In re Smith

| N.Y. Sup. Ct. | Jan 15, 1819

Per Curiam.

Where an execution is issued for the separate debt of one partner, it has been ihe constant practice to take the share which such partner has in the partnership property; ^(a) but it has been settled, at least, since the case of Fox v. Hanbury, (Cowp. 445.) that the sheriff can sell only the actual interest which such partner has in the partnership property after the accounts are settled, or subject to the partnership debts. The separate creditor takes it in the same manner, as the debtor himself had it, and subject to the rights of the other partner. ^(b) The sheriff, therefore, does not seize the partnership effects themselves, for the other partner has a right to retain them, for the payment of.the partnership debts. (Moody v. Payne, 2 Johns. Ch. Rep. 548.) ^(c)

We have considered an attachment under the act for relief against absent and absconding debtors, as analogous to an execution ; ^(a) and in the matter of Chipman, (14 Johns* Rep. 217.) we decided that it might issue, where one of seve ral partners had absconded, for a partnership debt. But the sheriff can take the separate property only, of the absconding debtor. He cannot seize the partnership effects, for the other partner has a right to retain and dispose of them, for the payment of the partnership debts. The right of the-trustees appointed under this act, will attach on the interest only of the absconding debtor in those effects, or to his proportion of the surplus remaining, after payment of all the debts of the partnership. The case of partners, is different from that of tenants in common of a chattel. ^(b)

We shall, therefore, order the goods, books, &c.' to be restored, but without costs to either party.

The following rule was entered: “ Ordered, that the sheriff of the county of Ontario do restore to William Soulden, er to such person as he shall appoint to receive the same, the goods, books, and moneys, taken by the said sheriff, under the first mentioned attachment, and the other goods or property of the said Soulden Smith, as partners, which he may. have so taken : And that the sheriff of the county of Oneida do, also, restore to the said William Soulden, or to such person as he shall appoint to receive them, the books of account, and papers, taken by the said sheriff, as aforesaid, under the second attachment; and that, as to the goods taken on the said execution, and claimed, also, by the said sheriff, by virtue of the said attachment, that he do henceforth surcease all proceedings, or claim to the said goods, under or by virtue of the said warrant of attachment.”

(a) Vide Backhurst v. Clinkard, (1 Show. 169.) Heydon v. Heydon, (1 Satk. 392.) Anon. 1 Comyn’s Rep. 277. Holt, 302. 643. Pope V. Harman, (Comb. 217.) Tissard v. Warcup, (2 Mod. 279, 280. 12 Mod. 446.) Jacky v. Butler, (Ld. Raym. 871.)

(b) Vide, also, Eddie v. Davidson, (Doug. 650, 651.) Smith v. Stokes, (1 East,. 367.) Wilson v. Gibbs & Conine, (2 Johns. Rep. 282.) Taylor v. Fields, (4 Vesey, 396.) Chapman v. Koops, (3 Bos. & Pull. 289.) Parker v. Pistor, (3 Bos. & Pull. 288.)

