COOK V. THE lDMINISTRATOl\.
Company, except that which was so invested in the life-time of said testator and that said will does not render the estate of the testator not already invested in said partnerJhip liable to the payment of any debts of said partnership contracted a,fter said testator's death. He says that said will limits the responsibility of said testator's estate for debts of said part. nership to be contracted after his (said testator's) death to that part of said estate already embarked in said partnership at the death of .said testator, and he denies that said estate is liable to the plaintiff beyond the amount of its property and assets embarked in said copartnership. To this point the plaintiff demurs generally. -Two questions are involved tn the determination of this demurrer: First, by virtue of the contract of partnership and the provisions of the will, did the general estate of the testator become liable for debts contracted by the partnership after the death of the testator? Second, if it did not, did that part of the estate belonging to and arising out of other partnerships, which it is claimed the executors were authorized to continue, become liable for the debts of this partnership? Did this liability of the general estate arise out of the terms of {!he agreement creating the partnership? The agreement was not for any definite number of years; there- could be no question, therefore, that the death of either partner, of itself, would dissolve the partnership; but, even if it had stipulated for duration of a particular period, the death of either partner within that period would have worked its dis. solution, unless expressly stipulated that it should not have that effect. This agreement provides simply against that result by say· ing that "in the event of the death of either party to this agreement this copartnership shall not, on that account, be dissolved, but the interest of such deceased party may be continued'and represented by the legal representative of said deceased party, or otherwise disposed of by them." It does not provide that it shall be continued notwithstanding the death J but that it may be. There is no binding obligation upon the part of Patrick Rogers that this copartnership should 'con-
74
FEDERAL REPORTER.
tinue after his death; it does not in terms fix and extend any liability upon him or his estate after his death. And it seems to me very clear that if he had died intestate, and his administrator had undertaken to have carried on this partnership with the general assets of the estate, he could not, under this clause, have been justified in doing so. It would have been the exercise of a discretion and power which, as against the individual creditors and the heirs of the intestate, could not have been supported. Does, then, the will, in connection with this agreement, or without it, give such power as to make his general estate liable? The clause of the will by which it is claimed this result is produced is: "It is my will and direction that my share and interest as one of the partnel:s in the Louisville & Cincinnati Mail Line Company, and also my share and interest as one of the partners in the Marine Railway & Dry Dock Company, and also my share and interest in the Sectional Dry Dock Company, of St. Louis, Missouri, shall not cease, nor said partnership be determined, by reason of my death, but that my share and interest in each shall continue and be kept up and represented by the executor of this my will, in my stead, until such time as in his judgment it shall be most advantageous for my estate to sell out and settle up and close up the said shares and interests respectively. And to that end I do hereby fully authorize and empower and direct the executor of this my will to hold, manage, and represent all my shares and interest in said companies respectively, for the benefit and use of those who shall be entitled to my estate, until such time as in his discretion and judgment it· shall be most advantageous to sell or close and settle the same, and then to sell out my said shares and interest in said companies, or either of them, or settle and close the same by agreement with the partners, whichever he considers best, and upon such terms and for such price as he shall deem proper and sufficient. The testator then provides for a sister, and then provides that "subject to the foregoing provisions, and to the dower, distributive share, and allowances for my wife provided by II
