Opinion · Supreme Court of Iowa
Fleming v. Fleming
Fleming v. Fleming, 194 Iowa 71 (Iowa 1919)
- Type
- Opinion
- Court
- Supreme Court of Iowa
- Jurisdiction
- Iowa
- Date
- 1919-12-16
- Topic
- general
Gaynor, J. *741. Partnership : the relation: partnership (?) or joint tenancy (?) *73This action is in equity, brought by Anna B. Fleming, as the surviving widow of Charles Fleming, against *74his surviving brothers, as individuals, who, named in the order of seniority, are Robert J.-, John A., and Stan-hope Fleming; and against Fleming Brothers, ah alleged partnership, composed of deceased and the three brothers above named; and against John A. Fleming', as administrator of the estate of Charles Fleming. The plaintiff’s claim is that her husband, Charles, died seized and possessed of an interest in certain property now in the possession of and held by these defendants; that they refuse to recognize her right to a distributive share therein, and claim to own the same, as against the right asserted by her.
Citator
UpLaw has not yet analyzed Fleming v. Fleming. The absence of a flag is not a finding that it is good law.
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The plaintiff’s claim is that her husband, Charles, died seized and possessed of an interest in certain property now in the possession of and held by these defendants; that they refuse to recognize her right to a distributive share therein, and claim to own the same, as against the right asserted by her.
The original purpose of the action was to have ascertained and set aside to her, as the surviving widow of Charles, her distributive share in so much of the property as her husband died seized or possessed of. She claims that he died seized and possessed of an interest in the property now in the hands of these defendants, or some of them.
Here the issues are narrowed to the ascertainment of whether or not plaintiff’s husband, Charles, died seized or possessed of any interest in the property held by these defendants, or some of them. If it be determined that he had an interest in the property at the time he died, then she is entitled to a distributive share therein, and her claim' must be recognized and enforced; but the amount of her interest is not the subject of investigation at this time; for, by agreement of parties, this is left for future consideration and determination by the nisi prius court. The determination of the question here involves only the proper construction of the three writings on which defendants rely to defeat her claim, to which specific reference will be made hereafter.
It appears that, up to and at the time Charles died, Fleming Brothers, including the deceased, Charles, owned quite a large estate, consisting of both real and personal property. The question to be determined is whether this property was owned by these four brothers as joint tenants, with a right of survivor-ship, or whether it was owned by them as partners. It is the claim of the defendants- that all the property in controversy, prior to and at the time of Charles’s death, was held by these
Charles Fleming, the deceased, was married to the plaintiff on the 2d day of January, 1880, and died in Polk County, January 15, 1916.
The first instrument on'which the defendants rely to cut off this widow from a right to share in the accumulations of all these years of her husband’s faithful service and toilsome labor, represented by the property in question, was made on the 14th day of December, 1896, and at a time when but a small portion of the accumulated fortune which is the subject of tfiis litigation had come into existence. It reads as follows:
“Know all men by these presents, that we, Kobert J. Fleming, Charles Fleming, John A. Fleming, and Stanhope Fleming, of the city of Des Moines, state of Iowa, in order to provide for the future uninterrupted prosecution of the business of life insurance in which we are now or may be hereafter engaged and mutually associated, and to fix and determine the interests of each therein, hereby mutually agree, and bind ourselves, our heirs, executors, administrators or survivors and all other persons, that, each of the parties to this stipulation and agreement, shall have only such share of, and interest in the profits, earnings and income of the business of life insurance in which we are or shall be jointly engaged, as shall be actually received by each or paid upon the order of each, with the consent of the others, from the income of said business. And such amount so paid shall fully represent the share and interest of each of the •parties hereto, at any time while we the undersigned shall be associated together in said business or thereafter. Upon the death or withdrawal of any party hereto, all his interest in said business shall thereupon cease and determine and at no time shall any accounting be made or required to be made by any party hereto, his representatives, executors, heirs or survivors, or any other person claiming under him, or to any person officer or representative, upon any basis of labor performed or
No doubt deeming that this instrument did not fully express the purpose and intent of the parties, and might not be construed to effectuate their purpose and intent, they made a second instrument on the 23d day of January, 1897, as follows:
