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come into the hands of the surviving partner, in which the estate of the deceased partner ought to participate. This difficulty was anticipated in the case first referred to supra,1 by LORD COLONSAY, who said: "I do not say that if a sum is unexpectedly recovered after the lapse of six years, the executor of the deceased partner, though he has lost the right to sue for an account of the partnership concerns, may not in another kind of suit demand a share of the particular fund so recovered." The observations of LORD CHELMSFORD on the subject in the same case are as follows: "There may be a difficulty in determining what is the right of an executor of a deceased partner when he has allowed the statute of limitations to run against his claim to an account, and a debt has been received by the surviving partner after the six years has elapsed. But this is a difficulty occasioned by his own laches, and I see no reason why, if he thinks that his interest in the sum received has not been absorbed by its application to pay debts due from the partnership, he should not have a right to sue for his share in this sum (a very different thing from a suit for an account of all the partnership transactions), the surviving partner being at liberty to defend himself by alleging and proving that the whole sum received has been applied, or was applicable, to the payment of partnership liabilities."
It may be remarked, however, that according to the dictum of LORD WESTBURY in the same case, the representative of a deceased partner has no specific interest in or claim upon any part of the partnership estate, so that it seems doubtful how far he would be able, as suggested by LORD COLONSAY, to sue for the share of any newly acquired asset as prima facie due to him, and in that way, in fact, obtain an account from the defendant by throwing the onus of proof (which would, in fact, require an account of the partnership transactions) upon the defendant, to show that the whole or part of such plaintiff's prima facie share was applicable to satisfy partnership liabilities. So, too, it is difficult to see how laches could be imputed on the part of the representatives of a deceased partner, at all events in respect of unexpected assets which fall in after the lapse of six years, in respect that he has not kept alive his right to have an account by filing a bill, or even, as suggested by LORD HATHERLEY, by filing continuous bills at sexennial intervals. It was contended that a surviving partner was a trustee of the partnership assets, and as such not within the statute; but this contention was overruled, LORD WESTBURY expressing a clear opinion that there was no fiduciary relation between a surviving partner and the representatives of one deceased, and that the former was not a trustee in the strict and full sense of the term, the term being so used only by a convenient but deceptive metaphor, and the rights of the parties being strictly legal rights.
Where partnership affairs are unsettled at the time the firm is dis
1 Knox v. Gye, ante.
2 Knox v. Gye, anter
solved, and by a written agreement one of the partners is designated to keep and dispose of the firm assets at such prices and upon such terms as he can, a continuing trust is thereby created, and the statute does not begin to run in favor of the liquidating partner so long as he acts under the trust or admits its continuance.1
SEC. 211. Acknowledgment by one Partner. As long as a partnership continues, each partner is an agent for the purpose of making an acknowledgment under the statute of limitations.2
Under the old theory of acknowledgment, an acknowledgment made by a liquidating partner after a dissolution of partnership might revive a debt; but under the new theory, and since the essential changes in these statutes both in this country and England, such agency will terminate at dissolution, and after a partnership is dissolved one of the late firm cannot by his act or admission involve his co-partner in any new legal liability. It is possible, however, that it might be otherwise if the admission consisted of a part payment out of assets belonging to the late firm.5 A right of action to sue for the settlement of partnership affairs does not, as a matter of law, accrue at the time of the dissolution of the firm, but depends on circumstances."
1 Causler v. Wharton, 62 Ala. 358. 2 Watson v. Woodman, L.R. 20 Eq. 730. 3 Wood v. Braddick, 1 Taunt. 104; Pritchard v. Draper, 1 R. & My. 191.
partnership dealings, so long as the party to whom the assets were delivered acted under the trust or admitted that it was still continuing. Under the agreement here it is obvious that it was Whitehill who was to close up the business at Arkansas City, which had been under his management; and under the averments of this
4 Watson v. Woodman, L. R. 20 Eq. 721; Thompson v. Waithman, 3 Drew. 628; Bristow v. Miller, 11 Ir. L. R. 461; Kilgour v. Finlyson, 1 H. Bl. 155. 5 Watson v. Woodman, L. R. 20 Eq. bill such a trust was created as would not 721.
