51 N.E. 604 | Ill. | 1898
In determining the rights of the parties on the question presented in this record, we shall proceed upon the theory, not disputed, that all the property conveyed by the chattel mortgages, and sought to be reached by the executions, was partnership property; further, that no question is raised as to the validity of the chattel mortgages executed before the confession of judgment, and under which mortgages the deputy sheriff, as agent of the mortgagees, was in possession of the two stocks of goods at the time of the delivery to the sheriff of this execution. After the satisfaction of the prior three chattel mortgages, there remained in the hands of the deputy sheriff $2,240. The only question to be determined is whether this should have been applied on the execution of appellants against W. A. Cave, then in the hands of the sheriff, or should have been applied, as it was, upon the chattel mortgages of J. V. Farwell Co., executed by the insolvent firm, after appellants' execution was delivered to the sheriff. It appears the firms of W. A. Cave Co. and F. G. Mathison Co. were insolvent, and their partnership property was not sufficient to satisfy partnership indebtedness. The evidence of one of the members of the firm shows this fact, and the appellate court has so found. Appellants object to such fact having been proved in the *606 manner it was; but we see no reason why a member of a mercantile firm may not testify, on a direct question put to him, whether or not his firm was solvent or insolvent. After the payment of firm indebtedness, therefore, nothing would have remained in this instance to be distributed to the two partners; and therefore they had no interest, individually, in the firm property, over and above such partnership indebtedness. It is true, a partner's interest in firm property may be sold under an execution against him individually, and such partnership interest will pass by execution to the purchaser; but such interest, when so acquired by the execution creditor, passes subject to the rights of partnership creditors and to the rights of other partners. Such purchaser would be compelled to settle with the other partners precisely as would the defendant in the execution had not his interest been sold. In this case the sheriff had in his hands $2,240, proceeds arising from the sale of firm property, and $72 additional of firm money. He had in his hands two executions against the members of this firm individually, and also two chattel mortgages given by them as a firm. There can be no question but it was his duty to apply the firm money on the firm indebtedness.
Appellants insist that their execution against W. A. Cave was in fact for firm indebtedness, and that they referred the sheriff to the note in the files in the case wherein their judgment had been rendered, as evidence of this fact. It was not error, however, for the sheriff to be governed by the writ delivered to him, which was against W. A. Cave alone. The partnership being insolvent, Cave's individual interest was worthless. Therefore, there was nothing of value to levy on, and the plaintiffs could not have been injured by the failure to levy. In the case of Chandler v. Lincoln,
From a review of the foregoing decisions it seems to have been considered a circumstance of no importance whether the creditors of the firm, where it was insolvent, had recovered judgment, and were enforcing the collection of their demands, or had ever commenced actions for the purpose, or, if they had, in what stage these actions were at the time of the decisions; and in several of them the claim of a creditor of one or more individual members of the firm was resisted and disallowed because it did not appear whether the firm was solvent or not. In the case of Lyndon v. Gorham, 1 Gall. 367, Fed. Cas. No. 8,640, it was said: "If, upon the whole, it appears that the judgment debtor had only a nominal interest, I don't think that a greater interest can be conveyed under an execution, and, if the partnership be insolvent, that any interest can be conveyed." In Rice v. Austin,
From these authorities, and on principle, it appears that an officer having executions against an insolvent partnership, and also against individual members of the firm, is required to make application of the proceeds of firm property to the payment of the executions against the firm, even though such executions are junior to those against the individual members of the firm. The officer, acting as agent of a mortgagee having a chattel mortgage for collection against a firm, may, when an execution against an individual member of the firm comes to his hands, apply the same principle without being liable for a false return. It is apparent, therefore, that Cave, the defendant in the execution. had no property subject to the lien of this execution, for the only interest an individual has in firm property is the surplus after the partnership debts are paid and the accounts between the partners have been adjusted. The propositions of law asked by appellants, and refused by the court, involving the questions of law discussed in this opinion, were properly refused by the trial court. The judgment of the appellate court for the First district is affirmed. Judgment affirmed.
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