Case ID: h-mch_4/html/0167-01.html
Source: Caselaw Access Project
Author: {"author": "Hanson, Chancellor.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

COURT OF CHANCERY,
    MAY TERM, 1798.
    Ridgely, vs. Carey, Executor of M‘Kenna.
    The bill in this case, (filed on the 24th of stated, that the complainant, some time inJ0i December 1796, entered into a copartner®!]! Jtin and MTCenna ami Jacob -Franks Levy, %or A., pose of a trading voyage to the West índlIaíAm the'ri joint account. It. was stipulated that-the complainant should go to the West Indies as supercarglL JnUT^i-anr owner, and superintend the sales, and aleo jachase a. return cargo. That the said Parkin and Jf«JibmST'S't^g to be the agents, and make sale of the return cargo for the use, and on the joint account of the said concern. it an said The. had whenever the said voyage should be complete and i end. That in pursuance of such agreement, the copartners did procure a schooner vessel called ¿fancy, of the burthen of about 800 barrels, and the same laden on their joint account] that is to say, the complainant was one third part interested, the said Parkin and M^enna one other third part, and the said I. F. Levy the remaining third part. That the complainant, in the said month of December, departed from the port of Baltimore in the said schooner called The ¿fancy, and did proceed to the West Indies, where he. made sale of his outward bound cargo, and did invest the proceeds thereof in coffee, for the joint account of said parties, with which the complainant returned is? the said schooner, to the port of Baltimore, where, bo arrived about the 29th of April 1797, and did deposit the said vessel and return cargo in the hands of the Said Parkin and Medina, as agents for said concern; to make sale thereof for -their joint account: That the daid Parkin and M-Kenna did accordingly, as agents for said, concern, in the mouth of May 1797; make sale of daid cargo, the net proceeds whereof, after deducting charges, amounted to § 36,-651 7Í. That the said sales were made on credit; (except a Small part;) and negotiable notes, due at different periods, were taken and made payable to the said Parkin and M‘ICenna only. That it was agreed between the said Copartners, that if any Joss should arise by the non-payment of the said notes; or the. insolvency of the drawers thereof, that such loss should be equally sustained by the parties in proportion to their respective shares of said adventure; and" that the money arising from the said notes should be divided among the said parties, from time tej time, as it should, grow due and be collected: and to ascertain each party’s share, the said Parlim and McKenna did give to the Complainant, and the said Lctiy, their own notes for {heir respective shares, payable as the notes for the said sales should become due; and which said notes were to be returned tti the Said P. & M; in proportion as they collected the proceeds rif the Sales of the said cargo, ¿nd divided the same among the partners — And it was also the express agreement between the complainant, arid the said P. & M. that the said notes,-so :gi ven to the complainant; and which were only given to designate the amount of the complainant’s share of the said cargo, and as a security for the same, should .not be transferred or negotiated -by the complainant, or converted by him to any use -whatever, but to be returned again to said P. & M. from time to time as they collected the proceeds of said cargo and divided the same — and that no final settlement was to take place respecting the said voyage till the whole amount of said cargo had been collected, and each partner in the mean time was to run the risk of loss from bad debts in proportion to his Interest in said adventure. That the said P. & M. have both departed this life; but the said M. was the surviving partner. That before their death they did receive and collect the sum of § 16;050 97, from the said sales of said cargo. That at the time of their death there remained due for the said cargo notes to the amount of § 20,600 74. That Francis M'ICenna, surviving partner, made and executed his last will and testament, wherein he appointed Janus Carey executor, &c. That the said Carey, as executor, has receive^ the sum of §6,920 19 arising from the said notes, and there still remains dee on account of said cargo jg 13,680 55, which the complainant expects the said Carey will receive from time to time as the said notes shall become due :„nd payable. That the complainant hath applied to the said Carey for his third part of the money received on account of said cargo, according to the terms of the co-partnership, and for a settlement of the same; but the said Carey hath refused to comply with the said request, alleging that the said P. & M. at the time of their decease, owed sundry sums of money to divers individuals on their own private account; and that by the testamentary laws of tills state all creditors of a deceased person are entitled to a distributive share or dividend éf his effects, and that no priority or preference could be given to the complainant in the payment of his claim; although the complainant charges, and so the truth is, that the net proceeds of said cargo do not constitute a part of the personal estate of the said P. & M. and therefore are not applicable by law to pay their private debts, it being copartnership property, and not the private property of said P. & M. And £lie complainant states, that he is entitled to bis share of said adventure, and also to a settlement with the defendant, Carey, respecting the same, without any interference of the claims of the private creditors of the said P. & M. — -Prayer for general relief, &c.
    The Defendant, by his answer, admitted certain parts of tbe bill. He has no knowledge of any agreement about any loss which might arise by the nonpayment of any of the notes, or the insolvency of any of the drawers, or that the money arising from the said notes should be divided, &c. That he had been applied to by the complainant, &c. but he declined to comply with such request, being advised that the complainant was only entitled to a rateable proportion of the assets, which the defendant believed would he greatly inadequate to the discharge of the debts due by the said P. & M. And being also advised, that if the complainant over liad any lien on the said cargo, or the sales thereof, for Isis Interest therein, that he had parted with, and relinquished such lion, by authorising a sale thereof to be made by the said P. & M. and taking and holding their negotiable promissory notes for the supposed amouut of such interest in the cargo aforesaid, thereby creating the relationship of debtor and creditor, rand consequently retaining no other claim than such as must he in common with the other creditors of the saul P. & M. — And being also advised, that it was wholly immaterial whether any agreement had been made that the complainant should refund or abate from the notes given by the said P. & M. to him, for the supposed amount of Ills interest in the sales, for his proportion of any loss on the cargo aforesaid, as the complainant would be compellable at law or in equity to return whatever excess he might receive under a mistaken conception of his interest in, or the value of the said cargo; and that the complainant, having elected to make the said P. & M. his debtors, that he could no longer consider them as trustees, or pursue in specie the said cargo, or the proceeds of sale thereof, to the injury of the other creditors of the said P. & M. more especially as the said P. & M. liad during their lives collected g 9,752 of the proceeds of the sale of the said cargo, and employed the same, and the same never came to the hands or possession of the defendant; and that the complainant, if entitled to any preference, could only be entitled to demand from the defendant a preference in proportion to his interest in g 20,600 74, the sum due and remaining from the sales of the. said cargo at the time of the death of the said P. & M. first deducting therefrom the amount of the complainant’s proportion of duties. That the defendant hath not assets sufficient for the payment of the complainant’s demand, if this court shall be of opinion that the complainant is, under the circumstances stated and disclosed, entitled to payment of his claim in preference to the other creditors of the deceased, and before the expiration of the time limited by law for the exhibition of claims against the estate of the said P. & M. and W'ithout notice to the other creditors of the said P. & M. to shew cause against such preference to the complainant’s demand.
    
      Jldjnissions of the parties. That the complainant, before the death of the said P. & M. received on account of his part of the money arising from the sale of the coffee in the bill mentioned, and on account of part of the notes given by purchasers, the sum of g 2,860 99; and that no more than the said sum hath been received by the complainant from the said P. & M. or from either of them, or otherwise, on account of the said coffee; and that there remains due to the complainant, from the said partners, the whole of his share amounting to g 13,651 24, deducting the aforesaid sum of g 2,860 99, and deducting also his proportion of duties. That this admission shall be considered by the chancellor to have the same effect and consequence as if the bill and answer w ere amended for the purpose of stating the facts herein stated.
    Hanson, Chancellor. [October term, 1797.] “The said cause being submitted, the bill, answcr, exhibits, depositions, and all other proceedings, were by the chancellor read and considered.
    
