No. 84-167
I N THE SUPREME COURT OF THE STATE OF MONTANA
1985
I N THE MATTER OF THE ESTATE OF
ROBERT R. PALMER, D e c e a s e d .
APPEAL FROM: District Court of t h e S i x t h J u d i c i a l District,
I n and f o r t h e County o f P a r k ,
The H o n o r a b l e Byron Robb, J u d g e p r e s i d i n g .
COUNSEL OF RECORD:
For Appellant:
Hooks & B u d e w i t z ; P a t r i c k F. Hooks a r g u e d , Townsend,
Montana
Moore, R i c e , O ' C o n n e l l & R e f l i n g ; P e r r y J. Moore,
Bozeman, Montana
For Respondent:
D r y s d a l e , McLean, S c r e n a r & D i R e ; R o g e r S c o u t e n &
J a m e s McLean a r g u e d , Bozeman, Montana
-
Submitted: May 2 3 , 1985
Decided: October 2 1 , 1 9 8 5
Filed: O C T 2.i j985
Mr. J u s t i c e F r e d J . Weber d e l i v e r e d t h e O p i n i o n o f t h e C o u r t .
A motion t o determine t h e existence o f a j o i n t tenancy
was f i l e d i n t h e p r o b a t e p r o c e e d i n g s i n t h e D i s t r i c t Court of
Park County. An a p p e a l was t a k e n from t h e o r d e r d e t e r m i n i n g
t h a t t h e c h e c k i n g a c c o u n t , c a t t l e , c a t t l e b r a n d s and b r o k e r -
age account did not pass to the surviving partner in his
capacity a s surviving joint tenant. We affirm the D i s t r i c t
Court.
The i s s u e s a r e :
1. Did t h e D i s t r i c t C o u r t e r r i n h o l d i n g t h a t t h e b a n k
c h e c k i n g a c c o u n t i n t h e names o f W i l l i a m P a l m e r a n d R o b e r t
P a l m e r a s j o i n t t e n a n t s was p a r t n e r s h i p p r o p e r t y ?
2. Did the District Court err in holding that the
c a t t l e b r a n d e d w i t h a b r a n d r e g i s t e r e d i n t h e names o f " W i l -
liam Palmer or Robert Palmer" were partnership property?
3. Did t h e D i s t r i c t C o u r t err i n h o l d i n g t h a t a b r o k e r -
age account, registered i n t h e name o f William Palmer for
w h i c h R o b e r t P a l m e r s i g n e d a document a s a j o i n t t e n a n t , was
partnership property?
Following are pertinent f a c t s contained in t h e uncon-
t e s t e d findings of f a c t of t h e District Court.
Robert Palmer ( R o b e r t ) d i e d on November 8, 1981. For
many years prior to Robert's death, he and his brother,
W i l l i a m , o p e r a t e d and c o n d u c t e d a p a r t n e r s h i p c a l l e d " P a l m e r
Brothers." The p a r t n e r s h i p was e n g a g e d i n t h e b u s i n e s s o f
r a i s i n g l i v e s t o c k and feed, conducting a feedlot operation,
a n d b u y i n g and s e l l i n g c a t t l e on r a n c h l a n d s a b o u t 10 m i l e s
n o r t h e a s t o f L i v i n g s t o n i n P a r k C o u n t y , Montana. W i l l i a m and
M i l d r e d , h i s w i f e , r e s i d e d on t h e r a n c h f o r many y e a r s p r i o r
to Robert's death, while Robert resided in Livingston.
R o b e r t m a r r i e d Constance on September 21, 1979, and C o n s t a n c e
is Robert's sole heir a t law. For many vears prior to
Robert's death, R o b e r t and W i l l i a m owned a c h e c k i n g a c c o u n t
in First Bank Livingston, in which t h e y d e p o s i t e d a 3 1 re-
c e i p t s and t h e p r o c e e d s from c a t t l e s a l e s and o t h e r income,
and from which t h e y p a i d a l l p a r t n e r s h i p d e b t s and o b l i g a -
tions. Additional f a c t s w i l l be set f o r t h i n o u r d i s c u s s i o n
of t h e checking account i s s u e . W i l l i a m and Brad P a l m e r , son
of William, claimed t h e proceeds i n t h e checking account a t
the time of Robert's death as surviving joint tenants.
