Case ID: h-mch_2/html/0463-01.html
Source: Caselaw Access Project
Author: {"author": "\n      The Court\n    ", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

GENERAL COURT,
    MAY TERM, 1790.
    Wallace, Johnson and Muir, against William Patterson and Brothers, Garnishees of Benjamin Eyre.
    THIS was an attachment with a clause of scire facias„ issued the 8th of May, 1787, on a judgment rendered (after two non ests returned) for attachment at May term, 1787, for 1,544l. 2s. 7d. current money, damages and costs.
    The following statement of facts was submitted to the Court for their opinion, viz-
    
    It is agreed, that a certain Benjamin Eyre, of London, in the kingdom of Great Britain, on the day of —, was indebted to the plaintiffs, citizens of this state, in a sura oí" sterling money of the value of 1,544/. 2¿. 7d. current money, and that for the recoverv thereof thee7 prosecuted a suit is this Court against the said Benjamin Eyre; and at May term, 1787, obtained judgment for attachment against the said Eyre, for the said sum of 1,544/. zs. 7d. current money,. an<^ costs. It is further agieed, that the plaintiffs after-wards prosecuted and sued forth the writ of attachment in-this cause upon the said judgment, and laid the said attachment in the hands of the defendants; that the defendants at the time of laying the said attachment in their hands, and still are, indebted to the house of Eyre, Atkinson and Walton, of London, in Great Britain, merchants, in the sum of 839/. 14s. 8d. sterling money; of which house the said Benjamin Eyre was, at the time of laying the said attachment, one of the partners, and interested in one third part in the said partnership transactions. It is further agreed, that the defendants were not, at the time of laying the said attachment, nor at any time since, indebted to the said Benjamin Eyre in any other manner than as a partner of the house of Eyre, Atkinson and Walton, as aforesaid ; that the said house of Eyre, Atkinson and Walton are not indebted to any citizen of this state.
    It is also agreed, that before the laying of the attachment aforesaid in the hands of the defendants, the aforesaid Benjamin Eyre, in his separate capacity, and the aforesaid Eyre, Atkinson and Walton, as partners, became bankrupts, and have been declared such according to the respective statutes of the kingdom of Great Britain relating to bankrupts ; and that Joshua Johnson, one of the plaintiffs, was, at the time aforesaid, when the debt aforesaid from the said Benjamin Eyre with the plaintiffs was contracted, and ever since, hath been, residing in the kingdom of Great Britaim and that the whole transactions relative to the said debt, and the contracting of the same, were had, made and passed between the said Benjamin Eyre and the said Joshua Johnson, on behalf of himself and his partners, the plaintiffs in this suit, in the aforesaid kingdom of Great Britain.
    
    And it is also agreed, that some of the partnership debts due by the said Eyre, Atkinson and Walton are yet outstanding and unpaid, and that it is uncertain whether the partnership property of, and partnership debts due to, the said house of Eyre, Atkinson and Walton will be more than sufficient to satisfy and pay the debts due from the said house.
    And if the Court shall be of opinion that the said sum of 8391. 14s, 8d. sterling money, or any part thereof, in the hands of the defendants, is liable to satisfy the debt aforesaid, due from the said Benjamin Eyre to the plaintiffs, then judgment of condemnation to be entered for such sum as the Court shall direct against the defendants ; but if the Court shall be of opinion that the said sum oi 839/. 14s. 8d. sterling money, nor any part thereof, in the hands of the defendants, is not liable to satisfy the plaintiffs on the aforesaid attachment, then judgment of nonpros to be entered in this cause.
    
      William Cooke, attorney for plaintiffs.
    
