REPORTS OF CASES ARGUED AND DETERMINED COURT OF APPEALS MARYLAND. BY1847USA

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REPORTS OF CASES

ARGUED AND DETERMINED

COURT OF APPEALS

MARYLAND.

BY RICHARD W. GILL,

CLEHK OF THI OOCKT Of A F P £■

firs.

VOL. V.
CONTAINING CASES IN

is n.

BALTIMORE:

PRINTED BY JOHN D. TOY.

Entibxd,! according- to the Act of Congress, in the year one thousand eight
J^Andred and fifty, by Richard W. Gill, in the Clerk’s Office of the
Risiiict Court of Maryland.

95158

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NAMES OF THE JUDGES, &c.

DURING THE PERIOD COMPRISED IN THIS VOLUME.

*Mh^’fcA^0*’N***N^*

OF THE COURT OF APPEALS.

Hon. STEVENSON ARCHER, Chief Judge.

How. THOMAS BEALE DORSEY, Judge.

How. E. F. CHAMBERS, Judge.

Hon. ARA SPENCE, Judge.

Hon. ALEXANDER C. MAG RUDER, Judge.

Hon. ROBERT N. MARTIN, Judge.

OF THE COURT OF CHANCERY.

Hon. THEODORICK BLAND, Chancellor.

Hon. JOHN JOHNSON received the Great Seal, and took the oath

of office as Chancellor, on the 21st December, 1846, vice Theo-

dorick Bland, Esquire, deceased.

OF THE COUNTY COURTS.

First Judicial District — 5/. Jftfary’s, Charles and Prince George’e Counties.
Hon. ALEXANDER C. MAG RUDER, Chief Judge.
Hon. EDMUND KEY, Associate Judge.
Hon. CLEMENT DORSEY, Do.

Hon. P. W. CRAIN, Associate Judge, vice Clement Dorset,

Esquire, deceased.

Second Judicial District — Cecil, Kent, Queen Anne and Talbot Counties.

Hon. E. F. CHAMBERS, Chief Judge.

Hon. PHILEMON B. HOPPER, Associate Judge.

Hon. JOHN B. ECCLESTON, Do.

Third Judicial District — Calvert, Anne Arundel, Montgomery and Carroll

Counties, and Howard District.

Hon. THOMAS BEALE DORSEY, Chief Judge.
Hon. THOMAS H. WILKINSON, Associate Judge.
Hon. NICHOLAS BREWER, Do.

iv NAMES OF JUDGES, &c.

Fourth Judicial District— Caroline, Dorchester, Somerset and Worcester

Counties.

Hon. ARA SPENCE, Chief Judge.

Hon. WILLIAM TINGLE, Associate Judge.

Hon. BRICE J. GOLDSBOROUGH, Do.

Fifth Judicial District — Frederick, Washington and J&Uegany Counties.

Hon. ROBERT N. MARTIN, Chief Judge.

Hon. RICHARD H. MARSHALL, Associate Judge.

Hon. THOMAS BUCHANAN, Do.

Sixth Judicial District — Baltimore and Harford Counties.

Hon. STEVENSON ARCHER, Chief Judge.
Hon. JOHN PURVIANCE, Associate Judge.
Hon. JOHN C. Le GRAND, Do.

OF BALTIMORE CITY COURT.

Hon. NICHOLAS BRICE, Chief Judge.

Hon. ALEXANDER NISBET, Associate Judge.

Hon. W. G. D. WORTHINGTON, Do.

ATTORNEY GENERAL.
GEORGE R. RICHARDSON, Esquire.

NAMES OF THE CASES

REPORTED IN THIS VOLUME.

^^■■^^^^^■^^^^^WW^*

Alexander, Ashton, and John Wilson vt. The Mayor and City Council

of Baltimore, 383

Alexander, Thomas 8., and Mary A. Ghiselin w. Robert Ghiselin et al. 188

Anderson, Isaac C, and T. C. Worthington vt. Alexander Hammond, . 461

Baynard, Elizabeth, vt. William Norris and Mary Ann, his wife, Rachel

Heide, J. P. Jones and J. Morris, 468

Bennett, Henrietta, et al. vt. John Bennett, et al., 463

Brown, David U. ait. Rebecca Somerville, 899

Brown, Jeha, t». Elizabeth Brown, 249

Burgess, Thomas A., ait. Elizabeth Lewis, 129

Chappell, William O., adm’r of William West, ait. Erasmus West, . 228

Clark, Baly L. vt. Robert Diggea 109

Coe, Samuel, adm’r of Alexander Mundell, use of J. B. Brooke, adm’r
of Richard Peach, ait. William G. Hardey and Thomas J. Mar-
shall, surviving obligors of N. Hatton and Joseph N. Burch, Jr., . 189
Crawford, William, Jr., vt. Samuel, Mary and Charles Severson, 443

Dement, Juliana E., adm*x of George Dement, ait. Ancus M. Hoffar, . 182

Dent, Priscffla E., vt. William Hancock 120

Digges, Robert, ait. Baly L. Clark, 109

Edelen, Ann, ait. Bennett Gough, 101

Edelen, Ann, vt. Bennett Gough, 103

Fahnestock, James F., ait. William Graham, 215

Farmers and Mechanics Bank of Frederick County, The Bank of West-
minster and Anne Jones vt. Henry Wayman and Richard G. Stockett, 336

Flickinger, John, vs. Peter Hull, 60

Forbes, George, vt. James Forbes, 29

CASES

ARGUED AND DETERMINED

IN THE

COURT OF APPEALS

or

MARYLAND.

June Term, 1847.

Joseph Goodburn and Ann 6. his Wife, vs. Samuel
Stevens and others. — June, 1847.

Upon an appeal from an order of the Court of Chancery determining a question
of right between the parties, and directing an account to be stated on the
principle of such- determination, in pursuance of the act of 1845, ch. 367, this
court can only inquire into the correctness of the principles announced by the
Chancellor as the basis of the auditor’s report.

This court cannot consider any other questions than those determined by the
court below for the government of the auditor, without exercising original
jurisdiction.

Although a partnership be fixed for a particular term, yet it is understood as an
implied condition or reservation, unless the contrary is expressly stipulated,
that it is dissolved by the death of either of the partners, at any time within
the period.

Where a partner died in 1825, and his administratrix and widow in 1880 filed
her bill, charging that the personal property of her husband had been em-
ployed in the business of the partnership by the defendants, and prayed that
they may be compelled to account for the profits made since her husband’s
death out of the personal property, it was her right, at her election, to demand
either the actual profits made by the survivors from the use of her husband’s
share of the partnership property, or interest upon the capital thus employed.

Such being her right, the assertion of it cannot be justly regarded as evidence
of an assent on her part to the continuation of the partnership, so as to im-

1 v.5

2 CASES IN THE COURT OF APPEALS

Goodburn and wife vs. Stevens et al. — 1847.

plicate her as partner;— or as a ratification of the acts of the surviving
partners.

Surviving partners who show by their answer to a bill filed for an account by
the administratrix of a deceased partner, that they never consented to receive
her as a partner after the death of her intestate, and acknowledge their liability
to account, cannot claim to have the partnership accounts brought down to a
period subsequent to the dissolution caused by death.

When a partnership is dissolved by death of a partner, the accounts are to be
taken at that time, for the purpose of ascertaining the condition of the part-
nership, and the rights of the respective partners to the joint property.

