Case ID: miss_16/html/0557-01.html
Source: Caselaw Access Project
Author: {"author": "Mr. Chief Justice ShaRKEy", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Robert Sims vs. Ross, Strong & Co.
    When one or more of several partners have been declared bankrnpts, and discharged under the general bankrupt act, a suit cannot be maintained in the name of the several partners, on a note owned by the firm before such bankruptcy.
    R., S. & Co., as partners, sued S. on a promissory note; he pleaded the general issue, and, on the trial, proved, by a duly certified transcript from the recordsof the United States court for the southern district of Alabama, that two of the plaintiffs had been discharged from their debts, under the bankrupt act, and, thereupon, requested thecourt to charge the jury, that if all or any of the firm of R., S. & Co. had, since the giving of the note, become bankrupts, under the act of congress, then the plaintiffs had no right to sue, as they did sue in that action, which charge the court refused to give: Held, that by the act of bankruptcy, two of the plaintiffs were not only divested of all interest in the note, but their interest was vested in their assignees ; and, consequently, there was error in refusing to give the charge asked.
    ErroR from the circuit court of Holmes county ; Hon. Morgan L. Fitch, judge.
    This was an action of assumpsit brought to the April term, 1844, of the circuit court of Holmes county, by William Ross, Thomas Strong, and William Hurt, late copartners, doing business under the name and firm of Ross, Strong, & Co., against-Robert Sims. The declaration was founded on a promissory note, drawn by the defendant, in favor of the plaintiffs, by their partnership name, for the sum of five hundred and six.ty-five dollars, dated the 15th day of February, 1840, and payable one day after date. The defendant pleaded the general issue. On the 24th day of April, 1845, the cause was tried. On the trial, the plaintiffs read, in evidence to the jury, the note sued on, and rested their case. The defendant then read to the jury, a duly certified transcript of the records of the district court of. the United States, for the southern district of Alabama, which showed that William Ross and Thomas Strong, on the 19th day of February, 1842, filed their petition to be declared bankrupts, pursuant to the act of congress, passed on the 19th day of August, 1841; and that on the 4th day of July, 1842, they were regularly discharged from all their debts. The defendant then moved the court to instruct the jury : “ That if they believe that all or any of the said firm of Ross, Strong &Oo., to whom the note sued on was given, have, since the giving of said note, become bankrupts, under the act of congress, in such case made and provided, that the said plaintiffs have no right to sue, in manner and form, as they*have sued, and they must find for the defendant,” which charge the court refused to give, and the defendant excepted. The jury found a verdict for the plaintiffs, and the court rendered judgment thereon. To reverse which, the defendant now prosecutes this writ of error.
    
      Brooke, for plaintiff in error.
    The bill of exceptions, in this case, shows that the defendant below proved, on the trial, that two of the plaintiffs were bankrupts, and had become so since the making of the note sued on. The court was requested to instruct the jury, that, under such circumstances, no recovery could be had. The refusal of the court to give this instruction, is the error complained of.
    When one or more of several plaintiffs are bankrupts, the suit cannot be maintained. 1 Chit, on Plead. 27; Eckhardt v. Wilson, 8 T. R. 140; 10 East, 418; 4 lb. 230; 12 Mod. 446; 5 J. Ch. R. 70. The case in 8 Term Reports, is conclusive, being a case precisely in point.
    Want of interest in plaintiffs in a note, is a good defence under the general issue. 2 How. 642. The only case controverting the foregoing, is the one from 1 Johnson, relied on by defendants in error. By reference to that case, it will be seen that the court were equally divided in opinion. Justices Thomson and Kent, by far the ablest lawyers on the bench, being of opinion that the bankruptcy was a bar. This is the only case in opposition, and its weight, as authority, is entirely nullified by the circumstances attending it.
    