When the right of action accrues, so as to set the statute of limitations in motion, depends upon circumstances, and cannot be held as matter of law to arise at the date of the dissolution, or to be carried back by relation to that date. Todd v. Rafferty, 30 N. J. Eq. 254; Partridge v. Wells, id. 176; Prentice v. Elliott, 72 Ga. 154; Hammond v. Hammond, 20 Ga. 556; Massey v. Tingle, 29 Mo. 437; McClung v. Capehart, 24 Minn. 17; Hendy v. March, 75 Cal. 566; Foster v. Rison, 17 Gratt. 321; Boggs v. Johnson, 26 W. Va. 821; Atwater v. Fowler, 1 Edw. Ch. 423, 6 N. Y. Ch. L. ed. 195. In Causler v. Wharton, 62 Ala. 358, the court held that where one partner, by a written agreement with the other, left the partnership assets with him to dispose of, whenever he could do so at a fair price, a continuing trust was thereby created, and the bar of the statute of limitations would not begin to run against the right to an account of the
be barred by the statute of limitations until it was repudiated by Whitehill, which attitude on his part there is nothing here to disclose unless his defence to the bill may be construed as such.
In Adams v. Taylor, 14 Ark. 62, it was held that "the relation between co-partners does not create such a trust as will exempt a bill for a mere account and settlement from the operation of the statute of limitations, or the analagous bar by lapse of time, or staleness of the demand." That was a case where a partner came into chancery eight years after the dissolution of the partnership, for an account and settlement, and no circumstances of fraud, accident, or concealment were alleged to have prevented the settlement after the partnership affairs had been wound up. The question of when the right of action accrued did not arise, nor was that anything more than, as stated by the court, a bill for a mere account and settlement; whereas we have in this case the state of
When the partnership affairs are being wound up without antagonism between the parties, and assets are being realized and debts paid, the statute does not begin to run. Where the dissolution is effected by the death or assignment of one partner, the surviving or solvent partners hold the partnership property for the purpose of closing up its affairs. And where there is an agreement that one partner shall close up the business of the firm and settle its affairs, which have been under bis management, a trust has been created and the statute does not begin to run against the right to account, so long as such partner acts under the trust until he repudiates it himself.1
If a partner dies during the partnership, it seems that the maxim contra non volentem agere non currit lex prevails, and that time will not run against his estate, and in favor of the surviving partner, till there is administration to the estate of the dead partner, unless there have been disputes so as to give a cause of action before the death of the dead partner.2
affairs which existed in McGuire v. Ramsey, 9 Ark. 519, where, with respect to real estate paid for with partnership funds, it was held that the plea of the statute could not be allowed in favor of one partner in possession of such real estate as against the other.
The case of Chouteau v. Barlow, 110 U. S. 238, is very much in point. In that case Sanford, Chouteau, Sarpy, and Sire were co-partners in business in St. Louis. During its existence the partnership purchased and paid for, with the partnership funds, acre lands and town lots in Wisconsin and Minnesota, and held the same for the benefit of the co-partnership. The firm was dissolved in 1852 by the retirement of Sanford, and some twenty-four years thereafter his executor and trustee filed a bill against the representatives of the other members of the firm, who had all died, to compel an accounting touching the property of the partnership and the proceeds of such property. The dispute between the parties was as to the terms of the agreement of dissolution of the partnership in 1852. The complainants alleged that Sanford released to Chouteau all his interest in the estate of the firm, except its lands and town lots in Minnesota, and that Chouteau agreed to relieve Sanford from the debts of the firm and assure to him his proportion of the lands and town lots free from any debt or liability growing out of the co-partnership affairs. The answer alleged that Chouteau agreed to relieve Sanford from the debts of the firm,
and that Sanford released to Chouteau all his interest in the assets of the firm, includ ing his interest in any of the lands and town lots in Minnesota; and further averred, by way of defence, that more than six years had elapsed since the accruing of any of the alleged causes of action set out in the bill. The opinion of the court thus concludes: "On the whole case, we are of opinion, that, after the dissolution of the St. Louis firm, the members other than Sanford were entitled to collect and dispose of all its assets, including the Minnesota 'outfit' and the Minnesota lands, to liquidate its affairs, without the interference of Sanford; that all claim on their part against Sanford individually was relinquished, leaving recourse only to those assets; and that, if there should be any surplus of those assets, after paying the debts of the firm and the advances of any of the other partners therefor, Sanford's executors would be entitled to his proper proportion of such surplus. No judicial accounting has been had on the basis of the rights of the parties as we have defined them. The bill prays that the defendants may account touching the affairs and property of the co-partnership and touching the proceeds of any such property. We think the plaintiffs are entitled to such an accounting, and are not barred from it by laches or by the operation of any statute of limitations."