Where it appeared that real estate had been used by a partnership for a long
series of years in the manufacture of iron, and that upon the death of any
partner, his heirs at law, to whom the land descended, came into the partner-
ship in his place, and there was no proof of any articles of partnership, it was
held, that the whole partnership estate, whether consisting of real or personal
property, was to be regarded in equity as a consolidated fund to be appropri-
ated primarily and exclusively to the satisfaction copartnership debts.

In the absence of any agreement between partners direct or implied, impressing
upon their real estate the character of personalty, the true rule is that the in-
terest of a deceased partner in the partnership lands, is to be treated as real
estate, and that his widow is entitled to a suitable allowance out of the pro-
ceeds of the sale of the partnership lands, as an equivalent for her dower,
provided the partnership shall be found to have been solvent at the period of
its dissolution.

The doctrine that real estate purchased with the partnership funds for its use,
and on its account, is to be regarded in a Court of Equity, as the personal
estate of the company for all the purposes of the company, stands upon the
familiar and just principle of constructive trust, resulting from the relation
which the partners bear to each other, and from the fact, that the estate was
brought into the firm, or purchased with the funds of the partnership for the
convenience and accommodation of the trade.

Upon the death of a partner, the legal estate of which he was seized as tenant
in common passes to his heirs or devisees, clothed with a similar trust in favor
or the surviving partners, until the purposes for which it was acquired have
been accomplished.

When the partnership accounts are fully and finally settled, in the absence of an
express or implied agreement to convert the real into personal estate, no solid
reason can be assigned, why the real estate should not be treated in equity, as
at law, according to its real nature, and chargeable with the widow’s dower.

Appeal from the Court of Chancery.

The bill in this cause was filed on the 15th January, 1830,
by Ann B. W. Hayes, and alleged that she, on or about the 9th
December, 1824, intermarried with a certain Samuel Hayes> who
afterwards, to wit : on the 20th May, 1825, departed this life

OF MARYLAND.

Goodburn and wife v$. 8tevens et al. — 1847.

intestate and without issue ; that at the time of his death, the said
S. H. was seized and possessed of, or otherwise entitled to
forty-seven hundredths of a large and extensive manufacturing
establishment, situate in Cecil county, Maryland, commonly
called and known by the name of Elk Forge, consisting of several
thousand acres of land, two large forges, a grist mill, saw mill,
dwelling houses, blacksmith shop, and various other buildings,
situated on the waters of Big Elk Creek; also a grist mill, oil
mill, and nail factory, with a dwelling house and other out
houses, commonly called and known by the name of Marley
Mills, situate on the waters of Little Elk Creek, and about one
hundred acres of land lying in the States of Delaware and Ptr-
ghua, and from twelve to fifteen thousand dollars worth of
personal property thereto attached ; that for many years, the
business of this copartnership had been carried on under the
firm and style of Samuel Hayes fy Company; the said company
consisting at the time of his death, of the said S. H, and of
Samuel Stevens and Eliza Stevens his wife, Maria Rudulph,
$*&, ^c, that the said S. H. at the time of his death, left your
oratrix his widow, and the said Maria Rudulph, John Hayes,
a certain Henry M. Hayes, fyi, ^c, his heirs at law ; that she
hath, been informed and verily believes, that the said Samuel
Hayes acquired twenty-five hundredths or one-fourth part of
said co-partnership property, by purchase from a certain William
Seal, for the sum, &c., and for the purpose of securing him, he
executed his mortgage to the said William Seal of the interest so
purchased, and that at the time of his death, there remained due
and unpaid about, &c. on mortgage, and he also owed other debts,
to the amount of seven hundred dollars or thereabouts, that the
residue of the said Samuel Hayes’ property, did not exceed the
value of five hundred dollars, and consisted of personal property
and a lot of ground, with a log tenement of little or no value.
And your oratrix hath been informed, and charges the fact to
be, that at the time of the death of the said S. H., the said firm
owed few or no debts, and the debts due and owing to them,
and which have long since been collected by said surviving
partners were more than sufficient to pay all the debts due by

4 CASES IN THE COURT OF APPEALS

Goodburn and wife vs. Stevens et al. — 1847.

said firm, and there was at the time of his death, a considerable
profit for division among the said partners. That she had
made repeated efforts to prevail on the surviving partners of
her said husband to settle the partnership accounts, and to
make her such allowance for her interest in the same as might
be reasonable and just ; but finding all these efforts unavailing,
she on the 26th September, 1825, obtained letters of adminis-
tration from, &c, on her said husband’s personal property,
hoping and expecting that in her united character of widow
and administratrix, she might be able to obtain a final and just
settlement of said partnership property and interest But in
this, she has been- entirely disappointed, and your oratrix has
at last, lost all hopea of an amicable adjustment of her fair
claims. In the meantime, the said surviving partners have
carried on the business under the firm and style of S. H. fy Co.,
employing as the manager a certain James Jackson. They
have torn down the old, and built up in its place a large new
forge on Big Elk; they have erected a large and expensive
stone dam on the Little Elk, destroyed the grist mill and built
an entire new forge, and as your oratrix believes these expen-
sive improvements have been made entirely from the profits of
said concern ; and they have divided among themselves a large
and annual sum exceeding as your oratrix has been informed,
three thousand dollars, current money, per annum; and during
all this time, your oratrix has not received the sum one of
hundred dollars; and the said WUliam Seal has been paid
only the interest due, on the residue of the before mentioned
mortgage; to the end therefore, that the said surviving partners
may be restrained from using the said partnership name of S.
H. Sf Co.; that they may be enjoined from using the share or
proportion of the personal property which belonged to the said
Samuel Hayes; that a receiver may be appointed to receive
the profits of said concern, until this matter shall be fully con-
sidered in this Honorable Court, that the said surviving part-
ners may be compelled to render a full, true and perfect ac-
count of all the transactions of said concern ; that they may be
compelled to pay off and satisfy the debt, due to the said

OF MARYLAND.

Goodburn and wife t». Stevens et al. — 1847.

William Seat, from that portion of said concern, which was
originally bought of him ; that they may be required to pay
over to your oratrix as administratrix of the said Samuel Hayes,
his share or proportion of the personal property of said concern
as well as his share or proportion of the profits which have
accrued thereon since his death ; that your oratrix may have a
reasonable and just allowance made for her dower in her said
husband’s interest in said lands and premises, and that the said
surviving partners, and the said Jame$ Jackson their manager,
may answer this bill, &c, and its various special interrogatories ;
and that your oratrix may receive such other and further relief
as may be agreeable to equity and good conscience, also for an
injunction and subpoena.

On the 18th January, 1830, the Chancellor (Bland) ordered
an injunction and subpoena.