      As this appears to be a case of the first impression, lie cannot but regret the want of arguments from the counsel on both sides to assist him. He can find no decision which applies directly to this case; but he conceives that there is a sufficient analogy between it and cases of bankruptcy, and real assets, to enable him to form a just opinion. Indeed, the general principles of this court, which adopts substitution! contemplates trusts where none were originally intended; and, in short, does every thing not injurious to others, which appears necessary for doing justice between the parties to a suit, are favourable to the present complainant; whose application is, in effect, only for the purpose of obtaining justice, by pursuing the notes, arising from the sale of his property, and taken in the name of his agents, instead of his own.
    It is certain that if the transactions, stated in the bill, and admitted in the answer, between the complainant and deceased partners, bad neyer taken place, the creditors of those two men would not have been in so good a situation, as they will enjoy, after relief shall be granted to the complainant. How then can it, with reason, be said, that the relief will be injurious to those creditors?
    Again — The defendant insists that the complainant ought to be on a footing with the otheremlitors, because he received for his share of the produce of the cargo the notes of the deceased, payable at the periods fixed for the discharge of the notes given to them by the purchasers of the cargo. But who ever intended, or supposed, that by taking a bond, or note, he should lessen the security he had before? Taking all circumstances into view’, it is manifest that the object of the complainant in taking those notes, and the deceased in passing them, was merely to ascertain the share of the complainant in the proceeds of the sale. The passage of those notes, cannot, on any sound principle, make a difference in the case. The relation of debtor and creditor would have existed as well without them as with them; and, in fact, they only answered the purpose, for which they were intended, of ascertaining tire complainant’s share; and had they all been negotiated, and the deceased compelled to discharge them, the effect would only have been to prevent the present claim of the complainant; except indeed, that in case there shall prove to be any loss of the money still due from the purchasers, the defendant would have a claim against him; and except that there would be a claim against him on account of duties.
    That the deceased received the money on part of the notes, can make no difference in reason and justice— enough is left for the purpose of the. complainant; and the assets for other creditors are the same, whether the deceased collected the money on that part, just before their death, or left it to the executor to collect; nor is it material to the creditors, whether the. complainant obtains his share by taking the whole of some of the notes, or by taking a part of each note, provided that he sustain a proportion of any loss which may eventually take place. Had all the money been collected by the deceased, the complainant would indeed have been on a footing with other creditors, because there would be nothing' specific to pursue. Let the case be compared to that of a man who sells land, and conveys it before tiie consideration is paid — If the buyer dies without having disposed of the land, and it is sold under a decree of this court for the payment of his debts, the original vendor is entitled to be paid before other creditors. But, if the. deceased had conveyed to another purchaser, the original vendor is on a footing witli other creditors, with respect to other lands left by the deceased.
    Upon the whole, it is this, &r. adjudged, ordered and decreed, that the defendant, James Carey, as executor of Francis McKenna, shall bring into this court to be paid, or pay to the complainant N. G. R. the sum of §5 6,570 90, which is the proportion the complainant is entitled tore-' ceive of the money already paid by the purchasers of the cargo, deducting the money he hath already received, according to the admission filed, amounting tó g 2,860 99. And likewise, that when the defendant, shall receive the money, or any part of the money still due from the purchasers, amounting to ¡¡5 4,248 27, he shall bring in or pay as aforesaid the complainant’s just proportion thereof, which will be to the whole to be received as ¡518,617 24 is tog 36,6)51 71.'
    If the whole of the notes shall be collected, there will be due to the complainant, for Isis Just proportion aforesaid, the sum of S 1,578 24, which with the aforesaid f-i 6.570 90, and the So 2,860 99 admitted to have been received by the complainant, amount to S 11,010 IS, the sum which the complainant was entitled to out of the proceeds of the sale, after deducting the duties, which were g 7,017 "20.
    Petition by the defendant for a rehearing, (filed 22d November 1797,) stating, «he conceives himself aggrieved by the said decree, inasmuch as the said decree having passed without argument, the defendant may be exposed to suits as executor aforesaid, and collusion may be imputed to him in acquiescing in the said complainant’s claim. That by the said decree the defendant is directed to pay to the said complainant divers large sums of money to discharge the claim of the said complainant, without regard to the assets which have or may come to hand, and the debts due by the deceased; and which claim the defendant is advised by the rules of this court and of law, ought only to be paid pari passu with the other debts of the said Parkin and McKenna.
    
    The defendant humbly conceives, that upon a rehear - ing of the said decree, lie will be able to satisfy the chan - cellor that the decree as passed, ought to be changed and altered. That whatever may be the ultimate determination of the said cause, the defendant is anxious to have the. same fully and justly argued and investigated, and anil doth not desire a rehearing for any purpose of delay or procrastination. He therefore- prays that a day to be. assigned and appointed by the chancellor for rehearing and arguing the said decree, may be fixed, and, he vvili, &c.
    Winchester, for the defendant,
    observed, tiiat be conceived that a rehearing of the decree referred to in the petition would be just and proper. He begged leave also to add. that at the time of the submission of the bill, answer and exhibits, in the cause, without argument, it was the impression and expectation of the counsel for the defendant, that if any doubt or difficulty should arise with the chancellor, and the same was communicated, that a day would be fixed and assigned for the argument thereof; and that the principles of defence assumed by the defendant, in his answer, would in case of doubt afford an'opportunity for that investigation; and the object and intention of the submission was only to prevent delay and expense. That such decree as may be passed after argument would be satisfactory to the defendant and the creditors, while a decree passed without argument, and having the appearance of an admission of the said claim, would probably produce pew suits, and delay the final close of the administration. Hw flattered himself that he should he able to shew, that by the decision in chancery upon the facts stated, the complainant is only relievable as a creditor, and that no specific right exists in him as -a partner, or against the defendant as a trustee.
    Hanson, Chancellor. The petition of the defendant, relative to the decree in this cause passed, was by the chancellor read and considered.
    It appears to the chancellor, that notwithstanding the very short lapse of time since the institution of this suit, the defendant has done every tiling which might reasonably be expected from him, to have the cause decided on its merits. He has indeed concurred with the wishes of the complainant to obtain a decision, without delay, which would have been extremely inconvenient to the complainant, without the least advantage to the other creditors of the deceased; and, in so doing, he appeared to the chancellor to have acted the part of an honest, ingenuous, humane person. But so far was he from admitting the complainant’s claim of a lien on the notes, given by the purchasers oi the cargo, which remained undischarged at the time of the testator’s death, that he expressly denied, in his answer, the equity of the said claim, and asserted positively the right of the other creditors.
    The first intimation which the chancellor had of the existence of this suit, was received in the following manner: Three days before the date of the decree, the papers were laid before him, as ready for a decree. As the cause was not inserted in the list of causes, regularly set down for hearing, and marked “submitted,” ho certainly would not have proceeded to a decree if he had not found amongst them a positive submission, signed by the counsel on each side, which he could not consider otherwise than equivalent, in all respects, to a submission, on a regular calling in term time, of the list of causes set down for hearing at the preceding term.
    No term of general use in the proceedings of this court is perhaps more generally understood than the term (tsubmitted.” It means, that the parties leave it to the chancellor to determine without argument. Like other terms indeed, it may be modified, or qualified by concomitant words, such as «submitted” on notes of the counsel “filed” or “to be filed.” But never yet was the term “submitted” in this court, without such modification or qualification, understood to mean otherwise than that the party or parties who “submitted” dispensed with the benefit of argument.
    The practice of the chancellor on the submission of causes, is generally known — He proceeds to examine the papers; if no doubt or difficulty occurs, he decrees without hesitation; if a doubt occurs, and he does not think proper to investigate the point without the aid of the counsel’s argument; or, if on investigation, the doubt remains, or he thinks it more safe and prudent to learn in what light it strikes the counsel, he then lays aside the papers, and notifies the counsel of his desire to have the cause argued.
    In the present case a doubt occurred on reading the bill and answer. He proceeded to an investigation, and the doubt vanished. He then framed his decree, in which the principles of his decision are explained; and the defendant is directed to discharge the complainant’s claim, partly out of the money which he has received since his testator’s death on the notes which remained due at the death, and in which the chancellor conceived the complainant had a just right, aqd partly with the money, still to be received, on the notes remaining undischarged.
    Now, supposing the chancellor to hear an argument of the case, and to retain liis opinion, he does not perceive in what respect the defendant’s situation will be better than it is at present; he will remain liable to every suit which may now be instituted against him, and he will be no more entitled to the protection of this court than he is at present. Let it again be repeated, that the cause has been decided on its merits; and that the defendant in his answer insisted on every thing which could fairly be urged in behalf of M’ICenna’s creditors. For it is not even alleged that the amount of the complainant’s claim is exaggerated, and it is only that which is called a preference that is complained of.
    It would seem from the representation of the defendant’s counsel, that a submission docs not mean a waiver of argument by the parties or their counsel, but only refers the papers to the chancellor, with a view that he may suggest the points on which the decision is to depend. A very little reflection will satisfy, either that this cannot be the meaning of a submission, or that a submission is always improper. Suppose then that a submission does not authorise the chancellor to decree without argument, but only to suggest points; and if the counsel are at liberty afterwards to make other points, what is the effect of the chancellor’s investigation, but to aid the counsel, or to give his mind a prepossession, or to expose him? If the counsel are not thus at liberty, is it not obvious, that if the true points should escape the chancellor the submission will have operated to defeat justice? In fact, the danger would be greater in the latter case than if the submission precluded the counsel from argument; for if that were the case, the chancellor might be expected to he far more careful in his investigation. In short, if a submission did not authorise, the chancellor to decree without argument, or if after a submission and decree without argument, the counsel were considered to be as fully entitled to argue the cause as if they had not submitted, the chancellor would never again accept a submission. He knows a little of human nature; and he must be morn than man, if he be not far more likely to form a just decision, after hearing the arguments of ingenious ami learned counsel on each side., than to retract an opinion given before he had the assislanee of those argununts.
    The chancellor has been thus full and explicit, because he feels himself called upon by the present application, cither to justify his proceedings, or renounce his error. He wishes ail the practitioners in this court to consider these remarks, and to weigli well the immediate effect, and the probable and possible consequences of the submission of a cause.
    After all, the chancellor, under all the circumstances of this case, thinks proper to comply with the prayer of the defendant’s petition; and it is accordingly adjudged and ordered, that this cause be reheard, and stand for hearing at the time fixed in the beginning of the present term for the hearing of causes.”
    The cause came on for argument before the chancellor at this term, May 1798»
    