      Robert Smith, attorney for defendants.
    Jenings, for the plaintiff.
    It is admitted that the defendants owe Eyre, Atkinson and Walton the sum of 839/. 14s. 8d. sterling. Eyre has a right to the one third of this sum. We have attached it, and the question is, whether any thing in the state oí the case can be set up by the defendant as a defence to prevent the payment.
    They are tenants in common of this debt; and the property of one tenant in common may certainly be seized to pay his debts; otherwise, the being tenant in common, or entering info partnership, would defraud creditors, though such partnership share amounted only to the twentieth part.
    If this cause had been tried, the plea must have been nulla bona; and, on the evidence stated, the plaintiffs must have recovered; the defendants ought not to be placed in a better situation now.
    The point between us is, do the defendants owe Eyre any, and what money ? If they owe any thing, there must be a judgment for so much. They can never be called on again. The judgment will be a sufficient justification for them. If the other partners of Eyre wish to controvert this payment, they ought to appear and give bail.
    If it be objected, that the house of Eyre, Atkinson and Walton, being bankrupts, their effects should be first applied to pay the partnership debts in the first instance; it may be answered, that it is as much as to say, that if a person in England owes a debt to a creditor hi re, and has effects in the state, they shall never be taken until all the partnership debts in England are settled. This would leave the creditor here without any remedy. For example: I remit to my correspondent in England, money to the amount of 5,000/. to be placed in a merchant’s or banker’s hands, and he does place it. This banker, or merchant, is concerned in a variety of partnerships, and I can never come at his effects here till the several partnership accounts are settled. I cannot compel a settlement of these accounts, and have no control over them. In the mean time I am to be prevented from laying-an attachment; the effects are remitted; and I am ruined by the loss of the only fund which could make me any satisfaction. This would be a dreadful doctrine for the people in this country.
    The partnership effects in England may be greatly more than, sufficient to pay the partnership debts. This is a matter it is impossible the plaintiff can know. Men frequently become bankrupts by sudden pressures, who have more than the amount of their debts. This is a matter not within our power to discover, and we should not suffer for not doing impossibilities. They may recover the money from us if they have a right to it. On a final settlement, Eyre may have much more coming to him than the whole amount in the hands of the garnishees.
    Before the revolution, when a man became a bankrupt in England his effects in this country were subject to pay his debts due to the people here; notwithstanding any commission of bankruptcy, and security was not to be given on that account. At that time there could be no plea that the partnership debts in England were to be first paid. Are we to be in a worse situation now i
    Since the revolution, no commission of bankruptcy can issue here any more than in France. If the commission of bankruptcy is to prevail, then the effects here must be taken to pay British creditors first. But this would be against the policy of our laws and government. The laws of England may regulate the proceedings of British subjects, but they cannot affíct us. Suppose an express law made in England, that on a commission of bankruptcy, all debts there should be first paid, and that effects in America should be answerable for that purpose; it would be a nullity: á fortiori, no constructive implication having that effect, should be set up. Creditors here cannot attend on the execution of bankrupt commissions. In England they have notice to attend.
    If objected that Mr. Johnson lived in England; it is answered, he acted for the house here. Merchants in this country have persons always employed in England to transact business for them. If that could have any influence on the case, every person here must be affected by the bankrupt laws of England. Johnson could claim no benefit as a British subject, with respect to his vessel or duties; he therefore ought not to be considered as such, so as to subject himself and partners to their burdens.
    Cooke, for the plaintiff.
    1st. If there be several partners, the partnership effects may be taken in execution for the debt of one of them, and the sheriff ought to sell his share in the property. Cooke's B. Law, 55 3.
    2d. If one partner becomes a bankrupt, his assignees, or, if he d|es, his executors, stand precisely, as between them and the other partners, in the same situation that the bankrupt or deceased partner stood himself. Cooke's B. Law% 
      554.) They are entitled to an account of the partnership, and to the balance, if anv, on that account.
    So under the bankrupt laws of England, it has been the practice of the Courts of Chancery, where there has been a joint and separate commission taken out against partners, to marshal the assets, by applying the joint effects to the satisfaction of the joint creditors; and the separate effects to the satisfaction of the separate creditors.
    At first, it was doubted whether a joint creditor of the partnership could prove his debt under the separate commission issued against one of them; or, whether a separate creditor against one could prove his debt under a joint commission against all. These claims, by degrees, were established, but prevailed under this limitation, that if a separate Creditor proved under a joint commission, he could only have a dividt nd of the surplus, after payment, in the first place of the joint creditors; and so, if a joint creditor claimed under a separate commission issued against one partner, he could only take a dividend out of the surplus, after paying ids separate debts. But this is now exploded. Cooke’s B. Law, 291, 292, 293.
    3d. All these cases extend only to creditors coming in find proving their debts under the bankrupt laws of Great Britain. But any creditor in England might either prove his debt under the commission, or, if the bankrupt had property beyond sea, where the bankrupt laws did not extend, might send and attach the debt in such foreign country. Cooke’s B. Law, 370,
    If this may be done by a subject of Great Britain, under their own laws, it will hardly be contended that we, who are not bound by these laws, can in any manner be affected by them, if what is contended for should prevail, we are much worse off than the subjects of Great Britain. They could send here and attach, but we must wait till all the partnership accounts are settled to come in for a share of the surplus. The property in the mean time will be taken hence, and we will be obliged to go to Great Britain to pursue the claim there. Eyre may be a creditor of the partnership greatly beyond the sum we claim.
    Smith, for the defendant,
    contended that the separate creditors of Eyre could have no claim against the partnership effects. And, to show that one partner has a lien on all the partnership effects, cited Cowp. 256. 1 Burr. 494. 3 Bac. 590. Cowp. 471.
    
      Martin, (Attorney-General,) for the defendant,
    admitted that the bankrupt laws of England do not extend here. And that if the attachment had issued against Eyre, Atkinson and Walton, it would have been good; but not so when against only one of the partners. That the same rule applied in this case as in the case of a factor. lie cited 2 Vern. 706. 1 P. Wms. 326. 2 P. Wms. 500. 3 P. Wms. 25. 182. Cooke’s B. Law, 553. 1 Atk. 67. 97, 98, 99.
   The Court

gave judgment of condemnation for the plaintiff, for the one third of the debt due from the defendants to Eyre, Atkinson and Walton, and costs.

The defendant appealed to the Court of Appeals; which Court, at June term, 1792, affirmed the judgment of the General Court.