The defendants Samuel Stevens and Eliza Jlf., his wife,
answered the bill and admitted that the husband of the com-
plainant had a considerable interest in the manufacturing estab-
lishment spoken of by the complainant in her bill of complaint,
and they believe that his interest was nearly, if not quite as
great as the complainant sets forth in her bill of complaint.
But these defendants state they are informed, and believe it to
be true, that the husband of the complainant acquired by pur-
chase, one-fourth of said interest from a certain William Seal,
and that the purchase money has not yet been paid for it.
These defendants claiming no part of the estate of S. /£, (the
husband of the complainant) have no particular interest in the
question, whether the money yet due to the said William Seal,
is* to be paid out of the personal or real estate, but they are
advised that the personal estate is the proper fund for the pay-
ment of it, and that the same ought to be so applied. These
defendants admit the marriage of the complainant, the death of
her husband without children, and intestate, and that the com-
plainant has adminstered on his estate ; they also believe it to
be true that the several dates of these events are correctly
given, and they admit the same to be correct. They also

6 CASES IN THE COURT OF APPEALS

Goodburn and wife vs. Stevens et al. — 1847.

admit that the names of the heirs at law of said Samuel
Hayes are correctly set forth in the said bill of complaint.

They futher answering, admit that the business spoken of in
the bill of complaint, was for several years carried on under
the firm and style of S. H. Sf Co n and these defendants are
willing to admit that at the time of the death of the said S. If.,
the names of the parties interested in said partnership, are cor-
rectly stated’ in the bill. These defendants state, that since the
said works have been carried on, different persons have at dif-
erent times been interested in them, the said S. H. himself pur-
chased the interest of some, and became as heir entitled to the
interest of others, and at the time of his death his interest in
the lands and the buildings and improvements thereon, de-
scended to his heirs, who consented to a continuance of the
business for the benefit of themselves and of those to whom
the said real estate belongs.

These defendants do not presume that the complainant, as
administratrix, can claim any interest in or control over the
business of said partnership since the death of her husband.
These defendants do not know what amount of debts was due
from said S. H. at the time of his death, nor what estate he
left to pay them with. They expressly deny the charge, that
they have opposed a settlement of the claims of the complain-
ant, on the contrary, they are willing the same should take
place, and that a decree should be passed for the purpose.
These defendants have not that particular knowledge of the
business which would enable them to state the amount of the
claims against the concern, or of debts due to them at the time
of the death of the said S. JET., nor of the profits of said
concern. The said S. H. had for some time before his death
been the active manager of the business. The information
relative to claims and profits may be had from the books of
the concern, to which these defendants refer, and the produc-
tion of which can be required. These defendants believe it to
be true, and admit that since the death of said S. /£, a new
forge has been built in place of the old one, which would no
longer answer the purposes of the concern ; and other changes

OF MARYLAND.

Goodburn and wife vs. Stevens et a). — 1847.

have been made as stated in the bill of complaint; to these it
is presumed the complainant cannot object The interest of
ber husband in the real property did not descend to her, and
his heirs are now partners in the business. These alterations
cannot diminish the claim of the complainant, or the security
for her claim, on account of the personal estate. In regard to
the personal property of the said partnership at the time of
the death of said S. H., these defendants are informed and
believe it to be true, that an inventory thereof was taken about
the time of the death of the said S. H, that the amount thereof
was upwards of $10,000, that it consisted principally of iron,
which was to be sold, and afterwards was sold, and of pro-
visions which were to be consumed, and it is to be presumed
were consumed at the works — of coal, which of course was
not to be kept, but for which the individuals who upon the
death of said S. H. became interested in the partnership con-
cerns must account There were of course, horses, wagons,

m

tools and implements ; these it was not expected upon the
death of any partner would be divided among the individuals,
but would remain on the premises for the use of those still
carrying on the business; and the deceased partner upon a
settlement of his accounts, to be allowed a fair price for his
proportion of said property, most, if not all of such articles,
it is to be presumed, would in the course of four or five years,
be dead, consumed or disposed of, and others be procured to
supply their places. Of these, it would be impossible for
these defendants now to give an account, but the inventory
taken about the time of the death of the said S. J7., and already
spoken of, will furnish all the evidence which the complainant
can want or require, in order to ascertain if any thing be due
to her, as administratrix, in which character alone these de-
fendants are advised, she can claim any such account These
defendants do not admit that when a fair and full settlement
takes place, there is any balance due to the said S. H. It will
be found as stated in the bill, that the interest of said S. H. in
the concern was considerable ; that at the time of his death,
as well as for some time previously, nearly one-half of the

8 CASES IN THE COURT OF APPEALS

Goodburn and wife vs. Stevens et al. — 1847.

land belonged to him; the expenses of such concern were
necessarily great, and these expenses were principally defrayed
out of the profits of the business, the said S. H. as well as
the others consenting to it, and being willing thus to invest his
profits, and thereby add to the value of his real estate, for
much of the land claimed by the said S. /£, as the bill of com-
plaint truly states, the said Samuel Hayes had not paid ; and
these defendants are advised that the personal estate ought in
the first instance, to be applied to the payment of his debts.
These defendants deny the charge that the defendants have
divided among themselves a large and annual sum. These
defendants state, that the business in which with the other part-
ners they are now engaged, was commenced about thirty years
ago, and was then carried on under the firm and style of
Robert May fy Co.; at that time the owners of the land and
premises were Robert May, Joshua Seed, Slg. This defendant,
Eliza M., is the daughter of the said Robert May, and is
entitled to his interest. These defendants have parted with no
portion of that interest, and claim none other in the works.
The interest of Joshua Seal was afterwards, these defendants
are informed, transferred to William Seal, who subsequently
sold, as stated in the bill of complaint, to the husband of the
complainant; the interest of John Hayes and Stephen Hayes
have been transferred, and have descended at different times
to different persons, and the partnership has been carried on
for the benefit of those who at the time owned the property.
The husband of the complainant claimed at the time of his
death, SeaVs part and a portion of the original interests of the
two Hayes* before named ; with these claims however, these
defendants have no concern. They claim the one-fourth and
only the one-fourth part of the property and the profits, and
they claim the whole of the interest of Robert May, (father of
this defendant, Eliza Jtf.,) and claim no interest in either of
the other (originally) three equal parts. These defendants
have as yet received for profits of this estate very little; the
expenses of keeping in repair and enlarging the establishment,
not authorising an actual payment to the parties of the dividend

OF MARYLAND. 9

Goodburn and wife vs. Stevens et al. — 1847.

of profits which hare accrued at any time. Bat these defend-
ants are informed and believe, that the husband of the com-
plainant, who, for ten or eleven years before his death, and
until his death, was the manager of said partnership concerns,
and received a salary therefor, did during his life draw his
salary, and also his proportion of the profits, and was indebted
the concern two or three hundred dollars. These defend-
ants therefore, while they are ready and willing to have a set-
tlement of the concerns of the company, so as to ascertain
whether anything can be claimed by the personal representa-
tive of said Samuel Hayes of the concern, and are willing also
that the partnership name of S. H. fy Co. be no longer used,
do object to and protest against the appointment of a receiver
to take charge of the property and receive the profits of said
concern ; the complainant, these defendants are advised, can
claim no right to exercise a control over the said partnership
concern as administratrix, she may demand a settlement of
the account between her intestate and those who, during his
life, were his co-partners, and it is not pretended that if
there be any balance due to the intestate of the complainant,
there is any charge that the same cannot be recovered, or
that the personal property or the business of the concern is
diminished; as the widow of the said Samuel Hayes she may
assert her claim to dower; but in this character she cannot
claim any right to meddle with the partnership business.
While these defendants cannot deny to the complainant a right
to assert all her claims, they insist that the appointment of a
receiver at the instance of the complainant, would be a wanton
violation of the just rights of these defendants, upon the motion
of a person having no interest in common with the defendants,
and no pretext of right to interfere with and prejudice their
interests. The answer of the defendant, James Jackson, who
is the agent of the company, will show it is expected, the
amount of pig and bar iron, and of materials, and which were
on hand at the time of the death of said Samuel Hayes.