“Know all men by these presents that we, Robert J. Fleming, Charles Fleming, John A. Fleming and Stanhope Fleming of the city of Des Moines, Iowa, in view of our past association in, and the manner of the conduct of our business without the usual and ordinary incidents of a partnership, and to more effectually define and determine our individual interests in said business in the future, as between ourselves and in relation to all 'other persons, and to provide for the future uninterrupted prosecution of said business in which we are now engaged, or may be hereafter associated, hereby mutually agree and bind ourselves, our heirs, executors, administrators, survivors, and all other persons as follows: That in consideration of the services of each of us rendered, or hereafter to be rendered in the business of life insurance, of the income to be derived therefrom and of the mutual stipulations herein contained, each of the parties to this agreement has, and hereafter shall have, only such share of, and interest in the profits, earnings, .renewals due or to become due under any and all contracts of insurance, or commissions thereon, to whomsoever nominally payable in the business of life insurance in which we are now or any of us shall hereafter be jointly engaged, as shall be actually received' by each, or shall be paid upon the order of each with the consent of the others, from' the general funds or income of said business; and any sum or amount so paid shall fully represent the share and interest of each of the parties hereto at any time while any of the undersigned shall be associated together in said business or thereafter. It is further agreed that upon the death or withdrawal of any party hereto, all his interest in said busi
Under these two instruments, they continued their labors and prosecution of the business in which they were engaged and mutually associated, and further property was accumulated through the joint efforts, and a large estate created. However, on the 7th day of January, 1911, feeling that they had not yet fully expressed in writing their relationship to each other and to the estate that had been and was being accumulated, they made a third writing, as follows:
“Whereas, the undersigned, Robert J. Fleming, Charles Fleming, John A. Fleming and Stanhope Fleming are engaged in the life insurance business in the states of Iowa, Nebraska and Wyoming under a contract with the Massachusetts Mutual Life Insurance Company; and,
“Whereas, each of the undersigned is the owner of one fourth of the stock of a corporation organized under the laws of the state of Iowa known as Fleming Brothers, Incorporated; and
“Whereas, the undersigned also are the owners of certain
“Whereas, the undersigned expect to acquire additional property hereafter; and,
“Whereas, the said property now held and owned by the undersigned has been acquired by them with the understanding that it shall be disposed of as hereinafter set out;
“Now, therefore, in consideration of the premises and one dollar in hand paid by each of the undersigned to each of the others whose names are signed hereto;
‘ ‘ This agreement made and entered into by and between the said Robert J. Fleming, Charles Fleming, John A. Fleming and Stanhope Fleming on the 17th day of January, A. D. 1911, will witness:
“1st. That the partnership between the undersigned is with the express and distinct understanding and agreement that all of the property heretofore acquired by the undersigned has been acquired as the results of the said partnership, and that said property now belongs to the said partnership, including all proceeds of said insurance business with the renewals to which the parties hereto may be entitled thereon,
“2d. That upon the death of either one of the undersigned, the property then owned by the said partnership, including all property standing in the names of the individual partners which embraces said stock in Fleming Brothers, Incorporated, shall be and become the property of the surviving brothers of the said partnership; and that what said decedent has theretofore withdrawn from said partnership shall constitute his sole and entire interest therein, and the sole and entire interest of his estate therein.
“The premiums upon all insurance carried by the undersigned, whether life or accident, (except Policy No. 741051 in the Mutual Life Insurance .Company of New York, upon the life of Robert J. Fleming, payable to Emma D. Fleming, his wife, which policy is not a part of said partnership property) have been paid by the said partnership, and the said partnership is entitled to the proceeds of all such insurance except the policy above referred to payable to Emma D. Fleming.
“3d. This contract covers not only the property now
“Executed in quadruplicate.”
In this third instrument, the parties to the first two instruments have undertaken to define the relationship existing between them, and to more clearly state the relationship they sustained to the property, and to define more clearly what they meant when they said in the first two contracts, ‘ ‘ In order to provide for the future uninterrupted prosecution of the business of life insurance, in which we are now or may be hereafter engaged and mutually associated.” This last quoted instrument is the last expression of these parties touching the subject-matter of all three contracts; and they themselves have therein stated, in words that have definite and legal signification, what they understood the relationship was, under which they were operating.