C o n s t a n c e c o n t e n d s t h a t t h e b a l a n c ~i s a p a r t o f t h e p a r t n e r -
s h i p a s s e t s and s h o u l d b e a c c o u n t e d f o r i n t h e p a r t n e r s h i p .
Because o f t h e - b r a n d c e r t i f i c a t e , W i l l i a m c l a i m s t h a t t h e
or
b r a n d s and any c a t t l e c a r r y i n g them p a s s e d t o him a s s u r v i v -
ing joint tenant, and t o M i l d r e d a s h i s s u c c e s s o r i n i n t e r -
est. Constance claims the property is part of the
partnership's assets and should be accounted for in the
partnership. In 1 9 7 9 , W i l l i a m opened a commodity o r b r o k e r -
a g e a c c o u n t w i t h M e r r i l l Lynch. William claims t h e Merrill
Lynch account as his sole property, o r a s surviving joint
t e n a n t i f t h e a c c o u n t i s found t o b e j o i n t , while Constance
claims t h e account i s p a r t of t h e p a r t n e r s h i p a s s e t s .
The D i s t r i c t Court pointed o u t t h a t William t e s t i f i e d
t h a t h i s r e l a t i o n s h i p w i t h R o b e r t was v e r y c l o s e a n d t h e y g o t
a l o n g w e l l b o t h a s f r i e n d s and a s b u s i n e s s p a r t n e r s u n t i l t h e
l a s t few y e a r s o f R o b e r t ' s l i f e , when h i s p e r s o n a l i t y changed
and h e d i d e r r a t i c t h i n g s . Constance t e s t i f i e d t h a t Robert
and W i l l i a m w e r e n o t f r i e n d l y f o r s e v e r a l y e a r s b e f o r e Rob-
ert 's death, a lthough she acknowledged that Robert named
W i l l i a m a s p e r s o n a l r e p r e s e n t a t i v e i n h i s 1977 w i l l . Another
brother, Maro Palmer, testified that Robert had told him
W i l l i a m was t r y i n g t o t a k e the business away from him and
that Robert's behavior had not changed until a few weeks
before death. Brad Palmer t e s t i f i e d t h a t W i l l i a m and R o b e r t
g o t a l o n g w e l l w i t h o n l y normal d i s a g r e e m e n t s u n t i l t h e l a s t
y e a r o r s o when R o b e r t became u n a b l e t o make d e c i s i o n s and
l o s t h i s judgment. A neighboring rancher t e s t i f i e d t h a t t h e
b r o t h e r s g o t a l o n g w e l l and h e n e v e r saw any d i s a g r e e m e n t .
The D i s t r i c t C o u r t found t h a t t h e p a r t n e r s h i p income t a x
r e t u r n s f o r 1972 t h r o u g h 1981, w i t h 1974 m i s s i n g , showed t h a t
the partnership paid a l l of t h e expenses of operating the
ranch, i n c l u d i n g huge sums f o r p u r c h a s i n g and f e e d i n g l i v e -
s t o c k , i n t e r e s t on l o a n s , t a x e s , v e t c a r p and t r u c k i n g , from
t h e Palmer B r o t h e r s ' checking account; t h a t a l l partnership
income, i n c l u d i n g p r o f i t s from c a t t l e s a l e s , was d e p o s i t e d i n
that account; and that the partners s p l i t e q u a l l y any n e t
profits or losses. The D i s t r i c t C o u r t further found that
n e i t h e r b r o t h e r had a n y i n d i v i d u a l s o u r c e o f income.