      Winchester, for the defendant.
    Tills cause having heretofore been submitted, and the chancellor having expressed his regret that he had not been furnished with the, arguments of counsel, in the decree passed at October term; the increased probability of agreat deficiency of assets to satisfy the debts of the deceased; the uneasiness of many of the creditors; and the solicitude of the executor that his conduct might be such as not only to secure him from loss, but censure; occasioned the application for a rehearing, which the chancellor has been pleased to order.
    Strongly as the defendant’s counsel was of the opinion, that the complainant’s case was not sustainable, he con - fesses his confidence shaken by the opinion already giv cn; but well knowing that the liberality of a great mind will examine its own decisions with all the severity which justice requires, ho ventures to make some observations upon the case, in the same manner as if no decree had passcif; and only hopes, that tiieir pro - lixity, and the triteness of some of the remarks, will be excused on account of the importance of the sum in contest, and the principle to be established.
    The facts in this case, so far as they are material in the decision, appear to me to stand thusi — Parkin and JRICenna, Levy, and Ridgely, enter into a limited partnership, to wit: a joint adventure from Baltimore to the “West Indies. Ridgely was t.o go supercargo, and have tin: direction of the voyage, until the vessel and cargo should return to Baltimore. It was expressly agreed, that the. return cargo should immediately, on its arrival, be do Mvered to and sold by Parkin and JtLKenna, and accounted for to Ridgely and Levy, for their* respective proportions, after the amount of sales should he received. Pursuant to this agreement, Ridgely delivered the whole return cargo to P. & M. (who had purchased Levy’s share.) They sold the cargo, and took negotiable notes in their own name, but which are sufficiently identified to be the notes taken for this cargo. P. and M. executed notes to Ridgely, for his share, payable at the same periods as the notes received by them would fall due. Part of the notes received by P. and M. were paid, and part remained unpaid at the time of their deaths. P, and M. entered the cargo, gave bond in their own names for the duties, which have since been paid.
    In considering this case my arguments will be reduced to the following positions:
    1st. He who stands in the simple relation of creditor to another can have no relief which is not common to all the creditors.
    2d. A person seeking a preference against the estate of a deceased person, must be entitled on the ground of a written security, from the usages of trade, or by - operation of law.
    3d. The right to demand the possession of specific property, or its product, depends upon the circumstance, that he who demands the possession of such property was the exclusive owner and possessor thereof, not having parted with the right, or made any special agreement relinquishing absolutely, or impliedly, the right to pursue that property or its product.
    4th. Copartners in general trade, or a particular adventure, do not, as such, acquire the relations of debtor and creditor; but that relation is created whenever the adventure ends, and a balance is struck and promised to be paid, or any special agreement intervenes on which a legal remedy can be had.
    If these principles are correct, as I shall endeavour to establish previous to the application of them to the facts in this case, it will not be difficult to shew that the complainant’s claim is not tenable.
    
      1st, Position. — -This proposition is so clear, that to state is to prove it, but is important to mention it from its connexion with the other principles, and the conclusions which will be drawn in its application.
    
      2i. Position. — Independent of the protection afforded to this principle by the general policy of our testamentary laws, whose primary object is to level all debts, it is grounded on the first principles of justice; and the general maxim that equality is equity is more strongly and justly applicable here than in ordinary cases. Commerce '•■is its basis on credit=Gredit results as much from the possession of goods of which merchants are the appalent owners, and bills or notes shewn in their own. names, as from good conduct and real wealth. On these grounds commercial confidence is acquired. What destructive consequences would not result from discriminating the nature of debts, and permitting to the party himself to secure, or deducing legal consequences w hich should secure, a preference toa particular description to the exclusion of others? it is to guard against these consequences that our Insolvent acts interdict, under such sevrre penalties, the creating of preferences by the party. It is with the same view that our testamentary laws prohibit executors or administrators from giving a preference under the penalty of a devastavit. It would therefore seem, that a case which is bottomed on principles destructive of commercial faith, opposed to the general principles of equity, and subversive of the general policy of our laws, is not entitled to any favour. No person ran be deemed a creditor but from some valuable thing given or loaned. The meritorious nature of some species, of some considerations, are such as to justify securing a reimbursement, and this may eventually amount to a preference, As in the cases of a loan of money to establish a house of trade, or the gift of the use of a capital for a limited time to support its sinking credit, it is proper to secure a repayment or return of the thing, or its value. The law therefore permits its being secured by mortgage, or other written engagement tantamount to a mortgage, and this security could not be effected by a subsequent insolvency. This no policy opposes — It is founded ori principles necessarily resulting from property.
    
    When a party possessing property refuses to comply with his engagements, suffers himself to he sued, and the issue of a suit determines the, justice, of the claim against him, it would he. the height of iniquity to say, that no recourse should he had to the delinquent’s property. A lien is therefore, created by operation of law.
    The usages of trade also, on principles of general benefit, create liens in certain cases. As it will be attempted to bring the complainant’s case within some of these cases, let us discriminate them with precision.
    The first case is that of a factor who has a lien oil any property of the principal in his hands for securing disbursements on such goods or a general balance — - 3. Burr. 936. In tisis case it is obvious, that the lien was originally introduced to avoid circuity of action, and from analogy to the doctrine of set off.
    The next case is that of a manufacturer who has a lien on the goods in his hands for the vaiuc of his labour, &c>- — 1 Jltkynsg 235, 4 Kerr. 2S14.
    
      Those derisions are grounded on the effect of a bail-meat for a special purpose, by which the bailee acquires a special property, and which can only be defeated by payment of the debt.
    The nest case, in which may be indiscriminately classed inn-keepers, carriers, &c. depends on the comfflon usage in their favour. It is apparent that liens are in these cases exclusively against the owners of goods, but I admit they apply e converso in ms favour against any person whom he can make out to be his bailee or trustee.
    
