Giddens v. Reddoch
Giddens v. Reddoch
Opinion of the Court
The original bill sought the sale for division of certain town property in Luverne and 50 acres of farm land. The more material questions result from the cross-bill of the Bank of Luverne, a mortgagee, the contention being, in effect, that original complainants (appellants on main appeal) and others to be indicated were not entitled to an interest in the land, or that their rights were subordinate to those of the bank as mortgagee. This property was acquired, originally, by a partnership called Reddoch Bros., operating a mercantile business in Luverne. It was conveyed to the partnership so named. The members of this firm were C. E. and R. G. Reddoch. The father of these men died in 1901. Surviving him were his widow, Mrs. L. M. Reddoch (appellant) and seven children, viz. C. E., R. G„ J. H., I. R., J. D„ J. C., and Lena Reddoch, the latter the appellant Mrs. Giddens. Supplemented by small funds of their own, C. E. and R. G. Reddoch established the partnership of Reddoch Bros, through funds derived from their father’s estate and insurance on his life, no settlement or division of which- appears to have been made among those entitled thereto, except that to the widow was some time later conveyed the “home place farm,” after which she was credited at the store of the firm with the annual rents from that if not from other lands formerly owned by the father.
C. E. Reddoch died in 1904. In his will, which was duly probated with R. G. Red-doch as executor, he provided:
“It is my will that my interest in the business of Reddoch Bros, may be retained in the business for such time as may be agreed on between my surviving partner, R. G." Reddoch, and the heirs above mentioned as they respectively become of age.”
The heirs alluded to in his will were his brothers and sister. His mother, Mrs. L. M. Reddoch (appellant), was not mentioned in his will, and hence took nothing under his will. In 1905 R. G. Reddoch died, having taken no affirmative steps in respect of the agreement contemplated by the will of his testator, his deceased partner, nor engaged in any effort to segregate and distribute his brother’s interest in the firm. According to the evidence, there was no effectual- compliance with the quoted direction of the will. All that R. G. Reddoch did was promptly to take in as a partner his brother J. H. Red-doch, and to continue the business in the firm name of Reddoch Bros. However, the omission, if such it was, to meet the will’s condition for the retention of O. E. Reddoch’s interest in the original firm, is unimportant, since the death of R. G. Reddoch completely dissolved the original partnership and rendered impossible the observance of G. E. Red-doch’s desire that the business continue with R. G. Reddoch, jHis designated surviving partner, a member. And it .may be that the result of R. G. Reddoeh’s introduction of J. H. Reddoch into the firm — though J. I-I. Red-doch paid nothing for a partner’s interest therein — was to evince the surviving partner’s election not to favor or follow the direction of his brother’s will. In any event, the death of R. G. Reddoch in 1905 dissolved the partnership and interposed these complications : An unsettled partnership in which O. E. and R. G. Reddoch had been partners; the administration of the two estates of G. E. and R. G. Reddoch, the latter leaving no will, thereby admitting, differently from O. E., the mother, Mrs. L. M. Red-doch, as a beneficiary under the statutes of descent and distribution; and vacating R. G. Reddoch’s wholly unexecuted executor-ship of O. E. Reddoch’s estate as well as terminating R. G. Reddoch’s erstwhile function as a surviving partner of the original firm.
On April 26, 1906, J. H. Reddoch was appointed administrator with the will annexed of O. E. Reddoch’s estate.- In 1905 J. H. Red-doch was appointed administrator of the estate of R. G. Reddoch, deceased. In the estate of the former, O. E. Reddoch, the administrator with the will annexed took no action. In the estate of the latter, It. G. Reddoch, he went through the form of a *299 settlement, after reporting the debts paid, unto a decree in which the respective shares of each of the heirs at law and distributees were ascertained and determined by the probate ^court, and took from each a receipt in full therefor, though it is undisputedly shown that no sale of property of the estate was effected converting the estate into money as the receipts recite was done, and no money was in fact then paid to any of the distribu-tees of the estate of R. G. Reddoch, deceased. Under the apt authority of Vincent v. Martin, 79 Ala. 540, this effort at a final settlement by J. H. Reddoch as administrator of the estate of R. G-. Reddoch, deceased, was void. However, at a later stage of the opinion account will be taken of this “settlement” for its bearing upon -an issue of law upon which the cross-appellant, Bank of Buverne, relied for protection or relief. .
