Case Name: WARD vs. BRANDT & AL. SYNDICS
Court: Louisiana Supreme Court
Jurisdiction: Louisiana
Decision Date: 1822-05
Citations: 11 Mart. (o.s.) 331
Docket Number: 
Parties: WARD vs. BRANDT & AL. SYNDICS.
Judges: 
Reporter: Martin (Louisiana Term Reports)
Volume: 11
Pages: 331–433

Head Matter:
WARD vs. BRANDT & AL. SYNDICS.
A partnership^ 44 to do commission business as factors, in the city of NeW'Or-leans,” is not a particular partnership.
It is not necessary that the style of such partnership should contain the name of each partner.
The partners, in an ordinary commercial - partnership, are bound %n solido, and cannot prove or be paid their respective claims, until the partnership debts due to other creditors, are paid.
Debts other than those arising from consignment, may be proved on insolvency against a commission city. house in
Appeal from the court of the first district.
Grayson, for the plaintiff.
The petition of David L. Ward, the appellant, was originally preferred against J. Brandt &Co., composed of John Brandt and Henry Foster, of New-Orleans, and James Johnson and William Ward, of Kentucky, to recover the sum therein stated to be due from the latter to the former, with interest, damages and costs, according to accounts, made part of, and filed with the petition, signed with the name of J. Brandt & Co., by Henry Foster, who was thereunto authorised, and which accounts, on the 1st of September, 1820, for valuable considerations, were assigned to the plaintiff, and also what further sums might be due from J. Brandt & Co. to James Johnson, and Wards & Johnson.
East'n District.
May, 1822.
Private debts cannot be set off against pa,mei-rommeídaífi!m of o“inCNeu& the0liattCT,°fthe tucky, migft6
be^owTn'Tom-Bot^prívUege />hichearises be°ing ceeds*cannot"be efie^hTthefa-
themestitfs °0f termeddle in the" sons propertyj ..
The accounts made part of, and filed with the petition, are—
An account between James Johnson, creditor, and J. Brandt & Co. debtors, exhibiting a balance due from the latter to the former, on the 18th of April, 1820, of 43097 dollars 7 cents, subscribed J. Brandt & Go., by Henry At the foot of this account, a charge is made bJ J- Brandt & Co., against James Johnson, of 15080 dollars, for Rochelle & notes, delivered to Robert J. Ward; leaving a balance due James Johnson of28017 dollars 7 cents. There is an assignment of, and upon the account, and of what might be farther due to David L. Ward, for value, da-1st September, 1820, subscribed, “ James
An account between E. P. Johnson & Co. and J- Brandt & Co., shewing a balance in fa-vour °f the former, of 5131 dollars, 45 cents, the 14th of May 1819; signed, “ J. Brandt & Co., by Henry Foster.” And at the foot of the account, is an assignment thereof, from E. P-Johnson & Co., to D. L. Ward, for value, dated the 1st : September, 1820, subscribed, “ E. P. JohnSOU & Co.”
An account between William Ward, and John Brandt & Co., shewing a balance due to Win. Ward, on the 19th May, 1819, of 2680 dollars 50 cents, subscribed, “J. Brandt &Co., by Henry Foster.” And at the foot of which account is an assignment thereof, for value, from William Ward, to David L. Ward, dated 1st September, and subscribed, “ W. Ward.”
p‘0Q™*°lLwhe,.
of in_ t' *e°s owluthe'1" Ts10 thf .c/edl' ⅞⅛ have no right to be paid out of ^ciai*sqnthe are
A f?*sa,ge executed by two p^yTd foTf re-accotdedChgDes prefe ence< the mortgage^.
And an account between Wards & Johnson, and John Brandt & Co., exhibiting a balance due the former, of 14287 dollars 45 cents, on the 14th June, 1819, subscribed, “ J. Brandt & Co., by Henry Foster.” And at the foot of the account, is an assignment of it, to David L. Ward, and of what might be further due, dated 1st September, 1820, signed, “ James Johnson, Wm. Ward.” . ...
The answer of John Brandt and Henry Foster, objects : That John Brandt, Henry Foster, William Ward and James Johnson were ’ partners, as commission merchants, in New-Orleans ; that they obtained a respite; óf one, two and three years for the payment of their debts. That not more than one year had ed, and that two-thirds of their debts remained unpaid. And that since the exhibition the state bf their affairs, by which it appeared that the said James Johnson and William Ward, then co-partners, and from whom the plaintiff derived his claim upon the respondents, were creditors of J. Brandt & Co., for the amount claimed by the plaintiff, losses had been incurred by J. Brandt & Co.; whereby the balances claimed by the petitioner had been greatly reduced. And that the claim of the petitioner, as set forth in his petition, must be deferred until all the debts of J. Brandt & Co. should be paid.
The answer of the syndics objects : — That there is nothing due from J. Brandt & Co. to the petitioner.
That if any thing be due to him, it is due by assignments, made by James Johnson, Wards & Johnson and Edward P. Johnson & Co.; that the firm of Wards & Johnson is composed of James Johnson, William Ward and the petitioner, and that the fijrm of E. P. Johnson & Co. is composed of E. P. Johnson and Wm. Ward, and that Wm. Ward and James Johnson, were partners of J. Brandi & Co., and bound in solido for all the debts of the firm; And that Wm. Ward and James Johnson are indebted to the Respondents, as syndics, in a much larger sum of money than , , \ . . . the amount demanded in the petition, to wit. 100,000 dollars, which they plead, in compensation against the demands of the petitioner, who, as they say, knew the facts so set forth at the time said transfers were made. And they further object, that if any thing be due to the petitioner, the same is due by two of the firm of J. Brandt & Co. only, and must be postponed to the debts due to the creditors of said firm; that the property surrendered, will not be sufficient to pay the creditors of said firm, and that said property is all partnership property. And for further answer, they deny all the allegations of the petition.
The plaintiff and syndics agreed upon certain facts, and prayed the opinion of the court upon the questions arising thereon, to wit.
1. That the late firm of J. Brandt & Co., was formed for the purpose of doing commission business, as factors in the city of New-Orleans, and was composed of John Brandt and Henry Foster, William Ward and JameS Johnson; that the business of said firm was transacted by John Brandt and Henry Foster, who resided in New-Orleans, whilst the said William Ward and James Johnson, resided, tit- 11 . , as they did during the whole period ot said partnership, in Kentucky.
2. That the said John Brandt and Henry Foster, in the name of said firm, on the 19th May, 1819, applied for a respite, and on the 28th of December, 1819, obtained the same, the first instalment to become due the 28th December, 1820, the record whereof, and all the proceedings relating thereto, are made part of the facts agreed, as aforesaid.
The said record contains a schedule of the debts acknowleged by J. Brandt & Co., to be due from them, at the time of their application for a respite, and which schedule, among the debts so acknowleged, shews to be due to William Ward, 2680 dollars 50 cents; E. P. Johnson & Co. 5131 dollars 45 cents; James Johnson, 35236 dollars 51 cents; Wards k Johnson, 18151 dollars 86 cents; Wards & Johnson, 1590 dollars, in all 62,790 dollars 32 cents ; and to Lee White 512 dollars 50 cents.
3. That upon making application for said, respite, the said partnership wras dissolved, and shortly afterwards, to wit — on the day of May, in the year 1819, the dissolution afore- • said, was advertised in áome newspaper printed in iNew-Orleans.
■4. That at the times of applying for, and obtaining said respite, the said late firm was indebted to Lee White, in the sum of 512 dóllárs and 50 cents; to Edward P. Johnson & Co. in the sum of 5131 dollars and 45 cents; to William Ward, in the sum of 2680 dollars and 50 cents ; to James Johnson, in the sum of 43,097 dollars and 7 cents; and to Wards & Johnson, in the sum of 14,287 dollars 45 cents, for the proceeds of consignments made by said creditors, respectively to said late firm; That the firm of E. P. Johnson & Co, Consists of said Edward and William Ward, and that the firm of Wards & Johnson consisted of said David L. Ward, Wm. War'd and James Johnson; and upon settlement between the members of said latter firm, the said William Ward and James Johnson being found in arrear to said David L. Ward, the debt due to Wards & Johnson, as aforesaid, was adjudged to said David L. Ward, and assigned, to him accordingly in consideration thereof.