The evidence established that the bank account was
opened i n j o i n t t e n a n c y form i n 1947, and t h e Palmer B r o t h -
e r s ' p a r t n e r s h i p commenced b u s i n e s s i n 1949.
Following Robert's death on November 8, 1981, Rrad
Palmer was a p p o i n t e d a s p e r s o n a l r e p r e s e n t a t i v e o f h i s e s t a t e
u n d e r R o b e r t ' s w i l l o f F e b r u a r y 7 , 1977. Constance, a s s o l e
heir of Robert, petitioned the court t o terminate t h e ap-
p o i n t m e n t o f Brad a s p e r s o n a l representative. She was ap-
p o i n t e d a s p e r s o n a l r e p r e s e n t a t i v e o f t h e e s t a t e of Robert on
F e b r u a r y 24, 1982, and c o n t i n u e d i n t h a t c a p a c i t y . William
f i l e d a p e t i t i o n t o determine j o i n t tenancies i n t h e probate
proceeding. A h e a r i n g was h e l d , t e s t i m o n y was s u b m i t t e d and
e v i d e n c e was i n t r o d u c e d by b o t h sides. By O r d e r R u l i n g o n
Motion dated March 7, 1984, t h e D i s t r i c t Court denied the
motion o f W i l l i a m t o d e t e r m i n e t h e c h e c k i n g a c c o u n t , c a t t l e ,
c a t t l e b r a n d s and b r o k e r a g e a c c o u n t s p a s s e d t o him a s s u r v i v -
ing joint tenant. The c o u r t f u r t h e r d e t e r m i n e d t h a t a l l o f
such i t e m s of personal p r o p e r t y were t h e p a r t n e r s h i p p r o p e r t y
o f Palmer B r o t h e r s and w e r e t o b e a c c o u n t e d f o r by W i l l i a m a s
surviving partner, or his successors, to Constance, the
personal representative of Robert's estate. William and
Mildred, h i s wife and successor, appealed from the Order.
The i s s u e s p r e s e n t e d r e q u i r e u s t o c o n s i d e r t h e p r o v i -
sions of the Uniform Partnership A c t as adopted in 1947.
Because t h e r e a r e few Montana c a s e s which c o n s t i t u t e a u t h o r i -
t y on t h e l e g a l i s s u e s b e f o r e u s , w e h a v e found i t n e c e s s a r y
to review the historical. background of partnerships and
partnership property.
John C o l l . y e r l s - P r a c t i c a l T r e a t i s e - -e- -o f P a r t -
A on t h Law -
n e r s h i p , o r i g i n a l l y p u b l i s h e d i n England i n 1 8 3 2 , c o n t a i n s an
i l l u m i n a t i n g d i s c u s s i o n o f t h e h i s t o r y o f t h e law o f p a r t n e r -
s h i p which was w e l l d e v e l o p e d by c a s e s i n b o t h England and
t h e U n i t e d S t a t e s by 1 8 3 0 . Based upon a number o f E n g l i s h
and American cases cited in the footnotes, the treatise
discusses the treatment of partnership property upon the
death of one p a r t n e r . The a n a l y s i s i.s a c l e a r f o r e c a s t o f
t h e Uniform P a r t n e r s h i p Act a p p r o a c h a s d e v e l o p e d a l m o s t 1 0 0
years later:
From what h a s been a l r e a d y o b s e r v e d a s t o
t h e want o f s u r v i v o r s h i p among p a r t n e r s ,
i t f o l l o w s , t h a t , upon t h e d e c e a s e o f one
of several p a r t n e r s , h i s share o+ t h e
movable s t o c k and e f f e c t s o f t h e p a r t n e r -
ship, subject t o the partnership debts,
devolves t o h i s personal r e p r e s e n t a t i v e s ,