These defendants must rely upon him to furnish such infor-
mation, and upon the books of the concern to furnish whatever
2 v.5

10 CASES IN THE COURT OF APPEALS

Goodburn and wife w . Stevens et al — 1847.

information is wanted of the situation of its affairs at any par-
ticular time, to whom the said partnership was indebted, who
were its debtors, what sales and purchases were made on
account of the concern, and all the information which may be
wanted in order to a fair and full settlement of the account of
the said Samuel Hayes with the other partners. The com-
plainant has. not specified in her bill of complaint, at what
period of time her husband became the purchaser of the
several interests to which, as a partner in the concern, he
acquired title, &c.

The other defendants also answered the bill, and exhibited
therewith, accounts current; schedule of the interests of the
various partners in the partnership property; inventories of its
personal property, taken on the 1st May, 1825; of the per-
sonal property of Samuel Hayes, and list of balances due to,
and by the partnership.

Exceptions were taken to the answers by the complainants.

The defendants moved for a dissolution of the injunction,
and on the 22d July, 1830, the Chancellor (Bland) passed
the following order.

” With respect to the real estate of which the plaintiff claims
dower, I consider the answers as sufficiently full and explicit;
and as regards the share of the personal estate which the
plaintiff claims as the administratrix and widow of the late
Samuel Hayes, due to him at the time of his death, it appears,
that he had been the manager of the manufacturing establish-
ment, an account of which is called for, some years before,
and up to the time of his death ; and therefore, these defendants
have answered as fully and particularly as was in their power.
The act of 1798, ch. 84, gives to parties a right to call for
books, writings and papers, and in a partnership of the com-
plicated and extensive nature which this seems to have been,
it is sufficient for the surviving partners to answer in general
terms, to a general call for an account, with reference to an
offer to produce the books of the concern, unless the bill states,
as it does not in this instance, that they have some particular
knowledge of the affairs of the partnership, other than what

OF MARYLAND. 11

Goodburn and wife vs. Stevens et al. — 1847.

■lay be derived from the books so offered to be produced; and
such statements are not denied or sufficiently explained away.”

u Whereupon it is ordered, that the said exceptions to the
answers of the several defendants be, and the same are hereby
overruled, without costs — and it is further ordered, that the
injunction heretofore granted in this case, so far as it extends
to prohibiting the defendants from using the share or proportion
of the personal property which belonged to the said Samuel
Hayes, be, and the same is hereby dissolved; and as to all else,
the same is hereby continued until the final hearing or further
order.”

On the 5th June, 1833, the cause was referred to the auditor
by consent, with liberty to take proof, and a great variety of
testimony was taken.

In August, 1841, Mrs. Hayes having in the meanwhile
married the appellant Joseph H. Goodburn, a petition was filed
to make him a co-complainant in the cause.

On the 31st August, a decree was passed by consent for the
sale of the partnership property in the proceedings mentioned,
and a trustee appointed for that purpose.

At July term, 1844, this cause was by order of the Chancellor
consolidated with several other causes affecting the partnership
property, which made the assignees of William SeaVs mort-
gage, and creditors of the partnership — parties hereto.

On the 21st October, 1845, after much proof had been
taken, the auditor of the court appointed specially by consent
in this cause, reported that the accounts stated by him are com-
prised in various schedules, marked 6, No. 1 to 12 inclusive.

” The auditor reported that he had assumed the books of the
firm of Samuel Hayes $» Co. and their successors, called for by
the complainants, and exhibited by the defendants, as evidence
in the cause, and has assumed the accuracy of various schedules,
from A to E, filed in the cause on the 5th March, 1841, as to
names, amounts, and additions, and has assumed also, after re-
jecting the credits of real estate $1,928 75, and $2,877 63 in
schedule D, that the co-partnership of Samuel Hayes fy Co. was
insolvent. He has assumed also, that the partnership termi-

12 CASES IN THE COURT OF APPEALS

Goodburn and wife vs. Stevens et al. — 1847.

nated with the death of Samuel Hayes in May, 1825, from
which period, his widow and administratrix had no interest or
concern as partner in its concerns. Proceeding with these
principles, he states, that Exhibit No. 1 shows the debts due
the firm, and the sums never realized by it from its debtors.
That statement G, No. 2, shows the state of the firm, indepen-
dent of its real property, at the death of Samuel Hayes > from
which account, all sums due the partners for dividends and
profits as credited on the books are excluded, and from which
it appears, that the sum of $14,197 33 ought to be divided
among the partners, being the balance received by the sur-
viving partners in 1825.

Statement O, No. 3, shows the balances due the various mem-
bers of the firm for dividends and profits, and particularly the
interest of the deceased in those profits, as they appear on the
books of the firm, collected in schedule D, and demonstrate the
insolvency of the firm in their personal estate.

G, No. 4, parts 1 and 2, shows the interest of Samuel Hayes
in the firm, and how that interest accrued by purchase, and by
inheritance.

G, No. 5, shows the balances due on the bonds of Samuel
Hayes for the property purchased of William Seal; at the
time of Hayes* death, all the interest due was paid, and
the sum of $4,845 32 was due for principal. The heirs
of Samuel Hayes churn to throw that debt upon his personal
estate; but as that estate is also insolvent, they have only
credit in account G, No. 10, for $3,685 15. The balance is
thrown upon the real estate of Samuel Hayes before the dower
of his widow is estimated, that estate being under mortgage at
the time of his death.

Account G, No. 6, shows the various sums for interest paid by
the surviving partners of Samuel Hayes fy Co. upon the bond
of their deceased partner, between the years 1825 and 1838,
amounting to $2,952 13. This accountant r has given these
defendants no credit for those payments, considering them
made in their own wrong. If the surviving partners had
settled the estate promptly, they would have paid Mrs. Hayes

OF MARYLAND. 13

Goodbunt and wife vs. Stevens et al. — 1847.

id 1826, or 1827, $3,818 81, with which she could have
paid off much of the debt to Sea J; but they elect to keep
that debt unpaid — pay the interest of it, and now claim to
pay it out of the proceeds of the sum which they so withheld :
while this accountant reports that the heir-at-law has an
undoubted right to throw claims upon the real property,
for payment upon the personal estate; yet where he holds
both funds, and keeps back the personal estate, it would be
unjust to allow him interest to the detriment of the widow’s
dower. The unpaid principal of the mortgage is only
deducted in these accounts, in estimating the widow’s dower.
Statements G, No. 8 and 9, show the sum due the assignee of
SeaVs bonds, with interest to 1st September, 1845. These
debts, the defendants, survivors of Samuel Hayes, agreed to
pay, seeking their reimbursement as far as they are entitled to
it, out of the personal estate of the deceased obligor, they claim
to be substituted to Seal and his assignees as against that estate.

