Nashville union and American. [volume] (Nashville, Tenn.) 1853-1862, 1861-05-24

: ROD. La K. l.; and in recent case in New York,
Tnere sns description Of the creditors was,
eiass VI AOorers and woFkmenS of the assignors,
residing IN Albany and Buffalo, not mentioning the
names OF the persons or the respective amounts
due to each 1t was held that the assignment would
not be avoided on lnls ground % Barbour, $50 In
| all such cases, however, it ought to appear very
clearly, that the omission was not meditated snb
terfuge, with the view of leaving an openino for
fraudulent or unfair practises and the exisfence
and true amount of the debt at the date of the as
| sieument should be fully established
4th Il is not insisted that the serving Mariners
had no mower to make an assignment Of the mart.
nershp effects TO trustee, for the benefit of credi-
tors with or without preferences, Of either the per-
sonalty, or realty belonging to the frm-
This objection presents question OF serious diff
Guilty and one upon which the authorities are direct
| ly at VARIANCE.
The power of one partner to make general as
sgnment of all the partnership property. so as to
break I'D its operations has been regarded as doubt
full by some of the authorities Story on Part. sec
101, note 4, and cited. Burriu on assignment
I'D Ed) As to IS where the are more fully re-
ferred to.3 Kents Com, AZ, note The current OF
authority, however, IS perhaps, IN favor OF such
power. Sneed, l.
A much more different question is, as to the pow
er of partner-where ali are living, and capa-
Bile of acting in the matter, and mightbe consulted
/ to make such an assignment of the partnership
effects to trustee, for benefit Of creditors, with
out the consent, against the will Of his copart-
ners ;even though all the creditors be admitted TO
equal participation of the proceeds by the terms
of the assignment. The power to make such an as
| signment is denied. by numerous eases,-more
pecaly when it assumes to give preference to some
of the joint creditors and in other cases. the power
is distinctly maintained See the authorities above
referred to, where most of the cases. both sides
of the question, are noticed
The case Of Lassel vs. Tucker, Sneed, maintains
the doctrine tone partner the absence of his
partner may make valid assignment, to trustee.
of all the partnership effects for the security and
payment of the partnership debts This case sim
ply involved the question OF the power OF one part
ner to make such assignment in the absence Of
the other The question as to the power of giving
preferences the effect of the dissent of the other
partner to such assignment, were not IN the case
In this State these still open questions and, IN
regard to them, the law can scarcely be said to be
| settled.
If required now to express an opinion, we should
feel reluctant to Yield assent to the doctrine
that it is incompatible with the fundamental princ
pies upon which the partnership relation is based
that partner should be held TO possess the au-
thorty to exclude his co-partner from all particips
ton in the deter mination of the question, whether
or not an assignment should be made, and if So to
| whom made, and for the benefit of what creditors
of the firm The question would be difficult of
course where the emergency did not admit of cons
sutation with the other partner, as II he were abb
sent or incapable of acting in the matter; and upon
this distinction the Of Lassel VS.. Tucker is not
inconsistent with our present views.
partners are all living the time of the assignment,
the question more properly for our determination.
in the case before us whether or not after dis
solution of the partnership, by the death OF one mem
ber the surviving partners have authority to make
an assignment of all the partnership effects, real
and personal to trustee with preferences to some
of the joint creditors-the partnership being ua-
| solvent?
We are aware that upon this question, as upon
/ most others connected with this general subject,
there are conflicting authorities. See Story on Part
| and Burrill on Assignments, above referred to.
1t seems to US that the doctrine which asserts such
power in the surviving partners Is rreeonclleable
with the established rights, declared by law, of
the representative of the deceased partner, as well
as of the joint creditors of the firm, and conse-
auenty cannot be sound.
All the books agree that adSsolution by the death
of one partner, iSO tGctO puts an end to the part
| nership. Story oil Part, sec. 342. The partners,
from the time of dissolution become distant per-
| sons and tenants in common of the joint stock
Kent's Com. q Ed) 63. And the personal represen~
tative of the deceased partner becomes tenant 10
common with the survivor, of all the partnership
property and effects in possession. Story on Part,
see BAG 1t is true that to limited extent, and for
particular purposes, the partnership is said to sub
sst that is far and only so far, as It may be IN
| indispensably necessary to enable the surviving
partners to wind up and settle the affairs OF tne
partnership ID. 344 325.