Immediately after the death of R. G. Red-doch, I. R. Reddoch became a member of the firm still called Reddoch Bros., entering it on the invitation of J. H. Reddoch and paying-nothing, as did J. H. Reddoch when on R. G. Reddoch’s invitation he became a partner on the decease of O. E. Reddoch, paying nothing for an interest or share in the business. The firm of Reddoch Bros., composed of J. H. and I. R. Reddoch, pursued the like business until 1913, collecting and appropriating to the firm’s interest the insurance on goods and buildings burned in 1906-07, the insurance on R. G. Reddoch’s life, and probably the proceeds of the sale of some land the original firm had acquired before the death of G. E. Reddoch, at no time accounting to the mother, other brothers, and sister for whatever interest they had in the corpus of the firm property or in' the life or property insurance collected or in the proceeds of the sale of land sold by the firm when composed of J. H. and I. R. Reddoch, unless some character of such accounting was afforded by the “final settlement” of R. G. Reddoch’s estate by J. H. Reddoch, administrator, to which we have already referred, and that will now be stated.
On November 9,1906, J. H. Reddoch, as administrator of the estate of R. G. Reddoch, deceased, filed his “full inventory” of the assets, real and personal, of the estate of his intestate. The inventory defined R. G. Red-doch’s interest in all property, real and personal, as being seven-twelfths, including, as we understand the descriptions, the real estate involved in this litigation. The proportional statement in the inventory proceeded upon the theory that R. G. Reddoch held an undivided one-half interest, with the late O. E. Reddoch, in the original firm, and under G. E. Reddoch’s will had acquired a one-sixth-interest in O. E. Reddoch’s half interest in the properties of the original firm, and that the remaining five-twelfths interest in the properties, real and personal, listed on the inventory, was respectively held by the surviving brothers and sister, now Mrs. Gid-dens; and yet the latterly rendered probate decree before mentioned concluded in the mother’s favor (Mrs. L. M. Reddoch) for one-half of the “money” into which, it was avowed, the estate of R. G. Reddoch had been converted. Recurring to the recitals of the inventory, the order of the probate court appointing appraisers of the property of the estate of R. G. Reddoch, deceased, produced an appraisal consistent with the terms of the inventory, and it was so approved. It is manifest from the probate court record of the administration of the estate of R. G. Red-doch, deceased, that no subsequent .creditor or mortgagee of real property mentioned in the proceeding could thereby or therefrom acquire a status of purchaser or successor in right that was inconsistent with the existence in 1906 of the fact that there was outstanding in others than J. H. and I. R. Red-doch, composing in 1908 and afterwards the firm of Reddoch Bros., almost a moiety interest in the real estate noted in the inventory and appraisement. Any one consulting the probate record of that estate’s administration would have been so advised. The receipts from R. G. Reddoch’s next of kin and distributees were likewise impotent,' since: (a) Their recitals were not literally true, no money having been paid; and (b) they but token a reception of the money equivalent or share in the estate of R. G. Red-doch, deceased, which, the indicated probate record asserts, was only an undivided seven-twelfths of the properties, real and personal, listed on the inventory. So this matter of asserted satisfaction of these parties through or in consequence of those probate proceedings in the administration of R. G. Reddoch’s estate must be laid out of the cause, the evidence otherwise not sustaining the insistence of .the Bank of Buverne that the interests of' the heirs at law and dis-tributees of R. G. Reddoch, deceased, in his estate or in the properties, real and personal, of the original firm, were paid for by credits or advancements from the firm of Reddoch Bros, when composed of J. H. and I. R. Red-doch. The failure to better sustain the bank’s insistence in this-regard may be due to the absence of the’ books of the firm anterior to 1908; but this possibility, this absence of evidence, does not justify a different cqnclusion on the present phase oi the cause.
