Severson v. Porter

73 Wis. 70 | Wis. | 1888

Colb, 0. J.

If the assignment in this case is valid, the judgment of the circuit court discharging the garnishee must be affirmed. The assignment transferred to the as-signee all the property of the assignors of every kind. It is objected that the assignment was made with the intent to hinder and defraud creditors, but there is an entire absence of testimony to support such an assumption. On the contrary, the evidence shows beyond all doubt that the assignors acted in the utmost good faith in making the assignment, and did what they deemed was best for their creditors. They treated all the property as partnership property, and considered all debts contracted in the management of the business as the debts' of the company. The testimony is clear, positive, and uncontradicted that the father, Joseph K. P. Porter, in 1869, entered into a partnership with his son William B. to carry on a general business of farming and raising tobacco. They conducted this business until 1819, when Joseph B., the other son of Joseph K. P., became a member of the firm, and joint owner of all the partnership property, and equally liable for all the debts of the old firm. And it was understood and agreed among themselves that all the old debts and subsequent debts, whether contracted in the name of one or two or all of the partners, should bind the copartnership and be deemed partnership liabilities. Unless we disregard all the evidence in the case, these facts must be deemed conclusively established. The object of Joseph K. P. Porter in entering into this partnership was, as he testifies, to aid his sons, to give them a “good chance” to acquire property; consequen tty, all the personal property owned by him, or the money contributed by his sons to the business, was treated as the property of the firm. It appears that the business was conducted and carried on without any firm name, and that the names of any one or more of the members were signed as and for the firm, and represented it. This was the intention of the parties, and there was no legal objection to the business being conducted in that manner; for if, by agreement among themselves, the individual names of the partners, or any one of them, was to be used and bind the firm, the obligations would be good against the copartnership. In this case it appears that notes were sometimes signed by each partner, or by two of them, or by one alone; but still the intention was to contract a firm debt. They could, doubtless, adopt any name, and agree that it should represent the firm in its business transactions. This is a familiar and well-settled principle of the lawiof partnership. See Parsons on Partn. 12é et seq. Says this author: “When parties agree to transact business jointly, or under an agreement to share in the profits, the name or firm which they use is arbitrary and conventional. They may use the name of both, or of one of them alone, or any distinct designation by which all will be included and bound as if their names were used.”

We do not perceive any legal objection to the assignment. It is said there are reserved in the instrument certain exemptions in favor of the assignors, and that this renders the assignment void. We think this position untenable. As we have observed, all the property of the assignors, of every kind and nature, is expressly transferred and set over to the assignee for the payment of debts, “ except such as is exempt from levy and sale under an execution by the laws of the state, the same being more fully and particularly enumerated and described in the inventory.” In the inventory of assets certain personal property is specified as that claimed by the individual assignors as and for their exemptions. There are also homestead exemptions specified, which are reserved as and for a homestead by Joseph K. P. Porter and William B. Porter.

It has been decided in a number of cases that such a reservation in an assignment of partnership property did not render the assignment void. First Nat. Bank v. Hackett, 61 Wis. 336; Bates v. Simmons, 62 Wis. 69; McNair v. Rewey, 62 Wis. 167; First Nat. Bank v. Baker, 68 Wis. 442; German Bank v. Peterson, 69 Wis. 561; Cribben v. Ellis, 69 Wis. 337. So far as the homestead is concerned, that is secured to the debtor by the statute, and a clause reserving what the debtor could not assign without the consent of his wife would surely not invalidate the instrument. See Batten v. Smith, 62 Wis. 92. But the court held that each of the assignors was entitled to the exemption of the personal property respectively selected by him. This decision was based upon a finding, which is fulty sustained by the evidence, that in the forepart of January, 1887, and before the assignment was made, the partners divided the personal property of the firm to a sufficient extent, so that each owned in severalty an amount equal to the exemption allowed him by law. This will bring the case within the decision in O' Gorman v. Fink, 57 Wis. 649, where it is held that one .partner with the consent of the others may claim a separate exemption out of partnership property where there has been a severance of such joint property. At all events, it is quite clear the reservation would not avoid the assignment; and we see no good reason for denying each partner his statutory exemption under the circumstances. The firm property was actually selected and separated from the partnership assets before the assignment was in fact made. The fact that such exempt property was included in the inventory, as it was, should not be deemed a waiver of the exemption, nor does it afford any reason for holding the assignment void. If the assignors have claimed and taken personal property of greater value than the law allows each to hold, the court ..could direct the assignee to recover the excess and apply it in payment of debts. The statute gives the court ample power to make all necessary orders for the execution of the trust. Sec. 1693, R. S. Whatever property is not exempt, or which the firm owned, or any member of it was interested in, was expressly assigned for the payment of the creditors of the assignors. If there should be any question in the case as between the creditors of the individual members and the creditors of the firm, as suggested by the respondent’s counsel, it would be competent for the court to marshal the assets and apply them in an equitable order by paying partnership debts out of partnership assets, and individual debts out of private or separate property. But we think the proof shows clearly that all the assets and all the creditors are assets and creditors of the firm.

It is said that Joseph K. P. Porter had no right to give his property to his sons to the injury of his individual creditors. We fail to find any evidence in the case that he has done so.

It seems unnecessary to remark that, if the parties dealing with the firm were ignorant of the fact that a copartnership existed between Joseph I£. P. Porter and his sons, this cannot affect the assignment, nor change the rights of the creditors. The evidence shows that the assignee was not liable as garnishee to the plaintiffs in this action, and there was no error in giving judgment in his favor.

By the Court. — The judgment of the circuit court is affirmed.