5. That the said late firm of J. Brandt & Co., own real éstate in the city of New-Orleans, and elsewhere, to wit; lands, lots and negroes.
6. That the said Henry Foster and John Brandt own real estate, to wit; lands, lots and negroes.
7. That a parcel of land was sold in tfte city of New-Orleans, to Rochelle & ShifF, the property of the said John Brandt & Co. as aforesaid, for the sum of ; that the said James Johnson, received on account thereof as follows, Rochelle & Shiff’s notes, payable at 3, 4, 5 and 6 years from 22d April; one year for 4333 dollars 33 cents each, say 17,333 dollars 33 cents, deducting for interest 2253 dollars 33 cents, leaving the sum of fifteen thousand and eighty dollars, and for which said sum, the said John Brandt and Hénry Foster, have given the said firm credit on the debt due to said James Johnson as aforesaid, leaving a,balance of 28,017 dollars 7 cents.
8. That the agreement is not to preclude the said James Johnson, William Ward and Wards & Johnson from shewing further sums due to them, than, as above, or to prejudice them, or said David L. Ward in the recovery thereof; the right of recovering, which, if any such there be, is nevertheless to be saved to them. Nor is it to preclude the syndics from shewing less to be due than above stated.
9. That the record of the proceedings in the case of Robert Dyson and others, against John Brandt & Co. &c., be made part of the facts agreed.
That record shews, that James H. Shepherd, Peter L. Sloane and John B. Bernard, were on the day of in the year 1821, made syndics of J. Brandt & Co. and of J. Brandt and Henry Foster.
10. That the debts due to said William Ward, Wards & Johnson, E. P. Johnson & Co. and James Johnson were assigned by them respectively to said David L. Ward, on the 1st September, 1820, for valuable considerations, then given by said Ward, and that the debt due to said Lee White, has come to said Ward for a valuable consideration by assignment. ,
11. T$at on the 1st September, 1820, William Ward and James Johnson executed to David L. Ward, a mortgage, recorded in the officeJof the register of mortgages in this city, on the 29th December, 1820, which is made part of said facts agreed, and which mortgage is attached to a petition of said Ward in this court, against John Brandt,¡fee. to secure the payment of fifty-six thousand dolr Jars, with interest, and which remains due and unpaid, and that the accounts or debts assigned to said David L. Ward, as above mentioned, remain due and unpaid. ⅝
l2. That John Brandt and Henry Fostel are, and were at the time of the respite aforesaid, indebted to the said late firm of John Brandt Sr Co., in a sum exceeding one hundred and forty thousand dollars, a part of which was laid out in lands, lots and negroes, in their separate names.
13. That the property surrendered by said John Brandt and Henry Foster; both partnership and private property, will be insufficient to pay the creditors of the late firm of J ohn Brand t Sr Co.
14. That the plaintiff was conversant of the fact of John Brandt & Co. having obtained a respite.
15. That from the year 1815,1810, or 1817, when the partnership was formed of John Brandt & Co., to the time of the advertisement of the dissolution before mentioned, the said .William Ward and James Johnson, were well known in New-Orleans, to be part-nerifif said firm.
16. The questions submitted to the court are:—
Whether the plaintiff is entitled to come in r upon an equal footing with the creditors of John Brandt & Co., for a dividend upon all the above named debts assigned to him?
If not so entitled, upon what part of said debts he is entitled fo a dividend ?
Whether said plaintiff is entitled to any privilege, and out of what funds, and in what order his debts are to be paid; and whether said debts ought to be paid out of the private estate or estates of John Brandt and Henry Foster, or either of them?
17. The admissions, contained in the 4th article of said agreement of facts, are intended to operate no farther than to effect a settlement of the foregoing questions, and are no further to conclude the parties as to the amount of said debts.
The district court decided that the creditors of J. Brandt & Co. should be preferred-upon the funds of the partnership, to the plaintiff, except that as to the sum of $5131 45 cents, for which, as asssignee of E. P. Johnson, he should be paid rateably with the joint creditors of equal grade.
From this decision the plaintiff appealed.
I . His counsel insists that he is entitled ud-⅜ ⅜ r on the debts mentioned in his petition, and upon the debt assigned to him by Lee White, as stated in the agreement of facts aforesaid, to be paid out of the partnership fund of J. Brandt & Co. rateably with the creditors of said firm.
2. That if he be not so entitled upon the partnership funds, that he ought to be prefer* red to the partnership creditors upon the separate estate or estates of John Brandt and Henry Foster.
3. That the-mortgage of the 1st Sept. 1820, from William Ward and James Johnson, to David L. Ward, and recorded in the office of register of mortgages in New-Orleans, on the 29th December, 1820, as stated in the 11th article of agreed facts, to secure to him the payment of 56,000 dollars, with interest, according to the note of that date, of William Ward, James Johnson and A. M. Johnson, entitles the appellant, as mortgagee of William Ward and James Johnson, to their interests or portions in the lands and estates mentioned in said mortgage, out of which to be paid, as then creditor, the said sum of 56,000 dollars, with interest: and that said interests or portions have not passed to the syndics aforesaid.
,1. The counsel urge,s that a partner may he a creditor of the partnership for the sums he has disbursed, &c. Civil Code, 394. And, a fortiori, he may be a creditor of the partnership for monies received by it upon consignments made by him on his special and private account. Such were William Ward and James Johnson for the private accounts assigned by them respectively, to the appellant. — 4th article facts agreed.
That William W ard and J ames J ohnson are not bound, in solidó, for the debts of J. Brandt & Co., and so may, as well as others, be creditors of the partnership.
Their co-partners, Brandt and Foster, were the administrators of the partnership, and resided in New-Orleans, whilst William Ward and James Johnson resided in a different place, namely, Kentucky — 1st article of facts agreed. And therefore the latter are not bound by the agreements of the former.
The partnership of J. Brandt & Co. was not an ordinary commercial partnership; but was merely a partnership of industry and skill, to transact commission business, as factors, in New-Orleans — 1 st article of facts agreed.
But if the appellant be not entitled upon the partnership funds for all the debts stated in his petition, he is at least so entitled as to1 the debts in the names of Wards and Johnson. and E. P. Johnson ⅜ Co.
^.he account in favor of Wards 8f Johnson, though nominally due to them, that is to Wil-liamWard, David L. Ward and James Johnson, was in fact wholly due to D. L. Ward.— 4th article of facts agreed.
Wards and Johnson, and E. P. Johnson & Co. were separate and distinct firms from J. Brandt & Co. A firm is an unit, or quasi individual, and the firms of Wards and Johnson, and E. P. Johnson & Co. were no parties to and had no interest or concern in that of J. Brandt & Co.
II. If the debts of the petitioner are to be postponed to the partnership creditors, upon the partnership funds of J. Brandt & Co.; for that reason they are to be preferred upon the, private estate of J. Brandt and Henry Foster, the debtor partners.
J. Brandt and Henry Foster own real estate, to ivit; lands, lots and negroes.^ — 6th article of facts agreed.
The late firm of J. Brandt & Co. owns real estate in the city of New-Orleans, and elsewhere, to wit; lands, lots and negroes. — 5th article of facts agreed. And the appellant insists, that the interests or portions of the x. , 1 • , , , 1 , respective partners therein, are not held by them in commercial partnership : that though the partnership of J. Brandt & Co., as stated in the first article of facts agreed, be deemed an ordinary commercial partnership; yet that their lands, lots and negroes, do not enter into or belong to that partnership; that their partnership therein is private, special and particular, and the portions of the respective partners belong to their private estates. 11 Mass. Rep. 469.
III. The appellant relies upon the mortgage from William Ward and James Johnson, of the 1st September, 1820 :—
1. Because it was made upon a consideration then given.
It purports to convey their title to certain and any real estate of J. Brandt & Co. and the accounts or claims of James Johnson and William Ward against said firm, to pay a note of 56,000 dollars, of same date with the mortgage: and said accounts or claims were assigned to D. L. Ward, 1st September, 1820, for valuable considerations then given — 10⅛ article of facts agreed,
That the" consideration then passed is no where questioned or contested by the syndics.
