Houston, J.,
delivered the opinion of a majority of the court: The first matter we deem it proper to.consider and dispose of in this case was the question raised as to the competency of Amor H. Harvey, one of the respondents, to testify as a witness for the complainant, and whose deposition and testimony the chancellor ruled out on the hearing of the case below, upon the grounds stated in his opinion, and in which we concur, with the additional reason for it, that notwithstanding he was a joint defendant in the suit, he was legally interested in the success of the complainant in it, and would gain by it because as only a year or two before this suit was instituted he had filed a similar bill as the surviving partner of the firm of Hollingsworth, Harvey & Co. against his present co-defendants, as the executor and devisee of his former and deceased partner, Achilles Hollingsworth, in which he alleged and relied on the same resulting trust in relation to the same real estate uoay in controversy in this suit, for the benefit of the late firm above mentioned, Avhich is now alleged and relied on by the complainant in this case; and although the decree of the chancellor had been rendered and entered against his bill in that case and against such a trust, he was neverthess directly interested in having it established in this case, inasmuch as two years had not elapsed after the signing of the said decree, and his right of appeal from it therefore had not been barred by the statute of limitations at the time Avhen he was examined as a witness in this case.
It Avas contended by the counsel for the appellant that the ruling of the chancellor on that point was erroneous, and we Avere referred to both the forty-sixth rule of the Court of Chancery and to the provisions of the statute, Rev. Code Amend.. 652, as constituting him a competent witness .though a party to the record in the case, because he had been called and examined at the instance of the adverse party in the suit. But we consider that the rule referred to only authorizes a party, to the record to testify as to matters in which he is not interested for a very good and obvious reason, while the provisions of the statute construing the first as qualified by the second section of it clearly import, we think, that only a party adverse in interest as well as adverse in his position on the record of the suit is embraced within the true meaning and correct construction of them. These provisions of the statute we are well informed, however, are in point of fact but a literal transcript nearly of a similar statute previously enacted by the legislature of the State of New York, under which it has been decided in the courts of that State that the act of that State enabling parties in civil suits to call any adverse party as a witness was intended only to obviate the technical objection arising from the person called being a party to the record, but does not render him competent if he is otherAvise disqualified. Rich v. Hasson, 4 Sanf. 115. It had also been previously ruled by the courts in that State that the only disqualification designed to be removed by the statute was that ot being a party to the record, but if there be any other disqualification it is not removed by the statute. Pillow v. Bushnell, 5 Barb. 156. In both of the cases cited, although the person called as a witness was an adverse party to the record, it appeared that his interest in the event of the suit was in favor of the party calling him, and he Avas for that reason rejected notwithstanding the ternfs of the statute, the court holding that the intention of the legislature in enacting it was simply to supersede the rule of the common law which excludes á party to the record from testifying as a witness even in a case in which he may have no other interest in the event of it than his liability for costs provided it should be decided against him; and that it was only intended to render such an adverse party in any case a competent witness in it when called by the opposite party, but in no other case, though willing to testify for him. Applying the same rule of construction to our statute Ave are of opinion that Amor H. Harvey was not a competent witness for the complainant when he was examined as such in this case, notwithstanding he was an adverse party defendant to the record of the suit, because we think it is sufficiently apparent from the facts before stated that he was directly interested in enabling the complainant by his testimony in the case to establish the trust now contended for by him in regard to the real estate in question, that it was by the agreement and understanding of all the partners purchased and held by Achilles Hollingsworth for the use and benefit of the firm, although deeded and conveyed to him alone by the sheriff, and that so far as it had been paid for from the date of the purchase up to the time of his death, it had been paid for by him out of the funds of the firm, with the knowledge and consent of the other partners, during James Rice’s lifetime, and his own after his death, as property substantially belonging to the partnership. Because, as we have before observed, he had himself previously filed a bill in the court below against his co-defendants in this suit for a similar purpose, so far as the real estate then and now in controversy was concerned, with this difference only, that in that case the suit was by him as the surviving partner of the second firm of Hollingsworth, Harvey & Co., consisting of himself and Achilles Hollingsworth, after the withdrawal of James Rice from it, and was based on his equitable claim to one-half of it, as land held in trust by Hollingsworth for that firm, instead of the equitable claim now asserted by the complainant in this case to the one-third of it, as land held in trust by the same trustee for the first firm of Hollingsworth, Harvey & Co., consisting of himself, Achilles Hollingsworth, and James Rice, up to the time of the retirement of the latter from it; the only difference between his interest in that case and in this being the difference between the one-half and the one-third of it merely, but which, of course, constitutes no difference whatever in contemplation of law when we come to consider how far the direct interest to either extent which he may have in the event of this suit, rendered him an incompetent witness for the complainant at the time when his deposition was taken in it. The counsel for the complainant in their argument upon this point of the case contended that so far as Harvey was then interested it was an interest in the question only, and not in the result of the suit itself to be decided by the court, and that he was, therefore, a competent witness for the complainant under the rule of court and the statute before referred to and the decision of the courts in New York in the cases already cited. To our apprehension, however, he was interested not only in the question to be decided, but as a partner in both of the firms of Hollingsworth, Harvey & Co., so long as they respectively continued in existence he was directly interested in the very matter of this suit itself, the real estate involved in it, and, of course, in the result or event of it. For if the court below had decided, or this court should now decide, in conformity with his testimony (and which we may here add is the only direct testimony we have to that effect- in the case), that the real estate in question was by the agreement of all the partners in the first firm purchased by Achilles Hollingsworth and taken in his name alone for the use and benefit of their firm, and so far as it had been paid for up to the time- of his death that it had been paid for by him out of the partnership funds of the firm, and that it was therefore bought and held by him in trust for their firm, as one of the-three equal partners in it up to the time of James Rice’s retirement from it, he would certainly then have been, or would now be, prima fade equitably entitled to the one-third of it. This we certainly can say would be prima fade the direct and necessary result and conclusion of the case if such a decision had then been made in it by the court below or should now be made in it by this court.
We have before adverted to the bill previously filed by Mr. Harvey against his co-defendants in this suit in the court below, the decree of the late chancellor dismissing it, and to the fact that an appeal from that decree to this court had not been barred by the provisions of the statute of limitations applicable in such a case, when his deposition was taken in this suit, although the right of appeal from it is now barred if no appeal from it had been taken by him within the time limited by the statute; but whether, if it had been so taken, it would now be available for the enforcement of his equitable rights and claim against the defendants in that suit, and the recovery of his equitable interest, as one of the three partners in the first firm of Hollingsworth, Harvey & Co. in the one-third of the real estate in question, had such a decision been made in this suit in the court below, or should now be made in it by this court, as we have before supposed for argument’s sake, or what other remedy therefor he may have in such case, or what effect the discrepancies which appear between his bill of complaint in that suit and his answer filed and deposition taken in this case, might then have had, or may now have on his equitable claim to the one equal third part of the real estate in controversy in the alternative decisions before suggested, we do not consider at all material to the determination of the question of his direct interest prima facie in the result of this suit in the event of its being so decided by us; because viewed in the simple light in which the question is now presented to us, he is in our judgment clearly and directly interested in the result of the suit, and will gain by it an adjudicated equitable interest in one-third of the real estate in question, in case we decide in favor of the complainant on the grounds alleged by him that it was bought and held by Achilles Hollingsworth, and was paid for by him as before mentioned in trust for the firm, unless the contrary thereof should hereafter in some other suit be made to appear to the satisfaction of the court. In this aspect, therefore, his interest is identical with and not adverse to the interest of the complainant in the suit. Besides, and this we consider equally conclusive on the question of his being an adverse party in the case, no decree is sought against him in the suit, not even for the payment or satisfaction of any part of the alleged large amount of indebtedness of the first firm of Hollingsworth, Harvey & Co. to James Rice at the time of his retirement from it, for moneys alleged to have been advanced and loaned to it by him while he was a partner in it, and which constitutes so large a portion of the complainant’s case, as presented in the bill of complaint with his proofs and exhibits against his co-defendants, and the real estate in question, or any other property in their hands which might be found subject to Such claim.- We are, therefore, of the opinion that Amor H. Harvey, although technically an adverse party defendant to the record of this suit, was not a competent witness for the complainant, and we have accordingly excluded his entire deposition from our consideration of the evidence taken and of the facts alleged and admitted in the case.
We would also remark in this connection that none of the admissions made in the separate answer of Harvey in favor of the claim of the plaintiff in any of its essential particulars, as alleged in his bill of complaint, and denied by his co-defendants in their joint and several answer, can be read in evidence against the latter, although the complainant and the latter defendants are the legal representatives of two of the deceased members of the first firm of Hollingsworth, Harvey & Co., which was dissolved in the year 1854 by the withdrawal of James Rice from it, and Harvey, the other defendant, was also the other member of it, and the question between them is the settlement of Rice’s claims against that late firm for his equitable share and interest in the real estate which it is alleged was held in trust for that firm, and for the payment of its debts and the final adjustment of the partnership rights and interests of the several members of it inter se after the dissolution of the firm in that year, the connection of the partners as such having long since ceased and determined by the dissolution of the firm, Harvey not even being the surviving partner of it, as he was of the firm of the same name which succeeded it. 2 Dan. Ch. Pl. & Pr. 981; 1 Greenl. Ev., sec. 178 ; Chapin v. Colman, 11 Pick. 331. Nor can any statements or admissions made by Mr. Harvey to or in the presence of the witness Mr. Robb, in the absence of the complainant, in regard to Achilles Hollingsworth’s individual and separate ownership of the real estate, or to the effect that it was not held in trust by him for the use and benefit of the firm, be competent evidence in this case against the claim of the complainant in any of its branches or particulars, as the same are alleged and set forth in his bill of complaint.
With the evidence before specially referred to, and particularly the deposition of Mr. Harvey, which was taken subject to the exception filed before the commissioner, and the opinion of the court as to its admissibility, ruled out and entirely excluded from the case, the next most important question which presents itself for our consideration in relation to the proof introduced on behalf of the complainant, and which was very much controverted and discussed both in the examination of the various witnesses who were called on either side as experts in the busi ness of bookkeeping, and in the argument of the case by the counsel in this court is as to the true meaning, character, and construction of certain entries and accounts made and kept on the books of the firm of Hollingsworth, Harvey & Co. and other papers found among them in the handwriting of Achilles Hollingsworth, so far as they relate to the real estate from the time of its purchase at sheriff’s sale in August, 1849, until the year 1858, when Mr. Robb became the bookkeeper of the firm, put in evidence, and to which we have been specially referred at much length and in minute detail, the chief dispute between the parties with regard to them being whether the entries and accounts referred to, as so made and kept on the books of the firm by him during that time, properly import upon their face a personal account .of his own, as a member of the firm, for expenditures out of the funds of it by him on account of the real estate as his own separate and individual property, and for payments of principal and interest on the mortgages of it executed by him to the prior lien holders to secure the balance of the purchase-money after the payment of the ten per cent, of it by him out of the funds of the firm at the time of the purchase, and for subsequent alterations, improvements, and repairs of one of the buildings on the premises at the time of the purchase, and taxes and insurance on the real estate so purchased by him, or whether they properly import upon their face a partnership account of the firm for expenditures so made by him out of the funds of it for and on account of the real estate as the partnership property of the firm in fact, and not his own individual property. It should be observed in continuation of this summary statement that there are certain credits entered by him in the accounts referred to in the books of the firm of rents received by him from time to time from tenants of certain portions of the premises in question, not required or occupied by the firm in its partnership business, consisting of private residences, and rented to such tenants for that reason.
