Rice v. Pennypacker

5 Del. Ch. 33
CourtCourt of Chancery of Delaware
DecidedFebruary 15, 1875
StatusPublished
Cited by1 cases

This text of 5 Del. Ch. 33 (Rice v. Pennypacker) is published on Counsel Stack Legal Research, covering Court of Chancery of Delaware primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Rice v. Pennypacker, 5 Del. Ch. 33 (Del. Ct. App. 1875).

Opinion

The Chancellor.

About the 22d day of January, 1842, James Rice succeeded by purchase to the interest of Jacob Pearson in the firm of Pearson, Hollingsworth, & Harvey. From that day until some time in the year 1854 there existed a firm by the name of Hollingsworth, Harvey, & Co. Achilles Hollingsworth, Amor H. Harvey, and James Rice composed this firm as partners in trade as machinists and blacksmiths. The precise day of the dissolution of the firm has not been proved, although it is safe to assume, in view of all the facts proved, that the dissolution occurred early in the month of January, 1854, by the withdrawal of James Rice. The business was continued by Achilles Hollingsworth and Amor H. Harvey until some time in the year 1865, under the same name and style of Hollingsworth, Harvey, & Co., when the copartnership was dissolved by the death of Achilles Hollingsworth. On the 18th day of August, 1849, all the real estate [37]*37of a certain firm, known as Hollingsworth & Teas, composed of James Hollingsworth and Joseph Teas, was sold on execution process by Isaac Grubb, then sheriff of Hew Castle County, the aggregate amount of sales being $10,040. The firm of Hollingsworth & Teas prior to said sale was indebted to the firm of Harvey, Hollingsworth, & Co. in a certain judgment in the Superior Court at Hew Castle, being Ho. 424, May Term, 1848, the amount whereof was $2,650, and also to the said James Bice in his individual capacity in two judgments in the said court,— to wit, Ho. 425 to May Term, 1848, being for the real debt of $1,500; and Ho. 232 to Hovember Term, 1848, the real debt whereof was $1,200.

There also existed prior liens against the real estate of the said James Hollingsworth and Joseph Teas, and Hollingsworth & Teas, amounting to upwards of $10,000. The sale made by the sheriff, of this real estate, was under a certain writ of levari facias on a mortgage made by James Hollingsworth and wife in favor of, and held by, the Wilmington Savings Fund Society, to secure a debt of $2,600, and also under a writ of venditioni exponas following a writ of fieri facias issued upon the judgment of James Bice v. Hollingsworth & Teas, for $1,200. Achilles Hollingsworth, at the sale of said real estate, became the purchaser of the same, and received the sheriff’s deed therefor.

The bill of complaint charges that the firm of Hollingsworth, Harvey, & Co., of which James Bice was a member, by and through Achilles Hollingsworth, and by and through him only as the agent of that firm, bought all of the real estate at the said sheriff’s sale, for the use and benefit of the firm of Hollingsworth, Harvey, & Co., and for no other purpose or purposes.

The bill also charges that all of the purchase money paid for the said real estate came wholly, directly, and absolutely from the partnership funds of the firm of Hollingsworth, Harvey, & Co., and that it was purchased in pursuance of ail agreement between the partners for their common benefit, in order to cover the claims of the firm of Hollingsworth, [38]*38Harvey, & Co. upon the" said judgment for the said sum of $2,600, and of James Rice upon one or both of the two said judgments together, amounting to $2,700; for the reason that, in view of its availability for the purposes of their business, and the existence of the said liens, apart from other considerations, the said real estate was worth more to the firm of Hollingsworth, Harvey, & Co. than the price at which it was struck off at the said sheriff’s sale. It appears that a portion of this real estate was used by the firm, during its existence, in their business as machinists and blacksmiths, and that certain alterations were made by them in the portion so used, in order to adapt it to their business; and that, after the dissolution of said firm, it continued to be used for a like purpose by the firm composed of Hollingsworth & Harvey. The bill states other facts and circumstances with a view of establishing a common interest among the partners in the said real estate, and declares that the firm of Hollingsworth, Harvey, & Co. was, at the time of the withdrawal of James Rice therefrom, largely indebted to the said James Rice, and prays that Susan Z. Hollingsworth, the devisee of the said Achilles Hollingsworth, may be decreed to hold the real estate in trust for the use of the members of the late firm of Hollingsworth, Harvey, & Co. and the representatives of any deceased partner or partners; that the real estate may be decreed to be sold by a trustee to be appointed by the court for that purpose; that Susan Z. Hollingsworth may be decreed to convey said real estate to said trustee; and that the equitable share of James Rice therein may be paid to the complainant as his administrator. The bill also prays that an account may be taken of the whole amount which is due to the estate of the said James Rice, for and on account of the amount of money advanced by the said James Rice to the firm of Hollingsworth, Harvey, & Co., evidenced by certain memorandum checks amounting to the sum of $13,539.86, and for the amount of the private account of the said James Rice against said firm, amounting to the sum of $4,175.88, and also of the amount due to the estate of the said James Rice on account of his [39]*39interest as partner in the business of the firm, and also the amount due his estate up to the present time, for his share of the rents and profits of said real estate as equitable tenant in ■common thereof; and that the aggregate amount so found ■due, with interest thereon to the present time, may be decreed to be paid to the complainant as his administrator, out of the proceeds of the sale of the said partnership real estate, or out of any other property which may be found subject to the ■complainant’s claim.

The answer of Amor H. Harvey, one of the defendants, ■although drawn out at length and with great particularity, is, in substance and effect, a confession of the complainant’s bill.

The joint and several answer of William Gr. Pennypacker -and Susan Z. Hollingsworth, the other two defendants, after the admission of the existence of the alleged copartnership, in substance and effect denies every material charge of the hill upon which the complainant seeks relief.

These defendants positively and expressly deny that the purchase money paid for the said real estate came wholly, directly, and absolutely from the partnership funds of the firm of Hollingsworth, Harvey, & Co., and they allege that the same did come from the individual funds of Achilles Hollingsworth and on his own individual account; the manner of which is distinctly set forth in their answer, or appears by the evidence.

If the complainant is entitled to the relief he seeks, it must be for the reason that he has proved clearly, fully, and satisfactorily in the cause, that the firm of Hollingsworth, Harvey, & Co., of which James Rice was a member, actually paid the purchase money of the real estate conveyed by the sheriff to Achilles Hollingsworth, or incurred a liability for, its payment; and that such payment or liability for payment was a part of the original transaction of purchase, and not pursuant to any subsequent agreement or arrangement between the parties,— it being well established that a resulting trust must be coeval with the purchase, and must attach to the legal estate when it is taken under the deed; or, secondly, he [40]

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Bluebook (online)
5 Del. Ch. 33, Counsel Stack Legal Research, https://law.counselstack.com/opinion/rice-v-pennypacker-delch-1875.