who t h e r e u p o n become, b o t h a t law and i n
e q u i t y , t e n a n t s i n common w i t h t h e s u r -
viving partners. Although, for the
p u r p o s e o f e n c o u r a g i n g t r a d e , it i s h e l d
t h a t the harsh doctrine of the jus
a c c r e s c e n d i , which i s an i n c i d e n t o f
j o i n t t e n a n c y a t t h e common l a w , d o e s n o t
a p p l y t o t h e p a r t n e r s h i p p r o p e r t y , y e t on
t h e d e c e a s e o f one o f t h e p a r t n e r s , a s
t h e surviving partner stands chargeable
w i t h t h e whole o f t h e p a r t n e r s h i p d e b t s ,
the i n t e r e s t of the partners i n the
p a r t n e r s h i p p r o p e r t y s h a l l b e deemed s o
f a r a j o i n t tenancy a s t o enable t h e
s u r v i v i n g p a r t n e r t o t a k e t h e p r o p e r t y by
survivorship, f o r a l l purposes o f holding
and a d m i n i s t e r i n g t h e e s t a t e , u n t i l t h e
e f f e c t s a r e r e d u c e d t o money and t h e
debts a r e paid. When t h e d e b t s a r e a l l
paid, t h e e f f e c t s of t h e partnership
r e d u c e d t o money, and t h e p u r p o s e s o f t h e
p a r t n e r s h i p accomplished, t h e s u r v i v i n g
p a r t n e r s h a l l be held t o account w i t h t h e
r e p r e s e n t a t i v e s o f t h e deceased f o r h i s
j u s t s h a r e o f t h e p a r t n e r s h i p funds.
J. Collyer, A
- P r a c t i c a l T r e a t i s e - -e- -o f
on t h Law Partnership
§ 1 2 9 , a t 117-18 (4th Amer. ed. 1853) (hereinafter cited as
Collyer). In substance, t h i s p r o v i d e s t h a t upon d e a t h o f a
partner, h i s share of partnership property, subject t o part-
nership debts, passes to his personal representative who
becomes a tenant in common with the surviving partner.
F u r t h e r , because t h e s u r v i v i n g p a r t n e r i s chargeable w i t h t h e
whole of the partnership debts, the surviving partner is
deemed to take the property by survivorship in order to
administer the partnership. F i n a l l y , when t h e d e b t s a r e p a i d
and t h e p a r t n e r s h i p purpose i s accomplished, the surviving
p a r t n e r must a c c o u n t t o t h e p e r s o n a l representative of the
deceased p a r t n e r for his just share of t h a t which r e m a i n s .
The c a s e s r e f e r r e d t o i n C o l l y e r e m p h a s i z e t h e c o n t r a -
diction between the cases decided i n equity courts, where
forms o f o w n e r s h i p d i d n o t c o n t r o l , and c o u r t s o f l a w , where
t h e form o f o w n e r s h i p o f p r o p e r t y a s t e n a n t s i n common o r a s
joint tenants with r i g h t of survivorship controlled. In a
partnership, even though the property was held as joint
t e n a n t s , i n e q u i t y s u r v i v o r s h i p would n o t b e a l l o w e d n o t w i t h -
standing the form of the deed. The treatise states as
follows:
Where lands a r e conveyed t o certain
p e r s o n s , a s j o i n t t e n a n t s , f o r t h e pur-
p o s e s o f a t r a d e o r an a d v e n t u r e , i n
*
e q u i t y t h e r e -l - -no s u r v i v o r s h i p i n
w i l be
such p r o p e r t y , n o t w i t h s t a n d i n g t h e form
o f t h e conveyance.
