119 Me. 49 | Me. | 1920
Prior to March 30, 1918, the plaintiff and Cleon E. Webster were co-partners in business under the firm name of Webster & Gordon. The partnership had been dissolved before that time. On that date the plaintiff, in his individual capacity only, upon his voluntary petition, was adjudicated a bankrupt in the District Court of the United States for the District of Maine. On the 31st day of October, 1918, he received his discharge from all debts and claims which were provable against his estate by virtue of the acts of Congress relating to bankruptcy, and which existed on the 27th day of March, 1918, on which day the petition for adjudication was filed by him, excepting such debts as were by law excepted from the operation of a discharge in bankruptcy. In his list of creditors, filed with the petition for adjudication, is to be found the following: “The Texas Co. 1914 Portland. 131 Preble St., Portland, Me. Judgment against Cleon L. Webster and Nathaniel E. Gordon as co-partners under the name and style of Webster & Gordon $1215.45.”
At the time of the filing of the petition, on which said adjudication in bankruptcy was made, a suit was pending on said debt in the Superior Court within and for the County of Cumberland, in the State of Maine, entitled The Texas Company v. Webster & Gordon, in which the said Cleon L. Webster and the said Nathaniel E. Gordon were described as formerly co-partners under the firm name and style of Webster & Gordon, and in which action judgment was entered for the plaintiff on the 29th day of March, 1918, for $1215.49, with interest from date of the writ, and an execution issued thereon April 3d, 1918. On October 25th 1918, the Texas Company procured an alias execution on said judgment, placed the same in the hands of Frank M. Hawkes, the other defendant in this bill of equity, who was a deputy sheriff, and caused a seizure to be made of certain property claimed to be the property of the plaintiff.
Both defendants filed answer and demurrer. Replica tion followed. The demurrers were overruled, to which ruling exceptions were taken by both defendants. Upon hearing the court decreed a writ of permanent injunction to issue enjoining and restraining the defendants from taking any action to complete the seizure and levy made upon the individual property of the complainant, as set forth in his bill, and from attempting in any way whatsoever to satisfy the judgment above set forth out of the individual property of the complainant. From this decree appeals were seasonably taken. The decisive question may be found in the consideration of the appeal, viz., did the discharge in bankruptcy relieve the complainant from liability upon the partnership debt due the Texas Company.
The law is too well settled to require citation of authorities that individual estates of partners, in the absence of sufficient partnership assets to meet the debts thereof, are held for payment of partnership debts, provided such individual assets are not consumed in payment of individual liabilities.
It is also true that recent cases support the modern rule that partnership debts are provable against the individual estate of a partner, although postponed in payment until after the individual debts are paid in full. Note to Horner v. Hamner, L. R. A., 1918 E page 471, and cases there cited. This modem rule grows out of and is- in harmony with U. S. Comp. Stat. Section 9589, sub-division g, which declares that "The court may permit the proof of the claim of the partnership estate against the individual estates, and vice versa, and may marshall the assets of the partnership estate and individual estates so as to prevent preference and secure ihe equitable distribution of the property of the several estates.” .
Before proceeding further we deem it necessary to refer to a contention raised by the defendant in its demurrer growing out of the fact that the Texas Company’s original debt has been merged into a judgment which post-dated the adjudication of bankruptcy. Reliance is placed upon Jordan v. MacKenzie, 113 Maine, 58. The opinion in that case was based upon Emery et al, appellants, 89 Maine, 544, but we fear the fact has been overlooked that these Maine opinions
Since this was a provable debt against the plaintiff’s individual estate was it affected by his discharge “from all debts which are made
In re Kaufman, 136 Fed. Rep., 262, a case decided in the District Court for the eastern district of New York in 1905, and frequently cited with approval, presents facts and law, peculiarly applicable to the case at bar. The bankrupt filed his individual petition, although previously he had been a member of a partnership, With his petition he filed a schedule of creditors, in which were individual creditors and creditors of the partnership. Notice was sent to all creditors whose names appeared in the schedule. A partnership creditor, although in receipt of notice, did not prove his claim against the individual estate of the bankrupt. The bankrupt was examined and in due time, upon his individual application, was discharged from all debts and claims which were made provable by the bankruptcy act against his estate and which existed on the date of filing his individual petition. The court held that the creditor above referred to was permitted, if he had any claim against the individual estate of Kaufman, growing out of partnership relations, to prove such claim; and upon his failure to do so his right to collect from Kaufman a judgment against the partnership was foreclosed by the discharge of Kaufman as an individual. The court also declared that the creditor had full opportunity to prove his claim against the bankrupt, as an individual, which he neglected to do, and in default thereof the creditor was “debarred from thereafter claiming that the estate of the individual, or the individual himself, is liable for the payment” of the claim. The Circuit Court of Appeals for the Second Circuit cited the Kaufman case In re Diamond, 149 Fed. Rep., 407, and declared full concurrence in the reasoning and conclusion therein expressed.
In New York Inst. v. Crockett, 102 N. Y., Supp., 412, 17 Am., Bankr. Rep., 233, it was held that, since partnership debts are provable against the individual estate of a bankrupt partner, they are
In the case at bar, as we have seen, the Texas Company’s claim was sheduled in the plaintiff’s list of creditors. That company appeared before the Referee in Bankruptcy and examined the plaintiff. It had full opportunity to prove its claim against the individual • estate of the plaintiff, and if it failed to do so, we must hold that under the decisions above cited it is debarred from any attempt now to collect its claim from the plaintiff individually or from the plaintiff’s estate.
Our conclusion renders further discussion of the exceptions unnecessary.
Exceptions overruled.
Appeal dismissed with costs. Writ of perpetual injunction to issue.