70 Me. 363 | Me. | 1880
A question in the case is this: If a person holds a joint and several note given by partners in their partnership name, they being in insolvency as partners and also as individuals, is such person entitled to prove his note against the joint estate of the firm and also against the several estates of the individual members of the firm, and to receive dividends therefrom? We are of the opinion that he may do so.
The authorities of the present day are strongly in favor of such a rule in the settlement of bankrupt or insolvent estates. The English courts, after some hesitation, at an early day decided against the doctrine. The earliest and the leading case in our own country upon the question was a judgment pronounced by Judge Sprague in the United States district court, Massachusetts District, in 1843. In re Peter Farnum, 6 (Boston) Law Reporter, 21. This important case was never published in any regular book of reports, probably because the bankrupt law of 1843, under which the question arose, had been repealed before the decision was announced, thereby rendering the case as a precedent of less practical consequence. Judge Sprague vigorously opposes what was then the view of the English courts upon this question. Judge Story, in his work on partnership (§ 384, et sey.) published in 1841, admits that the English doctrine was too firmly established to be shaken, though he declares against it as, in his opinion, not having solid ground of equity or general reasoning to stand upon. The question has excited considerable attention in the courts of this country in cases arising under the late bankrupt law, and the decisions have been quite uniformly in accordance with the rule laid down by Judge Sprague in the case referred to. In 1861 the English rule became partly, and in 1869 wholly, changed by statutory enactments. The rule of practice in their
Wo have no hesitation in adopting the doctrine of the federal courts upon this question, and if the question was untouched by authority we do not see how a contrary conclusion could logically be reached. A joint and several note contains in one instrument two contracts separate and distinct from each other. The makers promise as a firm and also as individuals. In a legal sense, the parties to the two contracts are not the same but different parties. The parties meant something by this form of double contract. The holder intended to have a security upon more tharx one estate. The presumption is, that the creditor would not have paid the consideration he did, had it not been upon the expectation of a double security. Why should not a ex-editor have, as Lord Eldon (Ex parte Bevan, 10 Vesey, Jr. 107) thought ho ought in justice to have, “the benefit of the caxxtion he has used.” He might have taken separate notes for the same debt. Why not allow the same thing to be simply and directly done ? As said in In re Honey, supra, “if people are allowed by law to take a joiixt and several security, it seems unreasonable that those who have given such a security should not be bound by it, according to its terms.” One of the judges, in that case, remarked : “The effect of our rovers
Where a dividend has been paid, and generally when declared, on one estate before proof is made against another, the amount thereof should be deducted, and a dividend on the balance only allowed from the other. Here the different proofs have the same effect as if they had been made simultaneously. In re Peter Farnum, ubi supra. Sohier v. Loring, 6 Cush. 537, and citations. Ex parte Wildman, 1 Atk. 109. Ex parte Taylor, 1 De Gex and J, 302. Ex parte Talcott, 2 Low. Dec. 320. Ex parte Harris, Id. 568.
Another question is raised upon the part of the objectors. Is the estate of the firm holden upon this note, the members of the firm signing their individual names thereto, and not affixing any name as copartners ? The note was given for money borrowed for and used in the partnership business. The partners had never adopted a firm name. This was one of their modes of signing as partners. And there was no joint estate outside of the estate of the firm. This mode of signing binds the partnership as effectually as any other could. There are many cases, under different phases of fact, that sustain this position. Agawam Bank v. Morris, 4 Cush. 99. Trowbridge v. Cushman, 24 Pick. 310. In re Thomas, 17 B. R. 54. Richardson v. Higgins, 23 N. H. 106. Tucker v. Peaslee. 36 N. H. 167. Maynard v. Fellows, 43 N.
Exceptions overruled.1.
