This section is from the book "The Law Of Real Property and Other Interests In Land", by Herbert Thorn Dike Tiffany. Also available from Amazon: A Treatise on the Modern Law of Real Property and Other Interests in Land .
48 S. E. 393; Lutz v. Billick, 172 Iowa, 543, 154 N. W. 884; Spalding v. Wilson, 80 Ky. 589; Richardson v. Manson, 101 Mass. 482; Berry v. Folkes, 60 Miss. 576; Jarvis v. Brooks, 27 N. H. 67, 59 Am. Dec. 359; Darrow v. Calkins, 154 N. Y. 503, 48 L. R. A. 209, 61 Am. St. Rep. 637, 49 N. E. 61; Hayes v. Treat, 178 Pa. 310, 35 Atl. 987; Brooke v. Washington, 8 Gratt. (Va.) 256, 56 Am. Dec. 142; Scott & Callaway v. Dixie Ins. Co., 70 W. Va. 533, 40 L. R. A. (N. S.) 152, 74 S. E. 659.
77. 1 Bates, Partnership, Sec. 285; Jenkins v. Jenkins, 78 Ark. 388, 94 S. W. 45; Alkire v. Kahle, 123 111. 496, 5 Am. St. Rep. 540; Chandler v. Jessup, 132 Ind. 351, 31 N. E. 1109; Dyer v. Clark, 5 Mete.
In one or two states it has been held that land conveyed to the partners . before the formation of the partnership cannot be shown to be firm property as against one who gave credit to one of the partners as an individual without notice that the land was partnership, and not individual, assets,79 and in Pennsylvania the rule has been adopted that this cannot be done in the case of property conveyed to the partners even during the existence of the partnership, unless its partnership character appeared from the instrument of conveyance as recorded.80
In spite of the frequency with which it is stated that whether particular land is to be regarded as belonging to the partnership is a question of intention, such a view is not entirely satisfactory as applied to a case in which this intention does not appear in writing signed by the holder of the legal title. The Statute of Frauds requires an express trust in land to be evidenced by writing, and a trust, whether for the purposes of a partnership, or for other purposes,
(Mass.) 562, 39 Am. Dec. 697; Callumb v. Read, 24 N. Y. 505; Lefevre's Appeal, 69 Pa. St. 122, 8 Am. Rep. 229; City of Providence v. Bullock, 14 R. I. 353.
78. 1 Bates, Partnership, Sec.Sec. 286, 287; Thompson v. Bowman, 6 Wall. (U. S.) 316, 18 L. Ed. 736; Clark v. Lyster, 155 Fed. 513, 84 C. C. A. 27; Hatchett v. Blanton, 72 Ala. 423; Humes v. Higman, 145 Ala. 215, 40 So. 128; Robinson Bank v. Miller, 153 111. 244, 27 L. R. A. 449, 38 N. E. 1028; Gordon v. Gordon, 49 Mich. 501, 13 N. W. 80; Alexander v. Kimbro, 49 Miss. 529; Wheatley's Heirs v. Calhoun, 12 Leigh (Va.) 264, 37 Am. Dec. 654.
79. National Union Bank v. National Mechanics' Bank, 80 Md. 371, 45 Am. St. Rep. S50; Parker v. Bowles, 57 N. H. 491.
80. Hale v. Henrie, 2 Watts (Pa.) 143; Ebbert's Appeal, 70 Pa. St. 79; Stover v. Stover, 180 Pa. St. 425, 57 Am. St. Rep. 654; Cundey v. Hall, 208 Pa. 335, 101 Am. St. Rep. 938. That a like rule is applied when the legal title is conveyed to one partner for partnership purposes, see Gunnison v. Erie Dime Savings & Loan Co., 157 Pa. 303, 27 Atl. 747, disin so far as it is directly based on intention, is an express trust.81 If the property is purchased with partnership funds, this is sufficient, in the great majority of states, to raise an inference of a trust in favor of the partnership, in accordance with the general presumption of an intention to create a trust in favor of the person paying the consideration.82 And whether the property is or is not purchased with partnership funds, if it is conveyed to one or more of the partners, or to a stranger, for partnership purposes, such person or persons might occasionally be regarded as holding subject to a constructive trust in favor of the partnership, on the theory that, after acquiring the property by means of his promise to hold it for the benefit of the partnership, equity will not allow one to hold it for his own benefit, thus unjustly enriching himself by the repudiation of his agreement.83 In those cases in which the property is not acquired with partnership funds or under a promise to hold it for the benefit of the partnership, as when a partner orally agrees to consider land belonging to him as partnership property, the difficulty of giving effect to his intention, so expressed, without a violation of the Statute of Frauds, would seem to be insuperable, a view which is indicated with more or less clearness in a number of cases.84 tinguishing Erwin's Appeal, 39 Pa. 535.
81. Ante Sec. 106(c).
82. In one state the statute excluding the implication of a trust in favor of the person paying the purchase money (ante Sec. 167(c)) has been held to apply to a purchase with partnership funds. Winans v. Winans' Estate, 99 Mich. 74, 57 N. W. 1088; Contra Greenwood v. Marvin, 111 N. Y. 423, 19 N. E. 228; Richtman v.
Watson, 150 Wis. 385, 136 N. W. 797.
83. See Jennings v. Rickard, 10 Colo. 395, 15 Pac. 677; Lacy v. Hall, 37 Pa. St. 360; Hardin v. Hardin, 26 S. D. 601, 129 N. W. 108. See editorial note, 11 Columbia Law Rev. 461.
84. Smith v. Burnham, 3 Sumn. 435, Fed. Cas. No. 13019; Goldstein v. Nathan, 158 111. 641, 42 N. E. 72; Homer v. Homer, 107 Mass. 82; Alexander v. Kimbro, 49 Miss.
Sec. 196 ] in action which is to be classed with personal property.91 The reason just stated for regarding a partner's share in firm assets, although they consist partly of land, as in the nature of personalty, exists in this country to the same extent as in England, and it may be questioned whether the fact that here the land is not sold unless this is accessary for the purpose of settling firm accounts, justifies the statement that there is but a partial conversion. Each member of the firm has, in this country, as in England, but a right of action for his share of the assets, and the fact that, in a possible contingency, he will have-to take his share, to some extent, in land, should not give his right of action the character of land.
- The doctrine of conversion. In England land devoted to partnership purposes is, in the absence of a showing of a contrary intention, personal and not real property, as between the real and personal representatives of a deceased partner, this by reason of the principle that the share of a partner is nothing more than his proportion of the partnership assets after they have been turned into money and applied in liquidation of the partnership debts.85 In a few states the English doctrine has apparently been adopted,86 but in the generality of American decisions it is said, in terms repudiating the English view, that unless an intention to convert the realty into personalty for all purposes appears,87 the partnership realty is to be treated as personalty only to a limited extent, usually only for the purpose of paying the firm debts and adjusting the equities between the partners, and that after this is done it resumes the character of realty.88