Upon this vexed question we regret, although we cannot add that we are surprised, to find that the professed experts to whom we have before alluded have radically differed in the opinions which they have expressed in respect to it, those examined on behalf of the complainant unanimously holding that the entries and accounts, as so made and kept on the books of the firm by him, in their opinion import a firm or partnership account, and that the real estate to which they relate belonged to the firm, and not to Achilles Hollingsworth, the keeper of the accounts, individually, as his separate property, while those examined on behalf of the real defendants in the suit are unanimously of the opinion that they import a personal account of Achilles Hollingsworth, as one of the members of the firm, and that the real estate referred to in them belonged to him separately and individually, and not to the firm. Inasmuch, however, as it is manifest from an inspection of the accounts and books themselves, and it is conceded on both sides that the keeper of them, Mr. Hollingsworth, was evidently not an expert in what they have termed the science of bookkeeping, and that the accounts referred to are not kept by him according to any system or method of bookkeeping now recognized and approved by experts in that branch of business, it may well be doubted, we think, whether the question presented is a proper one to be solved by the opinions alone of persons particularly versed in the business according to the best and most approved methods now pursued by them. Because, if they were not kept, as it is admitted, according to any well-recognized and established plan of keeping commercial, manufacturing, or partnership accounts, why should the question as to the import of them be decided by rules which properly apply only to such a plan? But after all, the true question to be considered and decided by us in regard to the matter is, What did Achilles Hollingsworth himself mean and intend with reference to the actual and true ownership of the real estate, when the entries were so made by him on the books of the firm and the other papers referred to, as we now find them ? Upon this point there is no direct evidence, and hence the effort to ascertain and fix the construction to be given to them by the opinions and testimony of the witnesses examined as experts in reference to them ; but the marked and almost equal division of opinion between them in regard to the matter, viewed even in the light in which they alone considered it, has only added another to the real question, we think, which substantially underlies it. What Achilles Hollingsworth himself meant when he made the entries in the accounts and papers referred to, so far as the actual ownership of the real estate was involved or concerned in them, must therefore be left, not to surmise or conjecture on our part, but to the most reasonable inference or presumption which arises from them in respect to that matter when considered in connection with such other facts and circumstances proved in the case as tend to throw any light upon it.
And considering such well-established facts in the case as we think are calculated and combine to shed no little or deceptive light on this question, the first to which we will refer is the fact that the real estate in question, in addition to other and prior liens amounting in the aggregate to about ten thousand dollars, was subject to a judgment of the firm of Hollingsworth, Harvey & Co. against the firm of Hollingsworth & Teas, then the owners of a part of it, and the members of which were at the same time the individual owners of the other part of it, for two thousand six hundred and fifty dollars, and also to two judgments of James Rice, one of the members of the firm of Hollingsworth, Harvey & Co., against the same defendants, and then owners of it, as before mentioned, the one for one thousand five hundred dollars, and the other for one thousand two hundred dollars. It was then the site and place of a partnership business similar to that of the firm of Hollingsworth, Harvey & Co. carried on by Hollingsworth & Teas, and was well adapted to and favorably located in the city of Wilmington for such business. At the sheriff’s sale before mentioned, it was bid off by Achilles Hollingsworth for ten thousand and forty dollars, and for a sum just sufficient to cover all the liens resting upon it, and having priority to the judgment of the firm of Hollingsworth, Harvey & Co. for two thousand six hundred and fifty dollars ; and although no part of the proceeds of sale were applicable to it, or to either of the still younger judgments of James Rice before mentioned, it is a fact, we think, of no little import and significance in this connection that both James Rice and Amor H. Harvey quietly and silently acquiesced in his purchase of it at that price, and seem to have had no motive or interest to make it sell for a larger sum, notwithstanding the three next oldest judgments in which they were respectively interested, as we have just seen, were entirely lost and sacrificed by it, unless they expected to obtain some equivalent for that loss, as members of the firm with Achilles Hollingsworth, in the purchase of the real estate by him on that occasion. And accordingly we hear nothing from them in relation to the matter, and nothing further from any quarter in regard to either of those judgments, until Teas, one of the members of the late firm of Hollingsworth & Teas, afterward voluntarily paid to Achilles Hollingsworth the sum of over one thousand one hundred dollars on the first of them ; that is to say, on the judgment of the firm of Hollingsworth, Harvey & Co. for two thousand six hundred and fifty dollars, against that firm, for his Own release from his part of it; and the weight and effect and bearing of this latter circumstance upon the point we are now considering will only be the more apparent and striking when we recall to mind, in connection with it the testimony of James Hollingsworth, the other member of that late firm, in which he says, in his answer to the eleventh interrogatory propounded to him : “ After the sale I had a conversation with both Achilles Hollingsworth and James Rice; I told them that I felt under no moral obligation to pay the debts of the firm or of Mr. Rice either; that they had got the property for half what it was worth; if I was ever able to pay it I would, but I felt under no moral obligations to do it. I considered that they had got sufficient to pay it, and more too,” evidently meaning by the use of the terms, “the debts of the firm or of Mr. Rice either,” the judgment of the firm of Hollingsworth, Harvey & Co. for two thousand six hundred and fifty dollars against his late firm of Hollingsworth & Teas, and one or both of the two judgments before mentioned of James Rice against the same; and that the firm of which both Achilles Hollingsworth and James Rice were members, that is to say, the firm of Hollingsworth, Harvey & Co., by the sheriffs sale, and their purchase of the real estate in question, had got it so much below its actual value that they had both been more than paid in point of fact for the judgments referred to which they held against his late firm. Whether either of them made any reply to his remarks as thus detailed in his deposition is not stated, but as none is given, it is but reasonable to infer that neither of them denied that the firm of Hollingsworth, Harvey & Co. had become, by virtue of the sale referred to by him, the actual owners of the property.
The next in the order which we propose to pursue of the facts proved in the case, for the purpose which we have in view, has already been briefly adverted to, but we now recur to it again, and that is that one of the chief inducements which led to the purchase of the property by Achilles Hollingsworth was its peculiar fitness for the business of his firm as before stated. In the emphatic language of the same witness, when speaking of it in his deposition, “ It was just the place for their business, and it was very natural for them to transfer their business to that place if they bought it.” But notwithstanding it was not bought by them or conveyed to them, we find that the firm of Hollingsworth, Harvey & Co., soon after the purchase, transferred their business to it, took possession of, and continued to occupy and use so much of it in their partnership business as was required for that purpose, until the final dissolution of the firm of that name, and the discontinuance of the business by the death of Achilles Hollingsworth in the year 1865, without paying any rent to him for the same during that time, or any being charged to the firm by him on the books of it, or in any account stated or prepared by him in relation to it, or any of the members of it, so far as the evidence in this case goes, although the rental value of the premises so used and occupied by the firm during that time was, after his death, estimated, it seems, in the attempted settlement between Mr. Pennypacker and Mr. Harvey, at six hundred dollars per annum.
The next fact to which we shall refer, for the purpose stated, is proved by the testimony of the witness, Mrs. Patton, in regard to her renting, in the year 1860 or 1861, one of the dwelling-houses on a part of the real estate at the time of the purchase, but not required for the business or uses of the firm, and which had been previously rented to other tenants from the time the firm entered into possession of that portion of the premises which was occupied and used by them in their partnership busi ness. We only refer to so much of her deposition and the statement contained in it as stands unquestioned and unimpugned by the counsel for the defendants, the substance of which is, that she went there in 1860 or 1861, and lived there not longer than five years; she afterward adds, “I, rented the house. I applied to Achilles Hollingsworth for the house. I found him down at the office of the firm at the-machine shop. The firm of Hollingsworth, Harvey & Co. were indebted to me at that time in two thousand dollars; my husband had loaned the money. The firm paid me interest on the money prior to my taking the house; it was very hard to get it, and it was because I had hard work to get my interest that I applied for the house. I got the house to rent when I first applied to Mr. Hollingsworth for it. He did not hesitate a moment. Mrs. Baird lived there six years before I took it. She moved out to accommodate me, and let me in. I had no written lease at any time while I was in the house. I paid no rent, but lived in the house for the one hundred and twenty dollars a year—the interest. I never gave any receipt-for the interest or received any receipt for the rent.”
The next evidence in the case which we shall notice is the paper marked A, filed as an exhibit in the case on behalf of the complainant, found among the papers of the firm of Hollingsworth, Harvey & Co., and proved, and not denied, to be in the handwriting of Achilles Hollingsworth. The date of it, or when the statement which it contains was made by him, does not appear upon it, but the calculations of interest on the several mortgages against him referred to in it from the last preceding payment thereon in the year 1853 render it probable and reasonable to presume that it was made not a great while before James Rice’s retirement from the firm, early in 1854, and about the time when it was found necessary, from the pecuniary embarrassment in which it was then involved, to obtain an extension of credit upon some of its liabilities, and the purpose of the paper would therefore seem to have been to show by an exhibit of its assets and liabilities that, although the firm was then embarrassed, it was not insolvent. The statement is as follows :
PAPER MARKED “A.”
Mortgages.
Wilming. Savings Mmd.
Mortgages against A. Hollingsworth.
Wilmington Savings Fund, . . . $3,000 00
Farmers’ Bank, now held by the Savings’ Fund,....... 2,100 00
Del. Fire Ins.,....... 450 00
McDaniel & Harvey,..... 1,800 00
John Rice,........ 1,595 64
Robert E. Poole,...... 400 00
-$9,245 66
Interest due,........ 279 00
$9,524 66
Judgments against Hollingsworth, Harvey & Co.
Henry Rice,........ $900 00
John Rice,........ 1,950 00
Elizabeth Saunders,..... 1,100 00
Samuel McCaulley,...... 1,000 00
Robert E. Poole,...... 1,000 00
Jarrett Megaw,....... 600 00
Marena Jones,....... 205 00
Alexander Patton,...... 2,000 00
- 8,755 00
$18,279 66
Bills payable,....... 8,118 16
Book ac. agst,....... 5,254 56
Do. 493 00
$32,146 22
Real estate,........$14,000 00
Shop, tools, etc.,...... 21,580 00
Saw Mill, ........ 1,500 00
Bills receivable, ...... 1,559 00
Book accounts, •.......4,012 39
-42,651 39
$10,495 17
First on the list of liabilities, it will be observed, is stated the mortgages against himself, and which were executed by him individually, of course, as the sole legal owner of the real estate in question, and which was mortgaged by him to the several mortgagees stated, who were the prior lien-holders to whom the balance of the purchase-money was payable on the confirmation of the sheriff’s sale by the court, and to secure which, and obtain time for the payment of it, these mortgages, by an arrangement with them, were executed by him. And following them next will be found stated in the list of liabilities the judgment against the firm of Hollingsworth, Harvey & Co.,, and then, in the same list, bills payable and book accounts against the firm, making, when added up, the total amount of the liabilities of the firm thirty-two thousand one hundred and forty-six dollars and twenty-two cents. And then, and in the last place, follows a statement of the assets of the firm, and first on this list we find its real estate rated at fourteen thousand dollars; its shop, tools etc., at twenty-one thousand five hundred and eighty dollars; saw mill at one thousand five hundred dollars; bills receivable, one thousand five hundred and fifty-nine dollars, and book accounts, four thousand and twelve dollars and thirty-nine cents, making the total amount of assets forty-two thousand six hundred and fifty-one dollars and thirty-nine cents, which, deducted from the total amount of liabilities, leaves a net balance of assets of ten thousand four hundred and ninety-five dollars and seventeen cents. But the only question which it presents for inquiry, in connection with the other facts proved to which we have before particularly referred, is, what did he mean by including in the liabilities of the firm the mortgages of the real estate executed by him individually, and in the assets of it that same real estate which had been sold and conveyed to him individually ? For it is proved, and not denied, that if the firm did not own that real estate, it owned none. The account of liabilities and assets as thus stated by him, without any connection with or reference to his own name or legal title, in the entry of the real estate among the assets of the firm, and with other valuable property, such as the “tools, etc.,” which clearly belonged to it, certainly relieves it of any of the uncer tainty or ambiguity which characterizes some of the entries made by him in connection with or concerning the real estate on the books of the firm. And, as in the absence of any competent and direct evidence as to the interest of the firm in the real estate, we have thus far been reviewing the facts stated with a view to ascertain what is to be the most reasonable inference and presumption warranted by them and to be j udiciallydrawn from them, may we not hold, with reference to this particular paper at least, that it goes even beyond presumption, and actually implies a deliberate admission on the part of Mr. Hollingsworth that the firm of Hollingsworth, Harvey & Co. at that time owned the real estate therein referred to, and in some way not incompatible with his deeds for it ? This inquiry has been met with the suggestion that as his own absolute property, free of any trust, it would nevertheless have been liable for the debts of the firm of which he was a member, and recognizing, as he evidently did, in the first part of the statement, that it was so liable for the debts of the firm, he might well have included it afterward in his statement of the assets of the firm. But if that was his idea or his meaning, to be consistent and to complete the statement he should have included not only all his own separate property, but all the separate property of each of his copartners in the assets of the firm. And yet how could he reckon the mortgages against himself alone, although executed to secure the balance of the purchase-money, among the liabilities of the firm in any matter whatever, unless the firm had some property or ownership in point of fact in the real estate which alone was subject to the payment of them ?