C o l l y e r , S 134 a t 122 ( e m p h a s i s s u p p l i e d ) . The t e x t d ~ v e l o p s
t h i s t h e o r y f u r t h e r , s t a t i n g a t 5 135:
The r u l e s and p r i n c i p l e s by which p a r t -
n e r s h o l d r e a l e s t a t e , p u r c h a s e d by them
w i t h p a r t n e r s h i p f u n d s and f o r p a r t n e r -
s h i p purposes, h a v e been c o n s i d e r a b l y
d i s c u s s e d i n America, ... Several l a t e
d e c i s i o n s i n M a s s a c h u s e t t s have e s t a b -
lished the doctrine for t h a t State, t h a t
when r e a l e s t a t e i s p u r c h a s e d by p a r t -
ners, with t h e partnership funds, f o r
p a r t n e r s h i p u s e and c o n v e n i e n c e , a l t h o u g h
it i s conveyed t o them i n such a manner
a s t o make them t e n a n t s i n common, y e t ,
- -e a b s e n c e - - e x p r e s s a g r e e m e n t ,
in th o f an
o r o f c i r c u m s t a n c e s , showing a n i n t e n t
-
that-such
-- e s t a t e s h a l l - -l- o r t h e i r
be h e d f
s e p a r a t e - - - l-b e c o n s i d e r e d -
u s e , it w i l and
t r e a t e d , i n e q u i t y , a s v e s t i n g - - -i n
i n them
t h e i r parFnership capacity, clothed with
an i m p l i e d t r u s t , t h a t t h e y s h a l l h o l d it
u n t i l - t h e p u r p o s e s f o r which i t was s o
purchased s h a l l be accomplished, ...
Upon t h e d i s s o l u t i o n o f t h e p a r t n e r s h i p ,
by t h e d e a t h o f o n e o f t h e p a r t n e r s , t h e
s u r v i v o r h a s an e q u i t a b l e l i e n on such
r e a l e s t a t e f o r h i s indemnity a g a i n s t t h e
d e b t s o f t h e f i r m , and f o r s e c u r i n g t h e
b a l a n c e t h a t may b e due t o him from t h e
d e c e a s e d p a r t n e r , on s e t t l e m e n t o f t h e
p a r t n e r s h i p a c c o u n t s between them; and
t h e widow and h e i r s o f s u c h d e c e a s e d
p a r t n e r h a v e no b e n e f i c i a l i n t e r e s t i n
such r e a l e s t a t e , ... u n t i l t h e surviv-
i n g p a r t n e r i s s o indemnified.
Collyer, S 135 a t 123-24 (emphasis s u p p l i e d ) . The u s e of
equitable principles to disregard the legal form of joint
t e n a n c y o w n e r s h i p o r t e n a n c y i n common o w n e r s h i p was c l e a r l y
s t a t e d i n t h e c a s e o f Hoxie v . C a r r (1832) , 1 Sumner 1 7 3 , by
Mr. J u s t i c e Story:
" I n c a s e s where t h e r e a l e s t a t e i s p u r -
c h a s e d f o r p a r t n e r s h i p p u r p o s e s , and on
p a r t n e r s h i p a c c o u n t , it i s w h o l l y immate-
r i a l , i n t h e v i e w of a c o u r t o f e q u i t y ,
i n whose name o r names t h e p u r c h a s e i s
made, w h e t h e r o f one p a r t n e r o r a l l ;
w h e t h e r i n t h e name o f a s t r a n g e r , o r o f
one o f t h e f i r m . In e i t h e r case, let the
l e g a l t i t l e b e v e s t e d i n whom it may, it
i s i n e q u i t y deemed p a r t n e r s h i p p r o p e r t y ,
and t h e p a r t n e r s a r e t h e c e s t u i s que
trust. A c o u r t o f law may, n a y , m u s t ,
view it, i n g e v e r a l , o n l y according t o
the legal title."
See C o l l y e r , § 135, a t 125. This doctrine t h a t r e a l property
acquired w i t h p a r t n e r s h i p funds w i l l be regarded i n e q u i t y a s
p a r t n e r s h i p p r o p e r t y was a f f i r m e d i n C o n n e c t i c u t and V i r g i n -
ia. The a u t h o r e m p h a s i z e s t h a t t h e s e p r i n c i p l e s a r e founded
on sound p o l i c y and o b v i o u s j u s t i c e and t h a t t h e i r c o r r e c t -
ness appears incontestable.
