Robertson v. Baker

11 Fla. 192

• Court: Supreme Court of Florida
• Decided: July 1, 1867
• Status: Published

Opinion

DuPCLNT, C. J.,

delivered the opinion of the court.

This is a suit in equity, instituted by Bolling Baker against William F. Robertson. The complainant alleges in his bill that, on the 1st day of January, A. L>. 1847, the parties agreed to form a copartnership for the purpose of conducting and carrying on the business of planting, and in view of that purpose and design, they purchased from one Colin Macrae a certain tract of land or plantation, situated in the county of Jefierson, in the State oí Florida, together with fifty-one slaves, and mules, stock, ifcc.; that the said purchase wras made on the joint and equal account of both partners, but as the said Robertson was absent from the State at the time, and for the convenience of perfecting the security to be given to Macrae, the title to the property was made to the complainant individually; that, at the same time, the complainant executed to the said Macrae, in his individual capacity, a mortgage of the property purchased, and to secure the unpaid portion of the purchase money.

The bill further shows that within a few weeks after the completion of the said purchase from Macrae, it was deemed to be to the interest of the said partners to sell the plantation purchased from Macrae and to purchase one in Leon county; that said sale was accordingly made and another tract of land was purchased in the county last aforesaid ; that the said Robertson being still absent from the State, and for the like convenience, as aforesaid, the title to this tract of land was also made to the complainant individually, but that he subsequently transferred, by proper conveyances, to the said Robertson one undivided half interest in the said tract of land, and one undivided half interest in the negroes, stock, &c., which were embraced in the original purchase from Macrae; that it- was agreed between the said copartners and the agent of the said Macrae that the security for the balance then due to Macrae on the original purchase should be transferred to and made a lien on the said last mentioned tract of land, and which was accordingly done.

The bill further shows that the partnership was conducted on joint account, continuously, until the first day of January, A. D. 1856, at which time it was dissolved by mutual agreement ; that, at that date, the balance due Macrae on the original purchase, amounted to the sum of $$,000, which bore an interest at the rate of eight per cent, per annum; that to provide for and keep down this interest, it was agreed between the copartners that Robertson should retain the possession and use of the plantation, paying as rent therefor the amount of $640, which was the amount of the annual interest on the said balance of $8,000.

The bill further alleges that there was no settlement made between the copartners at the time of the dissolution of the copartnership, and that the accounts. between the partners, growing out of the partnership transactions, remain unadjusted to the present time.

It is further alleged that the said Robertson has failed to pay the interest on the balance of the Macrae debt, as he had agreed to do, since the year 1860 or 1861, whereby the debt has been largely increased in amount.

The bill further shows that, in order to sustain the credit of the firm and to prevent a sale of the pailnu-liip property, they, the said copartners, executed divers mortgages of the partnership property, in order to obtain the necessary advances of money. That these advances becoming due, he, the complainant, was forced to meet the payment out of his individual funds, and, to secure himself, received from the parties holding them an assignment of the mortgages above mentioned.

It is further alleged that the complainant holds a mortgage from the said Robertson, executed in the latter part of the year 1858, to secure the payment of $4,000, which the said Robertson acknowledged to be then due to the said complainant for advances made by him, and which mortgage embraced the then growing crops and all future crops of the said Robertson.

The hill further alleges that the land mortgaged to Ma-crae to secure the payment of the balance now due for principal and interest, is rapidly deteriorating under the bad husbandry of and through the waste committed by the said Robertson, in cutting down and clearing large portions of the forest land.

The prayer of the bill is, that the copartnership be decreed to be dissolved, and that it be referred to a Master to take and state an account between the copartners, of all matters, growing out of the business of the firm; and also to take and state an account between the said partnership and the said Macrae, and to ascertain and state what amount was due to said Macrae for principal of his debt on the first day of Jan., A. D.1856, and what amount is due for interest on said debt since the first day of January, 1856. The prayer also asks for the appointment of a Receiver. It is also asked that, the securities assigned to the complainant for advances made by him, shall be decreed to remain as a lien for any balance that may be due him, as also the' mortgage of 1858. It also asks for the sale of the land mortgaged to Macrae, and the appropriation of tlie proceeds of the sale to the payment of the balance that may be found to be due him upon the coming in of the Master’s report. There are other matters prayed for which are not material to be set forth in this opinion.