ooox
V. THE ADMINISTRATOB.
'15
law, I give and devise to each of my five children, Robert, Sarah, Thomas, Joseph, and Fenton, one-sixth of all the residue of my estate., " and to the children of a deceased daughter one-sixth, subject to certain deductions to be made to some of them for advance payments he had made. So far as the authority to earry on these several partnerships is provided for by this will, it speaks of his shares and interests in them, and they are to be continued and kept up shall be and represented by the executor until such time most advantageous to sell them and settle them up; not to continue the business of these firms generally and indefinitely by the use of his general assets, but only to continue the interests which he then had in them, and that only to such times as they could be most advantageously sold or closed up. But if it were doubtful, from the language used in this clause, whether the testator intended to limit the carrying on of this business to the funds already embarked in it, the residuary clause of the will, when taken in connection with this, seems to show such intention, for this disposes of all the balance of his property to his children and grandchildren. Mr. Lindley, in his work on Partnership, 1105, says: "It is now, however, clearly settled that the extent of the liability of the testator's estate does not exceed the amount authorized by him to be employed in the trade or business directed by him to be carried on." And again, on the same page, he says: "A general direction to carryon a business in which a testator was engaged does riot authorize the employment for that business of more of his assets than was embarked in that business when he dies." Justice Story, in delivering the opinion of the supreme court of the United States in Burwell v. Mandeville, Ex'r, 2 Howard, 560-577, says: "And thi"s leads us to remark that nothing but the most clear and unambiguous language, demonstrating in the most positive manner that the testator intends to make his general assets liable for all debts contracted in the continued trade, would justify the court in arriving at such a conclusion, from the manifest inconvenience thereof, and the utter impossibility of paying off the legacies beqneathed by the testator's will,
as
76
IEDERAL REPORTER.
or distributing the residue of his estate, without, in effect, saying at the same time that the payments may all be recalled if the trade should become unsuccessful or :r;uinous. Such a result would ordinarily be at war with the testator's intention in bequeathing such legacies and residue, and would or might postpone the settlement of the estate for half a century, or until long after the trade or continued partnership should terminate. " Mr. Parsons, in his work on Partnership, treats the continued partnership as a new partnership, and on page 454 says: "So the creditors of the new partnership have no claim whatever upon and no interest in the general assets of the deceased, or any part of them, but that which he expressly placed in the new partnership." And to the same effect is the doctrine of Ex parte Garland, 10 Vesey, 109-110 ; Pitkin v. Pitkin, 7 Conn. 307; and Lucht, Adm'r, v. Behrens, 28 O. S. 23l. I think, the;efore, that neither by the agreement nor will does the law make the general assets of the estate liable for the debts of this partnership contracted after the death of th& testator. Does, then, the provision of the will in regard to the other partnerships, and the fact that the executor collected dividends, and that the estate has derived large sums of money from them, make such incomes liable for the debts contracted after the death of the testator by this particular partnership? There may be more difficulty in this proposition, but it seemB to me that it can hardly be maintained. It is true that, for the time being, the shares and interest in these partnerships are placed in the management of the executor; but they are separate and distinct partnerships-separate and distinct in their formations and purposes, composed, so far as we know, of separate and distinct members, and there is nothing in the pleadings which shows that by their articles of copartnership there was any provision by which they should be continued, notwithstanding the death of any of its members. Neither is there anything in the pleadings which shows that these partnerships are solvent or insolvent, or whether there may be outstanding debts against them. If they are insolvent, or
IUMMERGEN 'II. BORURMEIEB.
77
there be debts of them unpaid, it would be more equitable that the separate income of each should be applied to the payment of its separate indebtedness. But, aside from this, the provisions of the will are that the shares and interest of the testator in them should be continued, not generally, but until they could be most advantageously disposed of and settled up. And, although the term "kept up" is used by the testator, it does not seem from the will that it was the intent of the testator that they should be kept up by his general estate, or by taking the profits and dividends arising from either and appropriating them to the payment of the losses and debts of the other. And, unless it was his intent that this should be done, I do not think that the mere fact that there had been some dividends received by the estate of a deceased partner from one or more of these partnerships would entitle a creditor to a judgment against his estate upon an indebtedness contracted by another partnership long after his death. Parsons on Part. 454; Ex parte Garland, 10 Vesey, 109-110. Persons dealing with partnerships are presumed to look to the part_ nerships themselves, and not to the estates of its deceased members, for the payment of debts contracted after such decease. I think, therefore, that upon this ground the demurrer cannot be sustained. The demurrer is 'therefore overruled.
HAMMERGEN
'II.
SCRURMEIER and others. - - , 1880.)
(Oircuit Court, D. Minnesota.
Motion for judgment for defendant on the pleadings. MILLER, C. J. This motion is founded on the idea that the ,former adjudication in the state court was on the merits of the case, and, therefore, So bar to the action. The case was,