It further satisfactorily appears from the evidence in this case that Mr. Hollingsworth was the senior member of the firm and attended principally to the financial business of it, and had charge of and kept the books of it in his own handwriting chiefly until the year 1858, when Mr. Robb was employed as clerk, who afterward kept them until his death, in 1865, in like manner and mainly under his supervision and direction, but that they were always open to the view and inspection of the other members of the firm during business hours. That James Rice became a member of it in the month of January, 1842, as an equal partner in it with Achilles Hollingsworth and Amor H. Harvey, the other equal partners in it, but, being engaged in another business in the city, he took no active part in the transaction of its business, and paid no personal attention to any branch or portion of it during the time he continued a member of it, which was until about the first of the year 1854, when he voluntarily withdrew from it in consequence of the embarrassment in which he had become involved in his other business. That the real estate in question was advertised and sold by the sheriff of the county on or about the 18th day of August, 1849, under execution process issued upon two of the several mortgages and judgments against the firm of Hollingsworth & Teas, with which it was then encumbered, the first of them being a judgment in favor of the Wilmington Savings Fund Society, recovered on a first mortgage made by James Hollingsworth, a member of that firm, and his wife, to secure a debt of two thousand six hundred dollars, and the other the judgment of James Rice against that firm for one thousand two hundred dollars before stated, while among the other judgments which then rested upon it, but on which no executions were then in the hands of the sheriff; was included the judgment of the firm of Hollingsworth, Harvey & Co. against that firm for two thousand six hundred and fifty dollars, and the other judgment of James Rice for one thousand five hundred dollars before stated. Excluding the testimony of Mr. Harvey for any purpose whatever in the case, we think that of Mr. Valentine, who was at the sale, warrants the conclusion that all of the members of the firm of Hollingsworth, Harvey & Co. also attended it. Achilles Hollingsworth was the highest bidder at the sale, and all the real estate which was advertised to be sold in two allotments was struck off to him, one allotment for four thousand dollars and the other for six thousand and forty dollars, aggregating ten thousand and forty dollars. Ten per cent, of it was required to be paid on the day of sale, and the balance of it on the return and confirmation of the sale at the following November term of the court. The ten per cent, was not paid on the day of sale, but whether any, or what kind of a note or other security was given to the sheriff for it, or by whom, aside from the testimony of Mr. Harvey does not appear from the evidence. It does appear, however, that interest upon it at the rate of six per cent, was afterward paid on or about the 24th of October following, when the principal of it was also paid to the sheriff.
In the meanwhile, the first entry that appears on the books of the firm, and which is admitted to be in relation to this real estate and in the handwriting of Mr. Hollingsworth, is a brief account on page 6 of book marked 33 by the examiner in this case, which is entered under the following heading in the book and in the following form :
DR. REAL ESTATE. CR.
1849.
Sept. 1. To cash paid Isaac Hollingsworth for fixing up shop,.............$4 00
Oct. 9. To cash paid Mutual Insurance Co. for one year’s insurance, ......9 26
It is the only entry on that page or on the next four pages of the book, while the accounts on the preceding pages of it extend back from 1843 to 1838, and on the succeeding pages of it forward from 1843 to 1850, with a regular numbering of the pages, from the commencement of them up to page 66, and then with a new numbering of them from 1 up to 6, on which we find the above entry, and from that on with regularity to page 265; there are, however, numerous pages in it still remaining entirely blank. It perplexed some of the expert bookkeepers examined as witnesses in the case not a little to determine whether it is to be considered an original or ledger entry; but considered alone as it thus stands on the book by itself, and without any reference to a subsequent entry made by him on another book of the firm, to which we shall next have occasion to turn, they all on both sides seem to agree that it properly imports on the books of the firm a firm account, and that the firm was the owner of the real estate referred to in the heading of it. And judged by their rule or standard of decision only, it would seem as clearly to import an admission on his part that at the time when that account was opened and those entries were made by him the real estate referred to was the real estate of the firm.
As before stated, the ten per cent, of the purchase-money, with the interest upon it from the day of sale, amounting to one thousand and fifteen dollars, as calculated by him, was paid to the sheriff about the 24th of October of that year, out of the funds of the firm, as satisfactorily appears from the evidence and is not controverted in the case. The sale was thereupon returned and confirmed at the following November term of the court, and on the 28th day of December following the sheriff executed and delivered to Achilles Hollingsworth two deeds in fee simple for the two allotments of the real estate so sold to him on the 18th of August preceding, and on the same day on which the deeds were delivered to him, Mr. Hollingsworth, to secure the payment of the balance of the purchase-money, which amounted to nine thousand and thirty-six dollars, and was applicable to the mortgages and judgments of the prior lien-holders before referred to, pursuant to an arrangement with them for the purpose, executed mortgages of himself and wife to them upon the real estate so sold and conveyed to him by the sheriff, as follows :
1. To the Wilmington Savings Fund Society, dated December 28th, 1849, for.......$2,400 00
2. To Ann Billany (same date), for..... 700 00
3. To the Delaware Fire Insurance Company (same date), for............. 450 00
4. To the Farmers’ Bank (same date), for ... . 2,100 00
5. To McDaniel & Harvey (same date), for . . . 1,800 00
And also his judgment bond to John Rice (same date), upon which judgment was entered, for . . . 1,595 64
Add 10 per cent, above named,....... 1,004 00
Making the total sum of . . . .$10,049 64
And which the defendants, Mrs. Hollingsworth and Mr. Pennypacker, in their answer allege were executed to the said parties respectively, in pursuance of an arrangement made by him with them that the several amounts thereof (which had been previously loaned to James Hollingsworth, or to Hollingsworth & Teas, and which were to be paid off with the proceeds of the said sheriff’s sale) should be loaned to him, and that he was thus enabled to make up without any aid from his firm, beyond the loan of the ten per cent, of the purchase-money as aforesaid, the full amount of such purchase-money (ten thousand and forty dollars).
The next entry and account on the books of the firm in the handwriting of Achilles Hollingsworth is the one that has given rise chiefly, if not solely, to the controversy in the case about who paid for the real estate in question, so far as it was paid for from the 24th of October, 1849, up to the time of his death, Achilles Hollingsworth, or the firm of Hollingsworth, Harvey & Co., and to the real dispute and exact question involved in it, as we consider it, whether he meant it to be when he entered it, as we find it on the books of the firm, a firm account or a personal account of his own merely as one of the members of it. It relates to the ten per cent, of the purchase-money (one thousand and four dollars) and the interest thereon for sixty days, ten dollars, paid by him on the 24th of October, 1849, as we have before seen, with the checks of the firm, as appears from them and the entries in the bank book of the firm of that date, and some other payments made by him on account of the real estate up to the date of the entries in addition to the ten per cent, of the purchase-money and the interest on it until it was paid. It is on page 1030 of the book marked D, and is as follows :
Wilmington, Dec. 31st, 1849.
Achilles Hollingsworth (for real estate) Dr. to cash for ten hundred and four dollars which he paid to Isaac Grubb, sheriff, in October last, being ten per cent, of the purchase-money on the property • of late James Hollingsworth and Joseph Teas, of which he purchased at sheriff’s sale in August last,.........$1,004 00
For ten dollars paid interest on the above acct. for 60 days,............ 10 00
For eleven 50-100 dollars paid Thos. S. Mehafiy, tax against H. Teas’ property,..... 11 50
For sundry expenses to New Castle,..... $3 50
Three dollars paid Isaac Hollingsworth for fastening up shop,......... . . . 3 00
Nine 26-100 dollars paid Insurance Company, Oct. 14th,............ 9 26
Two 12-100 dollars paid Biddle, Prothonotary, . 2 12
Twenty dollars paid to Mrs. Ann Billany, for interest on bond,........... 20 00
$1,083 38
There are also sundry other accounts in his handwriting in relation to expenditures upon or concerning the real estate on other books of the firm, and particularly upon page 179 of book marked C, and ledger page 37 of book marked E, and ledger page 55 of book marked 32, headed “ A. H. for real est.,” as to the import of which, as well as the import of the account just stated in full, the experts examined equally differed, those on behalf of the complainant holding that they clearly imported real estate belonging to the firm, and those on behalf of the defendants, Mrs. Hollingsworth and Mr. Pennypacker, that they clearly imported real estate belonging to.Achilles Hollingsworth individually; and yet it appears from the day books of the firm also kept by him that original entries of charges to him for or on account of the real estate are made to no small amount in the aggregate, which are not posted to his accounts for real estate in the ledgers, while there is otherwise no little evidence furnished by the books themselves that they were not only unskillfully, but sometimes inaccurately, if not carelessly, kept by him. As proof of this, we will take occasion to specially refer to but one example of it, because it is so palpable that the defendants above named were obliged to admit the important fact alleged in the bill of complaint that there was at the time of the purchase of the real estate a considerable amount of machinery affixed to it, a large portion of which after the purchase and after they had entered into possession of the premises the firm sold and appropriated the proceeds of the sale of it to their own use, and that no claim to the same was then made by Achilles Hollingsworth. This they could only explain by a counter statement, if it be correct, imputing to him an obvious error, as he was then the keeper of the books of the firm, and made the entries in the account in relation to the matter to which they refer in their answer to the bill on that point, and which is to this effect: that at the time of the purchase of the real estate all the machinery on the premises passed to him as the purchaser, as a part thereof, but at the request of the firm and upon their representation that the two engines and boilers and a trip-hammer which constituted a portion of it were too large for the purposes of the firm, they were sold, the firm agreeing at the same time with him to put in a smaller engine and boilers, which they did, and to expend an amount equal to that for which the two engines, boilers, and trip-hammer were sold in putting another story on and in otherwise improving the shop upon the premises ; further, that in making the improvement, the firm charged him in his real estate account with all the brick and other materials used in and with all the work and labor done upon the shop, and erroneously credited the receipts from the sale of the said engine, boilers, and trip-hammer to the shop account of the firm, instead of to the said Achilles Hollingsworth, and that too without replacing said engines, boilers, and trip-hammer with machinery of equal value, according to the agreement. And here, without repeating what we have before said in regard to the remarkable difference of opinion expressed by the experts as to the scientific import of the headings and entries of the several real estate accounts as kept by him on the books of the firm to which we have referred, and in view of the fact that they are doubtless justly susceptible ^ of either of the constructions which in the judgment of such witnesses has been given to them, may we not reasonably presume that he meant they should have both in the better understanding and more familiar knowledge of all that pertained to the interests and affairs of the firm, possessed by his copartners in it, and of their respective relations to it, and that they were so entered and kept by him simply to show to them that while he was drawing money from the copartnership funds of the firm to the amount which has been satisfactorily proved in this case, he was honestly charging himself with it on the books of the firm, and was at the same time honestly expending it on the real estate which was held in his name for the benefit of the firm, if it be true that it was so held by him according to the understanding of all the members of it, as the complainant contends ? For it only remains for us to add on this point that it clearly appears from the books that he kept no account whatever that can be strictly and appropriately called or considered a personal account of his own as an individual member of the firm, separate or distinct from such as those we have been considering, and that if he did not intend them to be understood and considered as firm accounts also, then it was very strange as well as injudicious and unfortunate for him that he inserted and kept them all among the firm accounts of the copartnership exclusively, instead of in a separate and distinct account of his own and rather in the form of partnership accounts than in the form of personal accounts simply.