The answer of defendant, Robertson, admits the existence of the partnership, as set forth in corefplainant’s bill; admits the purchase from Macrae, and alleges that it was made “ with moneys belonging to the said partnership admits the mortgage of the property purchased to secure the balance due on the purchase ; admits the sale of the tract of land purchased from Macrae and the subsequent purchase of the tract in Leon county; but denies that “he was a party to any agreement, or knows that any agreement was made, by which the mortgage given for the balance unpaid upon the original purchase in Jefferson county veas transferred to the tract of land in Leon county, Florida ; and that if such transfer of said lien to the said Colin Macrae was made, it was dene by the said complainant without his knowledge -or consent.” The answer further admits the dissolution of the copartnership on the first day of January, A. D. 1856, and the agreement of the defendant to retain the possession of the plantation, and to pay, as rent for the same, an amount equal to the annually accruing interest on the balance of the Macrae debt then due and unpaid. The answer alleges that, in compliance with his agreement, the defendant did continue to pay the interest on the said debt to the first day of January, 1859, and had made arrangements to continue to do so, but was prevented and foiled in his purpose by the unwarrantable interference of the complainant.

The answer further admits the payment by the complainant ■of the balance for advances due to Smallwood, Anderson & Co,, and of the transfer by the latter to the complainant of the securities which they held to secure the payment of the same; but alleges that at the date of this payment the complainant was indebted to the firm of Baker & Robertson in an amount much larger than the amount of the balance so-paid by him to Smallwood, Anderson & Co. The answer also admits the execution of the mortgage in 1858 to secure to the said complainant the payment of $4,000, but alleges-that the same was made inadvertantly and through an erroneous view as to the real state of indebtedness between him, the defendant, and his copartner Baker.

There are in the answer divers other admissions and allegations, but as these do- not afiect our conclusions in the view which we have taken of the case, it is unnecessary to incorporate them in this opinion.

The record shows that after an injunction had been granted, as prayed for in the bill, a Receiver appointed to take charge-of the partnership property, both real and personal, and an order had been made for a reference to- a Master to take and state an account between the parties, to-wit: on the third day of April, A. D. 1866, John A. Macrae, as executor of the aforesaid Colin Macrae, deceased, applied by petition to be permitted to be made a party complainant to the bill, setting forth in said petition his interest in the property in litigation, which application was granted and he ordered to be made a party complainant.

The record further shows, that at a subsequent day, to wit: on the 19th day of April, 1866, a motion was made to dissolve the injunction theretofore granted and to vacate the order appointing a receiver, and which motion was refused. It also shows, that after divers references and.re-references, with exceptions sustained and overruled, to wit: on the 6th day of August, A. D. 1866, the defendant filed his answer to the petition of the said Macrae, in which he contests the right of Macrae to intervene in this suit as a party, having no interest jn the subject matter in controversy.

The record further shows that the cause having been brought to a final hearing, the Chancellor caused to be entered the following decree, to-wit:

First. The exceptions made and taken to the report of F. IF Flagg be and 'are hereby allowed, and said report set aside.

Second. The Master hereinafter appointed is hereby ordered and decreed to pay to John A. Macrae the moneys in his hands, arising on the sale of cotton or other crops, not expended irt carrying on said plantation, and the costs and expenses of these proceedings and of the said Receiver in satisfaction and discharge of the interest on the debt due said Macrae, for which defendant Robertson is liable, as by the report of II. Archer, heretofore made.