1 Riddle v. Whitehill, 135 U. S. 621.
2 Spann v. Fox, 1 Ga. Dec. 1; Gardner
SEC. 212. How Trustee may put Statute in Operation in his Favor. -It is, as previously stated, a well-established rule in regard to direct, technical trusts, that, so long as the trust subsists, the rights of the cestui que trust will not be barred by the possession of the trustee, however long continued, as the possession of the trustee is treated as the possession of the cestui que trust, and although he does not execute his trust, his mere possession and inactivity as to the trust, of themselves, afford no indicia of an adverse claim by him.' But if the trustee denies the trust, and assumes absolute ownership of the trust property, in such a manner that the cestui que trust has actual or constructive notice of the repudiation of the trust by the trustee, the statute attaches and begins to run from that time against the cestui que trust, unless the latter is at the time under some one of the stat
v. Cummings, 1 Ga. Dec. Part I; Banning Fed. Rep. 912; McGuire v. Linneus, 74 on Limitations, 204–208. Me. 344; Robertson v. Dunn, 87 N. C. 191; Hastie v. Aiken, 67 Ala. 313; Bonner v. Young, 68 Ala. 35; Zuck v. Culp, 59 Cal. 142; Lakin v. Sierra Buttes Gold Mine Co., 25 Fed. Rep. 337; Bostwick v. Dickson, 65 Wis. 593; Fox v. Tay, 24 Pac. Rep. (Cal.) 858; Smith v. Glover, 44 Minn. 260; Roach v. Caraffa, Butler v. Hyland, 26 Pac. Rep. (Cal.) 1108; Byars v. Thompson, 15 S. C. (Tex.) 1087; Hill v. McDonald, 58 Hun (N. Y.), 322; Hinton v. Pritchard, 107 N. C. 128; Wilson v. Brookshire, 126 Ind. 497; Conger v. Lee, 75 Tex. 114; Wren v. Hollowell, 52 Ark. 76; Dyer v. Waters, 19 Atl. (N. J.) 129; Re Camp, 50 Huu (N. Y.), 388; Murphy v. Murphy, 45 N. W. (Iowa) 914; Hall v. Ditto, 11 Ky. L. R. 667; Charter Oak L. Ins. Co. v. Gisborne, 5 Utah, 319; Chadwick v. Chadwick, 59 Mich. 87.
1 Redwood v. Riddick, 4 Munf. (Va.) 222; Howard v. Aiken, 3 McCord (S. C.), 467; North v. Barnum, 12 Vt. 205; Overstreet v. Bates, 1 J. J. Marsh. (Ky.) 370; Thompson v. Blair, 3 Murph. (N. C.) 583; Wamburzee v. Kennedy, 4 Desau. (S. C.) Eq. 479; Armstrong v. Campbell, 3 Yerg. (Tenn.) 201; Martin v. Jackson, 27 Penn. St. 504; Jones v. Persons, 2 Hawks (N. C.), 269; Goodhue v. Barnwell, 1 Rice (S. C.) Eq. 198; Bowman v. Wathen, 2 McLean (U. S. C. C.), 376; Alexander v. McMurray, 8 Watts (Penn.), 504; Havenden v. Annesley, 2 Sch. & Lef. 633; Hemenway v. Gates, 5 Pick. (Mass.) 421; Steel v. Henry, Watts (Penn.), 523; Fishwick v. Sewell, 4 H. & J. (Md.) 393; Lawson v. Blodgett, 20 Ark. 195; Young v. Mackall, 3 Md. Ch. 395; McDonald v. Sims, 3 Ga. 383.
2 When the trustee openly disavows his trust, the statute begins to run. Thomas v. Merry, 113 Ind. 83; Reynolds v. Sumner, 126 Ill. 58; Ward v. Harvey, 111 Ind. 471; Reizenstein v. Marquardt, 75 Iowa, 294; In re Campbell, 50 Hun (N. Y.), 388; Gilbert v. Sleeper, 71 Cal. 290; Roach v. Caraffa, 85 Cal. 436; Miller v. Dell, 11 Q. B. 468; Hill v. McDonald, 58 Hun (N. Y.), 322; Hamilton v. Pritchard, 107 N. C. 128; Marshall's Est., 138 Penn. St. 285; State v. Shires, 39 Mo. App. 560; Bacon v. Rives, 106 U. S. 99; Ord v. De La Guerre, 54 Cal. 298; Governor v. Woodworth, 63 Ill. 254; Hayward v. Gunn, 82 Ill. 385; Grant v. Burr, 54 Cal. 298; Belknap v. Gleason, 11 Conn. 160; Hickox v. Elliott, 22 Fed. Rep. 13; Hartley v. Head, 71 Ga. 95; Re McKinley, 15
Robson v. Jones, 27 Ga. 266. Where an act is done by the trustee purporting to be an execution of the trust, he is from that time regarded as standing at arm's length from the cestui que trust, who is then put to the assertion of his claim at the hazard of being barred by the statute. Thus, where an infant executed a receipt as a discharge in full of a legacy to which he was entitled in right of his wife, and four years after filed a bill against the executors for the recovery of her legacy, it was held that he was barred. Coleman v. Davis, 2 Strobh. (S. C.) Eq. 334; Moore v. Parcher, 1 Bailey (S. C.) Ch. 195; Britton v. Lewis, 8 Rich. (S. C.) Eq. 271; Gisborne v. Charter Oak L. Ins. Co., 142 U. S. 326; Miles v. Thorne, 38 Cal. 335; Seymour v. Freer, 5 Wall.(U.S.) 202; Bacon
utory disabilities, or is under undue influence proceeding from the trustee. Such denial of the trust, and assertion of an adversary claim in himself, is an abandonment of the fiduciary character in which he has stood to the property, and from that time the claim of the cestui que trust is subject to the operation of the statute.' But in
v. Rives, 106 U. S. 99; Henry v. Confidence, &c. Co. 1 Nev. 619.
