Court of California, on a statute essentially different from our own, that jurisdiction to set aside a judgment, or to reinstate a cause, ceases at the close of the term, can not be entertained without wilfully ignoring the statute above cited. Equally untenable is the proposition that the County Court lost jurisdiction over its judgment, upon the filing and recording a transcript of the judgment. rendered by the justice of the peace, in the office of the clerk of the District Court. The statute which authorizes such transcript to be so filed and recorded specifies when and for what purpose the same may be done, viz: When the defendant has not sufficient personal property to satisfy the judgment, and the plaintiff desires to have the same levied upon real property.

It is for this purpose that a judgment of a justice of the peace is given the effect of a judgment of the District Court.

In respect to the point raised by the plaintiff in error, that when a judgment has been assigned it can not be legally vacated without notice to the assignee, it is only necessary to say the point is not available in the present action. The jurisdiction of the County Court must be tested by its own record in collateral actions, and can not be impeached by allegation merely. It does not even appear that there was any record in said court of the assignment of the judgment, nor does it appear that the court had any knowledge of the assignment.

Whatever relief the plaintiff in error may be entitled to receive, must be sought in a direct proceeding to review the rulings and judgment of the County Court. Judgment affirmed.

[No. 943.]

MELFORD L. SALSBURY vs. JACOB ELLISON.

Error to the District Court of Boulder County.

Opinion Filed January 25, 1884.

Surviving Partner.—A surviving partner is a trustee, and is governed by the rules applying to ordinary trustees.

Assignment with Preferences.—A surviving partner of an insolvent firm has no power to assign the firm assets with preferences. Such an assignment is void, and may be attacked directly in a court of law, as void.

Answer-When not Necessary.-Where plaintiff's proofs show, beyond question, the insolvency of the partnership at the time of assignment, it establishes the invalidity of the deed of assignment, and no answer showing such invalidity will be deemed essential.

Harmon & Ellis, for plaintiff; Platt Rogers and R. H. Whitely, for defendant. HELM, J.-B. F. Pine, Jr., being the surviving partner in the firm of B. F. Pine & Son, executed a written assignment of all the firm property to defendant in error. This assignment was for the benefit of the firm creditors, but gave preference to two of them. The firm being insolvent, Brinker, one of the creditors not so preferred, brought suit and recovered a judgment for the amount of his claim. In aid of such suit he caused plaintiff in error, as deputy sheriff, to levy a writ of attachment upon the property three days subsequent to the assignment thereof. Thereupon defendant in error, the said assignee, instituted his

action of replevin for possession of the goods. This action was successful, and the present writ of error was sued out of this court to reverse the judgment rendered therein.

At the trial of the cause the written assignment aforesaid was admitted in evidence over defendant's objection. This action of the court is assigned for error, and the most important question presented rests upon this objection: Can the surviving partner of an insolvent firm assign the partnership effects for the benefit of preferred partnership creditors; if he can not do so, may the validity of such assignment be questioned in a legal action by a firm creditor, or must an equitable action be first instituted to cancel and set aside the same?

The surviving partner is a trustee, the firm property being the trust estate. The partnership creditors and the representatives of the deceased partner are the beneficiaries. There being also a beneficial interest in favor of the surviving partner himself, the sole purpose of the trust is the closing up of the partnership business, and payment of the surplus, if any, after settlement of the debts, to the proper parties.

In the performance of his duties, the surviving partner is governed by the rules applying to ordinary trustees. His acts are scrutinized with the same care, and he is held to the same diligence and good faith as is required in the management of other trust estates. Gillet et al. vs. Gaffney et al. 3 Colo. 364.

His right to make an equitable and just assignment of the partnership effects and credits, for the equal benefit of all the creditors, is now recognized by a preponderance of authority. Such right is, we think, also recognized and regulated by § 68 of the General Statutes. When the assignment before us was executed, however, this act had not become a law, therefore our present investigation is not governed, or in any manner affected thereby. But an assignment for the benefit of preferred creditors, the firm being insolvent, is declared invalid by courts of the highest dignity and worth. In his position of trustee for all the firm creditors, the surviving partner is not permitted to sacrifice the interests of one by favoritism shown to another. If there be not sufficient partnership property to pay all the debts, equity and good conscience require that the trustee shall distribute the proceeds therefrom ratably among the creditors.