Third. That the land called the “Lenoir” plantation, referred to in the bill and exhibits in this cause, be sold by Charles II. Austin, who is hereby appointed Special Master for that purpose, on giving the usual notice ; the proceeds whereof to be applied as follows, viz: one-half of the proceeds to be applied in payment in behalf of Bolling Baker for one-half of the principal, viz: $4,000 of the Macrae debt, and one-half to be applied in behalf of ¥m. F. Robertson for his one-half of the principal of the Macrae debt, and also in payment of as much of the interest due by said Robertson on said debt as may remain unpaid after applying the proceeds of cotton and other crops in Receiver’s hands thereto, as hereinbefore ordered; and in the event of a surplus remaining after applying the one-half of the proceeds aforesaid in behalf of said Baker in discharge of his half of the principal of the Macrae debt, the said surplus to be paid over to the said Baker, unless such surplus should be neees-' sary to be applied to said debt for failure of the proceeds of said cotton and other crops, and of the half of the proceeds enuring to said Robertson to fully pay and discharge the interest of said debt, and the one-half of the principal payable by the said Robertson.

Fourth. It is further ordered and decreed, that the mortgage executed by the defendant to the complainant, dated the fifth day of November, eighteen hundred and fifty-eight, be foreclosed, and the defendant is hereby barred and foreclosed of and from all right and equity of redemption of, in and to the property described in said mortgage, and all persons claiming, by, through or under him, are also so foreclosed and barred.

Fifth. If the cotton and other crops, as well as the one-half of the proceeds of the land enuring to said defendant, shall be insufficient to pay the interest on said Macrae debt, and the one-half the principal payable by said Robertson, it is ordered and decreed that the personal property, mules, &c., described in said mortgage, and now existing in the hands of the Receiver, be sold by the said Master, and the proceeds, or so much thereof as is necessary therefor, applied to the payment and discharge of said interest and one-half of the principal as may remain to be paid as aforesaid.

Sixth. The court having considered the matters arising upon the indebtedness claimed by the parties, doth adjudge and decree that there is due from the defendant to the complainant the sum of seventeen hundred and ten dollars, and that for that amount the complainant ⅛ entitled to a sale of the personal property mentioned in said mortgage, and that the proceeds of such sale be applied to the satisfaction of said amount and paid to said complainant; but if it should be necessary to sell said personal property to pay the Macrae debt or any part thereof, as hereinbefore decreed, then the balance of the proceeds of such sale, and any balance that may remain after paying the portion of the Macrae debt and the interest on said debt, payable by said Robertson, be paid by the Master aforesaid to the payment and discharge of the said amount decreed, as aforesaid, to be due to complainant; and that Master do sell said property, real and personal, to carry out the provisions of this decree.

And the Receiver, Richard Saunders, is hereby ordered and decreed to turn over and deliver to Charles II. Austin, forthwith, all property, moneys and effects in his hands, received by him as Receiver, under the order appointing him in this cause. And it is further ordered that the account of said Saunders is approved, and he is hereby allowed the sum of six hundred dollars for his services as such, which may be retained by him out of the monies in his hands. And it is further ordered, that the costs of these proceedings be paid by the defendant, and in the meantime, that the same be paid by the Master, out of the funds that may come into his hands.

From this decree an appeal was taken by the defendant, and the case is now befóte us for our adjudication. The petition of appeal sets forth the following as the grounds upon which a reversal is asked, viz :

First. All the interest which he has in the real and personal property involved in this suit, is separate and distinct, is not impressed with partnership character, and there exists no lien of either partner to have a sale.

Second. Macrae is improperly made a party to sworn bill, after injunction, receiver and answer, and improperly made a coplaintiff of Bolling Baker, their rights being adverse and distinct—he being no partnership creditor, and having taken mortgage security.

Third. Upon the reference upon exceptions to the first Master’s report, the court should not have allowed new accounts to be brought into the Master’s office.

Fourth. The reports of both Masters, Flagg and Archer, should not have been set aside, and decree made upon the mortgage of defendant to complainant Baker; such decision being an arbitrary decision, in conflict with previous orders in the cause, and fraud and error having been charged in the answer.

Fifth. Receipts given for Confederate money and accepted by a creditor cannot be opened, and an absolute and arbitrary value be fixed by the Chancellor in the absence of all evidence fixing any value, nor can they be opened with such evidence.

Sixth. The removal of Master Flagg, upon no evidence except exparte petition of complainant, a party in the cause, was contrary to every rule of chancery practice.

Seventh. The decree should have been for Robertson, on Master’s report, or the Chancellor should, at most, have only sent the matter of account back to Master’s office, dissolving injunction and discharging Receiver—Robertson, as tenant, from year to year, being entitled to possession.

