Shearer v. Paine

Massachusetts Supreme Judicial Court
Shearer v. Paine, 94 Mass. 289 (Mass. 1866)
Colt

Shearer v. Paine

Opinion of the Court

Colt, J.

The defendant Paine, in his answer to this bill, alleges that Daniel L. Shearer, as the surviving partner of Leonard B. Shearer, under the original articles and the subsequent agreement, claims that he shall account with him for the property of the firm of Shearer & Paine, and forbids his accounting to the plaintiff, or paying over to her the share of the property of Shearer & Paine coming to said Leonard’s estate. And Daniel L. Shearer, in the answer filed by him, asserts his right as such survivor to all the property and the proceeds of the sale of any property of said firm of Shearer & Paine, after deducting Paine’s share thereof, to be held by him until the settlement of his partnership affairs with Leonard B. Shearer, and then accounted for to the administratrix of his estate.

The right thus insisted upon by Daniel L. Shearer to take by survivorship all the property of the firm of which he was a member, for the purpose of holding and administering on the estate until the effects are reduced to money and the debts paid, is a right incident to all partnerships, and one of which he cannot be deprived by the personal representative of the deceased partner, in the absence of any allegation of mismanagement or want of capacity. And this is decisive of the case, unless there is something in the relations of the parties which makes it an exception to the general rule.

The property in Boston of the original firm was indeed placed by Leonard B. Shearer’s agreement with Paine in the possession of the new firm of Shearer & Paine; but it was manifestly not intended to deprive Daniel L. Shearer of his interest in it as partner, or exclude him from the profits of the business in Boston ; and, as to the parties, it could not have that effect, whatever might be the result as between him and the creditors of the new firm. Nor was Paine, as among themselves, made a partner in the entire concern. The rights of the parties are to be settled here irrespective of liabilities which were incurred to creditors of either firm by the arrangement. A partner cannot make an arrangement of this kind with a stranger in referen *292to any portion of the property or business of the firm which shall deprive him, without his consent, of the right as survivor to collect the effects of the partnership and apply them in payment of its debts. So that, if there had been no understanding and agreement of the parties, it would seem clear that Daniel L. Shearer, as surviving partner, alone has the right to demand of Paine the effects of the original firm now in his hands, and his right in this respect is placed beyond question by the express written agreement between him and Leonard B. Shearer set forth in the bill. As the legal representative of Leonard B. Shearer, the plaintiff can assert her rights only in subjection to the arrangements which were made by her intestate.

It does not appear that the whole assets of the firm in Boston belonging to .the original partnership may not be needed by Daniel L. Shearer to pay debts; and if so needed, then in equity the real estate named in the bill must be sold and applied to their payment. Burnside v. Merrick, 4 Met. 537. Fitch v. Harrington, 13 Gray, 468.

It is argued that, as Paine was not a partner of Daniel L. Shearer, no suit can now be maintained by Daniel L. Shearer against him as partner; and that only the plaintiff, as representative of Leonard B. Shearer, can compel him to account for the effects in his hands. If this be so, it would follow that Daniel L. Shearer must await the result of this suit, and then look to the plaintiff for the partnership effects of the original firm. But this is not a correct view of the right of Daniel L. Shearer as surviving partner. Paine must at least be regarded as trustee of the assets in his hands for the legal representative of the old firm, and liable to account. Long v. Majestre, 1 Johns. Ch. 305, is in point. In that case A. and B. carried on trade as partners with the funds of A. in the name of B., and B. without the consent of A. entered into partnership with C., and carried into the new concern all the funds of the former partnership. A., on the death of B., filed a bill against his administratrix and C., his surviving partner, for a discovery and account. C. demurred to so much of the bill as sought an account from him of the trans* actions and profits of the partnership between him and the *293intestate, and of the personal estate in his hands; but the demurrer was overruled

The result to which we come in this case renders it unnecessary to consider the other questions so fully discussed at the hearing, or to decide whether upon the facts here disclosed a court of equity would decree a sale, by the surviving partner, of all the real estate, whether needed for the payment of debts or not, and a division of the proceeds as prayed for in this bill.

Bill dismissed, with costs.

Reference

Full Case Name
Corinna A. Shearer v. John S Paine & others
Status
Published