Case ID: mo_5/html/0463-01.html
Source: Caselaw Access Project
Author: {"author": "", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Hughes v. Ellison.
    i. A deed of trust, executed by one of two partners to a trustee, purporting to convey all the goods and effects of the firm for the benefit of such creditors as might become parties to the deed within sixty days, and the balance to remaining creditors, upon condition that those who became parties should release the firm from future liability. cannot be set up against an attachment, levied on the property of the firm, before the trustee took possession under the deed.
    Such a deed, to be effectual under any circumstances, should be accompanied with proof that the persons recited in the deed as creditors were bona fide creditors to the amounts specified.
    3. One partner cannot make a general assignment of the partnership effects, so as to bind the other; nor will such assignment avail to place the trustee in his own position, as partner.
    ERROR from the circuit court of Cooper county.
    J. Wilson, counsel for plaintiff m error:
    Hughes assigns for error: 1. That the court below erred in excluding as evidence from the jury the instrument of assignment read as evidence in this cause.
    2. The court below erred in refusing to grant a new trial, both of which involves the same point — that is, whether the instrument of assignment is void upon its face. It is contended by the plaintiff, which was denied by the court below, that one partner has a right to make a general assignment of all the goods and chattels, &e. of the firm — 3 Mo. Rep. 252; 3 Kent’s Com. 20, 25; Gow on Partnership, 95; Hodges; v. Harris, 6 Pickering’s Rep. 362. Admitting that one partner has no right to make an assignment in the name of the firm, still the partner executing the instrument of assignment, is individually bound by his own act — Gow on Partnership, 94; Green v. Beals', 2 C. K. 254.
    
      Hayden, counsel for defendant in error:
    The counsel for Ellison will insist upon the following points: 1. That the partner, Dobbyns, had no right Or power, as partner of McCune, to make the instrument of assignment, so as to invest the partnership property in Hughes, and that therefore the assignment is void.
    2. That if he had power to transfer his own interest, as partner, to Hughes, yet by doing so, Hughes was thereby substituted in the partnership interest of Dobbyns with McCune, and had no separate interest in the partnership effects, and could neither sue for the goods attached alone, nor interplead in the attachment upon the same principles.
    3. The instrument of assignment, upon its face, is fraudulent and void per se.
    
    
      A deed of trust, executed by one of two partners to a trustee, purporting to convey all the goods and effects of the firm for the benefit of such creditors as might become parties to the deed within sixty days, and the balance to remaining creditors, upon condition that those who become paj-tiesshouldrelease fipn fromfu-noUieset'up a-*1" gainst an attachment> levied on }*Sm*¡btfore the took poná-under the
   Ellison sued Dobbyns & McOune before a justice of the peace, and procured an attachment to be issued against their property. Ilarvey J. Hughes, claiming the attached property as his own, interpleaded in the cause under the 2d section of the 2d article of an act supplementary to an act, entitled “An act to provide for'the recovery of debts by attachment,” approved February 6th, 1837. Ellison denying his right to the attached property, an issue was made upon the interpleader, and that issue being found for Ellison, he had judgment before the justice. Hughes appealed to the circuit court, where judgment being again rendered against him, he moved for a new trial; -and'his motion being overruled, he comes into this court by writ of error to reverse the judgment of the circuit court. The bill of exceptions shows that on the trial of the cause Hughes read in evidence a deed of trust made by Dobbyns on behalf of himself and McCune, his partner in trade, by which deed were conveyed to Hughes all the goods, property and effects, &c. of said Dobbyns & McOune, in trust to be by him disposed of,- and out of the proceeds thereof to pay, first, all necessary expenses; secondly, all those creditors, in just proportions, who shall within sixty days become parties to the said deed; and thirdly, if any be left after paying all the demands of those who might within sixty days assent to and execute said deed, to appropriate it to the payment of the demands of the remainder of his creditors. By the terms of the deed, the creditors who become parties to it, released Dobbyns & McCune, in consideration of the dividend, from all further demands and claims, whether the same were due or not at the time of the execution oí the deed.