Eighth. The whole proceeding is irregular, illegal and defective.

In support of the first exception to the decree, as set forth in the petition of appeal, the Solicitor for the appellant assumed that the property sought to be subjected to the partnership lien, as well defined by the law, was not so impressed with the character of partnership property as to render it liable to the operation of that law. It was insisted that as to the real estate employed in the business of planting, it was held by the parties constituting the partnership as “ tenants in common,” and not as copartners; and as to the personalty that there had been a severance of title, upon the dissolution of the copartnership and that Robertson held the portion that was allotted to him in severalty and exempt from the lien of his copartner Baker. A distinction was drawn between trading partnerships and others of a different character, and it was insisted that the lien growing out of the application of the “ lex mereatoried'’ applied only to the latter description of property. To sustain this distinction numerous cases were cited, which we shall now proceed to examine.

The case of Crawshay vs. Maule, (1 Swanson R. 495,) was relied upon to show that real estate was not subject to the Hen of partnership, and the casual remark of tlie Chancellor, made before the case had been brought to a full hearing,, that it was an important consideration “ whether this business is such as would subject the parties to become bankrupts” was urged as affording the proper test. We do not think that such was the design of the Chancellor, and this is obvious in his subsequent remarks in the same case. At page 521 lie is reported, as saying, “ for ordinary purposes a lease is no more than stock in trade, and as part of the stock may be sold, nor would it be material that the estate purchased by a partnership was freehold, if intended only as an article of stock.” He says further, “ with respect to mere joint interest in land, I apprehend that the rule would be different, the parties then becoming tenants in common, each cannot call on his companions to concur in a sale, but must sell his own interest. It is said that this is only the case of tenancy in common of a mine; if so, I think that the doctrine with respect to land would apply, and not the doctrine with respect to trading partnerships; hut a very difficult question may arise, whether, if the parties being originally tenants in common of a mine, agree to become jointly interested in the manufacture of its produce, for the purpose of sale, they continue mere tenants in common of the mine.”

There is nothing in these remarks to sustain the idea that the lien derived from the law of partnership may not equally attach to real as to personal property. It is all made to depend upon the intention and agreement of the copartners-. It is true that, according to the English cases, and not a few of the American, unless that intention and agreement is made manifest and apparent, the strict rules of the common law, with regard to the succession, will be held to apply to that species of property, and this will be more clearly illustrated in our examination of other cases cited on the same side at the hearing.

In the case of Thornton vs. Dixon, (3 Brown’s C. C., 199,) the Lord Chancellor is reported to have said oil the first hearing that “ he had always understood that when partners bought land for the purpose of the partnership concern, it was to be considered as part of the partnership fund; and consequently that the land in question must be considered as personal estate and distributable as such.” But when the case came on to be heard a second time, he is reported to have modified that opinion by stating that, “ had the agree* ment been that the mills should be valued and sold, it would have converted them into personalty of the partnership; but that the agreement which had been entered into was not sufficient to vary the nature of the property, and therefore, that after the dissolution, the property would result according to its respective nature—the real as real and the personal as personal estate.”

In the case of Ripley vs. Waterworth, (7 Vesey, 425,) which was discussed before Lord Eldon, lie said, “I am strongly inclined to think that this is personal estate, being of opinion that upon the true construction of the deed, the ¡parties had contracted with each other, that when the partnership should be determined, whether by the act of the parties or of God, the property should be converted to all intents and purposes.” “ By the deed it is to be considered part of the capital stock in trade. The question is, whether three persons, engaging in the purchase of real property, such as this, and to be applied to such purposes, might not and did not contract that, if the partnership should be dissolved by the act of all, or the death of one, it should be all sold together for the purpose of producing more benefit upon the sale ?”

It will be seen by an attentive and critical examination of these two cases, that the question whether land is to be considered as real or personal property upon the dissolution of the partnership, is made to depend upon the previous intention or agreement of the copartners; and that the idea that there is any inherent quality in that species of property which precludes it from being subjected to the lien derived from the law of partnership, is not sustained or sanctioned.