In Lammer v. Stoddard, 103 N. Y. 672, it appeared that the will of Joseph Lammer, who died in 1837, gave to his wife the sum of $3,000, in trust, to be invested in bond and mortgage and the interest accumulating thereon to be applied to the support and maintenance of three minor children of the testator, Joseph, John, and Clarissa, during their minority $1,000 of the principal to be paid to each of the said children on their arrival at the age of twenty-one respectively. In case of the death of either of said children during minority, without issue, then its portion was given to the testator's widow. The testator's wife and his son Edward were appointed executors and trustees. The $3,000 was paid to the testator's widow, who invested it in a bond and mortgage. On Feb. 3, 1836, the principal was paid, and about that date she loaned to Edward Lammer $5,000, which was secured by bond and mortgage, payable Feb. 1, 1837. There was a prior mortgage on the mortgaged premises, which was foreclosed in 1837; and on foreclosure sale no surplus was left to apply on the second mortgage.
The court said: "Joseph Lammer died in 1840, the widow in 1870, and Edward in 1884. Clarissa was appointed administratrix of her mother's estate, and as such commenced this action against the executrix of the will of Edward to enforce a trust as to the $3,000. The trial court found, as matter of fact, upon evidence deemed by this court sufficient, after affirmance by the General Term, to sustain the finding, that Edward paid $5,000, the amount of the mortgage, to the widow during her lifetime. But the statute of limitations furnishes an equally conclusive defence to this action. If it be assumed that the trust fund was loaned to Edward Lammer with notice of the trust, under such circumstances that the trust within a proper time could have been enforced against him or his estate, the lapse of time would still
stand in plaintiff's pathway. If this were an action to recover the debt evidenced by the bond and mortgage, it is conceded that it would have been barred. But the action is to establish and enforce a trust, and hence the claim is made that it is not barred. It is undoubtedly generally true that as against a trustee of an actual, express, or subsisting trust, the statute does not begin to run against the beneficiary until the trustee has openly, to the knowledge of the beneficiary, renounced, disclaimed, or repudiated the trust. But Edward Lammer was not the actual trustee of this fund, and he never acknowledged a trust as to the money loaned him. He could, at most, have been declared a trustee ex maleficio or by implication or construction of law, and in such a case the statute begins to run from the time the wrong was committed, by which the party became chargeable as trustee by implica tion.
(Wilmerding v. Russ, 33 Conn. 67); Ashurst's Appeal, 60 Penn. St. 290; McClane v. Shepherd, 21 N. J. Eq. 76; Decouche v. Savatier, 3 Johns. Ch. 190, 216; Kane v. Bloodgood, 7 id. 90 ; Ward v. Smith, 3 Sandf. Ch. 592; Higgins v. Higgins, 14 Abb. N. C. 13 ; Clarke v. Boorman, 18 Wall. 493; Perry on Trusts, Sec. 865.
"We, therefore, see no reason to doubt that the judgment below was right, and it should be affirmed with costs."
1 Keaton v. McGwier, 24 Ga. 217; Wheeler v. Piper, 3 Jones (N. C.) Eq. 249; Welborn v. Rogers, 24 Ga. 558.
2 Murdock v. Hughes, 15 Miss. 219; Kane v. Bloodgood, ante; Smith v. Ricordo, 52 Mo. 581; Farnam v. Brooks, 9 Pick. (Mass.) 212; Decouche . Savatier, 3 Johns. (N. Y.) Ch. 216; White v. Leavitt, 20 Tex. 703; Andrews v. Smithwick, 20 id. 111; Lucas v. Daniels, 34 Ala. 188; Boone v. Chiles, 10 Pet. (U. S.) 223; Pipher v. Lodge, 4 S. & R. (Penn.) 310; Robson v. Jones, 27 Ga. 266; Wilson v. Watkins, 3 Pet. (U. S.) 52; Cunningham v. McKindley, 22 Ind. 149; Green v. Johnson, 3 G. & J. (Md.) 389; Starke v. Starke, 3 Rich. (S. C.) 438; Laller v. Crof, 7 id. 34; Per