    I also admit, that the claim of the complainant rests on a commercial transaction, but the usage in favour of his claim is denied, and it is not proved, But admitting it in the same manner as. if the usage existed and was proved, (which are denied,) 1 insist, that wherever any special agreement intervenes upon which the party in possession of property or its proceeds promises and becomes bound to pay, the special agreement excludes, the effect of usage and precludes any Mm. As in the case of Brenan and Currant, SaycPs Hep, 224 — A farrier* who agreed for astipulatedsum to cure the plaintiff’s mare* which he. performed, but refused to deliver her up until paid — it was adjudged that the special agreement su. perseded the right which the law would otherwise give to retain, and that his only remedy was by suit on the agreement. — S. P. 4 Burr. 2216, 2217. 2 Moll, ¿lb, 92, tit. Justification pi. 1, 2 — tSee also 2 Term.. Hep. 100.
    Another exception to the application of the doctrine of liens, is found in the case where the possession and right are changed. This exception results necessarily from the nature of the right, and is implied in the very definition of the term — “Lien is a tie or hold upon goods or other things which a man has, in bis custody.” There cannot therefore, in, the very nature of the case*, be a lien, tie or hold» on that which a man has not hi custody — for without custody there is no lien — 2 Vcm,. 117. 1 Jltkyns, 234.
    Again — There is no lien where the particular transaction siiews the parties intended there should be none,, by adopting or substituting and looking to personal credit and relying on it. — 4 Burr. 222S,. the latter part of the case Breen et al. vs. Farmer, perLd. Mansfield and the court. And on this case I will now observe, with great deference, that the argument «that no person ever <* intended or supposed, that by taking a bond or note* « he should lessen the security he had before,” is extremely fallacious, for it is tantamount to saying, the law shall never operate on an act unless the parties intend it; whereas it is certain, that the moment an art is done, the legal qualities incident to that act take their existence, whatever'the parties may suppose; as for instance, a 'deed may operate as a release or a confirmation, though the parties only intended or supposed it would act as a bargain and sale, and a variety of other similar cases which occur to the mind at once.
    It is only incumbent ■ n the .defendant to shew, that the complainant’s case is not within any of the general cases of lien, or that it is embraced bysomeofthe cases.which form exceptions to the general rules.
    It. appears to me, that the only ground upon which the complainant can pretend a right to a preference, is on the. ground of his original interest; and that the rights consequent thereto, substantially remain after a sale where the proceeds can be traced, I shall obviate this ground under my
    
      3d Position. — I admit that the owner, and exclusive .proprietor of goods, by confiding their possession to another does not part with the right. Possession of any kind, it is true, is prima facie evidence of right; but it may be precarious; as a deposit it may be criminal, as of a thing stolen; or it may be qualified as things in the custody of a servant, carrier or factor. The mere possession of a chattel therefore, neither gives or destroys title. The complainant, however, cannot deny, that Víhen an owner voluntarily places goods in the hands of a factor for sale, and a sale, accordingly takes place, the purchaser acquires an undoubted right; the property and possession both change. It is also unquestionable, that after a sale, and the property is converted into money, the first owner can only be esteemed a creditor, and is. entitled to no preference»
    Before a sale, where the depositor or principal is the sole owner, he may pursue his property specifically, hut that .is only in the case where the depositor might have retained the possession himself, and where tiie precarious possession is derived from and held in trust for him. And in no case, where the person in possession has it as a part owner, or in .virtue of an interest in such property, and in consequence of a’ special agreement, can any other person, having a less or even an equal interest, with him in that property, pursue that property, or deprive him of its proceeds, and a fortiori the proceeds of sale cannot be specifically pursued.
    Wherever two or more persons have a common interest, whether in equal or unequal shares, and one of them has the sole possession, that possession must either be lawful or tortious as it regards his cotenants; .if lawful, it must be because of consent; and in such case, after the property is sold, the relation of debtor and creditor is immediately created, and the only remedy is by action of assumpsit for his share or interest, and in such action mutual demands may be set off; 2 Burr. 936-7; for after such agreement the right to pursue the property speciiically, if it ever existed, is gone. When there is no right to demand the thing, it would be superfluous to observe there can be no right to demand its product. Or, the possession is tortious, as being adversary to and in exclusion of his co-owners. Now in this case it is clear, that there is no legal remedy by which he could be ousted of this possession.' — Salk. 290, Brown vs. Hedges — but if he sells, and receives the money, then the injured co-owner may have his remedy by action of trover, fCo.Litt. 200.. a. Cowper, 37'5;) or he may wave the tort and have assumpsit for his share of the money. — Bong. .137, C132,J Longchamp vs. Kenny. Does not the existence of these remedies destroy the idea of a specific right? How are the facts? By common consent P. & M. had the entire possession of the cargo for sale — -Their possession was rightful — Ridgely never co uld have deprived them of it against his own agreement and consent at law or in equity. He could not have followed the property. He cannot pursue the notes; for by his own agreement he was to receive his share in money (not notes,) at their hands. Why was this agreement made? Because he looked to their personal credit. If he had not, each would have taken notes at the time ojthe sale from the purchaser for his share. What then was Ridgely'"s demand against them, and in what character? It was for a specific sum, when received by them, and in the character of creditor. And the whole transaction clearly proves, that Ridgely never thought he had any right to follow the notes taken by P. and M. in their own name with his knowledge; and also clearly shews, that when betook their notes to ascertain his share, he relied on their stability, integrity and credit, for the payment of their notes. Where then is any ground to establish a lien to the injury of other creditors? It is said his case is hard — but the case of every man, who is likely to lose money honestly due, is likewise hard.
    It is in vain they claim the aid of a court of equity; for in cases of equity the hardship must be divided', and his right is only a legal one — -See the case above cited in Roll. Jib. and 2 H. Blackstone, Slubeyvs Heyward. That liens are clear legal rights — and with a remedy existing at law equity ought not to interfere, when the effect of that interference will be to swallow up the estate for one creditor. If relief to the extent he now claims cannot be had at law, it is because he is not entitled to it in justice* or from the usages of trade.
    
      
      4th. Position — The community of ■interest between partners during the continuation of that interest, greatly abridges the remedies which strangers have against each other. Their relation is sufficiently described by saying, that as partners they are not creditors of or debtors to each other. But when the partnership ends, and a specific sum is ascertained to be in one partner’s hands-belonging to tine other, which he engages to pay, and which engagement the other accepts, his specific rights as a partner end, and the common relation of debtor and creditor is created.
    2 Term Rep. 479, Foster vs. Jllíansm. The plaintff' and defendant had been copartners, but dissolved their eonnextion? an account was stated of a balance struck in favour of plaintiff which defendant promised to pay — - Action of assumpsit was brought, and ruled to lie- — -S. P. Moravia vs. Levy, 2 Term Hep. 483.
    So also- if a partnership is dissolved when goods arc on hand, and one partner is directed to sell them, ami promises to pay, when the money is received, the other’s share, the partners who accept this promise lose all claim to the goods and tlie.ir proceeds specifically, and can only have remedy on the promise — 2 Burr. 936-7. The right to follow goods or their product specifically, being lost when a promise- intervenes, in the same maimer asa lien would by such promise be destroyed.. — Bayer’s Hep* 324. 4 Burr. 2216. Now, though the relation of debtor and creditor may be said to exist independently of such promise, yet, according to the principle- of the case. Green and Palmer, in Burrow, It is the acceptance of, or reliance on that promise, or the credit of the promisor which destroys the specific right — And which is precisely the case of the complainant, who accepted the notes of P. and M. and relied on their credit.
    
    Let us now examine the cases of real assets, and cases of bankruptcy, which aré considered analogous to the present, and see in what they differ. The cases where arrears of purchase money have decreed to bo liens oe. the land sold, do not appear to sne to stand on similar grounds with this case. A bargain and sale mast be f&p money paid, otherwise it is in trust far the bargainor. If an estate is sold and no part of the money paid, ther«?4* dee is a trustee. In such cases therefore, from the foundation of the court of chancery, there must be a lien an the land itself, as the land is the trust fund,, ami that lien will be protected against a subsequent purchaser with notice. The lien springs from the sale which ipse facto creates a trust for arrears of purchase money; this trust like all others Is modelled as justice may require.
    
