Case ID: me_9/html/0133-01.html
Source: Caselaw Access Project
Author: {"author": "Mellen C. J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Locke vs. Hall.
    
      G. #• M. being partners in trade, and owing certain debts, took C. into partnership with them, constituting a new firm, under the style of G. M. fy- Co. The new firm received a transfer of all the effects, and the partners verbally agreed among themselves that it should pay all the debts of the old'firm. The new firm after-wards become insolvent, its stock was attached by L. a creditor of G. M. in a suit against them; and was afterwards attaolied by the same officer, in the suits of other creditors against G. M. Co. In an action brought by L. against the sheriff, for neglect to levy his execution on the goods, and for giving priority to the subsequent attachments against the new firm, it was held, that the goods were first liable to the creditors of the new firm; — that no creditor of the old firm could avail himself of the engagement of the new firm to pay its debts till he knew and assented to it; — and that his remedy on such agreement was to be sought only in an action against the new firm.
    The facts in this case, which came before the court upon a case stated by the parties, will be found in sufficient detail in the opinion of the Court.
    
      H. O..Alden, for the plaintiff,
    maintained his right to priority of satisfaction from the priority of contract, it being against the old company; from priority of attachment; and from the express agreement of the parties among themselves that the new company should pay the debts of the old. Gow on Parin. 343 — 346; 4 D. Sy E. 720.
    
      Allyn, for the defendant,
    cited Pierce v. Jachson, 6 Mass. 242 ; Phillips v. Bridge, 11 Mass. 242.
   Mellen C. J.

delivered the opinion of the court at an adjourned session in Cumberland, in August following.

This is. a special action on the case against the sheriff of Waldo, for an alleged neglect of Isaac Allard, one of his deputies, in-not selling on execution certain personal property-by .him attached in the plaintiff’s suit against the firm of Gilbert & Mitchell. The at-' tachment was made on the 5 tip of June 1829 ; judgment recovered at JYovember term following ; and the execution was placed'in the hands of Allard for service within thirty days after judgment. Having orders not to arrest the body of either of the ' defen da Ms,he returned the execution in due season, in no part satisfied. Whether this action can be maintained, depends on the following „ facts. On the sixth of August 1828, Sewall Gilbert and Samuel. A. Mitchell, having before that time formed a copartnership-urider’-the firm of Gilbert & Mitchell, became indebted to the plaintiff in the sum for which said judgment was recovered. In the month of September 1828, William A. Chandler became a member of the copartnership ; and they assumed the name of Gilbert, Mitchell & Company. At the time this new partnership was formed, there /as a parol agreement entered into, that the existing stock, goods Wilbert, Mitchell 8f Company; and that said firm should pay the pasting debts due from Gilbert & Mitchell, as well as its own lebts which might be subsequently contracted. The consideration i the above agreement on the part of Chandler was, that he :ty and business of the second firm. It seems that this second cm failed in business, in June, 1829 ; but there is no fact in the Irse tending to show that, when the second partnership was formed, 1 the parties were not solvent and unembarrassed; of course, we ust consider that they were; and had a right to make the above entioned contract and disposition of the property of Gilbert &f Ilitchell to the second firm, though they were indebted to the laintiff; 1 Mad. 589; 15 Ves. 558; and such a contract need lit be made in writing. Gow on Part. 277; 11 Ves. 3. After le second partnership was formed, it became indebted to Morrill I al. who caused the same goods to be attached, on the same day lit after the plaintiff’s attachment. They recovered judgment at liy term, 1829 ; and their execution also was placed in the hands t Allard, for service, within thirty days after judgment; who sold I the attached property thereon to satisfy the same. Until after Ib attachments were made, no notice was given by the second firm Itheir before mentioned agreement to pay the debts of the first, lie plaintiff claims a right to maintain this action in virtue of the fcve agreement; and insists that, as his attachment was prior to lit of Morrill and others, the property attached should have been lalied by Allard in satisfaction of his execution. The answer is, It the property, when attached, had belonged to the second firm, II the plaintiff’s writ and execution were against the first firm; and Ivas Intended to be, because, the contract of the second firm was I known by the plaintiff when the suit was commenced; and it Ibs not appear that it was known either by the plaintiff or Allard, lile the execution against Gilbert &/• Mitchell was in his hands, lease of the insolvency of a firm, the debts due from it must be nd debts of Gilbert Mitchell, should become the property of lould be equally interested with Gilbert &¡- Mitchell in the prop-first paid, before any of the property belonging'to it can be legally applied in satisfaction of debts due from any one'or more of the partners. This is an established principle. Hence the plaintiff I wishes to avail himself of the engagement of the second firm. On the facts before us, was he entitled so to do ? It is true that the second firm took and continued in open possession of the property transferred by the first, which perfected the transfer and vested the property in the second firm. Gow. 298; Exparte Ruffin, 6 Ves. 119; Exparte Williams, 11 Ves. 3. Yet, as before observed, the I agreement as to the payment of the debts of the first firm was notl known to the plaintiff, and, of course, he never could have assentedl to the substitution of the second firm as his debtors, which was necessary to authorize him to claim against that firm. Thus “ where| A, a trader, being indebted to several persons, entered into partnership with B, and brought his stock in trade into the partnership, and! by the articles of copartnership, it was agreed that the joint trade should pay the creditors of A, named in the subjoined schedule, il was held that a separate creditor of A, named in the schedule.! whose assent, before the bankruptcy, to the agreement between the parties, could not be shown, did not by the articles become a credl itor of A and B. Gow. 311, and cases there cited. In principlel the case above put, seems to be exactly similar to the case at barl But, had the plaintiff assented, we apprehend he should have madf his claim and brought his action against the second firm, and shapeJ his declaration accordingly. Exparte Peel, 6 Ves. 604. Thl judgment and execution would then have given information to thl officer as to priority of right, on whom to call and whose propertl to seize. If the parol promise was binding on the second firm, sucl would have been the proper course, had the transfer of promisl been known. If the promise was not binding, then the legal prioil ity belonged to Morrill and others as creditors of the firm whicl they had credited. In these circumstances it would seem injusticl to hold the defendant liable in damages, by considering Allard \ a wrong doer. We think that Allard was justified in obeying, I not bound to obey his precept, and govern himself accordingly the disposal of the property. It does not appear that he was conu-sant or ever informed as to any particular facts respecting the change and ownership of the property, and no indemnity appears to have been given to him. On the whole, our opinion Is that in the circumstances in which he stood, he conducted properly in'Selling the goods upon the execution of Morrill & al. against the firm of Gilbert, Mitchell & Company, to whom the property belonged, and applying the proceeds of the sale in satisfaction of that execution; and that as there was no surplus, he was correct in returning the plaintiff’s execution in no part satisfied. On these principles, according to the agreement of the parties, a nonsuit must be entered.) with costs for defendant.