2. Though J. Brandt & Co. be bankrupt, yet Wm. Ward and James Johnson are not so: and tbey had full power to mortgage any of their estates, for considerations present or past.
Their portions of the lands, lots and ne-groes of J. Brandt & Co. did not pass under the judgment of cessio bonorum, against J. Brandt & Co. to their syndics. That cession included only the effects belonging to the partnership of J. Brandt & Co. as stated in the 1st article of facts agreed, and not to the éffeets of any other partnership, though in the same name.
On the part of the appellant, I contend he is a creditor of J. Brandt & Co., and as such to be paid in concurrence with the other creditors of the firm, out of the partnership effects.
The firm of J. Brandt & Co. was formed for the purpose of doing commission business, as factors, in the city of New-Orleans, and was composed of John Brandt and Henry Foster, William Ward and James Johnson. The business of the firm was transacted by John Brandt and Henry Foster, who resided in New-Orleans, whilst William Ward and James Johnson, daring the whole period of the partnership, resided in Kentucky-^lst article of facts agreed.
A factor is an agent to buy and sell goods for others, for a certain allowance. 1 Liv. 68, Lex. Mer. Am. 388. He is not a merchant— merchants are those who buy things of others, with the intention of selling them again for the sake of the profits they thereby acquire. — 2 Partida, 715, tit. 7. /. 1. A merchant buys and sells for himself: a factor for others — he is the agent of the merchant.
The partnership of J. Brandt & Co., to transact commission business as factors, was then a partnership to buy and sell for others, not for themselves.
The debts of a partnership must be limited by the nature and object of it. Those of a company of factors, can only arise upon monies or goods delivered to them to buy or sell for others. And if debts be contracted in the name of the company, by one or more of the partners, without special authority from the others, for purposes distinct from or beyond the intention of the partnership, they are nof in law the debts of the company, but of the . r . contracting partners solely.
T^e debts claimed by the appellant, and originally in the names of Lee White, James Johnson, William Ward, Wards & Johnson, and E. P. Johnson Sr Co. accrued as and for the proceeds of consignments made by them respectively to John Brandt Sr Co. — 4th article of facts agreed.
These are then the debts of the company of J. Brandt Sr Co. contracted within the scope and intention of the partnership.
All the business of the firm was transacted by John Brandt and Henry Foster, in New-Orleans — 1st article of facts agreed. Their partnership with William Ward and James Johnson, residing in Kentucky, being for a limited object, gave them authority to bind them or the company so far and no further. It is therefore incumbent on those who prefer claims against the firm of J. Brandt Sr Co. to exhibit the nature of them, to shew how and for what they accrued, that it may appear whether the partnership be liable for them or not. In no instance has this been done, except by the appellant, and he is apparently the only legitimate creditor of the firm of J. Brandt &• Co.
On the day of , in the year 1821, John Brandt íyCo. and John Brandt and Henry Foster were declared bankrupt, and the ap-pelees confirmed syndics for their creditors. Vid. the case of Robert Dyson and others, against them, made part of the facts agreed.
When a partnership is brankrupt, the joint estate is to be first applied to the joint debts, and after they are paid, the surplus, if any, to the separate debts; and, vice versa, as to the separate estate. — Dig. Mod. Ch. C. 54-90. 4 Ves. 840.
In bankruptcy, joint creditors cannot touch the separate estate, till the separate creditors are satisfied.- — Dig. Mod. Ch. C. 57-122. 9 Ves. 124.
Separate creditors cannot take a dividend upon the joint estate rateably with the joint creditors: each estate is applicable to its own debts. — Dig. Mod. Ch. C. 69-169. 3 Ves. 240.
In bankruptcy, the usual directions are to apply the funds respectively, the joint to the joint debts, the separate to the separate debts, the surplus of each to the creditors remaining on the other. Dig. Mod. Ch. C. 69-90, 4 Ves. 240.
Upon proof of a joint debt, no dividend can be taken under a separate commission of bankruptcy, till the separate creditors have received 20s. in the pound.- — Dig. Mod. Ch. C. 4 Ves. 837, Vid. also, 1 Jitk. 227, Datfs Dig. 69, 5 Crunch, 289, 4 Ves. 840.
Thus each estate is answerablé, in the first instance only, for its respective debts. The estate which has received the consideration, and been benefited or enriched by it, is, if possible, to pay the equivalent that has been promised for it. The creditors of neither estate, until it is exhausted, can apply to the other, and then only for the surplus, after the payment of the debts due by it.
The debts above claimed by the appellant of J. Brandt & Co., as factors, are there*fore to be paid him in the first instance, out of the effects of the firm, in concurrence with other debts due by them, as factors, if any such there be; and if those effects be insufficient, the residue of his debts are to be paid, at least, out of the surplus of the separate estate of the partners, after the payment of their private debts. But I hope presently to shew, that these debts of the appellant are privileged upon the separate estates of John Brandt and Henry Foster, and to bp paid prior to their separate creditors.
As to the debts preferred by the appellant, as assignee of William Ward and James Johnson, it is objected that they accrued to members of the firm of J. Brandt Co., and that they can have no satisfaction out of the partnership funds, unless there be a surplus after the joint creditors are paid. If there be no joint creditor besides the appellant, this objection can be of no consequence. But the objection, however plausible in itself, is not well founded. It is true, that a partner can sustain no claim against the partnership for his portion of stock or profits, whilst the partnership subsists, or until the joint debts are paid. Each one’s portion of stock has been taken from his private estate, and appropriated to the partnership. The firm is an individual, and is proprietor of the joint stock, and of the profits which it may make, upon the faith of which it is enabled to obtain credit, and to contract debts. But if a partner lends money to the firm, to be repaid with or without interest; or if he makes disbursements for the firm beyond his share; or if the firm, as his agent, collects his money, to remit to him, or receives it on deposit, to keep for him, or receives his goods to sell for him, and remit to him the proceeds, or receives his goods ■ on deposit, or on pledge, the firm is his debt- or for so much, and the debt so created be-i°ngs to his separate estate. I repeat it, this debt makes a part of his separate estate. I have shewn that the private estate is liable in the first instance to the payment of the debts due the separate creditors, and that the joint creditors can only touch the surplus, after they are paid. The partner must therefore be permitted to recover this debt of the partnership pari passu, with its other creditors, to enable him to pay his separate debts. When they are paid, if there be a surplus of separate estate, the joint creditors may go upon it. But it may be the only separate estate which the partner may possess, and the money or thing received of him by the partnership, may have beeu furnished him by his separate creditors, and the debt due for it, may now be the only source to which they can look for payment. The partnership fund has been enriched to the amount thereof, and in good faith, the firm therefor had engaged to pay what is now, claimed by the partner for his separate creditors, and in consideration of which engage ment, credit was given to the firm by the partner. The money would not have been lent, the disbursements would not have been made, the goods would not have been pledged, deposited or consigned ; but upon the expectation that the obligations thereby imposed upon the firm, would be fulfilled according to contract. The civil law expressly decides, that a partner may be a creditor of the partnership, for sums disbursed by him on partnership account. Civil Code, 392, art. 26. He may be a creditor of the partnership. He has then all the rights of a creditor, to demand his debt, sue for it, assign it over; in fine, to dispose of it in any way he may think proper, or as any creditor might do. Lord Hardwicke, the most distinguished of English chancellors, and who owed his greatness, in a high degree, to his knowlege of the civilf^ law, decided, that a debt, due for money lent by one partner to the firm, ought to be dti^ sidered as part of the. separate estatejlr the partner; that a dividend should be plowed for it out of the partnership estattíjpand (that the separate .‘Creditors of the partner were entitled to have as much as^the dividend amounted to, together -wijjlNhe other sepa rate estate of the partner, applied m the first . . place, to the satisfaction of their separate debts. 1 Atk. 227. Cooke, 531, 532. This de-c's^on’s exactly in conformity with the principles above proposed, and supported by numerous authorities. It is true, the contrary has been elsewhere determined. Cooke, 532. But where decisions are contradictory, the court will follow that which is supported by principle.
