Rice v. Barnard

20 Vt. 479 | Vt. | 1848

The opinion of the court was delivered by

Redfield, J.

If this were the case of an ordinary copartnership, we should certainly be disposed to apply the same rule, in regard to real estate belonging to a partnership, which was applied to personal estate, in the case of Washburn et al. v. Bank of Bellows Falls et al., 19 Vt. 278. It is not a subject which we have much examined, and we do not find it necessary to determine it at present; but no sound reason now occurs to us, why real estate belonging to copartnership funds should not follow the same law of distribution, in a court of chancery, which is applied to personal property.

But in our apprehension there are other more formidable difficulties in the way of the plaintiff’s maintaining this bill. The acknowledged fact, that the plaintiff has not perfected his claim by levy upon the land, within the time which the statute requires, in order to perfect, or continue, his lien, seems very difficult to overcome; it is certainly uncommon for a court of equity to interfere in behalf of a creditor, until he has perfected his right, as far as it can be done, at law. It confessedly has never been customary, in that court, to interfere, until the plaintiff has established his claim, by judgment at law; or before any attachment of the property in dispute, where that can be made And an attachment, not followed up by a levy, so as to connect the levy with the attachment, is of no avail. An attachment, for some purposes certainly, creates no lien upon property, as against the debtor himself. It is of no use whatever, ordinarily, except as against subsequent purchasers, or incum-brancers. I speak of the attachment of real estate. The attaching creditor is not required to be made a party to a bill of foreclosure. To create any title to theland, it is surely necessary there should be a valid levy; and if it be desired to have that relate back to the attachment, it must be'made within the prescribed time.

But the court are very clearly of opinion, that the present is not a case, where the partners themselves can be said to have any lien upon the partnership funds, for the payment of the partnership liabilities, before individual debts. It seems to have been, as it is denominated in argument, not strictly a partnership, but rather a universal hotchpot of all the property and liabilities, present and prospective, of both the persons concerned. Every particle of property, both real and personal, (except furniture and apparel, in which creditors have no interest,) is thrown into the common stock. And so are all the liabilities of the parties. No express provision is made in regard to future acquisitions, or future liabilities. But the fact, that each had divested himself of all present possessions, and had become bound to apply himself with faithfulness and diligence to the management of the partnership concerns, leaves little ground to suppose, that the parties could have expected any such thing as individual property, or liabilities. The thing would seem impossible as to future property, unless it came from bequests, gifts, or inheritance, or were obtained by speculations or direct frauds,' — both of which would seem inconsistent with the probable expectation of the parties at the time of forming this connection in business, which was to swallow up all of their separate property, acquired before that time, and all their future time. Every other ground of obtaining property seems to be within the scope of, and so absorbed by, the partnership.

The practical construction, which the parties put upon this contract, shows, that such was their understanding of the matter. Both partners and their families were supported from the concern, and no account whatever kept against either; so that any thing like a settlement between them would be impossible. How, then, can it be fairly said, that here is a pledge of all the partnership property, to pay, first, the partnership debts, and that the share of each partner is only in what remains, after all the partnership debts are paid? An express promise to that effect would seem to contemplate the utter exclusion-;of all separate creditors from collecting any debt against either partner, and so might well be regarded as fraudulent. We would not, then, imply any such contract, or pledge. The truth is, that the parties, by their very articles of compact, must have contemplated a community of goods and of all other interests. Instead of being strictly partners, they became, more strictly speaking, .tenants in common in all present and future possessions. It would, then, be unjust, to give joint creditors any preference over separate creditors in such a community of goods, as seems to have existed in the present case.

It is obvious, that the parties contemplated no such thing; else they would have kept accounts. When each wished to purchase for his individual benefit, or to pay individual debts, he did it, and must of necessity do it, with the common property; for he could do it with nothing el§e. This was done by each and acquiesced in by each, for twelve years, until the concern became insolvent. At any moment Fletcher had a perfect right to appropriate any portion of the common property for his individual use; and can a court of equity give the common creditors rights superior to those of the debtors themselves? We think it is sufficiently shown, that this can never be done, in the two cases upon this subject in the 19th Yt. 278, et seq. The rights of the joint creditors result from and are based upon those of the partners among themselves.

It is obvious, that such was the understanding of the parties to this general hotchpot of goods and lands; for the very money recovered of Edson, out of which the present controversy arose, and which is shown, with the strictest, minutest detail of facts, was the individual concern of Fletcher, — almost all this money, except what was paid bacJc to Edson, went directly into the common stock, as Fletcher is compelled, reluctantly it would seem, to admit. He says, it went in payment of money he had borrowed of the partnership. Indeed it could go no where else, unless Fletcher kept it apart from all his other property. And whether in payment of money he had borrowed, or might borrow thereafter, was rather an inference of the witness, than any clearly defined state of facts, I apprehend. The whole affair seems somewhat like a man’s keeping a cash account with himself, or like borrowing out of his own pocket book. The scope of this partnership was so extensive, that we do not think it comes within any well defined rule of preference to be found in any of the English or American cases.

The decree of the chancellor is therefore reversed, and the case remanded, with instructions to the chancellor to dismiss the bill, with costs, and to make such farther orders in the premises, as may be necéssary to perfect the rights of all parties concerned.