We look to what is written in these three instruments, taken as one instrument, to find the thought that lies back of the writing, — the purpose and intent of the parties in the making of the writing, — and to find the legal status that the writings create. That these parties had a purpose and an intent to accomplish something touching their rights, duties, and obligations to each other in the making of the instruments, and a purpose to fix the rights of each in the property accumulated and to be accumulated, must be assumed. Within these instruments the height, depth, width, and length of that purpose must be found. The thought of the brothers could not have been that the title to the property acquired, as it came into existence, should vest in no one, except the portion taken and appropriated by each to his immediate needs. The title to property that can be the subject of ownership, we must assume, vests in someone, whether it be an individual, individuals, or a legal entity. This property, when it came into existence, vested in these brothers. They became vested with the title as joint tenants, or they became vested with the title as tenants in common, or they became vested with the title as a copartnership. The character of the title held by these defendants is the subject of our investigation,
2. Joint tenancy: commercial enterprise. We need not here enter into any discussion of the origin and purpose of a joint tenancy. Its origin and character were feudal. It was of English origin, and highly favored, at first, for reasons that were feudal. But whatever causes may have led to the origin of such an estate or commended it to the minds of the great jurists of that time, it unquestionably has grown into much disfavor in this country and in .England. Some states have denied the existence of it in any except real property. See Hart v. Hart, 201 Mich. 207 (167 N. W. 337). Some have abolished it altogether, and some require strict proof. It has been condemned because it imperils the future of those whom the law assumes to guard and protect. Under our law, the wife, the weaker vessel, the one who maintains the home and rears the children, is entitled to have provision made for her, if, peradventure, death robs her of the one legally and morally pledged to support and maintain her. She is entitled to share in such of his estate as by his efforts he accumulates and leaves at his death. • The husband
The essential elements of an estate in joint tenancy are that it be held by two or more 'jointly, with a clear right in all to share in the enjoyment of the thing during their lives. There are four requisites: The tenants must have one and the same interest. The interest must accrue by one and the same conveyance, except as modified by the statute of uses. They must commence at one and the same time, and the property must be held by one and the same undivided possession. If such an estate be recognized, and the right of parties to create it, with all its unnatural consequences, the consequences that legally flow from it must be permitted to flow, no matter what this court may think of the justice or injustice of it, and though it leave this wife to the cold charity of an unsympathetic world. In none of the writings did these brothers bind themselves to make any provision for her. If she receive aught from them, it comes to her, not as a matter of right, but as a matter of grace.
It is time that, under the common law, an estate may be created and held in joint tenancy. The estate is joined in the number of persons interested. No matter what the number of parties interested may be, the tenants are regarded as one individual. The right that each has in the joint estate continues
.Considering the foundation upon which the doctrine of joint tenancy rests, it is the opinion of this court that it does not apply to commercial enterprises of this kind, and that no joint tenancy can arise out of a commercial enterprise, such as we have here before us in this case. It is inconsistent with the very foundation principle upon which joint tenancy exists or can exist.
Analyzing these writings, we find that, at the time the first instrument was made, the parties had in mind that they were
If the parties were, in fact and in law, joint tenants, then each had a right to enjoy the income of the estate; and the fact that one of the tenants appropriated a portion of the income to his own use could not have the effect of destroying his interest in the subject-matter of the tenancy. The idea of joint tenancy is that each tenant has a right to an equal enjoyment of the thing which is the subject-matter of the tenancy. If the receiving of any portion of the income or the profits of the estate had the effect of destroying the interest of each in the subject-matter of the tenancy, then, upon the appropriation of any of the profits by the tenants, or any of them, the joint tenancy would cease. The provision of the contract above referred to must have been intended as limiting the right to enjoy the income and profits of the business, and not as taking his right in the subject-matter of the tenancy. His right to take was measured by his needs.. What he took was a declaration, by the taking, of his then needs, and measured his right, at that time, to take to his personal use the income and profits. It does not mean that it measured or could measure his interest in the property accumulated by the joint efforts of the parties, or that the
The second contract, though changed in wording, expresses practically the same thought, with the added purpose to transfer to the entity, whatever it is, all rights of Robert J., under his contract with the Mutual Life Insurance Company of New York.
It will be noted that, in the first two writings, no direct provision is made for the vesting of the title to accumulated property in any designated entity or person. It is now assumed by these defendants that it vested in the brothers as joint tenants. No estate in the tangible property that accumulated as a result of the business enterprise is by express provision vested in any person, persons, or entity. We turn, therefore, to the third writing, for further light as to the purpose and intent of these parties and the status created by the preceding writings.
It appears that, between the time of the making of the second contract and this third contract, Fleming Brothers had incorporated, or a corporation was created, known as Fleming Brothers, Incorporated. This corporation issued to each of the brothers stock in equal parts, we take it, and each undertook to assign his stock by writing his name on the back thereof, without naming the assignee, and deposited it in a receptacle which it is claimed was under the control of all four of the brothers. This third contract makes plain what is wanting in the other contracts, and says that they were associated together as a partnership, and that the partnership is with the express and distinct understanding and agreement that all the property heretofore acquired by the undersigned had been acquired as the result of said partnership, and that said property now belongs to said partnership. Reading the previous writings in the light of the revelations made in the third writing, it is not as difficult to understand and to give legal force and efficacy to what is therein said. We take it that these four brothers organized a partnership, with the understanding that the business carried on by the partnership should remain intact, and that the future of the business should be uninterrupted in its prosecution; that the title to the earnings and income of the business — the accumulated assets — should vest in the partnership; that each party should have a right to take, with the consent of the others, so much of the earnings of the partnership as his needs demanded,
“We are engaged as partners in the life insurance business, mutually associated together as partners, and as such we desire to provide for the future uninterruption of the business in which the partnership is engaged.”