But whatever doubt may exist in the English law, as to the claim of a partner upon the partnership, in the event of its bankruptcy, for advances or disbursements, upon partnership account; there is none, as to the claim of a partner or partners of a firm, who are distinct traders on their own account, and in that capacity deal with, and become creditors of the aggregate firm. In such cases the decisions are numerous and invariable, that proof may befcnade of the debt against the firm, in case of ifHj|>ankruptcy, in the same manner as if it had dJl|t with strangers. Lex. Mer. Am. 641. Cooke, -6¾(⅛. 538. Wats. 286.
This priftiple was adopted in a case where ' the members imposing the two firms, though nominally different,, were in fact the same.
Simon and Abraham Field, as co-partners, . carried on trade as woolstaplers, in South-wark, under the firm of Simon & Abraham Field. They also carried on trade as wool-staplers at Leeds, under the name of William Barker & Co. But Barker was a servant of the Fields, and received from them a salary of £100 a year, and was not interested in the profits or losses of either of the concerns. The concerns were kept totally distinct, and in all matters of trade and dealing between the two houses, regular debits and credits were given in their respective ledgers, and the same conduct in all respects observed, as if the proprietors of the two concerns had heen different and distinct persons. A joint commission issued against Barker and the two Fields. At the time of the bankruptcy, the house of Barker & Co. was indebted to the house of Simon & Abraham Field- in a considerable sum. The lord chancellor directed .that the house of Simon & Abraham Field should receive from the effects of Wm, Barker &*Co. a rateable dividend in proportion with their other creditors. That the effects possessed by each house shouldpie considered as their distinct property, and the pro duce divided amongst the creditors of the re- . , • .1 ■ .1 spective houses, in the same manner as it the firms had consisted of different persons. 6 yeS' 747 This decision results from the just and obvious principle, that each estate should bear its own debts, and that the credits due to an estate make a part of it, whether they be owing from the same, to other, or the same persons».
Where partners are engaged individually in other concerns, if they are distinct, proof has been allowed in bankruptcy of debts, as between the different estates, but not if they are merely branches of the same concern. Cooke, B. L. 529. 11 Ves. 413. 1 Rose, 146.
A joint commission of bankruptcy issued against Metcalf & Jeyes, by the description of oilmen, insurance brokers, dealers and chapmen. Metcalf also carried on the trade of an oilman, &c., as a distinct concern, and became indebted in his distinct trade, to the firnyof Metcalf & Jeyes, in the sum of £7144 9s, Id, The lord chancellor decided that the partnership was entitled to a dividend for this deb%out of the separate estate, with the separat^ predi tors; though he said it would have, been otherwise, if the debt ⅛¾⅜ accrued, for money received by the partner, on ac-i ■ . . • i i* count of the partnership, to be laid out tor the partnership, and not as carrying bn a distinct trade. 11 Ves. 413. 6 Ves. 123, 743,747.
In bankruptcy, among partners concerned also in other trades, the paper of one firm being given to the creditors of another, dividends were allowed out of both estates. Dig. Mod. Ch. C. 71-203. 8 Ves. 546.
On the principle of distinct interests, subsisting between the separate partnerships of the same firm, it is held that a transfer from one set of partners to the other, when fairly done, and on account of the several concern, is attended with the same consequences as if made to a third person. Lex. Mer. Am. 644. 1 Bos. ahd Pul. 539.
Where one partner carries on a distinct trade, and purchases goods of the firm, the other partner may, under his commission, prove a debt for goods sold to him by the firm. Cooke, 508.
The distinction which appears to run, though the latter English cases is, that one trade may prove against another, though represented by the same persons ; but that one partner cannot, prove against another, any claim he may have upon partnership account, until the . partnership debts are first paid.
Thus the solvent partner cannot prove aSa’nst ^ie estate of the bankrupt partner, the amount due to him on the partnership account, until he satisfy the partnership debts, or indemnify the bankrupt estate against them. Cooke, 537.
So if he bring money into the partnership beyond his share, and is a creditor on the partnership fund for so much, he cannot prove it in competition with the joint creditors.— Cooke, 532.
But the debts claimed by the appellant, as assignee of William Ward and of James Johnson, from John Brandt & Co., did not accrue to them, as for balances due to them on párt-nership account, or for advances or disbursements on partnership account, or monies brought into the partnership, beyond their shares. These debts arose, in distinct trades, carried on by James Johnson and Wm. Ward, respectively on their separate accounts. J. Brandt ⅝- Co. were factors, Wm. Ward and James Johnson were merchants or traders, and in that character consigned merchandize or produce to them to sell for the consignors, on their separate accounts, and to remit to them the proceeds. Not to apply those proceeds to partnership purposes, and to carry the same to partnership account ; but as agents to receive for, and pay over to William Ward and James Johnson, in their distinct trades, and upon their separate accounts.— Such was the expectation of William Ward and James Johnson, when they made their consignments, and such the obligation of J. Brandt & Co., when they received them. If it were otherwise, a partner carrying on a distinct trade, could not, and would never have any dealings with the aggregate firm.
The debts claimed by the appellant, as as-signee of E. P. Johnson & Co., and in his own right, and as assignee of Wards ⅜* Johnson, arose also upon consignments made by the parties to J. Brandt Co. — 4th article of facts agreed. Wm. Ward was a partner in the firm of E4ward P. Johnson & Co., and William Ward and James Johnson, in the firm of Wards & Johnson. The appellees admit, that the appellant is entitled to a dividend upon the estate of J, Brandt 8r Co. for one half of the former, and one third of the latter claim. As to the residue they make the ob jection before discussed, to the claims in the separate names ot William Ward and James Johnson. That objection applies with still ]ess reason to these claims. Edward P. Johnson, a member of the firm of Edward P. Johnson & Co., and David L. Ward, of the firm of Wards Johnson, and were seized, per my et per tout, of the property consigned by their respective firms to J. Brandt Co. Wats. 316. They certainly never contemplated that the property so consigned, or any part of it should be taken from their firms, and appropriated by, and to, and for the use of J. Brandt <fe Co., and be carried to the account of Wm. Ward and James Johnson with that firm. If Wm. Ward and James Johnson themselves, had been willing, they would have had no just right to make such misappropriation of the funds of Edward P. Johnson and Co., and Wards Sf Johnson, No partner has the moral right, without the consent of his co-partners, to apply to his own use, or turn from their proper course, the effects of the partnership. Moreover, William Ward and James Johnson, though partners, may have, in fact, no interest in the consignments made to Brandt Co. by Edward P. Johnson &• Co. and Wards &/• Johnson. “ Each partner is to be allowed against the other, every thing he has advanced or brought in as a partnership transaction, and to charge the other in account with what he has not brought in, or takert out more than he ought: and nothing is to be considered as his share, but his proportion of the residue on balance of the account.” So an execution against one partner for his separate debt, does not put the other in a worse condition: for he must have all; the allowances made him before the judgment 'cfDditor qáft have the share of the other applied to him. TPah 31⅛ .3.⅜7⅞ 5 Cranch, 289. Until a settlement of the accounts of Edward P. Johnson & Co., and Ward 6 Johnson, it cannot be known what, or that Wm. Ward and James Johnson have any interest in the effects of those firms. That settlement, however, has been made of the firm of Wards & Johnson, and William Ward and James Johnson were found indebted and in arrear to David L. Ward, and in consideration thereof, the debt due to the firm, from J. Ward& Co. was adjudged and assigned to him — 4th article of facts agreed. That debt, therefore, though nominally due to Wards & Johnson, was in fact wholly due to the appellant, a stranger to the firm of J. Brandt & Co.
All the before mentioned debts were created by consignments made by the parties to John Brandt & Co. as their factors or agents.
The consignment to a factor does not vest in him the property, and his possession is only in the right of another, for the purpose of sale. What is thus received cannot be liable for his debts, and on his bankruptcy, the effects of his merchant, do not pass by his assignment. Lex. Mer. Am. 398. He can have no property in the goods, neither will they be affected by his bankruptcy. 1 Liv. 262.