Statement 6, No. 10, shows the basis of the estimate for the
purpose of ascertaining Mrs. Hayes’ dower, and is brought
down to the time of the first sale under this decree, 8th Dec’r,
1841. It is supposed that after that time, the Chancellor will
allow Mrs. Hayes a proportion of the proceeds of sales,
looking to her age and state of health ; but as the sales are not
yet completed that allowance cannot now be made. 6, No.
11, is stated to marshall the assets of Samuel Hayes, to show
what proportion of SeaPs debt is paid by the personal estate of
the deceased, in the hands of his surviving partners, to wit :
$3,685 15.

6, No. 12, shows the sums due Mrs. Hayes on the 8th
December, 1841.

This accountant reports to your Honor, that as the principal
part of this sum is due for dower, he is in doubt whether the
surviving partners of Samuel Hayes fy Co. are jointly liable
for the whole sum. He supposes they are not so liable, but
that each surviving partner is only liable to the extent of the real
property which he inherited from Samuel Hayes, ihe deceased ;
if so, this accountant requests directions from your Honor how

14 CASES IN THE COURT 6F APPEALS

* i i, . . . .

Goodburn and wife vs. Stevens et al. — 1847.

he is to state such an account, whether the heirs only are
chargeable — whether each heir is chargeable separately, or
the whole jointly. If all the defendants who jointly used the
real property in connexion with their business as partners after
Hayes* death, are jointly liable for the whole, the parties so
liable may be readily ascertained; but if they are not so liable,
some further proof to show the extent of their respective
interests will be necessary.”

On the 22d Oct. 1845, the special auditor submitted the
following additional report :

” That no articles of partnership between Samuel Hayes and
his survivors appear in this cause ; a partnership is established
by inference of law, but no definite limitation can be inferred,
neither its duration, nor to the terms on which it is to be con-
ducted after the death of any partner is established. It results
that upon the death of Samuel Hayes, his personal representa-
tives, or his heirs- at -law, or the surviving partners might
demand its full and final settlement, a partition of the land, and
distribution of the personal estate ; Mrs. Hayes sought a settle-
ment, and the answers insist that the defendants were willing
to settle with her, but nothing was done, and the first bill was
filed in 1830, — meanwhile, the heirs-at-law of Samuel Hayes,
and the surviving partners of S. H. fy Co., the tenants in
common with the heirs aforesaid, proceed to use the property,
personal and real, and make the profits stated in schedule G,
No. IS. It appears then, that the heirs of Samuel Hayes, and
the surviving partners undertook by common consent in the
pursuit of a common purpose, for their common and exclusive
benefit, to use the whole estate, real and personal, of the part-
nership, and took no measures to satisfy the legal and equitable
rights of Mrs. Hayes; under these circumstances, the ac-
countant reports that the heirs of Samuel Hayes, and his
surviving partners now in being, should be held responsible to
Mrs. Goodburn for the whole sum, jointly stated in account O,
No. 12, as due her, and that it should be first paid out of the
proceeds of sales reported in this cause.”

“22 Oct. 1845.”

OF MARYLAND. 15

Goodburn and wife v*. Stevens et al. — 1847.

Both parties filed exceptions to the auditor’s account ; but
as the subjects of those exceptions were not carried up on this
appeal, they are here omitted.

On the hearing of the exceptions, the Chancellor (Bland)
on the 19th January, 1846, ordered that this cause be, and the
same is hereby again referred to the said special auditor, with
directions to restate the accounts from the pleadings and proofs
now in the case, and from such other proofs as may be laid before
him. ” It must be recollected, that the persons of whom the
partnership in the proceedings mentioned, has been constituted,
are to be considered as having been endowed with two separate
legal capacities, first, with that of an associated conventional
capacity as a partnership ; and secondly, with that of a natural
capacity belonging to them as individuals; and that as the
social, artificial, capacity of a partnership is entirely distinct
from the natural capacity of each individual ; and as each legal
capacity stands, in all cases, as a distinct person, these two
capacities of these parties must be carefully observed, and
treated throughout this case, as distinct persons. In respect to
all property belonging to the partnership, and so long as such
property may be so held, or be continued under the control of
this court in this suit, the accounts are to commence with the
original formation of the partnership, and to be brought down
through all its mutations, by any changes of the persons by
whom it was constituted, unto . its final dissolution by the
decree of the 31st day of August, in the year 1841. The
partnership might have been treated as having been terminated
by the death of Samuel Hayes, deceased ; but his representa-
tives so far from asking for its then dissolution, have, some of
them, insisted on its continuance, and as his widow and adminis-
tratrix has only called for a settlement, on the apparent
presumption of its continuance, the partnership must therefore
be taken to have been so continued, on its then existing terms,
by the express or implied consent and contract of all con-
cerned. All the property belonging to the partnership, of
whatever nature or kind, must be considered as its estate, and
being so held by those individuals in their associated capacity

16 CASES IN THE COURT OF APPEALS

Goodburn and wife vs. Stevens et al. — 1847.

as a partnership, must be treated as liable exclusively, and in
the first place, to none other that claims against that artificial
capacity or person ; and consequently, whether such property
of the partnership be considered as real or personal estate,
none of it can be held liable to the claim of a creditor, dow-
ress, heir, devisee, widow, legatee, or next of kin, of any
living or deceased partner in his natural capacity, until all
claims against the partnership have been satisfied, and the
whole concern has been so completely wound up and adjusted,
as to enable each member of the partnership to take his due
share of the surplus, or the residuum in his individual and
natural capacity. And as a widow of a deceased partner can
have dower assigned to her out of none other than such real
estate of inheritance of which her husband had been in his nat-
ural capacity, sole seized during the coverture; and as it does
not appear that Samuel Hayes, deceased, was, at any time, so
seized of any real estate held by the partnership as in the
proceedings mentioned, his widow can have no right to dower
as claimed by her bill of complaint; and recollecting moreover,
that as no one of the partners or his representatives can be
entitled to any thing more than his due share of so much of the
partnership property as remains after all its concerns have been
entirely closed, it is only that residuum which is to be dis-
tributed according to its true value ; and as that true value can
only be ascertained by an actual sale, it has been deemed
necessary, in all cases, to have it all sold, whether consisting
of real or personal estate, so as to make an accurate distribu-
tion of the net proceeds of sale, considering the whole as
personalty among the partners, according to the terms of the
contract or partnership, or among the legal representatives
of a deceased partner, according to their legal rights and
interests. 9 ‘

“And the parties are hereby authorised and allowed to take
testimony in relation to such accounts,” &c.

From this decree, the complainants Goodburn fy Wife ap-
pealed to this Court, under the act of 1845, ch. 367, mentioned
in the opinion delivered in this cause.

OF MARYLAND. 17

Goodburn and wife w. Stevens et al. — 1847.

This appeal was argued before Archer, C. J., Dorset,
Spence and Martin, J.

By Mater and Reverdt Johnson for the appellants, who
insisted :

1. If the real estate here is to be regarded as personal, it is
to be so treated, subject to the dower right of Mrs. Goodburn;
and dower should be allowed to her, if not specially, at least,
an equivalent out of proceeds of sales. This claim she has
not abandoned, either by the tenor of the bill, or by having for
some years deferred the filing of the bill.

2. The partnership, as to Samuel Hayes’ interest, was at an
end at his death ; and his widow’s rights, as administratrix, or
for dower, are to refer to that period; the option being left to
her, on her husband’s share of property used by the survivors,
to claim either interest or actual profits, earned between the
death of Hayes and the filing of the bill, without, however,
implicating her as partner, by claiming such latter compensation
for the use of the property.