It is stated both in the bill and in the answer of the defendants before referred to, and who, we may here say, are the only parties to this suit actually adverse in interest to the claims and demands of the complainant, or who deny or controvert any of the material statements on which they are founded, that Achilles Hollingsworth paid on the foregoing mortgages and securities executed by him to secure the balance of the purchase-money for the real estate as before stated, between the date of their execution and his death in 1865, both the principal and interest of the following:
The mortgage of Ann Billany, for......$700 00
On the mortgage of McDaniel & Harvey, for $1,800, 800 00
The judgment of John Rice,........ 1,595 64
$3,095 64
The above statement as carried out in the column of figures on the right hand contains only the amount of the principal paid on the several securities mentioned; but it is contended by the complainant, and from the cash books, bank, or check books, and the canceled checks of the firm in the handwriting of Achilles Hollingsworth produced in evidence, taken together (the bank or check books supplying in a few instances the deficiency in the non-production of the canceled check for the same amount), it appears that there was also paid by him during the same period, out of the partnership funds of the firm, interest on the several securities so executed by him for the balance of the purchase-money for the real estate to the aggregate amount of seven thousand and sixty dollars and forty-four cents. And they also further show that the payments of the interest so made by him were charged by him invariably in the firm accounts on the books of the firm, or were not charged at all by him ; while the evidence in the case does not show any payment of the interest as otherwise made by him, except the amount of five hundred and seventy-four dollars so paid by him and wholly unaccounted for.
In opposition to the foregoing review of the facts in the case clearly and satisfactorily established, to be considered by us as the evidence of the equitable claim asserted by the complainant on behalf of the firm to the real estate in question, it must be admitted that there is but little, if any, direct and positive proof on the other side beyond the admitted and fundamental fact on which the case proceeds from its inception, and that is, that the unqualified legal title to it was vested in Achilles Hollingsworth from the delivery of the deeds of the sheriff to him, with the ruling before announced excluding the admissions of Mr. Harvey as testified to by Mr. Robb in the absence of the complainant as wholly incompetent and inadmissible to affect or compromise in any manner his rights or interests in this suit. And without that testimony, and the statements and admissions of Mr. Harvey, made either to him or Mr. Pennypacker, on the occasions referred to, and as detailed by him, the question upon the proof as to the actual and bona fide and beneficial ownership of the real estate, seems now on the part of the defendants to depend entirely upon the construction we are to give to the several accounts pertaining to it on the books of the firm, from the purchase of it up to the time of the death of Achilles Hollings worth, and the other papers produced in evidence in relation to it. In the answer of the defendants it was expressly denied that any of the payments for the real estate were made by Achilles Hollingsworth out of the partnership funds of the firm, and alleged that the same were made from his individual funds and on his own individual account. But on the evidence coming in, and with the proof before us in the case that the first payment of one thousand and four dollars in cash was made out of the partnership funds for it, prior even to the acquisition of the legal title to it by him, and that, on the same day he acquired the legal title to it, he executed mortgages upon it to secure the balance of the purchase-money to the parties respectively entitled to it, and that all the payments of principal and interest that were afterward made upon them during his lifetime were made by him out of the partnership funds, the ground of defense has been shifted on that branch of the case, and has practically resolved itself into the single question whether the firm loaned him the money with which they were so made for that purpose, or whether it merely furnished the money to be so paid by him for the use and benefit of the firm as virtually the bona fide purchasers, holders, and owners of it from the time of the purchase, although the deeds for it had been executed to him alone, as the sole purchaser of it. And, as we have before said, the defendants, to establish their contention that it was a loan of the money by the firm to him as the sole and absolute owner of it, for the purpose of enabling him to pay for it as such owner, now rely almost entirely, if not exclusively, on the construction to be given to his real estate accounts, as well of receipts of rents from tenants in possession of parts of the real estate, as of expenditures made upon it, as they appear on the books of the firm.
But as this is now the vexed question of the case, and is still open to further inquiry and consideration, we must again resort to what would seem to be the most reasonable and material presumptions which arise out of all the facts and circumstances proved in the case that bear upon the question. And the first which presents itself in this connection is the fact, too painfully and distinctly proved, that with all the frugality, industry, energy, and enterprise which characterized the firm and the individual members of it, and with all, or nearly all, of the capital and means of the two active members of it invested and absorbed in its business, it is proved to have been, from the start up to the time of James Rice’s withdrawal from it, and for several years afterward, sorely straitened and much embarrassed for the want of money to carry on their business, and although the purchase of the real estate, with all the special advantages which specially fitted it for the business of their firm, particularly upon the long credit upon which it was purchased, may have been both a desirable and judicious purchase for them, yet we cannot believe, in view of these circumstances, that any member of the firm would have considered it able to advance the money to pay for it, as a loan merely, even to the member who purchased it; while at the saíne time we cannot even conceive what motive either of the other members could have had for loaning him the money for that purpose, since, if the firm had to advance money to pay for it, it was obviously so much more for their interest and benefit that the firm itself should become the owner of it. Each member of it seems, from the evidence, to have had at all times quite as much as he could do to keep the firm itself supplied with sufficient funds for the transaction of its business and the maintenance of its credit and solvency by loaning to it whatever sums each could contribute from his own means, or borrow from his relations or friends, in every pecuniary emergency which arose in its affairs, and which is strikingly exemplified with reference to the partner, James Rice, in particular, by the exhibit of the long list and large amount of memorandum checks for the moneys thus loaned by him to the firm during the ten or twelve years he continued a member of it, while Achilles Hollingsworth himself, as the witness, Mr. "Valentine, informs us, “always seemed to be looking after money for the firm, which, from the time he knew it all the way through up to 1862 was always hard up,” to use his language. Can it then be reasonably supposed that under such circumstances and in such a condition of the firm James Rice, or any other member of it, could have thought of loaning such a large sum of money, even to their copartner, Mr. Hollingsworth, to pay for the real estate and make it his own property absolutely, when it would have been manifestly so much better for the other members of the firm and would have required no more of the firm to make it partnership property ? The question, therefore, which we have now to determine is whether, with all these facts and circumstances before us, and with direct and positive proof of a satisfactory character, that the money with which the payments before stated were made, were drawn by him from the partnership funds, and that we have no direct evidence beyond that with regard to the matter, it is more reasonable to conclude that the firm simply loaned him the money for that purpose, or that, pursuant to some understanding at the time between the partners not disclosed to us, he was to buy the real estate at the sheriff’s sale, take the deeds in his own name for it, for the use and benefit of the firm, execute the mortgages to secure the future payment of the purchase-money, and the firm to supply the money for the purpose as it should be required until paid ? Of these two alternative presumptions and conclusions, upon all the facts and circumstances proved, we have no hesitation in saying, after mature consideration, we deem the latter much the most reasonable and probable, and have therefore come to that conclusion in the case.
And such being the conclusion of fact to which we have arrived from the evidence, we next proceed to state the legal result to which it has led us on this branch of the case, and that is, that in the consideration of a court of equity, under the facts and circumstances proved, and the reasonable presumptions warranted by them, in our judgment Achilles Hollingsworth took and held the legal estate in the land subject to a resulting trust for the firm, then consisting of himself, Amor H. Harvey, and James Rice.
For, as a general principle, what will constitute a resulting trust in a case like this is well settled and recognized by every elementary writer on the subject, we believe. It is thus stated by Sugden, “ If a man purchase an estate, and do not take the conveyance in his own name only, the clear result of all the cases, without a single exception, is that the trust of the legal estate, whether freehold, copyhold, or leasehold; whether taken in the name of the purchasers and others jointly, or in the names of others without that of the purchaser; whether in one name or several; whether jointly or successively, results to the man who advances the purchase-money ; and although the persons in whose name the conveyance is taken execute no declaration of trust, yet a trust will result for the person who paid the money by operation of law—this species of trust being expressly excepted out of the statute of frauds.” Sug. on Vend. 414, 415. Story also states it as an established doctrine, now no longer open to controversy, in nearly the same terms. 2 Story Eq. Juris., sec. 1201. And Spence, treating of trusts by implication and construction of law, that is tó say, of implied trusts, resulting trusts, and constructive trusts, says of the latter, “Trusts of this description depend upon the conclusions of law independently of contract, and often arise in cases where there was no intention to create a trust on the part of any of the parties concerned ; generally speaking they are imposed in invitum.” 1 Spence’s Eq. Jurisdiction 508. And to show that he intends to include in this description what are more usually denominated resulting trusts, he afterward states as his first illustration of what he calls constructive trusts the case of a purchase made by a man, or by his direction, and with his own money, the conveyance being in fact taken in the name of another,—“ The trust of the legal estate has been said in this case also to result to the man who advances the money.” Ibid. 510; Dyer v. Dyer, 2 Cox. 93. And to show that it is particularly approved and applied by courts of equity in such cases as this to joint purchasers in the way of trade and for purposes of partnership, Story adds in regard to it, that “The same rule is uniformly applied to joint purchases in the way of trade and for purposes of partnership, and for other commercial ■ transactions, by analogy to, and in expansion and furtherance of the great maxim of the common law : jus accrescendi inter mercatores pro beneficio commercii locum non habet. In cases, therefore, where real estate is purchased for partnership purposes and on partnership account, it is wholly immaterial in the view of a court of equity in whose name or names the purchase is made and the conveyance is taken; whether in the name of one partner, or of all the partners; whether in the name of a stranger alone, or of a stranger jointly with one partner. In all these cases, let the legal title be vested in whom it may, it is in equity deemed partnership property, not subject to survivorship, and the partners are deemed the ceskois que trust thereof.” 2 Story Eq. Juris., sec. 1207. It is true, and one or more of the cases cited in the argument by the counsel for the defendants show; that in the absence of fraud or breach of trust, property purchased with partnership funds does not of necessity become partnership property if that is not the intention of the parties, as where the funds are so used by one partner in a separate purchase on his own account and for purposes wholly independent of the partnership. “ But the circumstance that the payment has been made out of the partnership funds, especially if the property purchased be necessary for the ordinary operations of the partnership business, and be actually so employed, will afford a very cogent presumption that it was intended to be held as partnership property; and in the absence of all countervailing circumstances it will be absolutely decisive.” Per Story, J., in the case of Hoxie v. Carr et al., 1 Sum. 181, Harvey v. Pennypacker et al., pp. 25,26, per Bates, Chancellor. It will be observed that we have not found in the evidence admitted in this case any direct proof of an understanding or agreement between the partners of the firm that Achilles Hollingsworth should bid off the real estate at the sheriff’s sale and take deeds for it in his own name, and the firm should pay for it, although, none of them needed or could have desired to become the owners of it, except for their partnership business. There can then be, of course, no reason for considering the trust in this case an express trust. After having thus stated the general principle of equity jurisprudence as well recognized and settled, especially in such cases as this, and referring to the authorities cited in support of it, we do not deem it either necessary or proper to indulge in any mere supposition or conjecture to find a reason for the purchase of the real estate and for the taking of the deeds for it in Mr. Hollingsworth’s name alone, but if it were allowable to do so, besides others, a sufficient and satisfactory ground for it might be found in the fact mentioned in the argument, that if not entirely free from the liens and incumbrances of other judgments at that time, he was, at least, more so than either of the other partners.