The goods or produce consigned by James Johnson, Wm. Ward, Ed. P. Johnson & Co., and Wards & Johnson, to J. Brandt & Co. as their factors, did not vest in them the property. Their possession was only in the right of their consignors, for the purpose of sale. And the rights of the consignors could not be altered or affected by the bankruptcy of the consignees. If they have sold the goods and received the price, they have received that also, not as proprietors, but as agents for their principals, to whom it belongs, and not to them. Lex. M. A. 398. If one partner is an executor or trustee, and lends the trust fund to the trade, with the knowlege of the co-partner; it is a debt which may be proved against the ... ,, 7 joint estate upon its bankruptcy; Cooke, 537. The reason is, the partnership has received the money, as trust money, and agreed to account for it as such. So factors who have received the goods or money of a co-partner, upon trust and confidence, and agreed to account accordingly, shall be bound to do so, and the debt thereby created, should be proveable by the partner, against the joint estate upon its bankruptcy.
It is moreover objected, that the claim of the appellant, under James Johnson and Wm. Ward, is not the claim of the separate creditors of insolvent partners; but of the assignee of solvent partners.
I cannot see the force of this objection. If, upon the bankruptcy of a partner, the debt due to him in his separate trade from the firm, may be assigned for the benefit of all his creditors ; why may he not assign it before his bankruptcy, for the payment of a particular creditor, or for other purposes; upon a valuable consideration ? The reason why upon his bankruptcy, his separate creditors are entitled to it, is, that it belongs not to the joint, but to his separate estate. And as it is his sepa rate property, and he is sole proprietor of it, he may consequently, before his bankruptcy, dispose of it in any manner he may think proper. If one partner carries on a distinct trade, and purchases goods of the firm, the other partner may, under his commission, prove a debt for goods sold to him by the firm. Cooke, 537. What does he prove ? A debt due to the firm, a portion of which too, belongs to the partner against whom the proof is made, and from whose estate it is to be recovered. The equity of this claim is therefore something less than that of a partner carrying on a distinct trade, or of his assignee, against the firm. They are both, however, governed by the same principle; namely, that the debts due between distinct trades, are, in all respects, to be considered as due between strangers.
I contend also, that the debts claimed by the appellant before mentioned, being for the proceeds of consignments made by principals to their factors, are to be paid, not only out of the effects of J. Brandt & Co., in concurrence with other creditors of the same kind, but are privileged upon the separate estate of John Brandt and Henry Foster, the acting partners, and to be paid prior to their other debts. Vid. 1 and 4 articles of facts agreed.
I have shewn, that if A consign goods to B, as his factor, to sell and receive the price for and on account of A, he remains proprietor. B, for these purposes, is merely the agent of A, and is in no sense or degree the owner of either the goods or price. So if B become bankrupt, A may reclaim his goods in the hands of B’s assignees or syndics. 1 Liv. 263. Or if the goods were previously sold byB; if upon credit the debt belongs to A, and not to the assignees of B. 1 Liv. 266. And if the money were received by B, it is the money of A, and if it remain in the possession of B, distinguishable from his other monies, A may claim it of his assignees. Liv. 265, 266, 286. 1 T. R. 369. 5 T. R. 227. So far the claim of A is, that of the proprietor upon goods, or money which he finds in the possession of another. But suppose the goods of A have been sold by B, the factor,'and that he has taken a bond or note for the price payable to himself. Or suppose having received the price, he has not set it apart; but has put the money in the same bag or bank with his own, or has converted it to his own use. What then ? B had only a nak ed authority from A to receive the price of his 1 goods, as his agent, and he had no right or title to that price. When received by him, he is only the possessor, whilst A is true proprietor. ,He,can therefore dono act unau-thorised by or without the consent of A, which shall legally prejudice him. So if B take a bond or note for the price, in his own name, A is entitled to receive the money, and not the assignees of B. 1 Liv. 275. Or if Bhave received the money, and laid it out in other goods, they are the property of A, and not of B’s assignees. 1 Liv. 276, 278 to 287. But where B having received the price, has put the money into the same bag with his own, or has so misapplied it, that the misapplication cannot be traced to something in the possession of B, the rule of decision, according to the common, differs from the civil, law. The latter, however, is founded on that justice and good sense, to which all laws should conform; whilst the former in this, as in many other respects, too much cramped by technicality, does justice by halves, or as she may be assisted or required by some technical rule. So long as the money of A shall be kept by B, separate from his own money, and from it distinguishable as the identical money of A, the common law is able to secure it to him. But from the monf^nt that B shall confound it with his own money,'or,put both in the same bag or box, the common law, whilst she acknow-7 ?\ leges the title of A, loses1 the^ power of giving it to him, though he shall be able £q point to the very bag or box in which his rinniéjr..,. was put, and is now to be found. 1 Liv. 286. In the case of Taylor and another, assignees of Walsh vs. Sir Thomas Plumer. 3 Maide ⅜* Sd-wyn, 562. — Lord Ellenborough decided, that where “property, in its original state and form, is covered with a trust, in favor of the principal, no change of that state and form can divest it of such trust, or give the factor, or those who represent him in right, any other more valid claim in respect to it, than they respectively had before such change;” “ that an abuse of trust could confer no rights on the party abusing it, nor on those who claim in privity with him.” “ That it, made no difference in reason or law, into what other form different from the original, the change may have been made.” “ That the product of, or substitute for the original thing still follows the nature of the thing itself, as long as it can be ascertained to be such, and the right. only ceases when the means of ascertainment ' fail, which is the case when the subject is turned into money, and mixed and confounded jn a seneral mass of the same description. The difficulty in which case, is a difficulty of fact and not of law.” So if B has expended the money of A, and therewith purchased real or personal estate; if the property so bought cannot be traced and identified, the common law has no means of affording relief to A. Nor can she do so, if B has paid debts with the money of A, instead of his own; although by giving a preference to A upon the estate of B, his creditors would be in no worse condition, than if the misapplication had not been made. If the money of A, received by B, for the price of his goods, remains in his possession, whether it be kept separate from, or in the same bag with the money of B, can make no difference in reason or j’ustice. One dollar or one guinea is no better than another, and whether A shall take the very pieces received for him, or others in lieu of them, can be of no conceivable consequence. If property has been bought by B, the factor, with the money of A, whether it be confounded with his other possessions, or may be identified and distinguished from them, may create a formal, but can make no substantial difference. If the property can be traced, the thing itself should be given; but if not, and B has it, and will not or cannot designate it, or has changed it; how obvious and how natural to determine that A should, in lieu of his particular property, have a privilege upon the estate of B for the price. By this B and his creditors sustain no injury; if you do not take from them the very thing that did not belong to them, you take no more. And accordingly the civil law provides “in cases of insolvency, that he who has delivered property to his debtor, by any contract which does not transfer the property in it, remains the master, and is paid in preference to the other creditors.” “ And that the same privilege exists for the price, if the debtor should have alienated the object thus placed in his hands.” Clay vs. his creditors. 9 Martin, 523. Clay’s case was that of a pledge of negotiable paper, and where the pledgee had a special property or title in the thing pledged or delivered to him. This is ! the case of factors or agents, without property or title of any kind to the things received by them, and is so much the stronger. A pn- .... ° vuege is given upon the estate or a depository by the civil law, who receives no reward, to secure the return of the deposit. A factor receives a reward, and is therefore bound by a higher obligation than the depository. 