3. The proportion of the property to be allowed, as Samuel
Hayes* interest, is, JfJ. The personalty existing at his death,
is proved by the answer and books of the defendants. For the
specific chattels, whether preserved or consumed, the defend-
ants are answerable; and there is no abatement to be made
from the amount of claims belonging to the partnership, except
for the small amount where positive proof of actual insolven-
cies has been given.

4. The amount due Samuel Hayes, for dividend-claims at
his death, as well as the amount on general account, is to be
fully allowed, and without abatement from any comparison
between debts of the partnership and the amount of personal
assets. For all such allowance to Samuel Hayes, the personal
and real estate avails, are to be consolidated.

5. For any claim of Mrs. Goodburn, as administratrix, or
for dower; she has a lien on the proceeds of sales, made in
the cause, as to dower, paramount to all creditors of the con-
cern, existing at (1825,) her husband’s death; and, as admin-

3 v.5

18 CASES IN THE COURT OF APPEALS

Goodburn and wife vs. Stevens et al. — 1847.

istratrix, secondarily, to only the claims of such creditors.
She is entitled in the same way for rent; as to her dower,
or interest in lieu of it, on the average value, as stated by the
auditor, of the realty at her husband’s death.

6. The bonds of sale, and any payments on that account,
made before Hayei death by the partnership, are not to be
regarded as charges primarily on the personal estate, nor, as to
Mrs. Goodburris dower, to interfere with her allowance out of
the sales of the realty.

By McLean and McMahon for the appellees.

The appeal now before the court is from the order of 19th
January, 1845, and taken under the act of 1845, chap. 367,
sec. 1st

The appeal is, therefore, to be confined to that part of the
order which determines “a question of right between the
parties,” and directs ” an account to be stated on the principle
of such determination.”

The above order determines only,

1st. That the partnership continued to 1841, and

2ndly. That the complainants are entitled to dower, or an
allowance in lieu thereof, only after the payment of partner-
ship debts.

No other questions have been settled by the court below,
and they cannot, of course, be considered by this court, with-
out exercising original jurisdiction.

Jt will be contended, that the said order ought to be con-
firmed, because,

1st. If the partnership existing previously to the death of
her husband, was continued by the express or implied consent
of Mrs. Hayes, after his death, the order appealed from was
correct in directing the accounts of the partnership to be taken
down to the 31st August, 1841, and postponing her claim as
administratrix and dowress, until the payment of all the part-
nership debts, existing at that period.

2nd. That the origin of the partnership, and the manner in
which it was continued by the heirs and representatives of

OF MARYLAND. 19

Goodburn and wife vt. Stevens et a). — 1847.

deceased partners ; its admitted continuance after the death of
Samuel Hayes ^ the husband of the complainant, by all of Iris
heirs at law and next of kin ; the admitted negotiations and
transactions of the complainant, the widow, with the partners
after the death of her husband ; the claim to relief made by
her bill in this case ; the prompt offer of the defendants by
their answers to have a sale of her husband’s interest, or of
the property, as the court might direct, and to make her a
reasonable allowance for dower, as asked by the bill ; and the
subsequent proceedings in the cause after such offer, do mani-
fest an assent on her part to the continuance of the partnership,
and an election not to have the works and property of the
partnership stopped, and the business discontinued; but to
permit them to be carried on for the benefit of the interest she
had in the property, or which she represented.

3rd. That the claim made by her in her bill, to participation
in the profits of the partnership, which was admitted to have
been continued and carried on after the death of her husband,
by the surviving partners and by the heirs at law and next of
kin of her husband, was, of itself, a decisive election to take
her share of the profits of such continuing partnership, and as
such an assent to, and ratification of, the employment of her
share of the property in the partnership; that such election,
thus made, was a continuing election until the final accounts of
the partnership were taken; that it was not competent for her
to elect, to take profits for a part of the period, elapsing after
the death, and to claim interest for the residue of that period ;
and that even if it were, her election made by the bill, to take
the profits, continued unchanged, until the passage of the order
appealed from; and therefore the order was correct in the
directions given by it, as to the statement of the accounts of
the partnership.

4th. As to the 3rd, 4th, 5th and 6th points made by the ap-
pellants, the appellees do not deem it necessary to present any
counter propositions, as they are, as they conceive, points not
presented by the order appealed from.

20 CASES IN THE COURT OF APPEALS

Goodburn and wife vs. Stevens et al. — 1847.

Martin, J., delivered the opinion of this court.

This is an appeal from the order of the Chancellor of the
19th of January, 1846, instructing the auditor as to the prin-
ciples upon which he was to state the account between the
parties.

By this order, the Chancellor has determined :

First, That the partnership, in which Samuel Hayes was
concerned; was to be treated, as subsisting until the 31st of
August, 1841, when it was dissolved by the decree passed in
the case of the creditor’s bill; and that the accounts of the
partnership were to be brought down to that period.

Secondly, That the entire estate of the partnership, com-
prising both its real and personal property, was to be regarded
as a fund applicable exclusively, and in the first place, to the
payment of the debts of the partnership in preference to all
other claimants.

And Thirdly, That the real estate held and owned by the
partners, and used by them in the business of the partnership,
was to be considered, as converted for all purposes into per-
sonalty — as possessing in all respects, the qualities and inci-
dents of personal property, and therefore, not subject to the
claim of dower.

The appeal has been prosecuted, at this stage of the cause,
in pursuance of the act of Assembly of 1845, ch. 367, enlarging
the right of appeal in cases where decrees or orders to account
have been passed by the Chancery Courts; and a preliminary
point was raised by the counsel, with respect to the questions
which were properly open for adjudication on this appeal.

The first section of the act provides: — “That an appeal
may be taken from any decree or order of the Court of Chan-
cery or County Court, sitting as a Court of Equity, deter-
mining a question of right between the parties, and directing
an account to be stated on the principle of each determina-
tion :” and it is clear, that in our examination of the order, we
can only inquire into the correctness of the principles announced
by the Chancellor, as the basis of the auditor’s report. The
right of appeal from these interlocutory orders, has been con-

OP MARYLAND. 21

Goodbura and wife vt. Stevens et al. — 1847.

ferred only where a question of right has been determined
between the parties, and an account directed to be stated on
the principle of such determination ; — and it must be evident,
that we could not consider any other questions, than those
determined by the court below, for the government of the
auditor, without exercising original jurisdiction. A power
incompatible with the character and attributes of this tribunal,
and, certainly not intended to be communicated by the statute,
under which this appeal has been taken.

With respect then, to the first question decided by the
Chancellor, we think he erred, in regarding this partnership as
subsisting until the 31st of August, 1841.