There is no evidence in the case that there was any settlement had or account taken between James Rice and the other members of the firm, or with Achilles Hollingsworth, on his withdrawal from it in the year 1854, for or on account of his equitable rights and interests in the said real estate, or at any time before or after its dissolution by his retirement from it. It is in evidence, however, that immediately upon that dissolution the remaining partners, Mr. Hollingsworth and Mr. Harvey, proceeded under the same copartnership name, in the same co-partnership business, and in possession of the same real estate, and without any other change whatever in it than his withdrawal from it, until the final and total dissolution of it afterward by the death of Mr. Hollingsworth in 1865, Mr. Rice’s death having preceded his in the year 1861. It also appears that since the death of Mr. Hollingsworth, his executor, Mr. Pennypacker, and his widow and devisee, Mrs. Hollingsworth, up to the time of the filing of their answer had paid the interest on the unsatisfied mortgages executed by him to secure the purchase-money, and also the
Mortgage of Del. Eire Ins. Co., for.....$450 00
On the Farmers’ Bank Mortgage, for $2,100.00, . 500 00
Bal. of McDaniel & Harvey’s Mortgage, for $1,800.00,............. 1,000 00
$1,950 00 /
the devisee having been in the exclusive receipt of the rents and profits of the real estate since his death.
We will next notice in this connection the objection taken to the relief sought by the complainant on this branch of the case because of the delay which had ensued in the institution of the suit. In regard to a trust of real estate, no limitation whatever exists in courts of equity against a bill to establish it without a repudiation or denial of it by the trustee, or what is equivalent to it, that he has in point of fact held the land as his own for a period of twenty years at least, and without account ing in any manner for the rents and profits as trustee. Courts of equity are not in terms bound by the stutute of limitation, because they in terms apply to legal remedies only. But they are in effect addressed to courts of equity as well as to courts of law as it seems in all cases of concurrent jurisdiction at law and equity (as, for example, in matters of account) to which they directly apply, and in which they seem equally obligatory in each court. It has been justly1 observed that in such cases courts of equity do not act so much in analogy to the statutes as in obedience to them. In a great variety of other cases they act upon the analogy of the limitations at law. Thus, for example, if a legal title would in ejectment be barred by twenty years’ adverse possession, courts of equity will act upon the like limitation and apply it to all cases of relief sought upon titles or claims touching real estate. 2 Sto. Eq. Juris., sec. 1520 ; Hovenden v. Lord Annesley, 2 Sch. & Lefr. 630 ; Bond v. Hopkins, 1 Sch. & Lefr. 429; Cholmondley v. Clinton, 2 Jac. & Walk. 141; Grenfelt v. Girdlestone, 2 Younge & Coll. 662; White v. Parnther, 1 Knapp 226 ; Boone v. Chiles, 10 Pet. 177 ; McKnight v. Taylor, 1 How. 161. These cases clearly show, first, that courts of equity have at all times upon general principles of their own, even where there was no analogous statutable bar, refused relief to stale demands where a party has slept upon his right and acquiesced for a great length of time; and secondly, that whenever a bar has been fixed by statute to the legal remedy in a court of law, the remedy in a court of equity has been confined to the same period in analogous cases. To apply the principle to the present case, it only remains to observe that we have no proof in it that Achilles Hollingsworth ever claimed or alleged that he purchased the real estate in question for himself individually, or that he paid for it with his own money or with money loaned to him for that purpose by the partnership, or that he ever repudiated or denied the trust which consider clearly resulted for the benefit of the original firm, from the facts proved, and the payment for it by him out of the partnership funds; while it is equally clear that there was no adverse possession of it as against James Rice or his heirs-at-law until after the death of Achilles Hollingsworth in 1865, when it passed under the general devise of his real estate in his last will and testament to his widow and devisee, but who had so held and possessed it for considerably less than twenty years when this suit was commenced, and which would therefore constitute no bar under the twenty years’ limitation prescribed by our statute in an analogous case in the courts of law of this State, in accordance with the well-settled principles established in the cases last cited.
We shall have occasion to say but comparatively little on any other part of the case presented in the bill of complaint. They all, consist of money demands merely alleged to be due to the complainant as the administrator of James Rice, deceased, from the late firm of Hollingsworth, Harvey & Co., of which he was a member from the year 1842 until the year 1854, but more particularly, as contended for in the argument, of a note alleged to have been lost and never paid for money due to him individually from the firm, and for moneys advanced and loaned to the firm from time to time by him while he was a member of it, evidenced as is alleged by numerous memorandum bank checks of the firm given to him for that purpose when such loans were made, and which still remained among his papers unpaid, and had only been discovered as late as in the year 1866, and two others in 1869, amounting in the aggregate to a very large sum of money, but to which a considerable number of counter checks of a similar description from him to the firm were produced in evidence on the other side. To all of these demands, however, against the late firm the defendants, Mr. Pennypacker and Mrs. Hollingsworth, have pleaded the statute of limitation, and as to which the complainant relies, in the first place, on a distinct acknowledgment proved to have been made by Amor H. Harvey on or about the 19th day of Hovember, 1869, to the effect that the balance in favor of James Rice between the checks drawn by the firm and held by James Rice, and the checks of James Rice held by the firm, amounting to the sum of thirteen thousand five hundred and thirty-nine dollars and eighty-six cents, and the lost note before referred to, for two thousand five hundred and ninety-six dollars and five cents, were still subsisting demands against the said firm, to take the case as to them, out of the operation of the statute. But neither this court nor any other court of equity, we apprehend, will allow an acknowledgment of a stale demand made by a former partner so long after the dissolution of the firm and the accruing of the cause of action (fifteen years or more), and under such circumstances as accompany it and impeach the fairness and bona fides of the transaction in this case, to be given in evidence for the sole purpose of reviving it and taking it out of the operation of the statute, as against the legal representatives of a former and deceased partner, and in a case particularly in which no relief and no decree is prayed for against himself. The acknowledgment must, therefore, be excluded from the evidence in the case.
The other ground on which the complainant relies to take these personal claims out of the operation of the statute of limitation, is that he seeks in this case a remedy against the real estate in controversy, as being the only asset of the first firm of Hollingsworth, Harvey & Co. that is within his reach, and that he seeks the two amounts before stated, not as a personal claim against a former and living partner of it, nor against the legal representative of the former and deceased partner, or even his devisee, but having established a resulting trust in favor of the partnership in the real estate now held by Mrs. Hollingsworth, he contends that the same or its proceeds after sale under the decree of the court must be brought into court for distribution, and being necessarily brought into court for distribution by a decree that there is a resulting trust in favor of that firm, he is entitled without any further account (the balance due on the memorandum checks and note to James Rice having been definitely and finally ascertained between him and the firm, and so indorsed thereon by Achilles Hollingsworth about the time of James Rice’s retirement from it), to have paid to him out of such proceeds the amounts so remaining due to him with interest to the date of the decree; and that they should be ordered to be paid out of the fund which comes into court necessarily from the sale of the real estate as assets of that firm, is a conclusion which, of course, follows from the well-settled principles of the law of partnership. They consist of advances made by James Rice over and above his original contributions as a member to it. There are no creditors of the firm remaining unpaid, and it is therefore to be dealt with and disposed of by the court upon the rights of the partners as between themselves. These ascertained amounts and claims for advances against the fund are to be paid before any division or distribution is made among the partners ; no such claims exist on the part of either of the other partners, and consequently the fund is chargeable alone with these claims of his.
After thus minutely analyzing and defining and reducing these personal claims and the real estate itself to their last stage in the Court of Chancery, as we have thus seen, the ground next taken is that he has in equity a partner’s lien on all the partnership property, real or personal, of that late firm for the payment of these personal claims for advances made over and above his original contribution to its capital, for which we are referred to Sto. on Partn., secs. 97, 98; Coll. on Partn. 125; Hoxie v. Carr, 1 Sum. 173 ; 1 Ves. 142 ; 5 Metc. 562, and which will not be questioned by us for a moment. But he then proceeds one step further, and having completely resolved the real estate into personalty in the crucible of a court of equity, as must necessarily be done by a decree to that effect in order to reach it and obtain satisfaction of those personal claims out of the fund resulting from the process under the decree, he with great inconsistency in the next place contends that his lien as such partner for such personal claims is a lien on the real estate as the salé remaining asset of that firm, and is analogous in equity to a vendor’s lien for the purchase-money on land sold and delivered, in the hands of the purchasers until it is paid for, which is good for twenty years, and therefore this lien of the claims and the right to the payment of them out of the real estate cannot be barred in less time. For which we are referred to 1 Hil. on Mort. 656; 11 Gill. & Johns 218; 1 Bland. Ch. Rep. 236, which we find, however, have no relation to the subject of a partner’s lien in such a case, but refer solely to a vendor’s lien. But the law on the subject of a partner’s lien in any and all cases is well settled, and is so well stated by Justice Story in the case of Hoxie v. Carr et al., cited on behalf of the complain ant, that we shall content ourselves with the citation of it without any other authority, to show that a partner’s lien, even on the real estate of his firm for advances made to it, is a personal lien purely in equity, and expires with the extinction oi the claim by the bar of the statute, and in that respect bears no resemblance or analogy whatever to a vendor’s lien in a court of equity. Story, J., says: “A question often arises whether real estate purchased for a partnership is to be deemed for all purposes personal estate, like other effects. That it is so as to the payment of partnership debts and adjustment of partnership rights and winding up the partnership concern is clear at least in the view of a court of equity; but whether it becomes personal estate as between the executor or administrator of a deceased partner and his heir or devisee is quite a different question, upon which learned judges have entertained opposite opinions.” Hoxie v. Carr, 1 Sum. 173.
We therefore think that the personal claims of every description embraced in the bill of complaint, except for rents and profits of said real estate and the proceeds of any part or parts of it which may have been sold, are absolutely barred by the plea of the statute of limitation, and that there are no considerations of hardship, accident, or misfortune growing out of the facts of the case, such as the loss of the note or the long delay which elapsed before the accidental discovery of the memorandum checks referred to, which could warrant a court of equity in holding otherwise in this case, since no designed or fraudulent concealment of them by any one is charged in the bill, and the fact that the note and the memorandum checks were alike barred at the time of the death of James Rice, no diligence on the part of his administrator could possibly have saved them from the bar of the statute if he had found them all on his immediately coming into his office as administrator.
The Chief Justice concurred. Wootten, Judge, absent.
Wales, J.:
The view which I have taken of the law and of the evidence in this case compels me to dissent from so much of the opinion of the majority of the court as establishes a resulting ti’ust in accordance with the prayer of the complainant.
The case is not a novel one in principle, nor do the facts as alleged on either side take it out of the ordinary rangé of similar claims. The complainant seeks to establish an interest in real estate, not only without a deed, but in opposition to the written and recorded title of another, and courts of equity have been for so many years and so frequently called upon to consider and decide like cases that the principles governing this class of claims have become well defined and settled. So well is this understood that, in the argument before this court, there was no dispute over these principles except as to the lapse of time necessary to bar a claim for a resulting trust. The question to be decided, therefore, is more one of fact than of law, to wit: Did Achilles Hollingsworth purchase the real estate for himself individually dr as a member of the first firm of Hollingsworth, Harvey & Co., with the .partnership money and for the partnership use and benefit ? In other words, was there a resulting trust in Achilles Hollingsworth for the use of Hollingsworth, Harvey & Co. ?