      But bow different is the case of personal chattels? On ¿he sate of the chattel there is no irnsi created. The oh-ligation in law and morality ia to pay the price. — The thing casi never be specifically followed for Its price. The very moment the sale is completed, the right is vested iis the purchaser. A right to the price is vested in th© vendor. In the hands of the. purchaser himself, still less a third parson purchasing with notice, it cannot he pursued. In every circumstance of the two cases therefore, so far from resembling, they are opposed. Hoy.' destructive would it be to commerce if similar liens existed? B ut even iss the case of land where act oi'sale creates the hodyof a trust, the lien anil security are lostby agreements snuch loss important than those which took place between IP. and M. asid the complainant.
    1. Eq. M. 142, pL 14 — The simple circumstance of taking a note for a part of the parchase money, by introducing a personal responsibility, destroyed the lien. This case is recognised in the late case of Fowell SIee~ ■Bs, t Bro. Chy. 422, and is precisely the principle of the decision of Toril Mansfield in Burrow, and the determination its 2 Term« Ilep. 100. Indeed, in all the cases where taking bouds and notes, ike. have not beer, held to destroy ¿he lien, it has beer owing to this circumstance, that conic of the title papers have, been kept back, or the es-■late was not completely assured to the vendee.
    If’so small a circumstance shall destroy liens in the case of lands, and there is, as the complainant's counsel supposes, any analogy between that case and the case of merchandize, the circumstance of the agreement that P„ anil M. were to sell, called and pay, and executed their notes to the complainant for his share, by which, !£ i.hey had survived their personal credit only, could have been resorted to, and neither the. notes or property specifically pursued, proves conclusively, that. P„ ami M's. death cannot entitle, the complainant to any preference against the executor of the survivors nor is there, when fairly considered and applied, more foa*c? in the cases of bankruptcy, which have been considered, to favour the complainant's claim. The. principle of lhosccar.es are found in the cases exparle Deexe^ exparle Ochcndcii; zmi experts Dumas, in 1 JUkyns.
    
    As these cases in principle end facto are su nearly rU milar, I will only consider exparle Bunios, 1 JMcync 2ac. iS. C. 2 Fes. 582. it is briefly ihis— Ihitnc.s ¿f Cn. nut long before the bankruptcy of Julian -tf Vo. drew bills A' exchange upon the Julians, with a particular order as to the account to which they were to be placed. They were accepted and promised to be placed as directed. Other bills were drawn to reimburse the first; the first bills were protested and returned, and the Julians became bankrupt; 580k of the latter bills remained unnegociated, and were specifically claimed.
    It is obvious that the great direct inquiry in that case, was on the fact, is the property changed? And the inquiry whether the bhnkrupts were trustees or factors to the petitioner? And the material questions were therefore similar to the leading question in this case. The petitioner’s counsel did not pretend to claim for more than the unsold bills, and claimed to that amount only, on the principle that the property had never been changed; and the court only sustained a claim to that amount. Julians’ never had any interest, or share, or concern, in those bills, on their own account. The whole belonged to Dumas, & Co. They were clearly agents and trustees. The possession of the property was exclusively derived’ from the petitioner. Julians’ had no right to the possession independent of Dumas’s consent. The property itself was specifically found; the ownership was in them; 'Dumas’s had only a precarious possess,ion.
    
    But Ridgchj'was never more than a part owner with P. & M. They did not derive their possession from him, but had it as owners and in virtue of the preceding agreement. He could not, as I have before shewn, ever have deprived them of their possession. Against them therefore, supposing the. dispute to have arisen in their lives, what was his remedy? By bill in chancery for account, and a decree for payment, or an action at law on their notes, or on the promise to pay when collected. Upon either of these remedies what would have been his relief ? A decree or judgment for a specific sum. He would then be a creditor for that sum. If during their lives, remedies existed against them only as debtors, and the complainant would only have been protected as a creditor. The circumstance of a death cannot alter their relation.
    The case cited in Vezey and Mkyns, of a determination in the common pleas, that notes taken for sales might be specifically pursued, applies to a case where the facts must have been similar to those in Dumas & Julians; and the notes spoken of, Bank notes, which pass by delivery; for courts of law have no power to compel the endorsement of promissory notes, and otherwise the relief would be nugatory; for without an endorsement the promissor would not be justified in paying, nor could he be compelled to pay his note to any other than the party named in the note.
    It would be unnecessary to multiply references to cases which have arisen under the English statutes of bankruptcy, for they are all similar in principle to the ¡¡fading case of Dumas and Julian; are embraced and distinguished by my observations on that case; and are moreover subject to this general remark, that as the English statutes operate only on the bankrupt’s own estate, no question can arise unless the property be on hand specifically, or in notes taken in the name of the principal. But against the bankrupt’s estate no creditor has any preference; and it is wholly immaterial whether his estate consists of money, or notes taken in his own name, being the amountsales of property of others; for it is only the property of another in the bankrupt’s hands which can be pursued, and notes are not, and never were, the principal’s property.
    Liens created by the usages of trade, are to secure disbursements made on the credit of particular goods; and are very different from the leins which result from, ownership. None of the first description embrace the complainant’s case., for it is certain he, trusted to the credit and stability of P. & M. He could not possibly have contemplated a security in the property which was sold with his consent. lie could not have trusted to the, notes to be taken from the purchaser, because they were authorised to take them in their own name, and could have negotiated or disposed of them at pleasure. He did rely on their own .notes which he took, and on their commercial credit and character. The complainant expressly states that he was to receive money, not a share or part of the property or notes; calculating on that. Ids case is within the determinations in Sayer, and 2 and 4 Burrow, before stated. And I have before shewn, t ,at as part owner he has no lien, because he could not have followed or taken possession of the property.
    Itis said, that the complainant’s claim is more favourable, because he is only pursuing notes arising from the sale of his property taken in the name of his agents instead of his own. But 1 have already shown, that the facts in this cause are the reverse of those on which this reasoning would apply; for they were not to account as agents, they gave, their notes as debtors. I admit, that on the principle of substitution, chancery contemplates trusts, to do justice where it cannot otherwise be obtained. though the parties did not think of a trust; but that can only be in the case where the parties have done no act to prevent the implication of such trust, for the trust can only be implied; and where that implication is rebutted by circumstances, which shew that personal credit, a special agreement, or the like, was relied on, the court would not impK a trust, for the ground of implication fails, if, as he might readi'y have done, the complainant had negotiated the notes of thedeceased, would (here he any implication of trust in favour of his indorsee? Surely not. Yet the principle of substitution applies equally to such an indorsee as to the principal. The truth is, that in a case of this kind, the principles of substitution are analogous to the doctrine of liens; and where personal credit intervenes, neither is applicable. It is immaterial with what view the complainant took notes, whether barely to ascertain his share, or for negotiation, for the act of taking them destroys the implication in complainant’s favour, and introduces new rights, and legal remedies, am! that alone destroys liens and trusts — 4 Burr. 2223; fam, the reasoning which goes to establish a right to a share in sonic, or to the whole of some of the notes, appears to me equally inconsistent with commercial policy and legal decisions.
    The moment the notes were issued, a third person, the maker of the notes, became interested. He executed instruments, widen from their form and general usage, imported negotiability; would pass from hand to band in common transactions nearly as money; and were immediately discountable. When negotiated they were unimpeachable. If at law or in equity other persons are admitted to shew themselves interested than those appearing on the face of the instruments themselves, (here is an end to negotiable instruments; for on the very same, principle that the complainant’s right to a share in one note is conceded, he would become entitled to an injunction to restrain the payment to any other than himself — or if to the whole of one note, to a remedy for its recovery. Who would sign a note to be subject to such endless litigation as might be the result of contending claims and opposing interests? of endless bills of interpleader? Can there be different rules at law and in equity on this subject? Is there a clearer axiom tl»an this — It is only the parties, or executors or administrators of parties, named in a note or hill of exchange, who can claim or he sued for money? Now what rational difference is there whether P. & M. in their lives had received the money on these notes, and 510 other could have received the money on the notes? or whether their executor, who to all intents and purposes represents them, legally and equitably receives it? he receives the money in virtue of his office of executor, no other can receive it. He receives it as property which belonged to the deceased. It is conceded that Ridge ly never could have pursued it against them, and it seems very strange, that if, during their lives, he could neither have prohibited their receiving it, nor have pursued it when received, that his rights should vary when the claim is against one who stands in their shoes. Nor is t true that the assets would be the same to other eredbors if the money had been collected before their death a« now, if the complainant succeeds against the unpaid notes; for it is acknowledged, tiiat in the first case he must come in as a common creditor, and in the latter he claims a preference.
    As to such parts of the notes as were collected by the deceased, the claim of the complainant must at all events sink to a level with that of the other creditors; for the complainant’s claim is on the notes, or the proceeds of each note specifically; of those which remain he was only interested one third, and as his claim is specific, there can, upon no principle, be an extension of it because of his being a creditor.
    If my principles are correct, that the relation of debtor and creditor was created, or even if that relation was not. created, and independent of it a lien would have existed, that the special circumstances of this case prevent such lien; or, even admitting that under such circumstances as those existing in the present case, alien would exist between a factor and a consignor, there can he no lien in any case between partners where one fairly possesses and sells the stock and srives his note or bond to the other for his share; and I think the strongest reasons of policy and justice, and the most solemn determinations support them. The complainant can only be admitted to come in, in common with the other creditors.
    
