Case ID: ohio-st_24/html/0087-01.html
Source: Caselaw Access Project
Author: {"author": "\n      Welch, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

John Swasey & Co. v. M. T. Antram & Co.
    1. Where one of the defendants, in an action on a joint contract, dies beforejudgment, and the judgment is taken against all the defendants, without any suggestion of his death, or making his representatives parties, such judgment is not void, but merely voidable, and is a determination of the action, within the meaning of sections 218 and 219 of the code, authorizing an action by the plaintiff in attachment against the garnishee.
    2. A married woman has not capacity to enter into a general mercantile partnership not connected with or relating to her separate property, and where she assumes to do so with the consent of her husband, and is by him assisted in managing and carrying on the business, the husband, and not the wife, is to be regarded in law as the partner.
    3. A feme covert having obtained a “permit” to trade within the lines of the army, with the knowledge and consent of her husband entered into a partnership with other persons, for the purpose of buying and selling goods and merchandise under said “permit,” and herself, with the assistance of her husband, managed and conducted the business. The firm was subsequently dissolved, and its property transferred by the other partners to her, she agreeing to pay all the partnership debts. She then sold the property to S., who had notice of all the facts, and who in like manner agreed to pay the partnership debts. This was all done with the knowledge and concurrence of the husband, who joined her in executing the bill of sale to S. In an action by a creditor of the firm against the husband and the other members of the firm, not including the wife: Held, that the goods in the hands of S., or the price agreed by him to be paid therefor, and not yet paid, are liable to attachment in the action.
    Error to the Superior Court of Cincinnati.
    Antram & Co. brought an action against Hazard L. Baldwin and three other named persons, to recover the price of goods alleged to have been sold by Antram & Co. to the defendants, while the latter were doing business as partners under the name of M. J. Baldwin & Co. The suit was commenced by the issuance of a writ of attachment, and no personal service was made on the defendants. Process of garnishment was served upon Swasey & Co., charging that they had property of the defendants in their hands, or were indebted to them, and Swasey & Co. answered, denying all indebtedness and liability. Antram & Co. took judgment by default against the defendants in attachment. At the date of this judgment, Hazard L. Baldwin, one Of the defendants, was dead, having died after the commencement of-the suit; but the plaintiffs being ignorant of the fact, no suggestion of his death was made, nor were his legal representatives made parties. After obtaining their judgment, M. T. Antram & Co., being dissatisfied with the answer of Swasey & Co., brought an action against them (under the 218th section of the code, S. & C. 1009), charging that they had property in their hands, or were indebted to an amount exceeding the sum so recovered. The cause was submitted to the court upon the pleadings and an agreed statement, which embody substantially the following facts:
    In 1864, Mary J. Baldwin, the wife of said Hazard L. Baldwin, with the assent of her husband, procured a “ permit ” to trade within the lines of the federal army, and for that purpose, with like consent, entered into a partnership with the said three other persons so sued as co-defendants ■with her husband in the attachment suit. The business .consisted in buying and selling goods, and was managed principally by her, assisted by her husband. The business ■was commenced without capital, the goods being purchased on credit, and the claim of M. T. Antram & Co. was a debt due for goods sold to the firm.
    In May, 1865, the firm of M. <1. Baldwin & Co. was dissolved, and its property and effects sold by the other partners to Mrs.. Baldwin, she agreeing to pay all the partnership debts. This was done with the consent of her husband; and with like consent, in June, 1865, the entire property and effects were sold by her to Swasey & Co., the husband, as well as the wife, signing the bill of sale. Although this bill of sale purports to be an absolute transfer and conveyance, it was in fact intended as a mortgage, to secure a debt due to Swasey & Co. Swasey & Co., however, took the property upon the same terms as did Mrs. Baldwin— that is, they were to pay all the partnership debts, including the debt due to Antram & Co. The property was amply sufficient to pay all the debts. It was not actually delivered to Swasey & Co. at the time of the sale, but was subsequently managed, and sold from time to time, by Mrs. Baldwin, as agent for Swasey & Co., and the proceeds paid over to them as they came to hand, her husband assisting her in managing the business.
    After service of the process of garnishment upon Swasey .& Co., the principal part of the debt due to them having been thus paid from the proceeds of the property, the remainder of the property and effects was reconveyed by them to Mrs. Baldwin.
    On these facts, the court found for the plaintiffs; and after overruling a motion of the defendants for a new trial, predicated on the ground that the finding was contrary to the law and the evidence, rendered a judgment in favor of the plaintiffs. Whether the court erred in so finding, and in rendering judgment, is the question presented by the pres* ■ent petition in error.
    
