. 453. This decision grew out of the same transaction as the decision which we have already quoted in Bredow v. Savings Inst., 28 Mo. 181. Laying out of view matters of detail, the earlier of these cases held that the surviving partner of a firm, whose other partner had died since the dissolution, has the power to transfer promissory notes of the firm to secure the transferees against their liability as accommodation indorsers for the firm ; while the later decision, involving the same transaction, held that the surviving partner has no such power. The [464]*464former decision, proceeded upon the view that the transfer of the notes was an act, which the surviving partner had the power to do in liquidation of an obligation of the firm to its accommodation indorsers, and that it was not beyond the power of the surviving partner, because it imposed no new liability upon the firm. It also held that the power of the surviving partner was not suspended until he should give bond as required by the statute relating to administration, and that it was not superseded by the appointment of an administrator of the estate of the deceased partner, the latter not having given the bond required by the statute as an administrator of the partnership estate. It also held, and in conformity with the most elementary principles in the law of partnership, that, until the administrator of the deceased partner had given bond for the administration of the partnership estate, he had no power to meddle with the winding up of the affairs of the partnership. In the former case the decision of the court was written by Judge Richardson, and it has been frequently quoted in subsequent cases as a lucid exposition of this branch of the law of partnership.

The later decision in 37 Mo. misapprehends the most fundamental principles of that law. In the first place, it undertakes to draw a distinction in respect of the powers of surviving partners between the case, where the deceased partner dies before the partnership has been otherwise dissolved, and the case where he dies after it has been otherwise dissolved and while it is in liquidation. This proceeds upon the conception that, when the partnership was dissolved, during the lifetime of both partners by mutual consent, the two partners sank to the position of tenants in common, and their mutual agency and trusteeship thereupon ceased.

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Cite This Page — Counsel Stack

Bluebook (online)
45 Mo. App. 460, 1891 Mo. App. LEXIS 283, Counsel Stack Legal Research, https://law.counselstack.com/opinion/hargadine-v-gibbons-moctapp-1891.