But it is said that the fact that they called themselves partners, or that they were there engaged in a common enterprise
A slight history of the origin of partnership will not be out. of place at this time. Originally, it was founded on confidence, independent of any contractual relationship. Because of the fact that, in the early days, families followed one occupation, these partnerships usually were found to exist among relatives. Though founded in confidence in the early days, in modern times it was recognized as. a contractual relationship. It grew out of the necessities of trade, but confidential relationship was retained in the modern law. At the time the law courts first gave cognizance to what is known as partnership relationship, they were familiar with tenancies in common and joint tenancies. However, under joint and common 'tenancies, the co-owners sustained no confidential relationships to each other,— at least, not such as is found in modern partnerships; and the right of agency did not exist among the joint co-owners. After passing through many stages of formation, the law came to regard partnership as an entity, something separate and distinct from the individuals, and in some respects, much the same, as a corporation is separate and distinct from its stockholders. At. common law, a partnership was nothing more than an association of individuals. A firm was recognized as a short form of expression to designate partners collectively. The early decisions touching partnership depend a great deal on the viewpoint of the particular judge, — whether he had a mercantile conception or a common-law conception of a partnership; so that the courts have sometimes reached different conclusions, although the facts upon which they based their conclusions were substantially the same. Originally, there were different theories
“A contract of two or more persons, to place their money, effects, labor, and skill, or some, or all of them, in lawful commerce or business, and to divide the profit, and bear the loss, in certain proportions.”
Other writers define it as a combination of two or more persons of capital or labor or skill, for the purpose of business for their common benefit. Gilmore on Partnership, on pages 1 to 6, defines it thus:
“Partnership is a relation existing by virtue of a contract, express or implied, between persons carrying on a business owned in common, with a view of profit to be shared by them. ’ ’
It is defined in the English Partnership Act of 1890, 53 and 54 Victorian, Chapter 39, Paragraph 1, as “the relation which subsists between persons carrying on a business in common, with a view of profit.”
Partnership implies that there is more than one person interested in it, and there is implied a mutual consent to the association; but that is not controlling, since there may be organizations, by mutual consent, which are not partnerships, such as churches. A partnership, in its true sense, is formed for the purpose of trade or business, and the profits realized from the business must be the property of the persons associated, if they are to be treated as partners. Missouri Bottlers’ Assn. v. Fennerty, 81 Mo. App. 525; Burt v. Lathrop, 52 Mich. 106.
3. Partnership: the relation: implied agreement to share losses. As between the parties, the true test as to whether or not they are associated a$ partners is the intention with which they have entered into the relation. It is the legal intent or manifest intent of the parties that determines whether a partnership exists. In determining whether the parties to a contract intended to become partners, the court will take into consideration the whole situation existing at the time the agreement was made, and all the circumstances surrounding the transaction, as well as the subsequent admissions of the parties. That it is not denominated a part
4. Descent and distribution: surviving spouse: surviv-orship in partnership property. It must be borne in mind that the right of survivorship is only an incident to joint tenancy. It follows as a legal consequence from the creation of the joint tenancy. The joint tenancy, when created, vests in. each of the tenants a common right in the property, which does not survive his death, unless he becomes the last survivor of all the tenants. Then, for the first time, does that which before consisted, in a practical sense, of a life estate in the property, become vested as an^ estate of inheritance. In a legal sense, his death does not transfer the rights that he possessed in the property to the surviving tenants. Death does not enlarge or change the estate. Death terminates his interest in the estate. It is rather a falling away of the
We find, therefore, that a partnership existed between these parties. The provision, therefore, in the contract that, upon the death of any member, his interest in the partnership property should pass to his brother partners, is an attempt to make a testamentary disposition of the interest of each partner. A fair consideration of all these instruments shows that they were not understood as creating a joint tenancy. It fairly shows that all the profilers understood that they were associated together as partners, and that a partnership existed. An attempt to create survivorship among partners is an attempt to make a testamentary disposition of the dying partner’s property, or his interest in the partnership property, in favor of the surviving partners, to take effect after his death.
We are satisfied with the decree of the district court, and its judgment is affirmed. — Affirmed.
Ladd, C. J., Weaver, EvaNS, PrestoN, and SteveNS, JJ., concur.