There are authorities which seem to hold that a surviving partner may prefer creditors in settling the firm obligations; but so far as we have been able to discover, with a single exception, there was no question of insolvency in the cases upon which such declaration rests. The reason for the rule prohibiting preference among the creditors did not exist, and therefore such cases do not militate against the correctness of the rule where such reasón appears. If the the firm assets are sufficient to pay all of the firm debts, so that each creditor will ultimately receive compensation in full, preference in the time or order of payment may not be inconsistent with the conditions of the trust.

The exception referred to is the case of Egberts vs. Wood, 3 Paige's Chancery R. 526, in which the chancellor suggests that the representative of the deceased partner has "no interest in the question as to what debts shall be paid first, in case the partnership effects are insufficient to pay the whole," and therefore an assignment for the benefit of preferred creditors can not be impeached on the ground that such representative had no knowledge thereof. The suit was brought

by a firm creditor. The assignment was not sustained, but the reason given for declaring it void was that one of the surviving partners had no knowledge thereof and gave no consent thereto.

But counsel for defendant in error insist that the acts of the surviving partner in this respect can only be questioned in a court of equity. That his assignment for the benefit of preferred creditors can not be attacked in a legal form. From the nature of the transactions and legal status of the parties interested, it is true that these questions more often arise in equitable actions. But such an assignment, insolvency appearing otherwise, is held void as against a creditor injured thereby. No investigation is necessary to disclose this fact, for the instrument, the assignor being insolvent, bears on its face evidence of its own invalidity. Where the void assignment is offered and relied upon by the party to be benefited thereby, there would seem to be no good reason why objection thereto may not, under our practice, be made in a court of law.

In the action of ejectment courts of law have long assumed the privilege of rejecting a void deed, and they have insisted upon a large concurrent jurisdiction with courts of equity in investigating questions of fraud for the purpose of determining such invalidity. A resort to equity is necessary to set aside or cancel such an instrument, and remove the cloud upon title; but the defect appearing on its face, or being disclosed in a proper manner, courts of law simply treat the deed as a nullity, and ignore its existence. We do not think that such an assignment as the one before us ought to receive any greater consideration or protection than a void deed to realty. And this is especially true under our present system of procedure.

Had plaintiff averred ownership of the property replevined, by virtue of the assignment, defendant would have met the averment with an allegation of fraud upon creditors in the assignment, and the issue made upon the question would have been fully tried. There being only a general allegation of ownership in the complaint, it would be unjust to say that defendant might not object to the instrument upon which such ownership and right to possession entirely depend, where the matters appearing on the face of the instrument itself, together with the evidence already before the court, establish the fact that the claim of ownership is without foundation.

It must be borne in mind that the proofs of plaintiff in making out his case (including evidence without objection in cross-examination,) show, beyond question, the insolvency of the partnership at the time of the assignment; also, the facts that the assignment was made for the benefit of the preferred creditors, and that Brinker was an unpreferred creditor to the extent of over $3,000, and, therefore, plaintiff himself thus established a defense against his own action, which, if properly averred, would be decisive in a court of equity. It must also be remembered, that under our practice an equitable defense is available in a legal action, and therefore defendant was entitled, upon proper averment, to prove the same as an affirmative defense in this case. He would not be permitted, after plaintiff makes out a prima facie case and rests, to offer evidence of a defence, either legal or equitable, which was not presented by the pleadings. But when the evidence of plaintiff, in support of his case, discloses a perfect defense, whether the same be equitable or legal, he will be deemed to have

waived the defect arising from a want of averment thereof in the answer, and defendant may have the benefit of such defense. This is especially true where, as in the case before us, defendant may not, previous to the trial, have information which would enable him to plead the defense in his answer.

Had the assignment been rejected by the court when offered in evidence, plaintiff could not have recovered; having been received, in connection with the other proofs, it established a defence and defeated his claim of right to possession of the property in controversy.

The judgment will be reversed and the cause remanded.

Mr. Justice Stone concurs in this opinion..
Beck, C. J., dissents.

Reversed and remanded.

DISSENTING OPINION.