      
      C. D. Coffin, for plaintiffs in error; with whom was T. G. Mitchell and W. M. Ramsey :
    
    On the 23d day of June, 1865, Swasey & Co. had no-property of the defendants — Hazard L. Baldwin, James B. Peabody, Edward McCook, and Joseph W. Burke — against, whom, as partners under the firm name of M. J. Baldwin & Co., Antram and Sage took the joint judgment. They did not owe those defendants anything which could be the subject of attachment and garmishment under the provisions of the third chapter of' the code, and never did owe or have property belonging to them, or either or any of them. The said defendants never owned any property jointly. Peabody, McCook, Burke, and Mrs. M. J. Baldwin did,, jointly, before May, 1865, own the property on account of which Swasey & Co. were garnisheed. Previous to their owning jointly this property, Mrs. Baldwin obtained a valuable privilege of trading within the army lines, which washer separate property. She obtained it; she lived and resided in Ohio. This “ permit ” was valuable, and independent of our statutes, Mrs. Baldwin had the right to obtain aud hold it as her personal estate. Her husband had no interest in it. A partnership was formed between Mrs. Baldwin and Peabody, McCook, and Burke to do, aud which did, business under said permit in the name of M. J. Baldwin & Co.; but in May, 1865, Peabody, McCook, and Burke sold their interest in said business and joint property to Mrs. Baldwin, and about the 12th of June following, she assigned it to Swasey & Co. By this transaction,. Swasey & Co. did not acquire any property which then belonged to the firm of M. J. Baldwin & Co., or any member thereof, save Mrs. Baldwin, and no one but her had any claim or could assert any lien thereon. Swasey & Co. did not become indebted to that firm, or in any way agree to pay that firm anything for it. After the sale of the property to Mrs. Baldwin, aud up to the assignment of it Toy her to Swasey & Co., it was the sole and separate property of Mrs. Baldwin. Phillips v. Graves, 20 Ohio St. 371; Conway v. Smith, 15 Wis. 125; Wiemann v. Ayiderson, 42 Penn. St. 311; Foster v. Conger, 61 Barb. 145. Bat Mrs. Baldwin was not a party to the suit brought, or judgment obtained by Antram and Sage, nor were Swasey & Co. ever debtors of M. J. Baldwin & Co. Swasey & Co., then, can not be garnisheed as the debtors, or as having the property of the defendants in the attachment suit.
    The agreed statement is that, in May, 1865, the firm of M. J. Baldwin & Co. was dissolved; that all the property of the firm was “ sold and transferred ” to Mary J. Baldwin, she agreeing to pay the firm debts; not a syllable suggests-either an agency or a trust. Her agreement to pay the firm debts did not make her a trustee. Robb et al. v. Mudge et al., 14 Gray, 530; Clapp v. Lawton, 31 Conn. 95; Beach v. Hotchkiss, 2 Conn. 425; Howe v. Lawrence, 9 Cush, 553; Burt v. Wilson, 28 Cal. 632; Campbell v. Lacock, 40 Penn. St. 448.
    If trust existed, the property could not be reached by attachment, the remedy being in chancery. Clapp v. Lawton, 31 Conn. 95; Fitch v. Chandler, 4 Cush. 254; Frost v. Gage, 1 Allen, 262; Beach v. Hotchkiss, 2 Conn. 425; Oliver v. Smith, 5 Mass. 183.
    The husband of Mrs. Baldwin was not the proper person to be sued in the original action. He was not a partner. Mrs. Baldwin was the partner; and it does not matter that she had her husband’s consent to do business for herself. She did not have his consent to act as his agent and pledge his credit, nor did she do so. This is essential to recovery in all eases. Bright’s Husband and Wife, par. 14, chap. 2, p. 17; Taylor v. Britton, 1 Car. & P. 16; Bently v. Griffin, 5 Taunt. 356; Partridge v. Stocker, 36 Vt. 108; Taylor v. Shelton, 30 Conn. 22; Petty v. Anderson, 3 Bing. 170; Metcalf v. Shaw, 3 Camp. 22; Savage v. Davis, 18 Wis. 608; Todd v. Lee, 16 Wis. 480; Todd v. Lee, 15 Wis. 365; Wiemann v. Anderson, 42 Penn. St. 311; Oglesby v. Hall, 30 Ga. 386; Morse v. Tappan, 3 Gray, 411; Loring v. Folger, 7 Gray, 505; Randall’s case, 2 Mod. 308; Green, J., in Green v. Shaver, 3 Humph. 141; Griswold v. Stewart, 4 Cowen, 457.
    