      Ridgely for the complainant
    Before I advert to the arguments ol‘ the defendant’s counsel, it may be propel* to state several facts, which have been established by conclusive proofs in this cause, more fully and particularly than the defendant’s counsel hath done; there being some circumstances which are held material in the decision of the case, and which appear to have been totally omitted by him in his statement.
    By the testimony of Levy, it appears, that a copartnership was entered into between the complainant, Par-kin Sf M'Kenna, and Levy, for a trading voyage to the 'West-indies. Ridgely was to superintend and conduct the whole voyage, have a commission of 5 per cent on tiie sales of the outward hound cargo; and 2 1-2 on the return cargo; that the return cargo, was to be consigned to P. & M. “as agents for the concernedThat they have received it “as agents by agreement,” and have rendered an account, “ of their agency” stating the said cargo to be sold on credit, for notes, “on account of the complainant, Levy, and themselves,”
    
    It also appears, that if any loss was sustained by the non-payment of the notes, it was to b-" borne equally by all the parties interested. That P. & M. did give their notes to the complainant for his proportion, payable at the periods the notes to them for the cargo (an«l which †00{( as agents.) became due. That they were not to he answerable for the amount of notes so given by them further than they should colled from the sales of the cargo.
    That no final settlement was to take place tiil the monies due for the cargo were all collected, and that each partner in the meantime was to,run the risk in proportion to his interest in the. cargo. That part of the notes, arising from the cargo, were collected by P. &,M. before their death, as agents, and that the residue hath been since received by the defendant, as executor of the surviving partner; the said notes ('unpaid) being held by P. & M. at their decease, as agents for the whole, and at the joint risk though payable to them in their own name.
    On the aforegoing statement of facts, several questions have been urged by the defendant’s counsel, which will require both time and trouble to answer, arising, more from their prolixity than from any other source.
    1. The jirst position laid down by the defendant’s counsel is, «that he who stands in the simple, relation of creditor to another, can have no relief which is not common to all the creditors.”
    I shall - agree with the defendant’s counsel, that if the complainant, in the case before the court, founded his. claim of preference on the ground only of his. simply be., ing a creditor of P. & M. in equal degree with others, that his claim is not supportable, and that the bill ought to be dismissed; for whenever it happens that all creditors arc on an equal footing, equity knows no priority,. and makes no distinction. But the case before the court, is far different, as I hope to demonstrate in the course of my argument.
    2. I will now consider the second question — that «a «person seeking a preference against the estate of a de«ceased person, roust be entitled either on the ground «of a written security, or from the usages of trade, or «by operation of law.”
    
    In investigating this position, the defendant’s counsel has blended subjects, ashling illustrative of the question in debate, which are totally dissimilar in principle, and inapplicable in point of analogy. He premises his remarks with the observations, that '‘equality is equity” — «that commerce has its basis on credit” — that “credit results from the possession of goods, of which «merchants are the apparent owners, and bills and notes, «shewn in their own names, as much as from real «wealth.” «That our insolvent laws guard against «creating preferences — that testamentary laws prohibit “executors from giving a preference,” ike.- — And thence lie. would infer, that the present case is attended with some of the above circumstances, and “that a case hot“tomed in principles destructive of commercial faith, “opposed to the general principles of equity, and subversive of the general policy of our laws, is not entitled to favour.”
    The defendant’s counsel hath certainly not attended to the facts in this case, as proved, or the objects of the complainant’s prayer for relief, or he would siot have pronounced that his case, if established, would prove destructive of commercial faith, opposed to the general principles of equity, or subversive of the general policy of our laws.
    Let us see wherein the truth of this case consists, and what the complainant requires. It is no more or less than this — that in the event of bankruptcy or insolvency, where property is to be divided among creditors, that copartnership 'properly should be first applied to pay copartnership debts; and that private debts should be postponed to copartnership debts, when copartnership property constituted the only fund out of which payment was required. If this application bad been made, to pay the complainant out of P. & M’s separate property, either as a company, or individually, the observations of the defendant’s counsel would certainly have weight. But what does the complainant seek for? only to be paid his claim against the company out of the compamfs effects; that is, that the cargo held in company by the complainant, P. & M. and Levy, and hs proceeds, Cnot converted and reduced into moneyJ should not be considered as the sole property of P. & M. and divided among their private creditors, but that it should be first subject to the claims against the copartnership, then divided, and the dividend of P. & M. only subject to the claims of their private creditors.
    That this is conformable to commercial usage, and agreeably to the rules which prevail in a court of equity, will he readijy admitted, by adverting to the following authorities — 2 P. Wms. 501. 2 Vern.706. l Ml:. 98. 1 Eq. M. 55. 2 Bro. Chy. 15.
    Let us now see in what respect this case is bottomed on principles destructive of commercial faith, is opposed to the general principles of equity, or is subversive of the general policy of our laws.
    Assertions are easily made, and are as easily denied; but to support positions that are contrary to universal and received opinions, and are opposed to establish authorities, it is requisite they should he attended with reasons that carry conviction to the mind. And let ma ask, are not the very vitals of commercial credit wound» ed if tiic complainant fails? Is it not admitted, on all hands that the fund, out of which we pray relief, was partnership property.
    If then the private debts of P. & M. are to be paid out of this company property, what person would risk his property in copartnership with another, if private debts were admitted to swallow up the company ejects?
    
    But it is urged, that credit results from the possession of goods, of which merchants are the apparent owners, and from notes, shewn in their own names, as much as from real wealth.
    Credit and confidence, in general, result from the good opinion we have of the integrity and prudence of our debtors; and if the position advanced by the defendant’s counsel is to have any weight, it would follow as a consequence, that whenever a factor died or became insolvent, all the property in his possession, of every description and kind, let it belong to whom else it might, ought to be devided among his, the factor’s private creditors, he being in possession and consequently apparent owner.
    It is said, that our insolvent law's guard against preferences', it is true, and I admit the application of the rule in its full force, when the private effects of an insolvent are to be divided among his private creditors in equal degree. But if the insolvent retains effects in his hands as a factor or trustee, and belonging to others, or holds copartnership effects, our insolvent laws do not say that property or debts, under such circumstances, are to be distributed among such insolvent’s private creditors; the restrictions contemplated by our insolvent law's, embrace only the private property of the insolvent, not property held by him either in trust, as agent or as copartner, except his own sitare, after the copartnership debts are paid. The trustees of an insolvent have no power over such kind of property.
    It has been observed, that our testamentary law's prohibit executors from giving preference among creditors, under the penalty of a devastavit.
    
    How', let me ask, can the case of a deceased person, whose private property is to be divided among his private creditors, be compared to the case before us? The complainant does not require to be paid out of P. Sc M’s. private assets, he claims a preference out of the copartnership property; and if that was not sufficient, he would then be on an equal footing for the balance, with the other creditors of P. Sc M. Was it so known, that an executor of one copartner w'as justified in applying the property or debts of a company to satisfy the private claims of the deceased? How then can the insolvent or testam.cniarij laws of this state be reminded by a decree in the complainant’s favour when his case is no ways analogous? And can it be said that the general principle equity is opposed to his claim, when it is admitted on al! Siands, that the fund out of which he seeks payment would have been his own exclusively, as surviving partner, if the coffee had not been sold, or if it had been sold, and no notes h id been taken from the purchasers for the amount? For the account of sales rendered and filed in this cause ascertain the fact that the cargo was sold, on account of «‘the complainant and others, the copartners
    
    Would it not be contrary to the general policy of trade, and repugnant to justice too, to say, that A. B. & C. should be paid out of property belonging to D. in E’s. hands, as agent or factor, because E. was indebted on his private account to the said A. B. & C? Surely it would.
    The defendant’s counsel hath stated a case or two, where preference is admissible even by the bankrupt laws; as for instance — «a loan of money to establish a bouse of trade, may be secured by a mortgage or written engagement; hut this rule only applies to creditors of a bankrupt, pari passu”
    