BECK, C. J.-The issues in this case were purely legal. The action was replevin, the complaint merely alleging ownership of the attached goods in the plaintiff Ellison. The answer denied such ownership-alleged ownership in B. F. Pine, the surviving partner of the late firm of B. F. Pine & Co., and an indebtedness of the firm to the attaching creditor. The fact that the plaintiff acquired his title through an assignment for the benefit of creditors, made by the surviving partner, was not mentioned in the pleadings.

Prior to the recent statute (which, however, does not affect this case,) it was only in equity the rule obtained that the surviving partner of an insolvent firm could not assign the firm assets with preferences to certain of the creditors. Aside from this equitable rule the surviving partner could assign and convey the assets the same as his own property. Holding the legal title and possession he could invest a purchaser or assignee with good title. Of course, fraud may vitiate any contract, but the element of fraud in fact does not enter into this case. Neither does any matter of equitable defense, for the reason that no such defense was set up in the pleadings.

The assignment does not show on its face that the late firm of B. F. Pine & Co. was insolvent. This appeared by extrinsic evidence, elicited on the crossexamination of the surviving partner, who was a witness for the plaintiff.

While an equitable defense may be interposed in a legal action, I am of opinion that to entitle a defendant to the benefit thereof, proper notice must be given that such a defense will be relied upon.

Where this is not done I do not think that a party who has failed to sustain the legal issues involved in a cause, is entitled to equitable relief based on the testimony only.

For the above reasons I dissent from the opinion of the court.

[No. 968.]

MANVILLE vs. PARKS ET ALS.

Error to County Court of Lake County.

Opinion Filed December 22, 1883.

Mining Partnership.-A mining partnership may exist as well where the partners have only an interest in the profits, or a lease of a mine, as where they own the mine itself. Such a partnership may be implied, as well from the acts of the partners as from their declarations. Although persons may intend not to become partners, yet if they enter into such business relations as in law constitutes a partnership, they are no less partners than if they had fully intended to become such.

Authority of Mining Partners.-Members of mining partnerships have authority to bind each other by dealings on credit for the purpose of working the mine, if it be necessary or usual in the course of working the mine to deal on credit.

Default-Practice.-A default simply precludes the defendant from filing his answer after the entry of such default. A plaintiff is not obliged to enter a default before trial as a condition precedent to the taking of a judgment at the trial.

Louis Branson, for plaintiff in error; R. D. Thompson, W. H. Nash and T. A. Dickson, for defendants in error.

STONE, J.-The plaintiff, Manville, sued the defendants to recover the price of certain goods sold and delivered, for which the complaint alleged a joint and several promise to pay on the part of defendants. Two of the defendants, Parks and Yates, answered on their own behalf, denying the sale and delivery to them, and denying any promise to pay by them or either of them. The defendant, Smith, filed a separate answer, denying the sale and delivery, and denying a promise to pay by all or any of the defendants of the sum alleged to be due. The other two defendants, Bush and Henderson, filed no answer.

The testimony brought up by the record discloses the following facts: Bush proposed to Parks and Yates that they go into a mining operation together to make some money. Parks and Yates knew that one Brandon had a mine, onehalf interest in which could be secured to develop and purchase, whereby money could be made if it turned out well, 'and it was proposed that Parks and Yates make the necessary arrangement with Brandon for this purpose. Accordingly, Parks & Yates made a preliminary arrangement with Brandon, and afterwards a meeting was had at the office of Parks & Yates, in Leadville, where were present Brandon, Parks & Yates, Bush, and Smith, and Henderson, at which meeting an agreement was made, and a bond for a deed of a one-half interest in the mine in question-called the Tiptop mine-was executed, giving the defendants the privilege of working the mine for ninety days, with the option of purchase within that time. The several interests which the parties were to have in the mine were agreed upon, and mentioned in the bond. A day or two afterwards, this bond was taken up by agreement of the parties, and a deed in lieu thereof was executed by Brandon, which was deposited in escrow, conditioned like the bond, for payment of the agreed price of the half interest in the mine within ninety days, during which time the grantees were to have possession for the purpose of working and development, for taking out ore which should be found therein. The grantees named in the deed were Bush, Smith, Henderson and Parks & Yates, and the interest of each respectively, was expressed as in the bond previously.

This matter being arranged, it was proposed by Bush that Henderson take