Through its cross-bill the Bank of Buverne contends that the heirs at law and distribu-tees of the deceased Reddoehs are concluded by adverse possession of the land in question by-Reddoch Bros., as composed of J. I-I. and I. R. Reddoch, or are postponed in respect of right or interest precedent to the bank’s right to have its mortgage debt satisfied out of the land described in its cross-bill and mortgage; that, because of conduct *300 or acquiescence to be stated, sucb heirs at law and next of liin to the deceased Red-doclis are due to be subordinated in right or interest to tbe superior equity of the bank under its mortgage executed in. 1913 on real property that was owned as partnership property by the original firm of Reddoch Bros, when composed of O. E. and R. G. Reddoch. The status of the Bank of Luverne as a creditor of Reddoch Bros, was this: It took the mortgage in question in 1913 to secure money then advanced and an elder indebtedness the time of prior accrual of which is not shown. The mortgage was signed in the firm name and also by the firm’s members, J. H. and I. R. Reddoch and their wives. It covered, among other things, the real estate involved in this cause, such real estate having been partnership property of the original Reddoch Bros., when that firm was composed of G. E. and R. G. Reddoch, both of whom died prior to 1906. The bank is not a creditor of the original firm. It has taken security for an indebtedness contracted by the firm as last membered. It is not contended that the original firm, or the estates of its members, or those succeeding thereto under the will of O. E' Reddoch or under the statutes of descent and distribution as applied to R. G. Reddoch’s estate, are liable for this indebtedness to the Bank of Luverne. To the contrary, the bank’s insistence is that the property in question has become subjected to a liability in its behalf in consequence of acts of the parties who, at an earlier time prior to the interposition of the bank’s rights, might have enjoyed their original interests in virtue of the will of O. E. Reddoch, deceased, or under the statutes of descent and distribution, in the estate of R. G. Reddoch, deceased. The substance of the bank’s contention in this regard restricts the issue, and we so restrict its reconsideration on this appeal.
The relation of tenancy in common in the partnership land having resulted from the deaths of O. E. and R. G. Reddoch in 1904-05, it will suffice to say, under familiar principles, that the evidence does not show that adverse possession of this real property (as between tenants in common) characterized the holding thereof by J. H. and I. R. Red-doch, or either of them, or by the subsequent firm of which they were the constituents. None of the Reddochs have been divested of the unqualified title to the .real property in question that was in them, as tenants in common, in 1905-06. Have these joint owners since then become estopped to assert their title to this real property as against mortgages thereon subsequently given by members of Reddoch Bros, when composed of J. H. and I. R. Reddoch for debts contracted from three to eight years after the dis-' solution (by deaths) of the original firm? That these moitgages subjected the titles of J. H. and I. R. Reddoch in these real properties to the security they intended is, of course, evident; but these mortgages, in and of themselves, only conveyed or subjected the interests or titles of J. H. and I. R. Red-doch, is equally clear.
It results from these considerations and conclusions that the decree — a judicial entity —is affected with error in respect of the issues of fact and law raised by the amended original bill, the answers thereto, the amended cross-bill of the Bank of Luverne, and the answers thereto. The decree is reversed. The cause is remanded for the rendition and execution by the court below of a decree ascertaining, from the evidence now on file in the cause, and declaring the respective shares or interests of the respective tenants in common in the real estate owned by the original firm of Reddoch Bros., composed of O. E. and R. G. Reddoch, at the date of the death of R. G. Reddoch, declaring the undivided shares or interests only of J. H. Reddoch and I. R. Reddoch subject to their mortgage indebted» ness, first, to Winter-Loeb Grocery Company, and second, to the Bank of Luverne, and ascertaining the amount of such indebtedness with accrued interest, according priority to the mortgage indebtedness to Winter-Loeb Grocery Company, directing and effecting the sale for division, under chancery practices, of the real estate in which the surviving Red-do chs were and are tenants in common, and impounding and applying the net shares in the sale’s proceeds of J. II. and I. R. Red-doch to the satisfaction, as far as such shares of the proceeds will do so, first of the Winter-Loeb Grocery Company mortgage indebtedness and interest, and, second, of the Bank of Luverne mortgage indebtedness and interest, paying any balance to J. H. and I. R. Reddoch in equal proportions after the costs in the cause, including duly ascertained solicitors’ fees are first paid from the total proceeds produced by he sale for division, and decreeing in any other matter of related detail to effect complete relief in accordance with the major premises of the directions herein given.