The case of Bell vs. Phyn, (7 Ves., 453,) decided by Sir William Grant, Master of the Rolls, on the same day that the judgment was delivered in the last foregoing case, is thought to have conflicted with the principle established by the two cases above referred to; but we do not discover the alleged conflict. In the case of Bell vs. Phyn, the land in controversy liad been conveyed to the copartners by deed stipulating that they should hold as tenants in common in fee. By the very terms of the deed, the character of the property was defined and fixed, and against this express contract and agreement of the parties, the implied lien of the partnership could not prevail. Indeed, it is very strongly intimated in the opinion delivered in the case, that had this been otherwise, the principles established by the two cases before referred to would have prevailed. The ground of the decision is expressly stated by the Master of the Rolls, lie says: “ Here the parties have limited and defined the extent of the interest the partnership was to have in the real property.” There is then no conflict, but a strong intimation of the most perfect concurrence.

The case of Randall vs. Randall was confidently relied upon at the hearing of this cause to sustain the position that land could not be made the subject of partnership, unless the object and design of the association be for the purposes of trade. A careful consideration of the/befe of this case, we think, will show that the principle upon which it was decided is not in conflict with the cases already alluded to.

Richard and William Randall, with their brother James and sister Elizabeth, upon the death of their father, became entitled, as tenants in common to an estate partly freehold and partly leasehold. The two former, shortly after their father’s death, agreed to become copartners in farming, including the growing of hops. They subsequently entered into the business of malting and baking. The farming business was carried on upon the family estate. They purchased of James his interest in the estate, and paid for it with the partnership funds. They also purchased other lands, a portion of which was conveyed to them in moieties. The object of the bill was to have the real estate of the copartnership declare to be personalty. The Yice-Chancellor, after extensively reviewing many of the older cases, says: “ Taking then the law to be as it is to be collected from the cases to which I have referred, the question is whether the real estates in this case are to be considered as personal property. Now it does not appear that the parties purchased any part of the land for the purposes of their partnership trade. Having in the first instance agreed to carry on the farming business in partnership, they subsequently agreed to become co-partners—first, as malsters, and afterwards as biscuit-bakers. The first purchase that they made was of an undivided fourth part of an estate, of “which they previously had a moiety as tenants in common. It would, however, be strong to say that because these parties being partners in the farming business, which is not a trade, happen collaterally to that business to carry on a trade, therefore the nature of the property which they so purchased is to be changed.”

The deduction drawn from this part of the foregoing opinion delivered in that case is, that farming not being a trade, no association of individuals for that purpose would constitute them copartners so ás to invest them with lien derived from the law of partnership. We do not think this a legitimate deduction. That question was not mooted, nor was it necessary to be made, to warrant the conclusion at which the Yice Chancellor arrived. Had* it been attempted to subject the lands to the lien growing out of the farming partnership, it would have been a sufficient answer to have .shown that as to the lands derived by inheritance and used for the farming purposes, they were originally held as a tenancy in common, and there was no evidence to show that there had ever been any agreement between the partners, either express or implied, to change the character of the property.

In the close of the opinion delivered in the case of Randall vs. Randall, the Yice Chancellor goes on to say; “The malting business ceased in 1807, and the biscuit-baking in 1815. In 1820, the two brothers purchased two houses and gardens in Portesea, which of course were not used for farming purpose^ but were let to tenants. Those premises were conveyed in the same maimer as the land purchased of Tar-ver, and if in those instances in which the lands purchased by the brothers were conveyed to them, it is to be inferred from the form of the conveyances that they intended to hold them as real estate, it is but fair to conclude that they intended to hold those lands which were not conveyed to them in like manner; for it is unreasonable to suppose that they intended to hold part as land and part as impressed with the character of personal estate.”