A brief consideration of the law on the subject of resulting trusts of the character set up by the complainant’s bill will here be in place, before examining the evidence, in order to reach a satisfactory conclusion. As already intimated, there is little, if any, difference of opinion as to the definition of a resulting trust. Indeed, the only variance to be found in the text-books and in recent reports is one of phraseology, and not of substance. To constitute such a trust it is necessary, first, that the person in whose right the trust is claimed must have advanced the purchase-money or incurred a personal liability for its payment; second, that the purchase-money must have been paid, or the liability incurred, at the time and as part of the original transaction, and the trust must attach, if at all, by virtue of the circumstances of the transaction itself, and cannot be raised from subsequent matter arising ex post facto. (2 Sugd., V. & P. 131.) The law is well stated by Chief Justice John M. Clayton in Newells v. Morgan, 2 Harr. 229, which, like the present case, was an appeal from Chancery. The chief justice says, citing Dyer v. Dyer, 2 Cox 92 : “Soon after the statute of frauds passed it was determined that if an estate be purchased with the money of A., and the estate is conveyed to B., B. will be a trustee for A., and it is such a resulting trust by implication of law as is saved by the statute and needs no declaration. The substance of the cases on this subject appears to be that the trust of a legal estate * * * whether taken in the names of the purchasers and others jointly or in the name of others without that of the purchaser; whether in one name or several; whether jointly or successively, results to the man who advances the purchase-money; and this in analogy to the rule of the common law that where a feoffment is made Avithout consideration the use results to the feoffer.” But the trust must have been coeval with the deeds or it cannot exist at all. The resulting trust not within the statute of frauds, and which may be shown without writing, is Avhen the purchase is made with the proper moneys of the cestui que trust and the deed not taken in his name. The trust results from the original transaction at the time it takes place and no other time, and it is founded on the actual payment of money and on no other ground. (Chancellor Kent in Botsford v. Burr, Johns. Chy. 405.) It cannot arise from a loan—that is, where the grantee has borrowed the money with which to pay for the property and takes the deed in his own name; and if the deed is- made in the name of the lender by way of security for the repayment of the loan, the equitable title will vest in the borrower. (Boyd v. McLean, 1 Johns. Chy. 590.)
It is well settled that a trust of this character may be proved by paroi evidence, but with this doctrine is indissolubly connected another and vitally important one, to wit, that such evidence must be clear, full, and satisfactory. Says Chancellor Kent, in Boyd v. McLean, just referred to, “ the cases uniformly show that the courts have been deeply impressed with the danger of this kind of proof, as tending to perjury and insecurity of paper title; and they have required the payment of the cestui que trust to be clearly proved;” and he cites the case of Lench v. Lench, 10 Ves. 511, where Sir William Grant did not deem the unassisted oath of a single witness to the mere naked declaration of the trustee admitting the trust as sufficient, and there were no corroborating circumstances in the case. He thought the evidence too uncertain and dangerous to be depended upon. The doctrine of resulting trusts is admitted to be a very dangerous and questionable one, and is acted upon only with great caution, especially after much time has elapsed. In several of the States it has been done away with by legislation, except in cases of fraud, to the extent that no resulting trust shall arise or be claimed where the deed has been made to and in the name of the grantee with the knowledge and consent of the person paying the consideration. The history of the law on this subject is one of slow, hesitating, and cautious progress. At first it was doubted whether paroi evidence could be received to impeach and contradict the written terms and meaning of a deed of conveyance executed with all the formalities belonging to an instrument of that nature. It was at length decided that such evidence could be admitted, not to contradict and control the written terms of the deed, but to engraft a trust upon the legal title, and that to do this the payment of the money must be clearly proved, as by evidence going directly to the fact of payment or by admissions of the nominal purchaser. The next queátion that came up was, whether such evidence could be admitted under any circumstances against the answer of the nominal purchaser denying the facts on which it was attempted to establish the trust; and this stage having been reached, another subject of controversy arose on the point whether, after the death of the nominal purchaser, paroi was admissible to prove a resulting trust. The negative of this last proposition has been maintained by able lawyers (1 Saunders on Uses and Trusts 354; Roberts on Frauds 99), while in Hill on Trustees 95 it is guardedly laid down that, “ Upon the whole, the preponderance of authority seems to be in favor of the admissibility of paroi evidence to support a resulting trust, as well after the death of the nominal purchaser as in his lifetime, although the purchase deed expressly state the money to be paid by the nominal purchaser; ” but the author carefully adds, “ however, it is to be observed that where the evidence is merely paroi, it will be received with great caution, and the court will look anxiously for some corroborating circumstances in support of it; and in cases of this nature the claimant in opposition to the legal title should not delay the assertion of his right, as a stale claim would meet with little attention.” And last of all came the question as to the lapse of time and the operation of the statute of limitations in defeating the execution of a trust. On this point there is some discrepancy of opinion among the authorities, the only well-recognized principle being that where the trust is created merely by implication or construction of law, the plea of lapse of time will be more readily admitted as a bar to any claim by the cestui que trust than in the case of an express trust. (Hill on Trustees 265.)
After this cursory review of the law defining the elements of and the incidents to a resulting trust of the nature claimed by the complainant, the inquiry may now be made, Has he furnished a sufficient proof of facts in support of a trust to entitle him to a decree in his favor ?
The evidence produced by him to establish this part of his case may be arranged in the following order:
1. Entries on the books of Hollingsworth, Harvey & Co., made by Achilles Hollingsworth, and as such, being admissions that the purchase was made with the funds of the firm, and for its use and benefit.
2. The occupation of a principal portion of the property by the firm from and soon after the time of purchase as adapted to and fitted for their business, and the absence of any claim or charge for the rent of the same by Achilles Hollingsworth.
3. The paper A, in the handwriting of Achilles Hollingsworth, setting forth a statement of the assets and liabilities of the firm, and including the estimated value of the real estate as a part of such assets.
, 4. The testimony of Messrs. James Hollingsworth, Teas, and Valentine, and of Mr. Patton.
1. The first entries on the firm books in which mention is made of real estate are under the date of December 31st, 1849, and are as follows :
Achilles Hollingsworth (for real estate) Dr.
To cash for ten hundred and four dollars which he paid to Isaac Grubb, Sheriff, in October last, being ten per cent, of the purchase-money on the property late of James Hollingsworth and Joseph Teas, which he purchased at sheriff’s sale in August last,.........$1,004 00
For ten dollars paid interest on the above account for sixty days,........... 10 00
For eleven 50-100 dollars paid Thomas J. Mahafiy, tax against Hollingsworth and Teas property, 11 50
For sundry expenses to Hew Castle,..... 3 50
For three dollars paid Isaac Hollingsworth for fastening up shop,.......... 3 00
For nine dollars and twenty-six cents paid insurance company, October 14th, last, .... 9 29
For two dollars and twelve cents paid Biddle, Prothonotary,............ 212
For twenty dollars paid Mrs. Ann Billany, for interest on bond,........... 20 00
It is contended, on the part of the complainant, that these entries conclusively fix the character of the transaction to which they relate, and are equivalent to acknowledgments by Achilles Hollingsworth that the real estate was bought with the money of the firm and for the firm. In support of this interpretation of their meaning, the testimony of five witnesses, who were examined as experts in the science of bookkeeping, was offered, and they, without exception, were of the opinion that the entries indicate that the real estate was bought for the firm by Achilles Hollingsworth, and that it was a “real estate account” and “ a firm account.” One witness says, “ A. H. was the agency through which the transfer of cash was made to the sheriff.” The same witness adds : “ From the connection of A. H.’s name alone with the entry, it tends to complicate it. From a bookkeeper’s standpoint, I can see no object of associating the name of A. H., except to set forth the fact that he was the agent of his firm in the transaction” * * * * “personal transactions are never properly attached to partnership accounts.” ( W. G. Gibbon’s test., p. 76.) On p. 81 of complainant’s testimony, Mr. Woolley, a well-known accountant, says : “I have examined all the accounts and original entries referred to in the interrogatory. The nature of the account in my opinion is real estate belonging to the firm.” On cross-examination he admits that a private venture in real estate by one partner on his individual account might be kept on the firm books with the consent of the firm, and that the entries A. B. (the individual member) for real estate Dr. to Cash, and Cash Dr. to A. B. for real estate, would be the proper ones, and would apply to money borrowed from the firm from time to time to pay liens, interest on liens, repairs, taxes and insurance, and to money received for rents from portions of the real estate. George W. Elliott is equally positive that “these entries clearly indicate firm property” (p. 95), and J. Groesbeck, another expert, says: “Most decidedly, it is the firm’s business, and that includes the ownership of the real estate. These entries signify firm’s real estate ” (p. 106). The last two witnesses agree that an individual account of a real estate venture may be kept on the firm books with the consent of the firm.
J. Taylor Gause is the first witness produced on the part of thé defendants as an expert, who, to. use his own words, has “ had a good deal to do with the science and practice of double-entry bookkeeping since 1843.” He testifies that the account as opened on the books is perfectly correct and proper. “ I consider it an individual account with the firm.” “ I have examined several of the entries as posted on folio 37, and find charges for interest paid on liens against the property, repairs done to buildings, rents collected, all of which indicate that A. H. was the owner of the property.” He also says that it is consistent with the science of double-entry bookkeeping for a member of a firm to have a dozen accounts, if the nature of his transactions require them. Eli Garrett has been concerned in bookkeeping since 1855. In his judgment the entry in Book D signifies that “Mr.. Hollingsworth was the owner of that real estate—this is the story of the transaction; ” and that it is not inconsistent with correct bookkeeping for a member of a firm to have two or more accounts on the firm ledger. He keeps several such accounts. In addition to Messrs. Gause and Garrett, five other practical bookkeepers testify as decidedly and directly to the same effect. These entries are mostly in the handwriting of Achilles Hollingsworth, who had charge of the books, which were at all times during the existence of the partnership subject to the inspection of all the partners. What, then, do they mean ? If there was no other testimony in the cause, would they be sufficient to sustain the charge that the real estate was bought for the firm and belonged to the firm ? Clearly, not; and this conclusion is confirmed by the testimony of Charles S. Eobb, whose veracity, although it has been seriously questioned, has not been successfully impeached, and who, as far as we may judge from the papers filed in the cause, is entitled to equal credit and consideration with the other witnesses whose testimony has been admitted. He was in the employ of the firm as an apprentice as early as 1853, and was afterward engaged as bookkeeper from 1856 or 1857 to 1865, that engagement ceasing in September, after the death of Achilles Hollingsworth. Mr. Harvey gave his attention to the mechanical part of the business, while A. Hollingsworth acted as financier and correspondent. Mr. Eice was not known to Eobb as a member of the firm. Mr. Harvey had the same access to the books that Mr. Hollingsworth or witness had and frequently examined them. In 1865, sometime after the death of Mr. Hollingsworth, Mr. Harvey took the books and papers of the firm to his private residence. The important part of the testimony of this witness is, that he was directed and instructed by Mr. Harvey, in the latter part of July or August, 1865, to make a settlement of the partnership accounts upon the basis that all the expenses connected with the real estate should be charged to Mr. Hollingsworth, and that all the rents for the same which had been received by the firm should be entered on A. H.’s real estate account, together with the old boiler and shafting that had been taken out at or about the time of the purchase; and that A. H.’s real estate account should be credited with six hundred dollars per annum for rent of that portion of the property occupied by the firm in carrying on their business.