The doctrine upon this subject has been stated with clear-
ness and accuracy, by Judge Story, in his late work on part-
nership. He says, ” although the partnership be fixed for a
particular term or period, yet it is always understood as an
implied condition or reservation, unless the contrary is ex-
pressly stipulated, that it is dissolved by the death of either
of the partners, at any time within the period. This doctrine
is founded in equitable principles, and is the natural result of
the peculiar objects of the contract. Every partnership is
founded in a delectus persona, which implies confidence and
knowledge of the character, skill, and ability of the other as-
sociates ; and their personal co-operation, advice, and aid in the
management of the business. The death of any one partner,
necessarily puts as end to such aid and co-operation. If,
therefore, the partnership were not put an end to, by the death
of any one of the partners, one of two things must follow;
either that the whole business of the partnership must be earned
on by the surviving partners exclusively, at the hazard of the
estate and interests of the deceased partners, or else, that the
personal representative of the deceased, toties quoties, who may
be a mere stranger, wholly unfit for and unacquainted with the
business, must be admitted into the management. The law
will not force either of these alternatives upon the parties; but
it presumes in the absence of all contrary stipulations, that by
a tacit consent, death is to dissolve the partnership, because it

22 CASES IN THE COURT OF APPEALS

Goodburn and wife m. Stevens et al. — 1847.

dissolves the power of a personal choice, confidence, and
management of the concern.”

In Crawshay against Mauls, 1 Swans. 508, Lord Eldon
said, u The doctrine that death ends a partnership, has been
called unreasonable. Much remains to be considered before
this objection can be approved. If men will enter into a part-
nership, as into a marriage, for better and for worse, they must
abide by it ; but if they enter into it, without saying how long
it shall endure, they are understood to take that course in the
expectation, that circumstances may arise from which a dissolu-
tion will be the only means of saving them from ruin ; and
considering what persons death may introduce into a partner-
ship, there is strong reason for saying, that such should be its
effect. Is the surviving partner to receive into the partnership
at all hazards, the executor or administrator of the deceased,
his next of kin, or possibly a creditor taking administration ?”
And the Supreme Court, have declared in Scholefield against
Eichelberger, 7 Pet., 594, “That, although the liability of a de-
ceased partner, as well as his interest in the profit of a concern,
may by contract, be extended beyond his death; yet without
such stipulation, death dissolves the concern.” The same
doctrine is announced in Vuiliamy vs. Noble, 3 Mer. 614.
Crawford vs. Hamilton, 8 Mer. 136. Gratz vs. Bayard, 11
& $■ Raw. 41. Dyer vs. Clark, 5 Met calf, 575, and in other
cases to which it is unnecessary to refer. It must therefore
be regarded as an established principle, resulting from the
nature of the contract, and necessary for the protection both of
the rights of the surviving partners, and the estate of the de-
ceased, that the death of either of the partners produces ipso
facto a dissolution of the concern; unless there is inserted in
the contract, some provision imposing upon the surviving part-
ners, and the representative of the decedent, an imperative
obligation to continue it. There is to be found in this contract
of partnership no such stipulation, and, we think that the
death of Samuel Hayes, on the 20th of May, 1825, is to be
treated as the true period of its dissolution.

The counsel for the appellee have however contended, that

OF MARYLAND. S3

Goodborn and wife m. Stevens et al. — 1847.

if this partnership was continued from the death of Samuel
Hayes to the 3 1st of August, 1841, with the express or implied
consent of Mrs. Hayes, the order of the Chancellor in this
respect was correct, and that the consent of the widow and
administratrix to its continuation, is to be inferred from her
conduct, and especially from the character of her bill, in
which she claims a right to participate in the profits earned by
the partners, between the death of her husband and the period
of the institution of her suit.

Samuel Hayes died on the 25th of May, 1825. On the 36th
of September of the same year, Mrs. Goodburn obtained
letters of administration upon his estate, and on the 15th of
January, 1830, she filed her bill, in which she charges, “That
the personal property of her husband had been employed in
the business of the partnership by the defendants, and prays
that they may be compelled to account for the profits made
since bis death, out of the personal property, and that she
may have a reasonable and just allowance for her dower
in the lands.” And assuming the facts stated in the bill to be
true, it was the unquestionable right of the administratrix at
ber election, to demand either the actual profits made by the
survivors from the use of her husband’s share of the partner-
ship property, or interest upon the capital thus employed.

In Story on Part., sec. 343, it is stated, — ” That dissolution
by death puts an end to the partnership from the time of the
occurrence of that event It completely puts an end to the
power and authority of the surviving partners, to carry on for
the future the partnership trade or business. It is therefore
the duty of the surviving partners to cease altogether from
carrying on the trade or business thereof; and if they act
otherwise, and continue the trade or business, it is at their
own risk, and they will be liable at the option of the repre-
sentatives of the deceased partner, to account for the profits
made thereby, or to be charged with the interest upon the
deceased partner’s share of the surplus, besides bearing all the
losses.’ 1 The rule is also correctly given in a late treatise on
this subject Cary, 117*

24 CASES IN THE COURT OF APPEALS

Goodburn and wife vs. Stevens et al. — 1847.

The author says, u where the surviving partners continue
the business, employing in it the share belonging to the repre-
sentative of the deceased partner, and no express direction has
been given by the deceased, relative to the continuance of the
business, the party entitled to the share of the deceased is at
liberty to choose either to receive the legal interest on the
capital so employed, or to take the profits that have arisen
from the use of such capital; and in order to enable a party
so interested to determine his choice, a decree will be passed
directing an inquiry, whether the account of interest or profits
will be most advantageous ; but unless under particular cir-
cumstances, the party having the choice cannot elect the
interest for one period, and the profits for another, but must
elect to take one or the other for the whole period,”

In Crawshay against Collins, 15 Ves. 227, Lord Eldon
said, —

” If the surviving partners do not think proper to settle with
the executor, and put an end to the concern, but to make that,
which is in equity, the joint property of the deceased and
them, the foundation of increased profit, they must be under-
stood to proceed on the principle which regulated the property
before the death of their partner. 9 ‘

The same doctrine is declared and illustrated : In the cases
of Brown vs. Brown, 1 P. Will. 140. Hammond vs. Douglas,
5 Fes. 539. Exparte Ruffin, QVes.U 9. Brown vs. De Tasht,
1 Jacob, 295. Heathcote vs. Hulme, 1 Joe. 8f Walk. 122, and
is too firmly established to be questioned.

As therefore it was the undoubted privilege of the appellant
on the case made by her bill, to demand the profits produced
by the employment of her husband’s share of the property,
from his death to the institution of her suit ; the assertion of
this claim cannot be justly regarded as evidence of an assent on
her part to the continuation of the partnership, so as to impli-
cate her as a partner; — or as a ratification of the acts of the
surviving partners.

We cannot perceive any thing in the conduct of the appel-
lant, evincive of her assent to the continuation of this partner-

OF MARYLAND. 25

Goodburn and wife t». Stevens et al. — 1847.

ship ; and this question is placed beyond controversy by the
commanding fact, that in her bill, she expressly prays that the
defendants may be restrained from using, in the business of the
concern, her husband’s proportion of the personal estate.

There is another objection to the position taken by the
counsel of the appellees, that cannot be overcome; and that is,
that it is manifest from the answers of the surviving partners,
that they never consented to receive the administratrix into the
firm, as a continuing partner. While they acknowledge their
liability to account to her for the partnership property as it
existed at the death of Samuel Hayes, they reject the idea,
that she possessed any authority to interfere in the manage-
ment of the affairs of the company, subsequent to that period.
We have already seen Xhat a contract of this description, is
one of personal confidence, in which the ability, skill and
character of each partner is supposed to enter into the consid-
eration of his associates, in the formation of the connexion,
and that therefore, there can be no legal continuance of a part-
nership dissolved by death, in the absence of a new assent on
the part of the survivors. You cannot impose upon the sur-
viving partner the obligation to introduce into the partnership
the representative of his former associate. Thornton vs.
Dixon, 3 Bro. C. R. 200. Marquand vs. New York Manu-
facturing Company y 17 John. 535. Pearce vs. Chamberlain, %
Ves. Sr. 83.