J o s e p h S t o r y , i n h i s Commentaries - -e- -o f P a r t n e r -
on t h Law
ship, stated the rules under which partnership real and
p e r s o n a l p r o p e r t y a r e h e l d by t h e s u r v i v i n g p a r t n e r a s t r u s t -
ee n o t w i t h s t a n d i n q l e g a l t i t l e :
B u t , however t h e t i t l e may s t a n d a t law,
o r i n w h o s e s o e v e r name o r names it may
be, t h e r e a l e s t a t e belonging t o t h e
partnership w i l l i n equity he t r e a t e d , a s
belonging t o t h e p a r t n e r s h i p , l i k e i t s
p e r s o n a 1 f u n d s , and d i s p o s a b l e and d i s -
t r i b u t a b l e a c c o r d i n g l y ; and t h e p a r t i e s ,
i n whose names it s t a n d s , a s owners o f
t h e l e g a l t i t l e , w i l l be held t o be
t r u s t e e s o f t h e p a r t n e r s h i p , and a c c o u n t -
a b l e accordingly t o t h e p a r t n e r s , accord-
i n g t o t h e i r s e v e r a l s h a r e s and r i g h t s
and i n t e r e s t s i n t h e p a r t n e r s h i p , a s
c e s t u i s que t r u s t , o r b e n e f i c i a r i e s o f
t h e same. Hence i n e q u i t y , i n c a s e o f
* -
t h e d e a t h o f one p a r t n e r , t h e r e i s no
survivorship i n t h e r e a l e s t a t e of the
p a r t n e r s h i p ; b u t h i s s h a r e w i l l go t o h i s
proper representatives ...
Upon t h i s p o i n t t h e r e h a s been a d i v e r s i -
t y of judicial opinion, ... some j u d g e s
h o l d i n g , t h a t i n s u c h a c a s e it r e t a i n e d
its original character of real estate,
and p a s s e d t o t h e h e i r s o r d e v i s e e s
a c c o r d i n g l y ; and o t h e r s h o l d i n g , t h a t it
was t o b e t r e a t e d t h r o u g h o u t , a s p a r t n e r -
ship property, and therefore as
p e r s o n a l t y , and b e l o n g e d t o t h e e x e c u t o r
o r administrator. The d o c t r i n e u n d e r
t h e s e c i r c u m s t a n c e s must b e c o n s i d e r e d ,
a s open t o many d i s t r e s s i n g d o u b t s .
J. S t o r y , Commentaries - -e- -o f P a r t n e r s h i p
on t h Law §§ 93 & 94
a t 138-40, (5th ed. 1859) (hereinafter cited as Story).
A s i s a p p a r e n t , t h e d o c t r i n e was n o t u n i v e r s a l l y a c c e p t -
ed. Nonetheless Joseph S t o r y f u r t h e r concluded that there
was no reason to distinguish between realty and personal
p r o p e r t y s o f a r a s t h e p a r t n e r s a r e concerned:
Nor i s t h e r e i n r e a l i t y , a s between t h e
partners themselves, any difference,
whether t h e p a r t n e r s h i p p r o p e r t y , held
f o r t h e purposes of t h e t r a d e o r busi-
n e s s , c o n s i s t s o f p e r s o n a l o r movable
p r o p e r t y , o r o f r e a l o r immovable p r o p e r -
t y , o r of both, so f a r a s t h e i r ultimate
rights and interests therein are
concerned.
S t o r y , $ 92 a t 137.