2 Part. 63P>. Late 2. In the case oí Gilespic vs. the syndics of Peter Laidlaw &/• Có., in the court of the first judicial district, it appeared that Peter Laidlaw, attorney in fact for Gilespie, received for him a sum of money. “The court decided that when Laidlaw & Co. failed, they could cede to their creditors nothing more than their own estate : that the money paid to Laidlaw, as agent of the plaintiff being the property of the plaintiff could not be ceded to the creditors of Laidlaw & Co., that it was a sum certain, and it mattered not whether it was kept separate and distinct from, or commingled with the monies of Laidlaw & Co. That the agent possesses for his principal and not for himself: that the plaintiff could not be viewed in the light of a creditor of the estate of Laidlaw & Co. He claims that the syndics should hand over to him the identical sum which his agent received, and which he passed into the hands of the syndics, and never made part of the insolvent’s estate. The creditors cannot complain that there would be injustice in allowing this sum to be paid over to the plaintiff, because the estate of Laidlaw & Co. would be so much the richer than it ought to be, this never having formed a part of their estate.” Judgment for the plaintiff vs. the syndics, for $1606 3 cents, with interest. Livermore counsel for syndics. No appeal. The reason upon which the privilege given by the civil law, in all these cases, is one and the same. It is, that where one man receives the money or property of another, upon confidence that he will restore or pay it over to him without appropriating or using it as his own; if the law were not to accord this privilege, she would be accessary to, and would sanction a wilful breach of good faith in the debtor, or oblige him to commit it, when, perhaps, he did not intend it. Most men, when they apply to their own use the property or money of others in their hands, do so with the intention and hope of replacing it. If this should be postponed by circumstances until a. bankruptcy, the law, as a careful guardian, should step in and do for them what they ought and would have done of themselves, if they could. It is the first duty of a factor when he has received the money of his principal, to pay it over, or remit it to him. He is no^ to aPProPr>ate it to his own use. He is not even to keep it: he Js no depository for that purpose. But if he should keep it, or convert it to his own use, without the consent of his principal, the interests of commerce imperiously require that a privilege upon his estate should be sustained for it. That such should be the law of Louisiana is particularly desirable. The commerce of its city of New-Orleans is immense. In time it must surpass that of any other'city on the globe. Its merchants, destitute of the necessary capital, are at present, unable to carry on this commerce upon their own account. They are the factors or agents of others, who reside at a distance, and by the insalubrity of the climate, are, perhaps, fated ever to remain so. As principals abroad cannot watch the motions of their factors here; or be present to demand their money as soon as received by them : to know that it is secured to them by a privilege upon the estates of their factors, in case of their bankruptcy, will give full credit to the latter, and by exciting confidence in the for mer, encourage them to commit their business to residents of the place, instead of sending supercargoes with their property, or special agents to dispose of it. By this the interests of both parties will be promoted, and what is of no less consequence, good faith from the one to the other will be insured. Privilege, as a security against the violation of good faith, in those who obtain the possession of the property or money of others, is a favourite principle of the civil law, whilst it is almost, if not altogether, a stranger to the common law. Among other instances, the civil law gives a mortgage on the property of those who, without being tutors or curators, have taken on themselves the administration of the property of minors, persons interdicted or absent, from the day when they made the first act of that administration. Civ. Code, 456, art. 20, Afactorwho sells property and receives money for a correspondent abroad, is one who takes upon himself the administration of the property of an absent person, and whom, as he cannot be present to secure himself, the law secures by a mortgage upon the factor’s estate. The expressions of this article of the Code are clear and free from all ambiguity. The terms are general and comprehensive, and include , N the case of a factor for a merchant abroad. .And whatever maj be its spirit, the letter is to be observed. For, w hen the law is clear and free from all ambiguity, the letter of it is not to be disregarded under the pretext of pursuing its spirit. Civ. Code, 4. art. 13. The debts before mentioned arose upon consignments made by parties in Kentucky, to a house in New-Orleans, as their factors, who accepted and took upon themselves the administration, the sale and disposal of the property so consigned, the collection of the proceeds, and the remittance thereof to their absent principals. To secure to these principals a faithful administration of their property by their factors, the civil law grants them a mortgage upon the property of their agents from the day when they received the goods. In pursuance of the same spirit, the civil law provides, that “ the territory, the different parishes, cities and other corporations, companies of trade, or navigation and all public establishments, have a legal mortgage on the property of their collectors, and other accountable persons, from the day when they entered into office, en /motions. Civil Code, 456. art. 25, Companies of trade have a mortgage upon the estates of their collectors, and other accountable persons. The factor to a mercantile company, or company of trade, is an accountable person. He is their agent; their collector is neither less or more. The money he may receive or collect for the mercantile company, to which he may be factor, is as little his as the money received by their collector is his, and he is guilty of the same bad faith in converting it to his own use. There is the same reason for granting a mortgage upon the estates of both, for the security of their principals. It is not easy to see why the law should give a mortgage upon the estate of the collector or factor of a mercantile company, and not of an individual. Nor is it so, if the reasoning before advanced, be correct.
The legal mortgage extends to all the debt- or’s estate, either present or to come, which may be lawfully mortgaged. Civil Code, 456. art. 28.
If, therefore, as contended, the debts due to the appellant from Brandt & Co. as factors, be privileged ; if the law accords a mortgage for them, it extends to the separate estate of Brandt & Foster, the acting partners, as well as to the partnership effects, and they are to be paid in preference to the debts of their other creditors.
So ^ar argument has proceeded upon the supposition that the partners in the firm of J. Brandt & Co. were bound in solido, a supposition, the correctness of which, I by no means admit. On the contrary, I insist they were not so bound, for reasons which will be better shewn by Mr. Livingston, counsel for the appellant.
If the appellant should not be entitled to be paid the whole of the debts before mentioned, out of the effects of J. Brandt & Co. in competition with the creditors of the partnership, because a portion of them accrued to persons who were members of the company, it will follow that he may go for such portion upon the separate estate of John Brandt and Henry Foster, the administering and debtor partners. Vid. 1 & 12 articles of facts agreed.
2dly. I claim that the appellant is a creditor of J. Brandt and Henry Foster, to be paid out of their separate estates.
The 12th article of agreed facts, shews that Brandt and Foster are, and were at the time of their respite, indebted to J. Brandt & Co. in a sum exceeding $140,000. That firm was composed of four persons. It does not appear they were interested in unequal proportions, and we are, therefore, to take it for granted, their interests were equal. J. Brandt and H. Foster took from the joint stock $140,000; that is, from themselves $70,000, and the like amount from William Ward and James Johnson. Or rather, as the $140,000 are the balance against them, it follows they have taken out of the partnership stock all they put in,and $ 140,000 more: that amount, therefore, it would seem, is wholly taken from the co-partners, Ward & Johnson.
When Brandt and Foster withdrew this amount out of the partnership stock, they did not thereby create a debt for so much between themselves and the creditors of the partnership. As to that, there was no privity between the two. The creditors of the partnership have nothing to do with the balances or sums which may be due from the respective partners to the partnership. Cooke, 532, 534. Lex. Mer. Am. 640. They look to the existing state of the partnership effects. If that be deficient, they go upon the private estates of the partners, whether they be creditors or debtors.
Brandt & Foster, withdrawing $140,000 from the effects of J. Brandt & Co.,thereby created a debt between themselves and co-part-Ward & Johnson. They took the property of their co-partners, and whether with or without their consent, equity will suppose a promise, or raise an obligation, to account with them for it.
“ Where one partner takes out more money from the partnership than his share amounted to, the other has a right to come upon the separate estate of that partner pro tanto” Dig. -Mod. Ch. C. tit. Bankrupt, 63-84. 1 Atk. 223.
William Ward and James Johnson, or David L. Ward, their assignee, is then entitled to go, not upon the partnership effects, in competition with joint creditors, but upon the separate estates of John Brandt and Henry Foster, for the balance against them on the partnership account. For that balance they are to be preferred, upon the separate estate in concurrence, with the separate creditors. Dig. Mod. Ch. C. 57,122, and the cases before cited upon this point.
In the third place — The mortgage made by an authentic act, and duly recorded, from Wil liam Ward and James Johnson, to David L. Ward,tosecure to him the payment of$56,000, with interest, according to their note of that date, purports to convey to him—
All their estates in Louisiana.
All their rights, interests, titles, claims and demands ⅛ the estate owned, possessed, or claimed by J. Brandt & Co., and particularly certain lots of ground therein'specified.
And their accounts or claims upon the firm. Vid. the mortgage and 11th art. of facts agreed.