    A case is instanced, when an execution is issued against a person, and his property seized, and it is call" ed “a lien created by operation of law;” but let us en-quire, suppose this execution was laid on copartnership property, for the private debt of one copartner, would a Ben be created on tlse whole copartnership property in. favour-of the judgment creditor? I answer, No. Vide the cases, 2 Lord Raym. 871. Salk. 392. Cowp. 449. Mow then can it be contended, that the private creditors of P. & M. have an equal lien on the property of Midgdij, P. <$• M. and Levy, with the claimants, on the latter concern? If this doctrine could be supported, the creditor of one copartner, on a judgment, might seize the joint effects to satisfy his claims; for such would he the result of a decree, saying that the private creditors of P. & M. were equally entitled to be paid, as the complainant, for if this court should so decree, surely an execution against P. & M. in their lifetime, would have, equally affected this property; and that such doctrine is not admissible, the cases already referred to ascertain.
    It has been urged, that whenever a special agreement intervenes it excludes the effects of a lien; and the case of a farrier, as reported in Sayer’s Septs. 224, is referred to. If the decision of that case rested on a ground similar to ours, it might easily be ascertained, by adverting to the proofs.in the cause, that the special agree
      
      ment between the parties directly supports the complain* ant’s case. What was it? That the notes taken by P. & ML were to be held by them, at the. joint risk of the concern. That the notes given by them were only to ascertain the portions of each partner, and not to be negociated. Arid that no final settlement was to take place till all the notes for the cargo were collected.
    The case of Dumas vs. Julian in 1 Mk. 234, when attentively considered, will, I think, fully establish the doctrine contended for by the complainant. It shews, that notes and bills, put into the hands of an agent, although actually indorsed over and made payable to such agent, if they remain unnegoeSated, may be pursued by the principal, and that he has a lien thereon. The Lord Chancellor in considering that case, declared that it was a question of great moment; “That the property of one man should not be dissipated to answer the debts of other men; that it was the policy of the bankrupt laws to put creditors, as near as may be, on a level, but that must be done only with regard to the bankrupt’s own estate.”
    And in this very case, the chancellor referred to a decision in the court of common pleas, where it was determined, “Thatnotwithstanding the goods so consigned were sold, yet as the factor took notes instead of money for them, that the principal was entitled to the notes, and not the creditors at large.”
    The bills remitted by Dumas to the Julians, were not drawn by them, bat endorsed over, and were negociated, so that they might have been paid away as fully as P. & M. might have paid away the notes in question. — If they had done so, I grant we could not have pursued the notes in the hands of a third person; but the specific notes, which remained, being unpaid and undisposed of, upon the principles which influenced the Lord Chancellor in 1st Mk. 234, the complainant certainly has a right to resort to in this court, either on the ground of surviving partner, or as a principal, puting goods into the hands of a factor, which he had sold, and received notes for.
    In defining a lien, it is contend d, that there cannot, in the very nature of the case, he a lien on that which a man has not “in custody,” for without custody there 'is no lien.
    
    Let me ask, had the Dumas’s in 1 Mk. 234, the custody of the bills which they indorsed over and remitted to the Julians? So far they had a possession, as the possession of a factor may be the possession of the principal. One reason whirh influenced the chancellor in that case was, that the bills were appropriated, when remitted, and were intended to answer a particular purpose. S© in the case before the court, the notes were put into the hands of P. & M. or suffered to remain in their custody, for the. express and particular purpose of dividing the amount from time to time, as received, and not for the separate or sole use of P. & M.
    It is also urged, that no lien, can exist when the parties have looked to personal security, and relied upon it, and 4 Burr. 2223 cited. The facts in that case were, that a dyer had, from time to time, dyed cloth for a clothier, which he had a right to retain till paid the. expense of dying, but instead of a retainer he delivered up the cloth, parted with his lien, and relied on the personal credit of the clothier. Nothing similar to this appears in Jthe case before the court, to shew that Eidgely parted with his interest in the concern on receiving P. & M’s. mates; the contrary is expressly proved by Levy, to be the fact.
    3. Let us now attend to the third position laid down by •the defendant’s counsel, viz. “that the right to demand «the possession of specific property depends upon the « circumstance, that he who demands the possession was “the exclusive owner and possessor,'not having parted « with the right, or made any special agreement reliasquishing the right.”
    In considering the observations made by the defendant’s counsel on the third position, I shall agree with, him, that when a factor makes a sale, and the property is converted into money» the first owner can only be esteemed a creditor, and is entitled to no preference; but if the case referred to by the Lord Chancellor in 1 Mk. had been attended to, the defendant’s counsel must have been satisfied, that where, notes instead of money bad been given to the agent, the right of the principal to pursue them did not cease. A distinction is attempted to be set up between a possession as part owner, and a possession as factor, and that P. & M. being part owners, the property therefore in their hands could not he, pursued; this objection, when duly considered, cannot possibly have any influence on the. event of this case; because it is contrary to the fact; for Levy expressly proves, that the cargo came into P. & M’s. hands as agents for the concern; and if they held as part owners, the right.to the property, or its product in notes, certainly survived agreeably to the rules which prevail in ail copartnerships.
    The defendant’s counsel has laid down a raost extraordinary position, when lie contends, “that where two “ or more persons have a certain interest, and one of «them has the possession, and the property is sold,that « the relation of debtor and creditor is immediately «« created, add an action oí assumpsit lies íbr his sliafé « or interest.'’
    
      TMs j,3 ¿[1C'grs| $|mQ i ever heard it asserted that ato action of assumpsit would lie by one partner against am« ther, for a copartnership transaction, before a ‘final sei± tlement took place, and a balance struck.
    What is the rule of law? Partners are seized per mi el per tout; they are considered as joint tenants in the stock, consequently nothing can be considered as the exclusive right, or actual share of one partner, but his proportion of the residue, upon a batanee being struck of the accounts between them.- — Law of Partn. 116. One joint partner cannot bring assumpsit against another, «or trespass. The case referred to ás an authority, (t Burr. 936,) relates to a factor, and not to a copartner.
    
    The cases cited from Salk. Cowper, Dóug. Sf Co. Litt. do not relate to a copartnership in trade, where the act of one partner is the act of, and binding én, all; but to a joint tenancy, where every one knows that an action at law cannot be maintained by the one against the other. For what purpose, these authorities were referred to, I cannot possibly discover, as they relate not to the case under consideration,
    It S3 asserted, «that P. & M. by common consent, had «the entire possession of the cargo for sale; their posses«sion was rightful; that Mdgely couid not have deprived «them of it against his own agreement; that he could not «have followed the property, and that by his own agree* «ment he was to receive his share in money.” These assertions cannot be supported upon any mercántile principle; for P. & M. were only agents, and held the property as such; and it was liable in their hands to all the operations of law, which prevail in cases between factor and principal. Mdgely did not, by his own agreement, agree to receive his share in money, and abandon his rights either as partner or principal. No such proof appears in the cause; and if it did, according to the doctrine of the defendant’s counsel, this consequence would ensue, that the very moment the cargo was put ihto the "hands of P. & M. for sale, his f Mdgely’s) right to a specific remedy, ceased; and yet the defendant’s counsel admits, that Ridgely’s right of resorting to the specific property, continued till after the sale, and till he took P. & M’s notes.
    It is urged, that Mdgely relied on the personal credit of P. & M. and never thought he had a right to pursue the notes; this assertion is contradicted by the proofs in the cause for it is expressly ascertained, that the notes were not taken in payment on a .final settlement, but only delivered as evidence of the amount of sales; and that th® reason why each partner did pot take notes at the time oí sale, from the purchasers, arose irons the difficulty of apportioning the notes, and because the method was unusual.
    It is also said, that ««in cases of equity the hardship mast be divided.” Does the defendant’s counsel, intend by this to infer that persons ne wise connected should contribute a portion of their property, that th© hardship may be divided? If such is his idea, it may he equality indeed, but not equity* although th® role has been contended for, that equality is equity
    
    It is also advanced as. a position, that “liens are clear legal rights,” and as a remedy exists at law, equity-ought not to interfere to, swallow up the estate for one creditor. Is there any weight in this observation? Arc there no cases of liens in equity that do not exist at law? Nay, when the lien at law lias been parted with? What is the case of a person selling land, talcing bond' for the purchase money, conveying the land, and the purchaser then becoming bankrupt? Equity gives relief, (though lave cannot,) and says, that the vendor shall be preferred to. other creditors, out of the land.
    