Robb further testifies that during the lifetime of A. H., “ Mr. Harvey has paid to me to be handed to Mr. Hollingsworth as his property rents from this real estate in controversy. That occurred often. It was always understood to be his property.” (Deft’.s test., p. 16.) On this point of the receipt and appropriation of the rents, Robb does not stand alone. Jarrett Megaw, who was in the employ of the firm for many years, and part of the time as the special agent of James Rice, says that “ when rents were paid I would receipt in the name of Mr. Hollingsworth and hand it over or put it in the fire-proof and report to him that I had collected so much. I signed the receipts ‘A. H. per Jarrett Megaw.’” (Deft.’s test., p. 50.) Finally, on the sale of the firm’s personal property to Megaw & Billany for seventeen thousand dollars, Mr. Harvey said, according to Robb, that the surplus, after paying the debts of the firm, would be to divide, and that he did hand over to W. G-. P., the executor of A. H., a bond of Megaw & Billany for some four thousand dollars, on account of what might be due him as executor from the proceeds of sale. (Deft.’s test., p. 19.) There is nothing at all improbable or unreasonable in what Robb has said of the instructions, conversations, and actions of Harvey, nor does his testimony appear to have been successfully contradicted or impeached.
Now, if Robb’s statements are worth anything, and are taken in connection with the testimony of the defendants’ experts and with the intrinsic evidence of the book entries, the conclusion is almost irresistible that the real estate account was the individual and personal account of Achilles Hollingsworth. In corroboration of Robb are the undisputed facts that at the time of the purchase Achilles Hollingsworth paid to the sheriff only ten per cent, of the purchase-money in cash ■ that before the sale, the property had been subject to a number of liens, but no money over the ten per cent, was paid to the sheriff or applied to the liens, and that on the 28th of December, 1849, Achilles Hollingsworth gave his own bonds and mortgages, in substitution of the liens as they stood in priority, up to the amount of the purchase-money—ten thousand and forty-nine dollars and sixty-four cents. These bonds and mortgages were as follows:
To the Wilmington Savings Fund Society, . . . $2,400 00
To Ann Billany,........... 700 00
To Delaware Fire Insurance Company, .... 450 00
To Farmers’ Bank, afterward ass’d to Sav’gs Fund Society, ............ 2,100 00
To McDaniel & Harvey, afterward ass’d to Jesse Lane,............. 1,800 00
To John Rice, a judgment bond,...... 1,595 64
$9,045 64
Which, with 10 per cent.,........ 1,004 00
Makes the entire purchase-money, .... $10,049 64
About three thousand dollars of the principal of these securities was paid off during the lifetime of Achilles Hollingsworth for the most part out of the partnership funds, and charged to his real estate account, together with the interest as it became due, and after his death the sum of one thousand nine hundred and fifty dollars was paid out of his estate, leaving a balance of four thousand dollars still unpaid, and for which his estate is liable.
2. The possession and improvement of a large portion of the property by the firm are relied on to prove the equitable ownership of H., H. & Co. But neither possession nor outlay for improvement can avail against the payment of rents and Robb’s testimony. The expenses for repairs and alterations were charged against the real estate account of A. H., and the rents of the dwelling-houses placed to his credit, while on the settlement of the partnership affairs by Harvey’s direction the estate of A. H. was to be allowed six hundred dollars per annum for the use of the shops and buildings occupied by the firm. From whichever side then these accounts may be examined, they either prove title and estate in A. H. or they leave the question of ownership so much in doubt as to prevent a clear under standing of what they do mean. There is no doubt that use, occupation, and outlay of money for permanent improvements without payment of rent or its equivalent may be, under some circumstances, presumptive evidence of ownership or of interest in the property beyond that of a tenant. Here, however, the legal owner was the active partner, financier, and bookkeeper of the firm. The books are admitted to have been carelessly kept, the firm was declining toward insolvency for several years, no balance sheet was taken off, and A. H. may have thought that there would be time enough to make charges for rent when the firm had settled with and paid off its outside creditors. Be this as it may, Harvey, the surviving partner, and who ought to know the history of the firm’s business, directed that the yearly rent of six hundred dollars should be credited to the account of his deceased copartner, A. H.
3. The next matter relied on to prove the trust is the paper A, containing what is claimed to be an exhibit, in the handwriting of Achilles Hollingsworth, of the liabilities and assets of ..■the firm, including among the former the mortgages and liens against A. H., and among the latter the estimated value of real estate. This paper is without date, signature, or indicia of any •kind to explain its true character and purpose, which are thus left to conjecture. Chancellor Bates, in his opinion in the first case of Harvey against his two co-defendants in the present suit, in endeavoring to reach a solution of its meaning, says: “There is nothing whatever on the paper or any collateral evidence to ■show the occasion or object for which this statement was made.” * * * “We must rather conclude that at sometime while there remained an expectation that the firm would take the property, or pending some proposal to that end, this statement was made in order to show in what condition the assumption of the property by the firm should it be taken would place its liabilities and assets : Its form and appearance indicate that it was made for some transient use or purpose which was not effectuated ; for we can hardly suppose that any statement made as an exhibit of the firm’s interest in this real estate and of its liability for its liens would not have been entered on its books. Further, the statement, in addition to the mortgage against Hoi lingsworth, includes also a debt to be added to the original debts of the firm, a mortgage of four hundred dollars to Robert E. Poole, a mortgage which had no connection with this real estate. The presence of this mortgage alone demonstrates that the statement was made in contemplation of some arrangements then executing and not afterward carried into effect. For it is certain that the firm did not in fact by proper conveyances take this property or assume the liabilities set forth, nor did they at any time cease to charge Hollingsworth with payments made on account of the liens. There may have been some omissions to charge him, but they must be treated as accidental.”
The defendants’ counsel assigns another, and, perhaps, equally natural and reasonable cause for the existence of the paper : “ Mr. Hollingsworth’s purpose was evidently to show that with what the firm had and what he had, he, as the financial member, could probably meet its liabilities if an extension was granted.” It would not be the first or only instance of a member of a quasi insolvent firm contributing his individual property and credit to sustain the sinking fortunes of a partnership. Thus it is seen that at every stage of the investigation of this case the pathway, instead of becoming more open and leading more directly to the point on which the complainant depends to establish his charge, is, as we advance, more and more beset with difficulties, uncertainties, doubts, and conjectures, for the burden of proof is on him by clear, full, and satisfactory evidence to engraft upon the legal title of Achilles Hollingsworth a trust in favor of Hollingsworth, Harvey & Co.
4. The testimony of Valentine, Teas, and James Hollingsworth throws no additional light on the original transaction which has given birth to this suit. They speak of no facts that bear directly on the question. Their impressions, besides being too vague to depend on, are not evidence. Teas mentions conversations between Achilles Hollingsworth and James Hollingsworth in reference to the purchase of the real estate, both before and after the sheriff’s sale, of which J. Hollingsworth has no recollection. Their impressions were, at the time of the sale, that the property was bought for the firm. Not one .of them can testify to the actual fact. Everything is indefinite. They refer to acts, expressions, and events which occurred more than twenty years ago, and after the lapse of so much time it would be perilous indeed to place any reliance on the mere impressions left npon the minds of the witnesses after the facts which created them have been totally forgotten or are but dimly remembered. The facts, if they could be recalled with certainty and distinctness, might bear a very different construction from the one now sought to be attached to them. Facts can be investigated and explained—impressions cannot; and Sir William Grant, in Lench v. Lench, 10 Ves. 517, declares that to be the most unsatisfactory evidence which can be fabricated with facility and is incapable of contradiction. Mrs. Patton’s memory is equally unreliable. She was a tenant of one of the dwelling-houses, and the rent (one hundred and twenty dollars) was set off against the annual interest of a debt of two thousand dollars which H., H. & Co. owed to her husband’s estate. A. H. negotiated the business with her. Wishing to buy, she inquired of A. H. what he would take for the house, and he replied that they would sell it for one thousand eight hundred dollars, but that they could not give a good title. On further examination, she was uncertain as to the expression used, whether he said “clear title” or “good title,” and whether he spoke for himself or for the firm. It is very apparent that, with incumbrances to the amount of nine thousand dollars on the whole property, it might not have been convenient or feasible for the legal owner to convey a clear title to any portion of it, even on the most tempting offer.
Though there is not the slightest ground for questioning the good faith of any of the witnesses, the evidence, on the whole, is contradictory, uncertain, and defective, and does not come up to the full measure of proof required. It will bear more than one construction and is capable of supporting more than one theory. Robb, whose testimony has been, freely criticised, is corroborated again and again by Megaw, who says that, after the separation of the personal from the real estate of H., H. & Co., and the sale of the former to Megaw & Billany, the last- named firm rented the shops and buildings from Mrs. Hollingsworth, and this with the consent, or, at least, without protest from Harvey. Megaw had been in the employ of both the first and second firms of H., H. & Co. during the existence of each.
The chancellor, in dismissing the bill, adopted the view of his predecessor in office, and interprets the meaning of the book entries to be that A. H. borrowed the purchase-money from the firm, charging himself with the sums taken from the partnership funds for that purpose, and also with the moneys taken from time to time to pay off liens, interest, repairs, etc., and thereby became a debtor to the firm for the amounts so charged. Chancellor Bates, in the Harvey case, thought that the real character of the payments was that of a loan to Hollingsworth, for which the firm became not cestuis que trust of the real estate but creditors, and that the firm could not be both the owner of the real estate and Hollingsworth’s creditor for payments made on account of it.
Why the purchase was made by A. H., and title taken in his name, while the main object seems to have been to benefit the firm by change of location and increased facilities for doing business, may be accounted for in the common experience of partnership concerns. Members of a firm do not always and at once agree upon what is best for their joint interest, and an individual partner, with clear foresight and strong convictions, may determine to assume a responsibility in which his partners refuse to unite; and it is doing no violence to admitted facts to suppose that A. H. may have bought the real estate under such circumstances with the design of having the firm profit by the transaction in the use of the shops and buildings, and with the expectation, also, that the firm would take the real estate off his hands, or, at least, so much of it as should be occupied by them, whenever the partners should consider it to their advantage to do so. But assuming this state of facts to be true, it would by no means leave it optional with the firm, or a surviving partner, or the representative of a deceased copartner, to set up a trust, either before or after the death of the legal owner.