Though the decision in this case was adverse to the attempt to convert the land into personalty, yet it is not to be inferred that the principle upon which it was decided is in conflict with the principle established by the cases before referred to. The contract or agreement of the parties, and even the intention, when clearly manifested, is recognized as the true and only test by which the character of partnership property is to be determined. And this, we think, will be found, upon a critical examination of the reported cases, to be the established doctrine of the English Courts. We have not been able to detect the great conflict of opinion on this subject so frequently referred to by American Judges. On the contrary, so far as we have had access to the English reports, we have found the adjudications on this point most harmonious, and the law settled and fixed. That law we take to be as follows, viz:

1st. That where the land used in the conducting of the partnership business was held by the copartners as tenants in common prior to and at the time of the formation of the partnership, it will continue to retain that character, unless the same be altered by some express contract or agreement of the parties. 2d. That the simple fact that land has been paid for out of partnership funds is not of itself sufficient to stamp upon it the character of personalty and subject it to the lien of partnership. It must have been necessary for the conducting of the business of the ^partnership, or there must be some contract or agreement, either express or implied, that it should be converted into personalty.

The case of Coles vs. Coles, (15 John. R., 159,) cited by the counsel for the appellant, fully sustains the English doctrine, as above stated. In that case the Court say: “Ho objection can be made on the ground of an existing partnership between Stephen and Willet Coles. They were tenants in common, not partners in this land. The principles and rules of law applicable to partnerships, and which govern and regulate the disposition of the partnership property, do not apply to real estate. One partner can convey no more than his own interest in houses or other real estate, even where they are held for the purposes of the partnership. There may be special covenants and agreements entered into between partners relative to the use and enjoyment of .real estate owned by them- jointly, and the land would be considered as held subject to such covenants; but nothing of that kind appears in the present case, and in the absence of all such special covenants, the real estate owned by the partners must be considered and treated as such, without any reference to the partnership. These are principles fully established,by the cases of Thornton vs. Dixon, (3 Brown's C. R., 199.) and Balmain vs. Shore, (9 Vesey, Jr., 500.)

It will thus be seen that in ISTew York the doctrine of the English Courts, making the character of the realty to depend upon the agreement of the parties, is in no wise departed from, but sanctioned and sustained. The cases cited from 4 Mass., and 1 Brock. IB, do not apply to a case of this kind, and are therefore of no authority upon the point under consideration.

In Vermont, the courts are disposed to carry the doctrine of converting realty held by a partnership into personalty further than has been done in England. It has been held in that State, that real estate belonging to a partnership fund should follow the same law of distribution in a Court of Chancery which is applied to personal property. Vide Rice vs. Barnard, 20 Vermont, 479.

In the State of Kentucky, the doctrine of the English Courts is fully sustained by the decision in Divine vs. Mitchum, (4 B. Munroe R., 489.)

In Massachusetts, the doctrine of conversion is carried beyond that of the English Courts, and it is there held that, “ When real estate is purchased by partners, with the partnership funds, for partnership use and convenience, although it is conveyed to them in such a manner as to make them tenants in common, yet in the absence of an express agreement, or of circumstances showing an intent that such estate shall be held for their separate use, it will he considered and treated in equity, as vesting in them in their partnership capacity, clothed with an implied trust that they should hold it until the purposes for which it was so purchased shall be accomplished; and that it shall be applied, if necessary, to the payment of the partnership debts. Upon the dissolution of the partnership, by the death of one of the partners, the survivor has an equitable lien on such real estate for his indemnity against the debts of the firm, and for securing the balance that may be due-to him, from the deceased partner, on settlement of the partnership accounts between them ; and the widow and heirs of Such deceased q>artner have no beneficial interest in such real estate, nor in the rent received therefrom after his death, until the surviving partner is so indemnified.” Dyer vs. Clark, 5 Met. R, 562.

The distinction between the English and the Massachusetts doctrine .is, that while the former requires it to be shown affirmatively, that it was the agreement or intent of the partners to hold the real estate subject to the partnership lien, before it will be declared to be personalty, the latter subjects it to the partnership lien, unless it be as clearly shown that it was not the intention of the parties thus to subject it. This is a marked distinction, and considering the difference of circumstances under which real estate is held in the two countries, we are of opinion the Massachusetts doctrine is to be preferred.

• This is not a new question in this court, and an apology may be due for laboring it to the extent that has been done in this opinion; but the books of American reports are so rife with charges against the English Courts for vacillation on this subject, that we deemed ourselves excusable in contributing to the task of disabusing the professional mind.