      ' Hazard L. Baldwin died before the rendition of the judgment, and it is therefore void as to him; and if void as to •one of the defendants, it is void as to all of the defendants. Rangely v. Webster, 11 N. H. 299; Richard v. Walton, 12 Johns. 434; Hall v. Williams, 6 Pick, 232, 247; Arnold v. Sanford, 14 Johns. 417, 425; Van Bokkelin v. Ingersoll, 5 Wend, 315; Benner v. Wold, 45 Maine, 483; Buffman v. Ransdale, 55 Maine, 252.
    
      Stanley Matthews, with whom was J. F. Baldwin, for defendants in error:
    The death of H. L. Baldwin, prior to the rendition of the judgment in the original action, does not render the judgment a nullity.as against the surviving partners, and as to .him it was only voidable on proceedings to reverse or vacate; but the judgment-is not void, so that it can he collaterally impeached and disregarded. Freeman on Judgments, secs. 140, 153, citing Collins v. Mitchell, 5 Fla. 364; Loring v. Folger, 7 Gray, 505; Coleman v. McNurty, 16 Mo. 173; Yaple v Titus, 41 Penn. St. 203; Day v. Hamburg, 1 Browne, 75; Gregory v. Haynes, 21 Cal. 443; Spalding v. Wathen, 7 Bush, 659; Camden v. Robertson, 2 Scam. 508; Shortgill v. Fullerton, 44 Ill. 108; Case v. Ritchie, 1 J. J. M. 30. Contra: Carter v. Carriger, 3 Yerg. 411; Morse v. Tappan, 3 Gray, 411.
    Supposing Mrs. Baldwin acquired the property in question as her separate estate, dealt with it as such, and was authorized bylaw to do so, she still remained a femé covert, and subject to all the disabilities of coverture; and consequently her contract with her partners in the firm of M. J. .Baldwin & Co., to assume and pay the partnership debts, which was the consideration of the purchase of the partnership property, could not be enforced against her by a personal judgment. That contract and promise, upon the supposition that she was dealing in reference to a separate ■estate, could only create upon it au equitable charge and lien. This charge and lien upon the property was created by Mrs. Baldwin in favor of her partners. They were entitled to enforce it against the property, by a proper proceeding, wherever they could find it, whether in the hands of Mrs. Baldwin or Swasey & Co., for the purpose of subjecting it to the payment of the claims of their creditors.
    An equitable right only, under our laws, is liable to be-seized under an attachment by actual levy, when the property itself is in the actual possession of the debtor, by process of garnishment when the legal title and possession are in a stranger, subject to an equity in favor of the debtor in the attachment suit. Carty v. Fenstemaker, 14 Ohio St. 457 Armstrong v. McAlpin, Hinman & Co., 18 Ohio St. 184.
    ■It has been repeatedly decided that where property is-placed in the hands of one to be sold, and the proceeds applied to a particular purpose, and upon the sale there appears a surplus of money over what is necessary for a given purpose, he will be held as a garnishee of the person to-whom the property belonged. Parson v. Weller, 3 Mass. 564; New England Mar. Ins. Co. v. Chandler, 16 Mass. 275; Webb v. Peale, 7 Pick. 247; Pickards v. Allen, 8 Pick. 405; Herne v. Crutcher, 4 Yerg. 461; Cook v. Dillon, 9 Iowa, 407.
    Mrs. Baldwin’s “ trade-permit” 'was not property at all. It has none of the elements of property. It had no marketable or salable value, because, in its nature, it was not assignable. If it were otherwise, it did not impart the-quality to the partnership effects of being Mrs. Baldwin’s separate estate.
    But she was not a partner in the firm of M. H. Baldwin & Co., for the sufficient reason that she had not the legal capacity to become one. She was a married woman, under • all the disabilities of coverture imposed by the laws of Ohio, her domicile, which determined her status. Her husband, by virtue of her arrangements with the other parties,. and his own assent, did become and was a member of the-firm, and was rightly sued as such in the original action.. Parsons on Partnership, 23.
    Consequently she had no proprietary interest in the assets and property of the firm; and they were, therefore,. not affected in any way by any interest she had in it under the permit; and it is this partnership stock, and not the ■trade-permit, which is the subject of controversy in this litigation.
    It is certain that the transfer to Mrs. Baldwin did not vest the property in her as her separate estate, so as in any way to meet the requirements of section 2 of the act of 1861, relating to the subject. Swan & Sayler, 389.
    Had Mrs. Baldwin been a person capable in law of acting in her own right, the transfer would have conferred the entire legal and equitable title to the property, in consideration of her binding personal obligation to assume and pay the firm debts. But she had not the capacity to bind herself by any contract personally.
    The promise to pay the firm debts, as a personal obligation, was a mere nullity. Morse v. Tappan, 3 Gray, 411. The consideration, then, for the transfer entirely failed from the beginning; and even if it be true that the legal title passed, the whole beneficial interest and equitable es■■tate remained in the vendors. Emery v. Davis, 17 Me. 252. And this brings the real parties—M. J. Baldwin & Co., and Swasey & Co.—into an immediate relation and privity.
    If Mrs. Baldwin is to be regarded as agent of the firm, intrusted with the title and possession of the partnership stock, with instructions and authority to sell for the payment of the partnership debts or as a trustee, under the terms of an express trust for the benefit of partnership creditors, the consequences remain the same. Eor, on that supposition, the sale to Swasey & Co. would be regarded as an execution of the trust; and while they would thus become owners of the property, they would be indebted for it to the defendants in the attachment, by virtue of the promise .and agreement made to and with Mrs. Baldwin, as their representative, that being the only capacity in which she can be supposed to have acted, in order to uphold and give validity to the transaction — a legitimate supposition fouuded -on, and required by the maxim, ut res magis valeat, quam -pereat.
    
