Supreme Court of North Carolina, 1873

Thompson, Adm'r v. . Rogers

Supreme Court of North Carolina · Decided June 5, 1873 · Settle

69 N.C. 357

Counsel

Fowle and Batchelor, Edwards Batchelor , for appellant. Battle Son , contra, submitted: 1. A surviving partner is held strictly as a trustee. Col. on Part. sec. 130. Like other trustees he cannot sell partnership property and buy it himself. Pars. on Part. (442) 2. When a trustee buys at his own sale even at a fair price, cestui que trust can treat the sale as a nullity; not because there is, but because there may be fraud. Patton v. Thompson , 1 Jones Eq. 285; Elliott v. Pool , 3 Jones Eq. 17. 3. No circumstances can justify a departure from the rule that a trustee must not be a purchaser at his own sale. Gordon v. Finlay , 3 Hawks 239. This doctrine was afterwards qualified to this extent: A trustee may buy and charge himself with his bid, and the cestui que trust may at their election hold him bound by it or may repudiate the sale, and treat the property as still belonging to the trust fund. Pitt v. Petway , 12 Ired. 69. 4. In this case the administrator of the deceased partner assented to public sale and that current funds should be taken; but he did not assent to a sale to Calvin J. Rogers for the firm of C.J. and B.Y. Rogers, of which the defendant was a member. He assents now to the purchase by C.J. and B.Y. Rogers, so far only as to hold them responsible for the value of the cotton, ascertained by their bid in Confederate money, scaled as of the day of sale. In any other view the estate of the deceased partner gets nothing from the sale, while the surviving partner (for himself and Calvin J. Rogers as partners,) has the value of cotton. This cannot be equity. 5. If, in fact the plaintiff assented to sale to Calvin J. and B.Y. Rogers, he must have done so with the understanding that the defendant was responsible for value of the cotton as ascertained that day by the bids. His silence could be interpreted as meaning only that the surviving partner should take the property, and be accountable to the partnership for its value. His refusal to take Confederate money when the note became due shows that his assent, if he did assent, meant nothing more. The tender here was not of all the money, Confederate and other, which B. Y. Rogers, surviving partner owed, but only of that he owed on the cotton transaction. The administrator of deceased partner could upon no principle be required to have partial settlements. So the funding here was of only part of the Confederate money he owed the partnership.

Opinion of the Court

Settle, J.

The defendant and one Peleg Rogers entered intered into a mercantile partnership in 1858, by which they agreed to share equally the losses and profits of the *362 concern. In February, 1863, Peleg<Rogers died, and during . the/month the plaintiff beeame'-bis ¿administrator. ' •

At Spring Term, 1868, the .plaintiff-.filed a. bill for. a- set•..tlement of the partnership, and at Spring''Term, -1869, a .commissioner was -appointed to state';the account of the-defendant' as surviving.-partner '; óf the firm of-'P. &B.' Y. -Rogers. The - case áse now -before us; by. appeal :from the rilling of his Honor overruling; the report of "the cornmis- - sioner. Wé do not- concur; either, with. the commmissioner or with his Honor.

The plaintiff seeks, to charge the defendant with-one-half of the value of a certain lot of cotton belonging to the firm, at the death of the plaintiff’s intestate. The facts necessary to a full understanding of the controversy are that the defendant in April, 1863, as surviving partner, sold a lot of cotton belonging to the partnership at public auction; that the plaintiff, administrator of Peleg Rogers, gave his consent and approbation to said sale as administrator, and was present at the same; that the terms announced publicly on the day of sale and concurred in by the administrator were a credit of six months, purchaser to give note, and such currency as should be in circulation when the note fell due would be received in payment of the same.

The cotton was purchased by one Calvin J. Rogers on account of himself and his partner, B. Y. Rogers, and they executed a note Avith security for the payment of amount bid. The note became due October 20,1863, and was immediately discharged, amounting-to $5,681.50, by payment, to B. Y. Rogers as surviving partner, to whom it was made paj^able when executed.

The defendant immediately tendered one-half of said amount to the plaintiff, who refused to receive it. The defendant then consulted counsel, and acting- under .their advice, funded, as surviving partner, the share of P. Rogers, deceased, and obtained a certificate'- for four per cent, regis *363 tered bonds of the Confederate States, which certificate he-has filed with the papéís-in the suit.

The commissioner failed to charge the defendant with ¡ánything.on’ account of She cotton,' but his Honor held that •he should, be- charged*with - the .-value -of, the -.cotton and interest from the day of. sale; the value to ‘be ascertained by applying, the scale to the amount bid for the,cotton. .

The defendant received $5,681.50, the the full price Of the cotton, for and on behalf of the partnership.

He seems ¡to have-acted in.¡good ..faith, and in his.seftlement.with the partnership he should; be allowed,, as .a credit, the certificate for registered bonds ,-of the Confederate States, but as he retained $2,840.75 of the, cotton money he is clearly liable to account therefor to the partnership. In other words, he held the whole amount' for the .firm, and the firm lost that which was funded in Confederate bonds, and the firm is entitled to divide- that which was not lost. But the scale as applied to contracts generally does not apply in this case. The defendant was acting in good faith in a fiduciary character, and is liable only for the value of the Confederate money at the time when it came into his hands.

There was error to the extent indicated.

Let this be certified.

Pee Curiam. Decree accordingly.

Case-law data current through December 31, 2025. Source: CourtListener bulk data.