T h i s r a t i o n a l e was r e s t a t e d by James Kent i n 1873:
( 2 ) S t o c k i n Land--If p a r t n e r s h i p c a p i -
t a l be i n v e s t e d i n land f o r t h e b e n e f i t
o f t h e company, t h o u g h it may b e a j o i n t
t e n a n c y i n l a w , y e t e q u i t y w i l l h o l d it
t o b e a t e n a n c y i n common, and a s f o r m i n g
p a r t o f t h e p a r t n e r s h i p fund; - - and t h e
b e t t e r o p i n i o n would - m t o b e , t h a t
see - -
e q u i t y w i l l c o n s i d e r t h e p e r s o n i n whom
t h e legal e s t a t e is vested a s t r u s t e e f o r
t h e whole c o n c e r n , and t h e p r o p e r t y w i l l
be e n t i t l e d t o b e d i s t r i b u t e d a s p e r s o n a l
estate.
3 J. K e n t , Commentaries "37 (emphasis s u p p l i e d ) .
I n o u r p r e s e n t c a s e , Will-iam b a s e d h i s c l a i m p r i m a r i l y
on the form o f o w n e r s h i p o f t h e j o i n t t e n a n c y c h e c k i n g a c -
c o u n t and t h e w o r d i n g c o n t a i n e d i n a b r a n d c e r t i f i c a t e . Had
this c a s e been considered in England o r t h e United States
prior to 1900, the predominant view would h a v e been that
leqal title alone could not control and that e q u i t y would
p r o p e r l y c o n s i d e r t h e a s s e t s t o be under t h e c o n t r o l o f t h e
s u r v i v i n g p a r t n e r f o r purposes o f winding up t h e p a r t n e r s h i p ,
with William's claim being limited t o h i s share of t h e p a r t -
n e r s h i p a s s e t s a f t e r t h e w i n d i n g u p and d i s s o l u t i o n .
The foregoing is a summary o f the law o f the United
S t a t e s i n e x i s t e n c e a t t h e t i m e of t h e promulgation o f t h e
Uniform P a r t n e r s h i p A c t in 1914. T h a t A c t was a d o p t e d in
Montana i n 1947. W e w i l l now review t h e p e r t i n e n t p o r t i o n s
o f t h e Uniform P a r t n e r s h i p A c t a s a d o p t e d i n Montana.
S e c t i o n 35-10-203, MCA, contains a c r i t i c a l definition
of partnership property:
Partnership property. (1) A l l p r o p e r t y
o r i g i n a l l y brought i n t o t h e partnership
s t o c k o r s u b s e q u e n t l y a c q u i r e d by p u r -
c h a s e o r o t h e r w i s e on a c c o u n t o f t h e
partnership is partnership property.
( 2 ) U n l e s s t h e c o n t r a r y i n t e n t i o n ap-
p e a r s , property acquired with partnership
funds i s p a r t n e r s h i p property.
Constance contends t h a t under t h i s s e c t i o n , a l l o f t h e prop-
e r t y i n q u e s t i o n was a c q u i r e d w i t h p a r t n e r s h i p f u n d s and i s
therefore partnership property.
S e c t i o n 35-10-501, MCA, s p e l l s out the property r i g h t s
of a partner:
Classification of property r i g h t s of a
partner. The property r i g h t s of a partx
ner are:
(I) his rights in specific partnership
property;
(2) h i s i n t e r e s t i n t h e p a r t n e r s h i p ; and
(3) h i s r i g h t to participate in the
management.
I t t h e n becomes n e c e s s a r y t o c o n s i d e r t h e n a t u r e o f a p a r t -
n e r ' s i n t e r e s t i n specific partnership property. The n a t u r e
of a partner's rights in specific partnership property is
s p e l l e d o u t i n S 35-10-502, MCA:
(1) A p a r t n e r i s co-owner w i t h t h e o t h e r
partners of specific partnership property
holding a s a t e n a n t i n partnership.
( 2 ) The i n c i d e n t s of this tenancy are
such t h a t :
(a) A partner, subject t o the provisions
o f t h i s c h a p t e r and t o any a g r e e m e n t
between t h e p a r t n e r s , h a s a n e q u a l r i g h t
w i t h t h e o t h e r p a r t n e r s t o p o s s e s s spe-
c i f i c partnership property f o r partner-
s h i p p u r p o s e s b u t h a s no r i g h t t o p o s s e s s
such p r o p e r t y f o r any o t h e r p u r p o s e
without the consent of the other
partners.