    Is it expected, that equity will not interpose to prevent the-estate of one person being swallowed up by claim» against another, although it is assumed, by the defendant’s counsel, as an. established point,, that, all the creditors of P^ ‡ M. stand on the same footing.. Dot me-ask this single question, were all the creditors of l3. & M. equally interested in the adventure to the West Indies? Where is the justice or equity that they should be satisfied debts against P.. & M. out of Sidgehfs property; or why should- P & M’s share of the- adventure be applied to their private debts, before the company's debts are adjusted? This would be reversing the law of merchants, and he destructive of commerce.,
    4. I come now to the. fourth and last- position of the defendant’s counsel — “that copartners in- general trade, or “a particular adventure,, do. not, as such, acquire the ««relations of debtor and creditor, hut that relation is. “created whenever the adventure ends, and a balance Is ««struck and promised to be paid,, or any special agree««ment intervene on which a Segal remedy can he had.”
    I readily admit, that the relation of debtor and creditor doth not arise between partners _tjll a balance is struck, and promised to be paid. This is not the case before the court; the contrary is the fact, as. Levy*s deposition will fully prove. But I cannot help remarking, bow contrary this concession is to the several' cases cited, and to the several, dicta there hazarded and insisted on by the defendant’s counsel. In- the preceding part 0f 1,¡S argument he insists that the complainant, lias a remedy at law, by action, as a joint tenant, he now re|i„qUis|lcs that point, and admits, that before one partner can sue another at law, the partnership must be dissolved, and a balance struck.
    
    This is not the case before us; the partnership was not mssolvea; for so long as the risk was mutual, and continued, the partnership could not cease; and no final balance could be agreed on. The notes for the cargo were, at the joint risk of the concern, and consequently must be considered as joint property. What are the leading facts in 2 T. R. 479 — a dissolution of the copartnership, a final settlement of accounts, and an unconditional promise to pay the balance by the defendant; neither of those three material facts exist in our case.
    A difference is attempted to be set up between a person who sells land, and a person who sells personal chattels. I cannot discover any difference, for land cannot be followed in the hands of a third person, as a purchaser, no more than merchandize; but the case in Mk. surely proves, that notes arising from sales made by an agent, can be pursued, they having ear-marks, •which money has not, and are therefore considered in the same light, as the goods for which they were sold. Bills remitted to a factor, while unpaid, are in the nature of goods unsold, and subject to such a lien as he may have against- them — 2 Blk. Rep. 1153. And I contend, the. reverse of the position is equally true in favour of the principal, and that notes or bills taken for goods sold by a factor, are subject to the same liens as the goods themselves.
    The case of 1 Eq. Ab. 142, pl. 14, cited by defendant’s counsel, is not recognized by the court, in 1. Bro. Chy. 422. as stated; but an opinion is there announced directly to the contrary, as having been delivered by Lord Hardwicke, and also by Lord Loughborough — that, where purchase money was unpaid, the estate purchased was liable by an equitable lien.
    That case is also contradicted by the following authorities. 2 Kq. M. 682. 1 Vern. 267-8. 2 Fez. 622. S Mk. 272. 3 P. Wms.307. 1 Fonbl.Bq. 143, 371, 374; but the cases in 1 Eq. Jib. 142, have been overruled by this court, in the decree B. Wells against Charles Ridgely’s estate, 
       which decision hath given general satisfaction, and been the constant rule ever since in similar cases. The defendant’s counsel relies on the agreement, thatP. & M. were to sell, collect and pay, as a circumstance that destroyed all right in Eidgely to resort to the property or notes specifically. Is it not the duty and office of every agent to sell, collect and pay?
    
    case of 1 Mk. 232, not defendant’s counsel — •Dumas's did not draw a second lot fflf bills to reimburse the first ones; they remitted bills drawn on another house, and were indorsed over by them to the Julians, which completely changed the property. Yet the defendant’s counsel contends, that the great inquiry in that case was on the fact, “is the property changed?" Surely it was. Whenever Dumas's indorsed the bills over to the Julians, and they were received by the latter, the property in the bills, and the right to receive the contents, were not in Dumas's, but otit of them.
    The dfendant’s counsel asserts, that notes taken in the name of the agent, for goods sold belonging to the principal, are to be considered as the property of the agent. This is denied to be a rule of law; it is contrary to universal usage among merchants, and the case referred to in 1 Mk. and already animadverted on, proves the contrary. Besides, if this position was true, an agent would be always liable for the amount of sales to his principal, where he had taken notes, although they proved insolvent. This would be making the agent guarantee all sales, and be an underwriter against all insolvencies; and this too, in the present case, where no commission was to be paid, for P. & M. were not to charge a commission; arid yet according to the doctrine contended for, they were responsible to Eidgely for his part of the gross amount of sales, notwithstanding insolvencies; and notwithstanding the agreement of the parties was directly the reverse, as is expressly proved.
    It is insisted, that as part owner Eidgely had no lien; I answer, that, as surviving partner he had a right to pursue the notes, inasmuch as P. ik M. were agents, and as such responsible to the concern, and as they took the notes for the joint account, and not for their separate uses It is contended, that to such part of the notes as were paid to P. & M. while living, the, complainant’s claim must sink to a level with that of other creditors. This I deny to be the rule in equity; for if we can find notes enough belonging to the concern, to pay our proportion, we have a right to pursue them. Suppose these had been paid out of the cargo on hand, when P. & M. died, could not Eidgely have taken possession of it as surviving partner, or would it have been appraised as P. & M’s property by his executors? tSertainly the surviving partner would have had the right; and in a court of equity, I contend, that inasmuch as part of the notes were pn hand for which the cargo was sold, and can be ikv 
      signated, we have a right to a decree that they shoulc be set apart for that purpose. And the misara, why money: cannot be pursued specifically, arises, says the law books, because it lias no ear-marks by which it can be designated.
    The observations of the counsel for the defendant were to have been attended to, and answered by the Attorney Generals hut as he docs not attend, I have therefore offered such arguments, as on a hasty consideration of the subject, appear pertinent. As the day is nearly arrived, being the IGth August, when Carey proposes to snake a distribution, it is hoped the chancellor will be able to give a decree before that period,
    
      
      
         See the case of the creditors of Charles Ridgely of John against. his heirs and devisees May terra 1792.
    
   Hanson, Chancellor.

«The argumente ©f the defendant’s counsel, against the decree in this cause passed* were by the chancellor heard and carefully considered-?, but he perceives nothing sufficient to. overthrow the principles which governed hiss in his decision, or to prove that those principles were not justly applicable 4a the case. He cannot discover in what manner those principles can be injurious to commerce, or affect tlie negotiability of notes, as is intimated by the counsel. He has only determined, that the notes, not negotiated in the lifetime of JtPICenna, shall be considered as in part the property of JHdgely, for whose use in part they were taken, and that the amount of the said- Midgehfs part in, the ij0tes,.whjcln remained as aforesaid unnegotiated, shall he considered, to be just so much as his share of all the notes taken ir.: the name of Parkin and M’ICenna amounted to», Is there any thing in this to shew the chancellor’s idea, that if A. sells the property of B. and takes a note for it, the note may not be negotiated .as other notes? Is there any thing to shew his idea, that if a man fields any thing ire secret trust, and disposes of it, as, if he were the real, owner, a fair purchaser may be disturbed in this c©v»rt? No! the chancellor’s idea goes no further tfim «his — so long as the subject of anexpress or implied trust, remains, in the hands of the trustee, or of bis heirs, executors,, administrators or devisees, this court wilt lay hold ©£ it; for the benefit of tbe cestui que trusts or if an executor*. &-c. converts it into money, this court will consider the money as justly belonging to tbe cestui qne trusts and; for rendering justice to him, will do any thing further not injurious to the creditors of the trustee; or (in other words,) not placing the creditors in a worse sitaatiois. than they would have been in if the trust had never existed.

Will the chancellor’s decision then tend in the least t© destroy trust and confidence amongst men, or to injure the mercantile interest? Will, it mot, rather have m- opposite effect? In short, after carefully considertng the counsels observations, after attending to every thing which learning and ingenuity could suggest against las decision, the cháncellor feels a much stronger asstiranee that his decision is right, and that it will be approved by every judicious trader, not interested in the cause.

It is thereupon this, &c. adjudged, ordered and decreed, that the decree in this canse, passed on the, &c. lie and shall stand good.”