(c) There appears to have been some difficulty as to the manner in which ■ the separate creditor of one partner was to take his execution against the share of such partner, in the joint property of the firm; and the Courts of law and equity seem not to have clearly understood each other on the subject. According to the old cases, at law, the separate creditor took the whole of the joint property, and sold an undivided moiety of it, and applied the funds to the payment of his debt, without giving himself any concern about the rights of the other partner, or previously ascertaining what was the interest or share of each. Since the case of Fox v. Hanbury, the Courts of law have professed to follow the principles of the Courts of equity. (Croft v. Pyke, 3 P. Wins, 182. Ex parte Ruff, 6 Fes. 126, 127. Ex parte Williams, 11 Ves. 5. West v. Skip, 1 Ves. sen. 239. 242.) In Taylor v. Fields, (4 Ves. 369.) the facts of which case are more fully stated in a note to Young v. Keighly, (15 Vesey 559, 560.) Ch. Baron McDonald, in delivering the opinion of the Court, says, that an assignee, or executor, or separate creditor, “ coming in the right of one partner against the joint property, comes into nothing more than an interest in the partnership, which cannot be tangible, cannot he available, or be delivered, but under an account between the partnership and the partner; and it is an item, in the account, that enough must he left for the partnership debts.” In Eddie v. Davidson, the Court of K. B. directed that it should he referred to a Master to take an account of the share of the partnership effects to which the other partner was entitled, and that the sheriff (who had sold the whole partnership effects under an execution against one of the partners) should pay over to his assignees, part of the money, equal to the amount of his share. But the Court of C. B. (3 Bos. & Pull. 288, 289.) refused to direct a reference to their prothonotary, to ascertain what was the interest of the separate partner, in the partnership effects, the whole of which had been seized by the sheriff, or to stay the execution, until an account could be taken of the several claims on the property. They said, that all the difficulties were to be encountered in equity; that the safest line of conduct for the sheriff to pursue, was to put some person into possession of the defendant’s share, as vendee, leaving him and the parties interested to contest the matter in equity, where a hill might be filed. They did not consider, that they had any authority or jurisdiction to order an account to he taken. In Dutton v. Morrison, (17 Vesey, 193—205.) Lord Eldon understands the rule to be, 61 that upon an execution against one partner, or the quasi execution in bankruptcy, no more of the property which the individual has, should be carried into the partnership, than that quantum of interest, which he could extract out of the concerns of the partnership, after all the accounts of the partnership were taken, and the effects of that partnership were reduced to a dry mass of property, upon which no person, except the parties themselves, has ¡any claim.” In Watson v. Taylor, (2 Ves. & Beame, 299, 300.) Lord Eldon, in the course of the argument, inquired, “ how the sheriff executes the writ under a judgment against one partner, according to the present doctrine of the Courts of law, that he takes the interest of the partner. Is not that a dissolution of the partnership?” Mr. Cooke, as amicus curiaz, said, “ the way in which the sheriff executes the writ in practice, is by making a bill of sale of the actual interest.” Lord Eldon observed, “ if the Courts of law have followed Courts of equity, in giving execution against partnership effects, I desire to have it understood, that they -do not appear to me to adhere to the principle, when they suppose that the interest can be sold, before it is ascertained what is the subject of sale and purchase.” King v. Sanderson, (1 Wightw. 50.) In The King v. Rock, (2 Price’s Excheq. Rep. 198.) where partnership property was seized under an extent for a. debt due to the Crown from one of the firm, the Court refused to grant an amoveas manus, in the first instance, but directed a reference to the Deputy Remembrancer, to report an account of the joint and separate property, and to ascertain the clear surplus and proportion of each party; and, afterwards, security being giving to answer the Crown’s debt, so far as it should appear, on the account, that the Crown was entitled, they ordered an amoveas mantes to he issued. In Moody v. Payne,' (2 Johns. Ch, Rep. 548.) the Chancellor refused to grant an injunction, on a hill filed for that purpose, to stay the execution at law until an account was taken. Hé thought,' that as the sheriff could sell only the interest of the one partner, subject to the rights of the partnership creditors, there would be no harm in suffering the separate creditor to go on at law; as, if any sacrifice of the interest of the separate partner should be made, by reason of the uncertainty of that interest, it could affect only that partner or the separate creditor, who did not raise the objection. And he thought Mr. <Maddock (1 Madd. Ch. Rep. 112.) was not warranted in his conclusion, that chancery would, on a bill filed by the other partners, stay the execution, until an account was taken of what was due to such separate partner. If the Covtt of law, then, cannot order an account to be taken between partners, and will not stay the execution to give the solvent partner time to have the account taken in equity, it follows, that the sheriff can sell only the right, title, and interest, of the partner against whom the execution issues, whatever it may happen to be, when the affairs of the partnership are wound up, and the account finally taken and settled. In Parker v. Qoodair, (11 Vesey, 78.85.) where partnership goods had been taken, on a foreign attachment, and the assignees under, a commission of bankruptcy against one of the partners, and, the garnishee, filed a bill to restrain the proceeding on the attachment, Lord Eldon held, that the proceeding Was to hé restrained, to give an opportunity to have the question decided by the Court, as to the application of the property among the different claimants. In Taylor v. Fields, (15 Vesey, 559. note. S. C. 4 Vesey, 469.) the sheriff seized all partnership effects, under an execution against one of the partners, and on being indemnified by the joint- creditors, gave üp the partnership effects, and-the creditor, of the separate partner, brought an action against the sheriff for a false return. The partners having become bankrupts sopn after the judgment, a bill was filed by the assignees to be’ quieted in the possession of the partnership effects, and for an account, and to restain, by injunction, the suit against the sheriff. The Court ordered the assignee to pay into court 640 . pounds, without prejudice, and in default thereof, the defendant to be at liberty to proceed in-his action; and it appearing, on an account taken of the interest of the separate partner, that there was no balance due to him, after payment of the partnership debts, the injunction, which had been issued in the mean time, was made perpetual.

(a) In Morley v. Strombom and bikers, fS Sos. <§• Pull. 254.) it was held, that where three partners, two of whom resided abroad, were sued for a partnership debt, and the resident partner appeared by himself, but refused to appear for his copartners, the sheriff, on a distringas against the non-resident partners, to compel their appearance, might take the partnership effects, in the possession of the resident partner, though purchased and paid for by him alone; and the Court refused to relieve him, saying, that what might he taken under an execution, might be taken under a distress.

(b) Vide Merserean v. Norton, (l5 Johns. Rep. 179.)