Dupuy v. Leavenworth

Citations

• 17 Cal. 262

Syllabus

<p>In equity, real property acquired with partnership funds for partnership purposes is regarded as personal estate, so far as the payment of partnership debts and the adjustment of partnership rights are concerned; and it is immaterial in whose name the legal title of the property stands ; whether in the individual name of one copartner, or in the joint names of all—it is first subject to the payment of partnership debts, and then to be distributed among the copartners according to their respective rights.</p> <p>The possessor of the legal title in such case, holds the estate in trust for the purposes of the partnership; and until such purposes are accomplished, each partner has an equitable interest in the property. Upon the dissolution of the copartnership by the death of one of its members, the surviving partner, who is charged with the duty of paying the debts, can dispose of this equitable interest, and the purchaser can compel the heirs-at-law of the deceased partner to perfect the purchase by conveyance of the legal title.</p> <p>Where two partners purchased in the firm name, with firm funds and for partnership purposes, a lot of land, and one then absconds with all the available funds of the firm, leaving his copartner without sufficient means to pay the debts of the copartnership, and he in good faith first exhausts the personal property to pay debts of the concern, and this is insufficient, he may then convey in the firm name the interest of the firm in the lot to pay debts, and the grantee can in equity compel a conveyance of the legal title to the undivided half of the lot, standing in the absconding partner’s name, from him or from parties taking a conveyance from him with notice of its partnership character.</p> <p>This rale is not in conflict with the doctrine that real property of a copartnership may be conveyed by one partner, on his individual account, to the extent of his legal title, so as to cut off the equitable rights of the copartnership, or