But to recur to the law. The doctrine of resulting trusts being deemed “ questionable,” “ dangerous,” and as “ one of the mistakes of equity,” except where fraud is alleged on the part of the purchaser named in the deed, it is most reasonable to require that the burden of proof should fall upon him who attempts to set up the trust, and that the evidence in support of such claims should be clear, full, satisfactory, and convincing; and that after the lapse of many years and the death of the nominal purchaser, still greater caution should be exercised in admitting and weighing the evidence. All the authorities are at one as to the high standard of proof necessary in such cases. The evidence must not only be distinct and credible, but preponderate, and if it does not the presumption is in favor of the party who has the deed. The payment by the claimant must be proved explicitly, and not be a mere inference or deduction from facts and circumstances. (46 Mo. 423; 13 P. F. Smith 229; 2 Md. 366.) After the legal title has once passed to the grantee by deed, it is impossible to raise a resulting trust so as to divest that legal estate by the subsequent application of the funds of a third person to the improvement of the property or to satisfy the unpaid purchase-money. The resulting trust must arise, if at all, at the time of the execution of the conveyance. (Rogers v. Murray, 3 Paige 390.) In Forsyth v. Clark & Stewart, 3 Wendell 937, it was held that the appropriation of the joint funds of a copartnership by one of the members of a firm to the purchase of real estate conveyed to such partner in his own name will not create a resulting trust in favor of his copartner, unless the funds were so appropriated in pursuance of an agreement between the parties at the time of the purchase. In that case it was alleged that Clark had purchased certain real estate with funds belonging to Stewart, and that by operation of law there was a resulting trust to Stewart in the property. In commenting on the evidence, Mr. Justice Marcy says : “ It is said Stewart furnished the funds with which Clark made the purchase. This assumption is not borne out by the facts of the case. Clark, in the first instance, used no funds for that purpose ; his own bond was substituted for the payment of the consideration money. In discharging the old incumbrance, he used no funds, for that was done by giving his individual bond and mortgage to Roberts. If he afterward appropriated the funds in his hands, belonging jointly to himself and Stewart, to discharge the obligations which he had in the first instance laid himself under in making this purchase, a resulting trust would not be thereby created unless it was unequivocally shown that there was an agreement, at the time of the purchase that these funds should be so appropriated.” The evidence in that case was much stronger in support of a trust, not only from the circumstances surrounding the purchase, but in the proof of fraud, than in the present one, and yet the court affirmed the decree of the chancellor dismissing the bill. The analogy between the two cases is still more remarkable in the difficulty which the court finds in the cited case of accounting for the disposition of the rents which were carried to the credit of Clark & Co. on the books of the firm, and the remarks of Justice Marcy in that connection may be applied with great appropriateness to the paper A, to which so much weight has been given. “ When exploring transactions suspected to be fraudulent,” says the learned judge, “ it often becomes necessary to build our conclusions upon an accumulation of circumstances, and such conclusions are strong or weak according to the number and character of the circumstances by which they are sustained. Circumstances which are inconsistent with one state of facts do not, however, necessarily prove another state of facts with which they may be made to harmonize. Combine those which this case presents to us as we may, doubts and difficulties, I. apprehend, will arise as to the simple question whether Stewart was a joint purchaser with Clark of the west half of the old Ton-tine Coffee House. Most of the pretenses that have been set up in opposition to such a conclusion have been scattered, yet competent proof is still wanting to create in the mind a confident reliance on its truth.” The opinion of Judge Story, in Hoxie v. Carr et al., 1 Sumner, cited by complainant’s counsel, does not controvert any of the foregoing authorities. The evidence there was not defective. Real estate, bought with the partnership funds, had been conveyed to the several partners in their individual names, and the property thus purchased was almost immediately occupied, used, and improved for the part nership business. There was no entry in the firm books of any charges for the real estate against the several members as upon a purchase made on their individual accounts. On the dissolution of the firm, which was heavily in debt, the question arose whether the real estate belonged to the several partners as tenants in common or was to be held as partnership assets. One of the partners had undertaken to sell his share of the realty to the defendants, and the latter declared that they had purchased without notice either express or constructive, that it was partnership property. The only defect in the proof was as to the knowledge of the defendants at the time the conveyance was made to them of the true situation of the firm’s affairs, and of this there was strong presumptive proof. Judge Story says: “ Some things may, in the present discussion, be assumed as settled, because both upon principle and authority they may now be treated as reasonably free from doubt. In the first place, property purchased with partnership funds does not of necessity become partnership property if that is not the intention of the parties, at least in all cases steering wide of fraud and breach of trust. One partner may certainly withdraw a part of the partnership funds for a separate purchase on his own account, and all may join in a purchase of real estate for purposes wholly independent of the partnership, intending to hold their shares severally on their individual account.” The proof, however, of the partnership purchase in that case was too clear and direct to be resisted, and the court, although not finally deciding the cause, on account of the want of proper parties to the bill, intimated what the decision would be. In Le Fevre Appeal, Judge Sharswood says: “ Partners have an unquestionable right to deal with the funds of the firm as they please- and if with their consent or knowledge or acquiescence a portion of their funds is applied to the purchase of real estate in the name of an individual member and as his private property, there is in such case no resulting trust. He is charged or chargeable with what is so withdrawn and appropriated in account. So if with the knowledge and consent of all the partners partnership funds are applied to the improvement of the real estate of one or more members of the firm.” 69 Penna. S. Rep. 122.
The opinions of these eminent judges and the adjudged cases before cited all concur in recognizing the right of a partner to apply the partnership funds to his individual use with the consent of his copartners, and that a separate account of his individual purchases and speculations may be kept in the books of the firm; and they also exhibit in a very clear light the great danger of admitting uncertain, equivocal, and purely circumstantial evidence to overthrow a deed or to engraft upon the legal title a trust which perhaps may never have been contemplated by any of the parties. Here there is so much to excite doubt about the true history of the sheriff’s sales on the 18th of August, 1849, from the absolute failure to prove any agreement or understanding between the copartners, as alleged in the bill (this court being unanimous in ruling out Harvey’s deposition), and by the reflection that the only support for the claim now made is on the book entries, the occupation of a part of the premises by the firm, and the paper A, each and all of Avhich may be and are subject to different and opposite constructions, that it Avould be extremely hazardous, after the lapse of so many years from the day of sale, and after two of the three copartners have long since died, to make a decree establishing a resulting trust. The difficulty of coming to such a conclusion is increased when it is considered that James Rice lived for several years after his Avithdrawal from the firm, and though out of business and insolvent, made no demand for any share or interest in the real estate during that time, nor informed any one that he was entitled to such interest; then came the complainant who as the legal representative of James Rice, was empoAvered to demand and compel a settlement of the partnership affairs and to receive what might have been found due to his intestate, and yet he slept on this claim until 1873, making in all nineteen years from the dissolution of the first firm of H., H. & Co., and upAvard of twenty-four years from the day of the sheriff’s sale. During all this time the actors in the original transaction were passing away and the memory of the survivors becoming more oblivious and uncertain, until at this late day it is attempted to set up a trust unsupported by Avritten proof, and depending on evidence which, viewed in the most favorable light for the complainant, reasonably admits of a conclusion that defeats his claim.
This leads us to the second branch of the defense—the plea of the statue of limitations.
Although a court of equity is said to be exempt from the compulsory force of the statute, and the operation of the bar is not governed by the same uniform and inflexible rules which prevail in actions at law, yet that court, acting in analogy to the statute, will in a proper case, after the expiration of a great length of time, refuse to enforce a claim which, without neglect, could have been sooner made. Where fraud enters into the transaction, the statute does not run except from the time of its first discovery, or when with reasonable diligence, it might have been discovered. The principles upon which equity applies the statute are here stated within the narrowest limits, for courts of equity have gone so far as, in every case free from fraud, to give the same effect to the statute as is done at law. The policy of the law is, for the welfare of the community, to fix a barrier to litigation, to render individuals secure in the undisturbed possession of their property, and for these objects to extinguish dormant claims. Another reason for the enactment of the statute was found in the difficulty of doing entire justice when original transactions have become obscure by time and the loss of evidence. The statute having been enacted on these grounds, there would seem to be no good reasons why, in the administration of justice, there should be any difference between the courts of equity and the courts of law in the operation of the bar, except in cases of fraud • or of peculiar hardship, relief from which it is the special province of equity to afford.
In Delaware an action at law for the recovery of land must be brought within twenty years from the time when the cause of action accrued. Amend. Stats. 727. In applying the statute here, a distinction is to be observed between an express trust, constituted by the act of the parties, and a resulting trust, which is created by implication or construction of law. As between trustees and eestui que trusts, an express trust will not be barred, because in such cases there is no adverse possession, the possession of the trustee being the possession of the cestui que trust; but where the trust is a resulting one, the lapse of time will be more readily admitted as a bar to any claim by the cestui que trust against the trustee. “ In such cases the possession of the trustee is usually to a certain extent adverse to the cestui que trust; for it rarely happens that such a trust is expressly recognized or admitted by the parties. Though in strictness the statute of limitations can scarcely be said to apply to these equitable cases, courts of equity have always admitted the validity of a defense founded on the analogy of the statutes, and have refused relief where a party with full knowledge, or being in a situation to have full knowledge, of his rights, has delayed for twenty years to prosecute his claim. On more than one occasion a delay of eighteen years in enforcing a claim founded on a constructive trust has been held a sufficient reason for dismissing the bill.” Hill on Trustees 265. In Angelí on Limitations, chap. 16 et seq., it is said: “ Where the trust, however, is merely implied, or constructive, there has been some disagreement among the cases, but the better opinion appears to be that, as in general the facts out of which such trust arises from their very nature presuppose an adverse claim of right on the part of the trustee by implication, from the beginning the statute will commence to run against the cestui que trust, from the period from which he could have vindicated his right of action or otherwise.” (See Hill on Trustees 264, note 2.) In Strimpfler v. Roberts, 18 Penna. S. Rep. 283, Chief Justice Black says the doctrine of resulting trusts is not to be favored in ordinary cases, and that a trust resting in a paroi is taken to be extinguished after twenty-one years; that “ the whole doctrine is a violation of the sound principles on which the statute of frauds is placed and ought not to be favored except when the trust originated in the bad faith of the nominal purchaser. The extension of it to cases in which the cestui que trust has voluntarily placed his rights in such a condition that he can only establish them by paroi is of doubtful policy, and, like other departures from the statute of frauds, has probably done more mischief than it has ever corrected.” * * * “ Mo man,” says Mr. Justice Sergeant, “ ought to be permitted to lie by while his rights can be fairly investigated and justly determined until time has involved them in uncertainty and obscurity and then ask for an inquiry. For such reasons as these it is that every civilized society has fixed a limited time within which all rights must be prosecuted. Where this is not done by positive enactments of the legislature, the judiciary calls in the aid of presumption • and courts of equity, though not bound by the statutes of limitations, close their doors against stale demands as sternly as the courts of law.” * * * “ Courts of equity will not listen to claims so old that they would be barred at law by the statute of limitations. If this rule, which is in itself so just and wise, needed the authority of great names to support it, Lord Talbot (3 Atkyns 325), Lord Redesdale (2 Schy. & Lefroy 71), Chief Justice Marshall (10 Wheaton 152), Chancellor Kent (3 Johns. Chy. 129), and Judge Storey (1 Eq. p. 529) ought to be sufficient for the purpose.”
The principles to be drawn from these authorities are too obvious, and-their application to this case are too apparent, to need elaboration. The decisions in England and the United States on the effect of the lapse of time in defeating ancient demands are uniform and conclusive almost without exception. Courts are always reluctant to overthrow written titles and legal estates by paroi, or to encourage litigation by listening to stale claims, more particularly after the death of the party whose actions are brought under review, and who, if living, could perhaps explain them in such a way as to remove all cause for controversy.
There was no fraud in the manner of making title by A. H.; it was done with the knowledge of the firm as the bill admits; nor are there any circumstances of peculiar hardship in the complainant’s case on his own showing to entitle him to relief. But, it has been replied that this case is taken out of the operation of the statute by the book entries made in the handwriting of Achilles Hollingsworth up to or near the time of his death, in 1865, and which constitute so many admissions by him that he was the trustee of the firm. This, however, even if sufficient for that purpose, is the assertion of a fact which has not, in my judgment, been satisfactorily proved. It is taking for granted that the evidence has established the fact that the personal account of A. H. is a firm account, and that each entry on the debit or credit side having reference to the real estate is an acknowledgment that the equitable title to the property is in H., H. & Co. ¡Neither the books, nor the contradictory opinion of the experts in relation to their meaning, or any circumstance proved in the depositions, warrant that assumption. The trust, if there was one, commenced on the day of the sale, or, at the latest, on the 29th of December, 1849, the date of the execution and delivery of the deeds, and there being no element of fraud or of peculiar hardship to prevent the operation of the statute, the complainant’s claim is barred.
For these reasons, I am of the opinion that the chancellor’s decree, denying the claim of a resulting trust as well as the other demands made by the bill should be affirmed.
The chancellor having decided that the trust was not sustained by adequate proof, did not, in his opinion, consider the plea of the statute.