Evans v. Gibson

Napton, Judge,

delivered the opinion of the court.

The decree in this case appears to be based entirely upon the. title acquired by the plaintiff, J. S. Evans, at the sale under execution against A. Reed & Oo. As the judgment, under which this execution issued, had been obtained on the 1st of November, 1856, and the delivery of the title bond by Reed to the defendant did not occur until the 21st of November of the same year, the plaintiff, who purchased at the sheriff’s sale, was supposed to have acquired all the title of Reed; so that, at the date of Reed’s attempted relinquishment to Gibson, he had nothing in the land to relinquish. Hence the decree, after the name of Jesse R. Evans was stricken out from the case as plaintiff, was for James S. Evans, the purchaser of Reed’s interest at the sheriff’s sale, and the legal title of Gibson, the defendant, was vested solely in him.

The judgment of the court appears to be entirely independent of all the allegations of fraud and trust, which constituted the very basis upon which the petition was framed. The decree proceeds, upon a theory of the case not assumed in the petition. Although the judgment against A. Reed & Co., in November, 1856, the execution, the sheriff’s sale under it, and the purchase by one of the plaintiffs, are stated in the petition, yet they are not relied upon as constituting an independent ground for relief,- but are merely referred *226 to in connection with the more specific charges of fraud and trust. The decree is therefore a complete departure from the pleadings, and is based upon a case not averred in the petition.

Aside from this objection, however, which is merely formal, we do not regard the purchase by Jas. S. Evans as having the effect which the circuit court seems to have attributed to it.

It is not material, in determining the character of this purchase, whether the lots are to be regarded as the property of the partnership or the individual property of Reed. The former is asserted throughout the petition, and is the theory which the plaintiffs could not of course controvert without a radical change in their bill. Upon this supposition, we have, then, a judgment and execution against a partnership, and partnership property levied on and sold to one of the partners. Will such a purchase be regarded in a court of equity as converting the property from the partnership to individual property of the purchasing partner? The debt for which the property is sold is the debt of all the partners, and tflie partner who bids is under as much obligation to pay it as either of the others.

If the lots belonged to Reed and not to the partnership, would the purchase transfer the property from Reed to J. S. Evans ? Each partner and his individual property is liable for the debts of the concern, as well as the partnership property. If the sale could have the effect of transferring the title from Reed to J. S. Evans, it is clear that it would still, as the property of Evans, bo subject to levy for the same debt, if the execution remained unsatisfied. We suppose a court of equity would, in such cases, regard the title as unchanged. It is the case of a tenant in common buying up an encumbrance, which a court of equity always has considered as enuring to the benefit of the common title.

If this be so, it is obvious that the merits of this case will not be affected by the sheriff’s sale in November, 1856, and that this incident will not dispense with the necessity of an inquiry into the allegations of trust or fraud, and the case must be remanded with a view to this investigation.

*227 It is, however, proper to add, as the case goes back, that the petition in this case, in any theory of relief sought, is singularly deficient. There is no allegation that the partnership of A. Reed & Co. has ever been dissolved, nor that any settlement has ever been had of the partnership concerns, nor that Reed is indebted to the partnership. There are allusions made in the petition to charges of embezzlement, from which it might be inferred that Reed was no longer a member of the partnership, and that the partnership had in fact ceased to do business, but these are mere conjectures. Nothing definite is stated in the petition on these points.

So far as the facts are developed by the testimony now in the bill of exceptions, it would seem that the important inquiry will be whether the lots in controversy were purchased with partnership funds; if so, whether the defendant was aware of the equitable interest of the other partners at the time he procured from Reed a delivery of the title bond; and if both these issues were found favorably to the complainants, they are certainly entitled to a decree in the event that Reed is no longer a member of the partnership, and that his accounts have been adjusted. The other judges con curring, the judgment is reversed and case remanded.