The word estate includes, not only real, but personal and moveable property, rights and credits. “ The word estate, in general, is applicable to any thing in which the riches or fortunes of individuals may consist.” Civ. Cods, 94, art. 1.
It is true, that moveables cannot be the subject of the conventional mortgage. “ But they may be subject to a privilege when they are yet in the debtor’s possession, or within a certain time limited by law, after they have been put out of his possession.” Civil Code, 458, art. 37.
Whilst then the debtor retains the property in his moveables, he holds them subject to a privilege for his debts by mortgage^ If he sell them, the privilege is destroyed.
But he may pawn them. “ One may pawn J 1 _ J r every moveable, which is a subject of commerce.” Civil Code, 446, art. 4.
“This privilege shall take place against third persons, only in case the pawn is proved by an act made either in a public form or under private signature; provided, that in this last case, it should be duly registered, in the office of a notary public, at a time not suspicious; provided, also, that whatever be the form of the act, it mentions the amount of .the debt, as well as the species and nature of the thing given in pledge, or has a statementym-nexed thereto of its number, weight and measure.” Art. 6.
The pawn, in this case, is made by an act in public form. It mentions the amount of the debt. It does not mention the species of the things given in pledge. Nor need it. That is required to distinguish the things pledged, from the other moveables of the debtor. Here ali are pawned, and therefore, to distinguish would be superfluous. Moreover, this want of description can be objected only in a contest with the rights of third persons. Here no such right is interposed. No one pretends claim to the estate of Wm. Ward and James Johnson, in opposition to the appellant. The t /* t -A , „ , . • syndics oí J. Brandt & Co. have no right or title to the estate of J. Brandt Sr Co. They have only the power of selling it. 44 The surrender does not give the property to the creditors.” Civil Code, 294, art. 171. The bankrupt still retains the title to it, and, therefore, notwithstanding the surrender, may make a sale not void, but avoidable only by those whose rights are injured by it. 3 Martin, 94.
The contest then is simply one between the pawnee and the pawnors; and the syndics can have no greater right than the bankrupt to whom they represent.
44 The privilege, mentioned in the preceding article, is established tvith respect to incorporeal moveable things, as moveable credits, only by an authentic act, or by an act under private signature, recorded as aforesaid, and notified to the debtor of the credits given in pledge.” Civil Code, 446, art. 7.
To give full effect to the pawn of a moveable credit, even as respects third persons, it is only necessary to have an authentic act. If the act be under private signature, it must be recorded and notified to the debtor.
Here the act relied on is authentic. More over, the notice required, as in the case of a . private act, has been given by the suit brought appellant upon his mortgage. And if it were otherwise and necessary, it would always be open to him to give notice until a third person should be able to interpose aright.
But was it competent to William Ward and James Johnson to mortgage or pledge their interest in the partnership effects of J. Brandt & Co., without first paying the partnership debts ?
It is said in one case that an assignment by a partner of joint property, to secure his separate debt, must be subject to the joint debts. Cooke, 529. But that case is without principle to support it, and there are cases the other way.
It is true, that if a partner assign his interest, it will be subject to the claim of his co-partner against him on partnership account. And why ? Because the partners are seized, per my et tout, and each is, therefore, to be allowed against the other any thing he has advanced or brought in as a partnership transaction, and to charge the other in account with what he has not brought in; or has taken out, more than he ought, and nothing is to be considered his share, but his proportion of the residue upon balance of the accounts. Cooke, 528. The partner has a specific lien on the stock. Cooke, 528, 529. The assignees, therefore, under a commission of bankruptcy against one partner, will be tenants in common, of an undivided moiety, subject to all the rights of the other partner. Cooke, 529.
But the partnership creditors are not seized of the partnership effects, and have no lien thereon. In ex parte Ruffin,- 6 Ves. 119. Wats. 265, the lord chancellor, speaking of partnership creditors, says, they have “ clearly no lien whatsoever upon the partnership effdfcts.” All the partners, therefore, may sell, or mortgage, or pledge the whole, or any portion of their effects; or any one partner may do the» same with his share ; free from the claims of the joint creditors, since those claims attach no lien thereon.
If one partner withdraw from a firm, and the partnership effects be made over to the other, who continues the trade, and' against whom a commission oft bankruptcy afterwards issues» all the effects of the old partnership found in specie amongst the property seized under the commission, vest absolutely in the assignees of the new firm; and tho’ there he outstanding debts of the former firm unsatisfied, these effects so found in specie, will not be considered as the joint estate of the former firm, either for the benefit of joint creditors, or the partner who has withdrawn. Wats. 264, 265. Not for the benefit of the partner, because he assigned his interest to the others. Wats. 267. Nor for the benefit of the joint creditors, because they had no lien. Wats. 266.
In ex parte Fell, 10 Ves. 374. Wats. 268. The case was — in March, 1803, one of three partners retired upon a covenant of the other two, in due time to discharge the partnership debts. The new firm was bankrupt in October, 1803. The petition of the retiring partner to have the specific stock and credits of the old partnership applied to the creditors of that partnership in preference, was dismissed.
Porter Shepherd and Richard Smith were partners, as linen drapers; dissolved their partnership; 5th Sept. 1803 ; published their dissolution the 25th Nov. 1803, and that all debts due from the partnership were to be paid by Shepherd, and on the 24th Dec. 1803. in less than two months after the dissolution, a commission of bankruptcy issued against Shepherd. The assignees under the commission, possessed joint property of the bankrupt, and Smith. The joint creditors petitioned that the joint effects might be first applied to the joint debts. But the petition was dismissed, the lord chancellor being of opinion that the partner had a right to assign his interest; that the joint creditors had no lien or equity to prevent him, and that what before was jointhad become separate property. Wats. 270.
Upon a question, whether assignees, under a joint commission, against two partners, taken out after the bankruptcy of both, could maintain an action of trover against a person in possession of goods under a sale or consignment, bona fide, for a valuable consideration, and without any mixture of fraud, from one of the partners, who had not then committed any act of bankruptcy himself, but after an act of bankruptcy committed by the other partner. The court held the action could not be maintained, because the act of the partner, who, at the time of the consignment, had not committed any act of bankruptcy, bound both; and also, because, supposing the consignment avoided as to a moiety, by the act of bank ruptcy of the other party, then it is an action of trover, by one tenant in common against another, which cannot be. Cooke, 529. Cow. 443 }n that cage Buper counsel for the assignees of the bankrupts, contended that by the act of bankruptcy of Ridgate, the partnership between him and Barnes was immediately dissolved, and that the solvent partner bad no longer a power over the whole: but each had his moiety only,to give or grant. Cow. 447. And lord Mansfield decided, that the utmost the plaintiffs could contend for, was that the act of Barnes did not bind the undivided moiety of Ridgate.
In that case the counsel admits, and the court decides, that after an act of bankruptcy by one partner, though followed by a joint commission against both, the other partner may dispose of his moiety of the effects : that it is his, to sell or grant, and that the assignees of the partnership, for the partnership creditors, cannot recover of his vendee.
In our case Wm. Ward and James Johnson, when they made the conveyance to appellant, of their interest in the partnership effects of J. Brandt & Co. had committed no act of bankruptcy, nor have they yet done so. They had then at least the right of granting their . . . . , proper interest, or portions therein, and they have granted no more. It is strange that this right should ever have been questioned. It is every day’s practice, for one or more of partners to sell out their portions or interests in goods, and other partnership effects, independent of the claims of the joint creditors. This is more emphatically so by the civil law, according to which, a partner, whenever, and of whatever he pleases, of the effects of the firm, may take even the entire, and convert them, or purchase therewith other effects in his separate name, and which, though bought with the partnership means, will be separate, and not joint property, and consequently subject primarily to his separate debts. Civil Code, 396, art. 37.
The mortgage preferred by the appellant, is made by solvent persons, who have a right to mortgage, either upon a past or present consideration. It wras, however, made upon a present consideration, and for such consideration, even insolvents upon the eve of bankruptcy, have the right to mortgage.