( d ) On t h e d e a t h o f a p a r t n e r t h a t
partner's right i n specific partnership
property vests i n t h e surviving partner.
... Such s u r v i v i n g p a r t n e r o r p a r t n e r s
. . . h a s no r i g h t t o p o s s e s s t h e p a r t -
n e r s h i p p r o p e r t y f o r any b u t a p a r t n e r -
s h i p purpose.
(e) Provided t h e proceeds o f a deceased
p a r t n e r ' s interest a r e included i n t h e
a s s e t s o f t h e d e c e d e n t ' s e s t a t e , such
p r o p e r t y i s n o t s u b j e c t t o a l i e n of t h e
s u r v i v i n g spouse f o r h i s o r h e r elective
share o r a l i e n f o r o r allowances t o
surviving spouses, h e i r s , o r next of kin.
The n a t u r e o f the partner's interest i n the partnership is
h i s s h a r e o f p r o f i t s and surplus. S e c t i o n 35-10-503, MCA,
provides :
Nature of partner's interest in the
partnership. A partner's interestTn
p a r t n e r s h i p i s h i s s h a r e of t h e p r o f i t s
and s u r p l u s and t h e same i s p e r s o n a l
property.
The d i s s o l u t i o n and w i n d i n g u p o f the partnership are
a l s o c o n t r o l l e d by t h e A c t . S e c t i o n 35-10-602, MCA, states:
Partnership - terminated
not dissolu-
tion. On d i s s o l u t i o n t h e Q a r t n e r s h i ~ s
i
not terminated b u t continkes u n t i l t h e
winding up o f p a r t n e r s h i p a f f a i r s i s
completed.
With regard to the causes of dissolution which are
p e r t i n e n t f o r t h i s c a s e , S 35-10-603 ( 4 ) , MCA, specifies that
" t h e d e a t h o f any p a r t n e r " i s a c a u s e f o r d i s s o l u t i o n o f t h e
partnership. I n t h e p r e s e n t c a s e , t h e d e a t h of Robert caused
a dissolution of the partnership.
With regard to the winding up of the p a r t n e r s h i p by
W i l l i a m a s s u r v i v i n g p a r t n e r , S 35-10-609, MCA, states:
R i g h t to wind 9. U n l e s s o t h e r w i s e
a q r e e d , t h e p a r t n e r s who h a v e n o t wronq-
f u l l y dissofved t h e partnership o r t h e
legal representative of t h e l a s t surviv-
i n g p a r t n e r , not bankrupt, has t h e r i g h t
t o wind up t h e p a r t n e r s h i p a f f a i r s .
However, a n y p a r t n e r , h i s l e g a l r e p r e s e n -
tative, o r h i s assignee, upon c a u s e
shown, may o b t a i n w i n d i n g up by t h e
court.
Following a d i s s o l u t i o n , a p a r t n e r h a s a r i g h t t o have p a r t -
nership property applied t o discharge partnership l i a b i l i t i e s
and the surplus paid in cash to the respective partners.
S e c t i o n 35-10-610, MCA, states i n pertinent part:
R i g h t s of p a r t n e r s a f t e r d i s s o l u t i o n t o
a ~ ~ l i c a t i o n ~ a r t n e r s h ~ ~ o ~ e r - to
of i r or -
t v
cLhtinue busineks. (1) hhen ; ' l i s s g l u t i o n
i s c a u s e d i n any way, e x c e p t i n c o n t r a -
vention o f t h e p a r t n e r s h i p agreement,
each p a r t n e r a s a g a i n s t h i s copartners
and a i l p e r s o n s c l a i m i n g t h r o u g h - t h e m i n
respect of t h e i r interests i n the part-
nership, u n l e s s otherwi-se a g r e e d , may
have