Reversed and remandefi, with directions.
Addendum
On Rehearing.
The argument first filed in support of the application for rehearing is substantially the same as that presented on original submission.
Adams v. Albert, 155 N. Y. 356, 49 N. E. 929, 63 Am. St. Rep. 675, 681, cited on the brief supporting the application for rehearing, was consulted in the course of the consideration of the appeals on submission. The doctrine there announced that a retiring partner is concluded and his interest is subordinated by his act in leaving property to. which he was entitled, in the continuing operations of the firm from which he had retired is not applicable to the circumstances" presented in this cause; so for the reason that here' the deaths of both the original partners completely dissolved the original firm, and, in the absence of then existing creditors, invested the surviving brothers, sister, and mother (in proper proportions) with the title and relation of tenants in common in the real estate that theretofore had belonged to the original partners. If the circumstance had been one of retirement of a partner, leaving his property or interest in the continuing firm, as was the very different case in Adams v. Albert, supra, the doctrine of that decision and of Parson on Partnerships (3d Ed.) 537, might have been invoked.
The deliverance in Hoyt v. Sprague, 103 U. S. 613, 26 L. Ed. 585, was considered and discriminated in the original opinion. That controversy was again before the court in Francklyn v. Sprague, 121 U. S. 215, 7 Sup. Ct. 951, 30 L. Ed. 936. After reconsideration of these cases the court remains convinced that the discriminative observations made with respect to those decisions were well founded.
In a supplemental brief subsequently filed in support of the application for rehearing, it is insisted that effect should be accorded the doctrine that, upon proper occasion, equity will treat partnership real estate as personal property. That doctrine’s design is to protect' and favor creditors of the partnership. Williams v. Wilson, 205 Ala. 119, 121, 87 South. 549; Butts v. Cooper, 152 Ala. 375, 382, 44 South. 616; Rovelsky v. Brown, 92 Ala. 522, 9 South. 182, 25 Am. St. Rep. 83. It does not appear from the record under review that the original firm of Reddoch Bros.» had any creditors at the time the partnership was dissolved by the death of R. G. Reddoch in 1905. The creditors now contesting the right or title to the real estate are creditors of the new firm as composed of J. H. and I. R. Reddoch — creditors that became such long after the dissolution of the original firm composed of. O. E. and R. G. Reddoch. The doctrine pressed in the supplemental brief is not available or applicable.
In respect of the citation of Goetter-Weil *303 & Co. v. Norman, 107 Ala. 585, 595, 596, 19 South. 56, considering a bill to set aside a ■conveyance for fraud, it will suffice, in discriminating that decision from the cause now under consideration, to observe that the facts of the case, the acts of the parties held to have been concluded, by estoppel, are materially different. In the present instance the evidence discloses no such adequately advised “assent” or course of conduct indicative of conscious surrender of known right and title as was shown in the Goetter-Weil v. Norman Case, supra.
Upon reconsideration the conclusions of fact set down in the original opinion (ante) are adhered to. The application for rehearing is denied.
Reference
- Full Case Name
- GIDDENS Et Al. v. REDDOCH Et Al.; BANK OF LUVERNE v. SAME
- Cited By
- 6 cases
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- Published