Upon the dissolution. each partner, In the words
of Mr. Story Ibid 326) has aperfect right to re-
uuire that the partnership funds shall be directly
and regularly applied 10 the discharge of the part
uershIp debts and liabilities and after these dis
charged to have his share Of the residue of the part
nership funds. And this right is lien upon the
partnership effects, as between the partners. The
personal representative of the deceased partner has
the same len equitable right; and hence it is not
merely his right, but his Imperative duty, TO insist
upon due and regular application of the Joint eft
ects to discharge the joint debts, and after that to
receive and apply the residue IN the proper dis
L 11isiu right and a
duty which the personal representative cannot sur
render or forego. 1t Is eDJoned upon hlm
| by law. How, then, can 1t be held that,
| in direct opposition to this right and duty
| and lien of the personal representative, the
surviving partners may assign the effects to trus
tee to be disposed of as they may choose to direct
amongst their favorite creditors? Nor can this
consist with the acknowledged lien of the personal
representative or, how can it be said to be within
the scope of the proper duty and power of the sur
| Viving partnersi
And the doctrine, it IS obvious, is no less lncon-
sistent with the rights of the JOINT creditors who
| have also in equity, quasi hen, under and
through the specific lien of the partners themselves,
emitting them to have the partnership effects rata
blu appropriated to the discharge OF each and all OF
the Ioint debts in of disposition by the death
| or bankruptcy of one of the partners sec.
| 361 ; 2 Story'S Eq. Jur. 1888
This well established equity of al the joint cred
itors-in case OF dissolution by the death or bank
| ruutcy of one partnsr-tO have equal distribution
/ of the partnership effects cannot possibly, as IL
seems to us be reconsidered with the supposed au~
| th0rity of the surviving partners to make an ar
rangement of all the effects, and thereby, either
wholly or partially to defeat the rights OF portion
| of the creditors. These conflicting rights cannot
| co-exist.
5th Another insuperable objection to this partic-
| ular assignment grows out of the provisions, con-
| ferring upon the trustee unlimited discretion as
TO the 'terms and conditions" of the sale, and, In
effect putting it in his power 70 delay for period
of eighteen months, before he could De forced TO
| make sale.
| In noticing this objection we of course, have no
reference to ordinary assignments for, as gene
raj rule it is well settled IN this state, and else
| where that reasonable discretion given to the
trustee in regard to the terms of sse or the giving
reasonable length of time for the execution Of the
trust will not effect the validity Of the assignment
The objection is restricted to this peculiar case
the case of an nsolyent partnership dissolved by
the death of one of the partners In such case,
Il seems tn u.s. that the discretion attempted to be
yiyen to the trustee in respect to the terms OF sale,
and the fine within which the trust shall be
ted is equally at variance with the prescribed duty
| of the surviving partners, and the recognised
rights of the creditors of the firm. In such case
tits alike the duty of the surviving partners and
the rieht of the creditors to have the effects of the
| dissolved and insolvent concern converted into
| money, without unnecessary delay, and applied to
| the payment of the debts.
And by the implied terms of the contract of part
] uership, well as oy implication OF law, the sur
viving partners themselves if capable of acting IN
the matter are the proper persons upon whom this
responsible trust is devOlved The attempt Of the
surviving partners to throw off this responsibility
unon stranger. and to commit the interests of the
| representative of the deceased partner, and the
| creditors to his mere Judgment and discretion !;
and withal to interpose delay of eighteen months
before he can be called upon to execute the trust,
| is in our opinion, contrary to the clearly estab-
lished legal and equitable rights of the representa-
tive of the deceased partner and the creditors OF
the firm, and consequently cannot be allowed
9Th in regard to the real estate the doctrine that
one partner may dispose Of all the partnership
property and effects for any and all purposes WITH
in the scope and objects Of the partnership and IN
the course of s trade and business, IS, upon gene
raj principles confined strictly to personal proper
ty and does not extend to real estate hsd Dy the
partnerships In such case, one partner can
not transfer the real property belonging to the rm
belongs the partners as tenants in common con mon
vdad interest-Story on Part l0l, "a, 92; Story's
Ed Jur. acc, 1901. IL is nevertheless, true, that