The case of Loubat vs. Nourse, decided by this court, and reported in the 5th Fla. R, 850, was a claim by a widow of a deceased partner for dower in real estate that had been purchased by the partnership funds. Justice Thompson, in a very able opinion, reconciled the English adjudication on the point, but announced the more extended doctrine of Massachusetts as the. better law. That decision is conclusive on the point raised in this case.

Recurring now to the facts of this case, the question is, whether it comes within the rule. By reference to the statement of the case contained in this opinion, it will be seen that the bill alleges, and the answer admits, that the land was purchased with partnership funds, and for partnership purposes, and was used in prosecuting the businéss of the partnership for a period of nearly ten years. With this state of facts before us, whatever doubts might have arisen under the English rule as hereinbefore laid down, there is none in the application of the rule as announced in the case of Loubat vs. Nourse. We therefore conclude that the land held by the firm is subject to partnership lien for the payment of partnership debts.

With regard to the personal property used in prosecuting the business of the partnership during its existence, a different state of facts is shown by the record. It is made to appear that upon the dissolution of the partnership in 1856, there was a partition of all of that species of property and a total severance of the joint estate. This being so, it is very clear that, as between partners, the partnership lien no longer existed in respect to .the property so partitioned and set off. Each held his portion in severalty, unaffected by the mutual rights growing out of the previously existing partnership. What lien the complainant may have on this property under his mortgage of 1858, and his right to enforce the same in this suit, will now be considered.

The giving of the mortgage of 1858 by Robertson to Baker is shrouded in considerable doubt and mystery. It is made to appear that at the date of its execution Robertson was in Florida and Baker residing in Georgia, and that it was intended to secure the payment of a balance acknowledged to be due on a running account between the parties. But neither from the allegations of the bill, the admissions of the answer or the proofs in the case is it definitely shown of what that balance is composed, whether growing out of partnership or individual transactions. Nor in this connection do we deem it a matter of much importance to be ascertained, for even if the indebtedness proposed to be secured by the mortgage should be shown to have originated in a partnership transaction, the acceptance by Baker of the spe-djic security vacated and neutralized the partnership liento that extent. The taking of the mortgage operated in law to divest the right, which he had previously enjoyed, to look to the partnership property for the payment of the debt, and he was thenceforth remitted to his specific security. The acceptance of the mortgage made the debt, whatever might have been its character before, the individual debt of Nob-ertson, and its foreclosure cannot be enforced in this suit, which is instituted for the single purpose of settling up the business of the partnership lately existing between the parties. The bill is defective in this respect, and must be dismissed so far as it seeks to foreclose this mortgage, and as a necessary and legitimate sequence, the order heretofore made for the appointment of a Receiver must be vacated, and the injunction granted must be dissolved.

In considering the state of the account between the parties, as exhibited by the respective reports of the two Masters, who were successively appointed to take the same, we are presented with the extraordinary spectacle of a difference in the results of over fourteen thousand dollars. In such a state of case a court may well hesitate before passing definitely upon the rights of the parties. The Chancellor below, however, did arrive at a conclusion on this point and decreed accordingly; but, as we are ignorant of the basis of the calculation or the process through which that conclusion was reached, we deem it to be most consonant with justice and equity that the decree upon this point be set aside and the accounts be recommitted to a competent Master, to be properly adjusted. In the settlement of partnership accounts, running through a period of nearly ten years, it is hazarding too much to make a decree in the premises without an intelligible report from a competent Master. In order to insure such a report, the Master must be specially instructed to confine bis investigation exclusively to accounts growing out of partnership transactions, and to exclude from his report all demands on either side which are of an individual character only; for these the parties must look outside of this suit for redress.

We are now brought to the consideration of Macrae’s' interest in this suit, and his right to be made a party thereto. In the discussion of this point, the Solicitor for the appellant insisted that “ after sworn bill, answer, injunction, appointment of lleceiver and passing of order settling the equities of the case, it was error to make Macrae a party,” and numerous authorities were cited in support of the position. In the view which we take of Macrae’s real character, as a party in these proceedings, it becomes unnecessary to determine the question as to how and at what stage of a cause a stranger may be made a co-plaintiff. The position of Macrae is not that of a co-plaintiff seeking the enforcement of any claim, against either plaintiff or defendant. He is a mere interve-ner, coming by petition and asking fbat be may have the <benefit of any decree that may be pronounced between the parties in respect. to property in which he has an interest superior to that enjoyed by either off them. Taking this view of his position in this suit as a party, his right to intervene cannot be questioned. How far that intervention will enure to his benefit will be hereafter considered.