We think therefore, that the death of Samuel Hayes on the
20th of May, 1825, is to be treated as the period of the dis-
solution of this partnership, and that the accounts are to be
taken at that time, for the purpose of ascertaining the con-
dition of the partnership, and the rights of the respective part-
ners to the joint property.

The second and third propositions determined by the Chan-
cellor, relate to the question, as to what extent and what pur-
poses the real estate of this partnership was to be treated as
converted into personalty? We consider it as now established
by at least a preponderance of authority, and upon proper and
just grounds, that the whole partnership estate, whether con-
4 v.5

26 CASES IN THE COURT OF APPEALS

#

Goodburn and wife vs. Stevens et al. — 1847.

sisting of real or personal property, is to be regarded in the
view of a court of equity, as a consolidated fund, to be
appropriated primarily and exclusively to the satisfaction of all
the partnership engagements. In Fereday vs. Whightwick, 4
Con. C. R. 31 9, the master of the rolls said, —

” The general principle is, that all property acquired for the
purpose of a trading concern, whether it be of a personal or
real nature, is to be considered as partnership property, and to
be first applied accordingly, in satisfaction of the demands of
the partnership.”

In Hoxie vs. Carr, 1 Sum. 183, Mr. Justice Story, in deliv-
ering the opinion of the court, says, —

” A question often arisen whether real estate purchased for
a partnership, is to be deemed for all purposes personal estate
like other effects. That it is so, as to the payment of the
partnership debts, and the adjustment of partnership rights,
and winding up the partnership concerns is clear, at least in
the view of a court of equity.” And again, he says, —

” The question, however, in the present case, is not whether
real estate, when it is partnership property, becomes to all
intents and purposes, in cases of intestacy and wills, person-
alty, but whether it is to be so treated in equity, as between
the partners themselves and the creditors of the partnership.
It seems to be the established doctrine of courts of equity,
that it is to be treated as personalty, as between the partners
and their creditors, in whosoever name it may stand on the
face of the conveyance.” This principle is sustained by the
cases of Dyer vs. Clark, 5 Medf. 562. Howard vs. Priest, 5
Medf. 582, and is to be received we think, as the correct doc-
trine upon this subject.

But the true question presented for our consideration on this
branch of the case, and that to which the argument of the
counsel has been addressed is : whether, assuming the partner-
ship to have been solvent, on the 20th of May, 1825, the period
of its dissolution, the interest of Samuel Hayes in the partnership
lands, is to be treated as real estate, descendible to his heirs,
and chargeable with dower ; or as changed for all purposes

OF MARYLAND. 27

Goodburn and wife w. Stevens et al. — 1847.

into personal estate, and distributable as such among his per*
sonal representatives ? «

It cannot be denied, that upon this question there has been
both in England and in the courts of the United States, great
diversity of judicial opinion and decision. But the case
before us is clear of any agreement between the partners,
direct or implied, impressing upon their real estate, the char-
acter of personalty, and under such circumstances, we consider
the true rule to be, that the interest of the deceased partner in
the partnership lands, is to be treated as real estate, and that
the appellant is entitled to a suitable allowance out of the pro-
ceeds of the sale of these lands, as an equivalent for her
dower ; provided of course, the partnership shall be found to
have been solvent at the period of its dissolution.

The doctrine that real estate purchased with the partnership
funds for its use, and on its account, is to be regarded in a
court of equity, as the personal estate of the company for all
the purposes of the partnership, stands upon a familiar and just
principle. It is the clear case of an implied or constructive
trust, resulting from the relation which the partners bear to
each other, and from the fact, that the estate was brought into
the firm, or purchased with the funds of the partnership, for
the convenience and accommodation of the trade. For this
reason, in whosoever name the legal title may reside, the
estate is held in the eye of a court of equity, for the use of
the partners as the cestui que trusts, and if a partner dies, the
legal estate of which he was seized as a tenant in common,
passes to his heirs or devisees, clothed with a similar trust, in
favor of the surviving partners, until the purposes for which
it was acquired have been accomplished.

But when all the claims against the partnership have been
satisfied, the partnership account adjusted, and the object of
the trust fulfilled, in a case, where the partners have not either
by an express or implied agreement, indicated an intention to
convert their lands into personal estate; no solid reason can be
assigned, why the real estate should not be treated in a court

28 CASES IN THE COURT OF APPEALS

Goodburn and wife vs. Stevens et al. — 1847.

of equity, as at law, according to its real nature, and conse*
quently chargeable with the widow’s dower.

The proposition thus announced, mil be found to be sus-
tained among other cases; by Thornton vs. Dixon, 3 Bro. C.
R. 200. Bell vs. Phyn, 7 Ves. 456. Balmain vs. Shore, 9
Ves. 508. Cookson vs. Cookson, 8 Simons, C. R. 529, and by
a very elaborate and able opinion, delivered by Chief Justice
Shaw, in Dyer vs. Clark, 5 Medf. 562. In this case it ap-
peared, that the real estate in controversy, was purchased by
the partners, with the partnership funds, for the use and con-
venience of the trade. On the death of Burleigh, one of the
partners, his administrator sold his undivided moiety of the
lands for the sum of fifteen hundred dollars. The firm was
represented to be insolvent, unless the proceeds of the real
estate so sold by the administrator, should be applied to the
liquidation of the partnership accounts. The prayer of the
bill was, that the plaintiff might be allowed to retain the rents
which had accrued since the decease of Burleigh, to be ap-
plied to the adjustment of the partnership accounts, and that
the defendant might be restrained from paying the proceeds of
the real estate to the individual creditors of Burleigh. The
widow and heirs of the deceased partner, also asserted their
claims upon the fund.

In this case, in reference to the rights of the widow, the
court say :

” That the right of the widow is not distinguishable from
that of the creditors, and heirs of the deceased partner. That
as far as this estate was held in trust by her deceased husband
for the purposes of the partnership, she was not entitled to
dower. For all beyond that she was entitled, because he held
it as legal estate, unless she is barred by her release.”

It follows from the views thus expressed, that we consider
the partnership as dissolved on the 20th of May, 1825, and
that, that is the period at which the partnership accounts are
to be stated.

That the whole estate of the partnership, consisting both of
its real and personal property, is to be applied exclusively, and

OF MARYLAND. 29

Forbes vs. Forbes. — 1847.

in the first place, to the payment of all the partnership engage-
ments, as they existed on the 20th of May, 1825.

That if the partnership was solvent at the period of its dis-
solution, the widow of Samuel Hayes is entitled to a proper
allowance out of the proceeds of the sale of the partnership
lands, as an equivalent for her dower. But as to what sum is
to be regarded as a fair equivalent for her dower, under the
circumstances of the case, and whether she has a lien for her
dower, on the proceeds of the sale, are questions upon which
we express no opinion, as they are not open for adjudication
on this appeal.

The order of the Chancellor is reversed, and the case re-
manded to the Court of Chancery for further proceedings.

DECREE REVERSED WITHOUT COSTS AND CAUSE REMANDED.

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