No person can doubt of the right, in the abstract, of any debtor to prefer any one creditor to another by paying his claim cither in money or property; the only restriction imposed by our laws on this right, is that imposed by the act for the relief of insolvent debtors. The petitioning debtor, in order to obtain the benefit of the act, must, among other things prescribed by the act to be done, swear that he has not paid, &,c. or m any way compounded with any of his creditors with a view, fraudulently, to obtain the benefit of the ac*. The same act, in the 30th section, provides a sum-nary mode of proceeding against any petitioning debtor who “hath assigned, conveyed or ddlvered any of his debts, rights or credits to any other person, with intent of taking the benefit of the act, or who hath given an undue preference to any creditor, &c. The debtor who may be guilty of the acts above mentioned as prohibited, loses the benefit of the act. In the present case the deed was executed at St. Louis, for a nominal consideration, to a man who is a m we agent of the makers of the deed, and the property granted by the deed was in Boonville, hundred miles distant. Betwixt the time of the execution of the deed of trust and that of the arrival of the trustee from St. Louis in Boonville, to take possession o.f the goods conveyed m the deed of trust, the attach-meat was issued and levied on a part of the goods, is unnecessary, therefore, for this court to say (indeed would bo extrajudicial to declare in this cause) would have been the effect of this deed ly which the makers undertake to hold up the property for sixty days iu the hands of their agent in order to make terms with the creditors. The trustee, in my opinion, acquired no right whatever again.-1 the attaching creditor by the delivery of the deed o', trust at St. Louis. This deed of trust, it may be obsc. ved, is made to Hughes, not for the benefit of an}’ purtic ilar creditors of Dobbyns & Mc-Cune, named in si.c.i deed, who might bo, perhaps, presumed to ass nit to the act of Dobbyns in making the deed. But it may be here observed, that had the deed even been cxecutec by persons purporting t,o be creditors of the ¡arm of Dobbyns & McCune^yet still, bgainst the attaching creditor in this cause, the trustee, before lie could havi any right to give the deed in dence, ought to ha-ie proved that they were, in good faith, crédito-.s. The error assigned by Hughes is, that tfcis deed was excluded by the circuit court from the si,deration of the jury.

Such a tob<l effectual unfler ¿ircumstan-oompaníed wiftT" that the per-sonsápeitodintho de0ere bonafid»'* to the amounts speorfi-

0nepar(n<w<Mln>. not mak*<> gener-assign-aont ®f bind tka ather; nor will such signment avail mhis own-posh* tion, as partner,

For the reasons above given, I am of opinion that circuit court cumniittel no error in excluding this deed from the jury. Other points were made in the circuit court, which wl.i b ■ n >ti ted, aidiough it is not material in this case to do s->; they may, however, become material in othei case;, m.d being zealously contested, and now fairly before the court, it may not be improper to decide them.

It was contender in the circuit court by Hughes, the interpleada:, that me p» rtner has the right to make a general assignment oi ad the goods and chattels, &c. the firm. To sn tain this point, the case of Deaver v. bavage and ota?- ,(£ .- >cc, p. 2::2.) ts cited; 3 Rent’s Com. p. 201, 25; Gow on Partnership, 95. The case cited from the Missouri Reports, does not show even the point made. ■ Keene & Page, it seems, had been in partnership, and the partnership had been dissolved on such terms that the whole stock, goods, debts and effects of the firm became the sole property of Page, who took as-possession, and afterwards made the assignment,

The points made in that case, were: 1. That the deed was v°id Mr want of certainty in the description of the property conveyed. 2. Because it established a preference among the creditors of the grantor. It is said in 20th Kent’s Com. vol. 3d, of the 1st edition, that “with -respect to the power of each partner over the partnership property, it is settled, that each one, in ordinary cases, and in the absence ol fraud on the part of the purchaser, has the complete right to dispose of the whole partnership interests, and is considered to be the authorized agent of the firm. He can sell the effects, or compound, or discharge the partnership debts. This power results from the nature of the- business, and is indispensable to the. safety of the public, and the successful operations of the partnership.” In the cause now before this court, Dobbyns does not assume to sell the effects, or to compound, or discharge the partnership áebts; but he strips not only himself but his partner of all power of doing either, by transferring that office to another person, Hughes. Gow on Partnership, p. 95, (cited,) also shows that one partner may release a debt due the firm, which, to the present case, is quite immaterial.

But it is contended that the deed was efficient to convey to Hughes all the interest of Dobbyns, and to prove this we are referred to Gow on Partnership, p. 94, where we learn that one partner, unauthorized by the firm, who executes a bond in his own name and that of his copart-ner as their joint and several bond, will be held bound by this bond, although inoperative against his partner, so as to bind him to pay money; for he cannot a,vail himself of the objection arising from the non-execution'of the bond by his copartner. So if a partner on behalf of •himself and his copartner, refer all differences between the partners and a third person to arbitrators, and promise to perform their award, which directs that the suits against sue’’ partner shall cease, and he shall pay a certain si.m, such ,: rtner is bablejto an action for a nonperformance of the award, although the other j artner is not made a partner to the submission. The effect of Dobbyns’s deed here is to dissolve the partnership be-twixt himself and McCune, without the consent or knowledge of McCune, and to impose on him another person in the character either of partner or ©f owner in common of the joint stock before held by him and McCune, a case by no means parallel with those cited. It is my opinion that he had no right whatever to dispose of his own part of the stock of goods without the consent of McCune, so as to put it into the power of Hughes for the purpose aforesaid. The circuit court, then, in my opinion, committed no error in refusing to permit this deed to be read to'the jury; and such being the opinion of the other members óf this court, the judgment of the circuit court is affirmed.