It was further insisted at the hearing that, admitting the right of - Macrae to intervene, he was entitled to no claim upon the funds to be derived from tbe sale either of the personal property or of the lands in Leon county, and that his right was restricted to his specific lien, created by morir gage, on the tract of land situated in Jefferson county. That he could assert no claim as a general creditor of the partnership, but must be restricted to his mortgage security. As a general proposition, this position is undoubtedly correct, but there may be equities arising out of the facts of the case, which may tend materially to the modification of its application.

The origin of tbe Macrae debt, it will be recollected, was the sale to the partnership of a tract of land situated in Jefferson county, and a mortgage upon the same to secure the payment of the purchase money. It will be recollected further, that this tract of land, so mortgaged to Macrae, was-sold by them to Jones, and the proceeds of that sale invested in a tract of land in Leon county. That to indemnify Jones against the lien of the mortgage given to Macrae, he received from the copartners a mortgage upon the tract of land in Leon county, and the sale of which is asked for in this bill. Under this state of facts,, it is insisted for the appellant that Macrae having no right as a general creditor, and his mortgage being upon the land in Jefferson and not upon the land in Leon, (which is the land sought to be sold,) he can assert no claim to the proceeds of the sale. We admit, that but for tbe doctrine of “ subrogation,” so frequently resorted to in equity, sucb would be bis position, and he could have no standing in this suit; but, by tbe application of that doctrine, Macrae becomes invested with the rights which Jones acquired under the mortgage given to indemnify him against the lien of Macrae upon the land purchased by him in Jefferson county. This is a right that Macrae is entitled to, for with a full knowledge of the contents of the bill and answer, and tbe object sought to be obtained, he does, by the simple act of intervention in this suit, make an election which estops him from ever hereafter asserting any claim upon the land purchased by Jones. Thus, by this simple mode of proceeding, so usual in courts of chancery, Jones gets the incumbrance remdved from Ms land, Macrae is placad in a position to have Ms debt satisfied, and the co-partners are relieved pro tanto from their obligation incurred in making the original purchase. The decree upon this point must be reformed and made to conform to these views by requiring that Macrae shall execute a release oí Ms mortgage upon the Jefferson county land before be is permitted to receive the proceeds to arise from the sale of the land in Leon.

A question has arisen in our minds as to the disposition that shall be made of the money now under the control of the court. Upon the principle that Macrae cannot intervene beyond the extent of his mortgage, we were at first inclined to the opinion that he could not participate in this fund. But reverting to the fact that there was an agreement between the copartners entered into at the time of the dissolution, that Robertson should hold the possession of the land and have the use thereof, in consideration of his paying the annually accruing interest of the Macrae debt; and to the further fact that a part of these funds, if not all of it, arose from the produce of the land, we think that strict equity between the copartners, as well as justice to Macrae, demands that these funds shall be applied to the payment of the interest so contracted to be paid by Robertson.

Considering all the circumstances of this case, as they have been made known to us by the record, we are of opinion that neither party can claim exemption from responsibility for the necessity which lias induced the institution of these proceedings, and therefore, we direct that the costs of the suit, up to this date, be borne by the complainant and defendant in equal proportions.

It is hereby ordered, adjudged and decreed that so much of the decree of the Chancellor as directs the sale of the land, and the application of the proceeds to the payment of the Macrae debt, be affirmed, and that the decree be executed in the manner therein directed. And as to the remaining portion of the said decree, it is hereby ordered, adjudged and decreed that the same be reversed and set aside, and that the cause be remanded to the court below with directions that tbe bill be retained, and such other and further proceedings bad in the cause as may be conformable to the views expressed in this opinion.

It is further ordered, that the costs accruing from the . prosecution of this appeal, be paid by the complainant and defendant in equal proportions.