   Welch, J.

We are unanimous in the opinion that this judgment should be affirmed, although we differ somewhat as to the ground on which the affirmance ought to be placed.

A majority of the court are of opinion that the husband, Hazard L. Baldwin, and not his wife, under the circumstances, became and was a member of the firm of M. J. Baldwin & Co., at least so far as to make him liable for its debts ; that the sale of the partnership effects by the firm, nominally to the wife, was in’ law a sale to the husband; that the sale to Swasey & Co., nominally by the wife and husband, was in law and in fact a sale by the husband; that Swasey & Co., by their agreement to pay the debts of the firm of M. J. Baldwin & Co., became liable and indebted to Hazard L. Baldwin, one of the defendants in attachment, and therefore liable to the process of garnishment.

This property was in no proper sense the separate estate of the wife, nor was it purchased with her separate property. It does not fall within any of the denominations of property declared by the act of 1861 (S. & S. 389) to be the separate property of the wife. The “permit” under which the business was carried on was not property, in the statutory sense. Besides, she had no capacity to enter into such a contract of partnership, to bind herself to pay for the goods purchased by the firm, or to pay the price stipulated for the goods sold by the firm to her. Her acts in alt these matters, being done with the knowledge and concurrence of her husband, must be held in law to be his acts, so far at least as regards his rights and liabilities as between himself and third persons. The promise of Swasey & Co. to pay the debts of the firm was, in law and under the circumstances, a promise made to the husband, and enforceable by him, if not also by his copartners and co-defendants in the action.

But suppose the law were otherwise, and that by her purchase of the goods from her partners, she, and'not her husband, became vested with the absolute ownership of the property. I am inclined to hold, as the court below seems to have held, that in that case her promise to pay the debt of the firm, being the promise of & feme, covert, and therefore a mere nullity, she held the property in the character of trustee or agent, and subject to the fulfillment of her promise; and if so, Swasey & Co., taking the goods of her with knowledge of these facts, and upon a similar promise-held them subject to the same equity or right of reclamation in favor of the other partners of the firm. If we call this a “trust,” it would not be a trust in favor of the creditors of M. J. Baldwin & Co., as counsel seem to suppose in their argument, but a trust in favor of M. J. Baldwin &' Co., or the retiring members of the firm.

A majority of the members of the court, however, disincline to put the decision of the case upon this ground, and hold, as I have indicated, that the husband, and not thewdfe, is to be regarded as the real party in these transactions,, and the wife as acting in the capacity of his agent.

But it is objected that the judgment in the attachment case was not final,, and that, therefore, the suit was not “ determined,” within the meaning of section 219 of the-code. (S. & C. 1009.) The judgment, it is said, is void, because of the death’ of Hazard L. Baldwin before its rendition, there being no suggestion of his death. The judgment was voidable, but not void. It was voidable at the instance of Hazard L. Baldwin’s representatives. Until avoided by proceedings in error by his representatives, it is final both as to him and as to the other defendants. It is. not even voidable by the other defendants, because, although erroneous, it is not erroneous to their prejudice.

Judgment affirmed.

Bat, C. J., McIlvaine, Stone, and ’White, JJ., concurring.