      
      H. W. Brotan, for defendants in error.
    The error complained of is, that the court refused to give the instructions asked for by the plaintiff in error.
    Under the state of the pleadings and proofs, the instruction was properly refused. The statute, How. & Hutch. 595, s. 32, enacts that all pleas to the action, shall be deemed and adjudged as admitting the parties, and the character of the parties suing. Now this suit was brought by the defendants in error, in their firm names, alleging themselves to have been late partners, &.c.- And the court was asked to instruct the jury, that if they believed, from the evidence, that all or either of the firm, became bankrupts, after the making of the note sued on, that plaintiffs have no right to recover. The instruction was.en-. tirely too broad. There was no proof, whatever, that Hurt was a bankrupt, or that he was ever divested of, or parted with, his interest in the note sued on.
    The proof that one or two of several partners have become bankrupt, where there is still a solvent partner, will not be sufficient to defeat the action, when the suit is brought in the names of all. The solvent partner, having the possession of the note, would have a right to use the names of the other members of the firm, as a matter of form, to recover his debt. The court is here respectfully referred to the case of Bird et al. v. Pier-pont, reported in 1 Johns. 118, as a case precisely in point, which decision was made after a full review of the authorities cited in the brief of the plaintiff in error. The controversy here, is not between the solvent partner and the assignees of the two bankrupt partners. The assignees do not interfere, and it does not lie in the mouth of Sims to object to the form merely, when the debt is indisputably just; for this is ftiore a question of form, than substance, and there can be no doubt of the right of the assignee to collect the debt due the bankrupt, either directly, in his own name, or as trustee, using the name of the bankrupt. See 2 Johns. 344. The assignees not interfering, and the solvent partner having the possession of the note, raises a strong presumption that the assignees have assented to sue as trustees, using the names of the bankrupt partners; and there is nothing in the record to rebut such presumption. The case cited, by the plaintiff in error, from 5 Johns. C. R. 70, has no application to the one before the court, it being a contest, solely, between the solvent partner and the assignees of his bankrupt partners.
    I see nothing in the record before the court, which shows that assignees were ever appointed, and for aught that appears, the trust has never been accepted by any one ; if such be the fact, surely the solvent partner should be allowed to use the names of all, until assignees were appointed.
   Mr. Chief Justice ShaRKEy

delivered the opinion of the court.

This was an action on a promissory note given by Sim's, in 1840, to Ross, Strong, & Co. He pleaded the general issue, and, on the trial, offered in evidence, a certified copy from the records of the United States court, for the southern district of Alabama, from which it appeared that two of the plaintiffs had been discharged from their debts, under the bankrupt act, and, thereupon, requested the court to charge the .jury, that if all, or any of the firm of Ross, Strong, & Co., have, since the giving of the note, become bankrupts, under the act of congress, then the plaintiffs have no right to sue, as they have sued, in this action. This charge the court refused to give, and. this refusal presents the only question in the cause.

The case of Eckhardt v. Wilson, 8 Term R. 140, was precisely such a case as this, except that the bankruptcy of one of the partners was pleaded specially, and it was decided to be a good plea in bar of the action. “ The plea showed,” said the court, “ not merely that there were other persons, (namely, the assignees of the bankrupt partner.) who ought to have sued with the plaintiffs, but that one of the plaintiffs could not sue at all.” The same point came before the supreme court of New York, in the case of Bird et al. v. Pierpout, 1 Johns. 118, and the judges who expressed opinions were equally divided ; Tompkins, J., having been assignee of one of the plaintiffs, expressed no opinion. This case, therefore, settles nothing.

In the case of Bird, Savage et al. v. Caritat, 2 Johns. 342, the assignees of the bankrupt joined in a suit, by the other partners, who were also bankrupts, but had been so declared in England, whereas the other partner resided in, and had been declared a bankrupt in this country. The bankruptcy of the English plaintiffs was pleaded, but on demurrer the plea was held bad, because the foreign assignees could not be plaintiffs here. No objection was taken to the joinder of the assignees of the bankrupt partner, who had been declared so in the United States, and it would seem to follow, as a conclusion, that the proceeding was considered regular.

In the case of Murray v. Murray, 5 Johns. C. R. 70, Chancellor Kent said, that the assignees of a bankrupt partner, and the remaining solvent partner, are tenants in common, in respect of the partnership funds, and one party cannot call the property out of the hands of the other; and he said that it had been held that they must join in a suit at law.

These authorities seem to be decisive of the question. By the act of bankruptcy, two of the plaintiffs were divested of all interest in the note, and not only so, but the interest was vested in their assignees. In the case of Eckhardt v. Wilson, the matter was pleaded specially ; but in the case of Webb v. Fox, 7 Term R. 391, which was an action of trover, the bankruptcy of the plaintiff, although pleaded specially, might, it was said, have been given in evidence, under the general issue. There was, consequently, error in refusing to give the charge asked.

Judgment reversed, and cause remanded.