The parties to the mortgage, declare upon the face of it, that the debt of 56,000 dollars. which it was given to secure, accrued by notes of that date. The agreement of facts between appellant and appellees, admits the mortgage as it is. It therefore admits all it contains, and that the debt of 56,000 dollars, accrued at the date of the mortgage, as therein stated. If the appellees designed to contradict the mortgage, to contend that the debt existed prior to that date, they should have qualified their admission, so as to have authorized them to make or require proof behind the mortgage. So far from doing so, they have no where contested or alleged that the fact is not as is assumed : they have no where apprized the plaintiff that they objected the consideration pre-existed the mortgage. But the court are to decide according to the facts agreed upon as they appear to them. A debt is shewn and agreed upon by the parties as far back as the date of the mortgage, and no farther. The court cannot go back; it cannot travel beyond the agreement of the parties, and suppose what does not appear, what is not even insinuated by the agreed facts, that the debt existed prior to the mortgage.
It does not appear expressly, what was the interest of the respective partners in the firm of J. Brandt & Co. But as it does not appear . that any one person of the firm was entitled to a larger portion than another, it is to be taken that their interests were all equal. The firm consisted of four persons, and William Ward and James Johnson, had therefore title to a moiety of the effects of the firm, of whatever they consisted, whether in possession or action. And their title to which they have conveyed to the appellant. Admit that a moiety of the personal effects or credits of J. Brandt & Co. did not pass to David L. Ward, by the mortgage from William Ward and James Johnson, or that he obtained thereby no privilege upon them; still it will remain that he is entitled to the real estate of William Ward and James Johnson, in Louisiana, Or their interest in, or title, to the real estate possessed or claimed by J. Brandt & Co., or in their name.
There can be no doubt as to the real estate of Ward & Johnson, and in their name; but it may not be so clear as to the real estate possessed by them, in the name of J. Brandt cV Co.
That partnership was formed for the purpose of doing commission business in New- Orleans, as factors; and a factor is an agent who buys and sells goods for others, for a eer-tain compensation, as before shewn. The effects 0f the firm, may consist of the stock, if any, brought into the partnership, or the proceeds of their industry. But the real estate purchased or claimed in the name of the firm, is foreign to the nature of it, and does not therefore make a part of the effects properly belonging to their partnership or fac-torage, and if purchased with the funds of the partnership, is a division thereof pro tanto. 11 Mass. Rep. 474.
The interest of each partner, therefore, in the real estate possessed ia the name of J. Brandt & Co. belongs to his separate estate ; is liable for the separate debts, and may be mortgaged to secure the payment of them.
The credit given upon James Johnson’s account, for Rochelle & ShifF’s notes, should be disallowed. The account was between James Johnson and J. Brandt & Co. as factors. The notes of Rochelle & Shiff resulted from the sale of an estate, that did not belong to the factorage partnership, and one half of which belonged to the separate estate of Wm. Ward and James Johnson. Brandt & Foster kept ffiore than their portions of the proceeds of sale; the parts of James Johnson and W.Ward, or a portion thereof, was given to James Johnson, who is liable to William Ward for his half thereof.
Livermore, for the defendants.
The plaintiff claims as assignee of William Ward and James Johnson, two of the firm of John Brandt & Co., and contends that he is entitledto a dividend upon the partnership funds of said firm. The defendants say, that Ward & Johnson are bound in solido, for all the debts of John Brandt & Co., and can take nothing from the joint fund, until all the creditors of the partnership are paid. Although creditors of the firm, they are debtors of the other creditors represented by the syndics, and therefore can have no satisfaction until the joint creditors are paid. Ex parte Hunter, 1 Jltk. 227, ex parte Russell, ex parte Parker, and ex parte Perie. Cooke, B. L. 532 ; Pothier, de société, n. 132, 173. A solvent partner cannot prove against the estate of a bankrupt co-partner, the amount of the balance due to him, unless he will satisfy the partnership debts. Cooke, B, L. 537. The equity of this rule is appa rent, and it would be absurd to say, that Johnson & Ward can appear as creditors of this estate as it is circumstanced, unless the plaintiffs’ counsel can succeed in maintaining the ground he has taken, that the partners in Kentucky are not bound in solido, for the debts of John Brandt &Co.
In commercial partnerships, en nom collectif, the partners are bound in solido, for the debts of the partnership. Civil Code, 397, art. 41.— But, says the gentleman, the business of factors, or commission merchants, is not commercial : the factor is merely the agent of the merchant, and the business of the merchant is alone commercial. This notion has at least the merit of being novel; and I believe it is the first time that any person has seriously asserted that the business of agents, engaged, in mercantile transactions, was not commercial. All the authors, who have treated of commercial law, have considered factors as a class of persons, whose powers and obligations were embraced in the subject of their discussion. I will refer to Straccha, Aucaldus, Juan de Hevia, Casaregis and Beawes. The French ordonnance du commerce oí 1073, has prescribed rules concerning the responsibility of partners in commercial partnerships, and . . their rules have been adopted in the French Code du commerce, and are the same as in our Civil Code. By the F rench law, a particular tribunal was appointed for deciding all commercial causes; and we find from the 12th title of that ordinance, art. 5, that factors were within their jurisdiction; and by the 3d art. of the same title, that this jurisdiction did not extend to disputes which were not. commercial. See also the commentary of Jousse, in the introduction to this title. The compilers of the French Codes have also considered the business of factors as commercial, and have laid down the rules for their government in the Code du commerce, and not in the Code Civil. See Code du commerce, liv. 1, tit. 6, art. 91-102. In the commentary of Mr. De~ laporte, it is said, ily a des négocians qui ne font que la commission, c'cst-a-dire tout leur commerce se home á recevoir des marchandises pour les vendre au compte d'un autre. Plusieurs personnes peu-vent s'associer, soit en nom collectif, soit en comman-dite, pour faire la commission. Dans ce cas, il faut suivre les regles établies pour les sociétés de commerce. Les commissionnaires sont de vérita-bles négocians. 19 Pand. Franc. 239. The books of the common law, which have been so often cited in this cause, will also shew that the general lien, in favor of factors, was first established upon evidence of the custom of merchants, Krupcr vs. Wilcox, Jimbl. 252; and that all their negociations, rights and duties have been considered with reference to the law merchant.
If the court were to adopt the doctrine of the plaintiff’s counsel, upon what would these articles of the Code, concerning commercial partnerships, operate ? There is scarcely a general merchant in New-Orleans. The business is almost exclusively a business of fac-torage ; in selling as agents the produce of the country, and in buying for the foreign merchant. It is said, that “ the debts of a company of factors can only arise upon money or goods delivered to them, to buy or sell.” That this is not true, will appear from a mere view of the nature of their business. The factors, who buy, may buy on credit; and the note given for the articles purchased is in the usual course of trade, and the vendor is a creditor of the company as much as any other person. So with the company of factors, whose business it is to sell. It is a part of n their business towÉjJÉte advances upon ■f V signments before the gooda are sold: and to effect this, they must have Credit and endorsers. They have, therefore, a right to make use of the name of the firm, for the purpose of raising money, and debts contracted in this way are within the usu&I course of business. It is a great fallacy for^the^plaintiff to say, that he alone has shewn the nature and origin of his debt, and that he must be presumed to be the only real creditor of the firm. The other creditors have not shewn in what manner their debts arose ; because it was not necessary until a tableau of distribution should be filed. They may then have an opportunity of establishing their claims, should they be disputed.
It is next contended, that the debt due to Johnson Sr Ward makes part of their separate estate, and that they must be entitled to recover this debt, in order to pay their separate creditors. To support this position, a great number of cases have been cited from the books of chancery in England. These cases are of no aHthority here. They arise under the English bankrupt laws, and refer us to the mode of dividing the estates, where all the partner&mre bankrupt,⅜⅞«8 several commis- . . rl , < _ sions have issued.; As tnese commissions issue under the saníe authority, and as the court chancery has jurisdiction over all the parties, to do complete justice between them, rules have been established for apportioning the property amongthfe joint creditors, and the creditors upon the separate estates. But the counsel shews no case where a solvent partner, ora partner residing out of the jurisdiction of the court of chancery, has been allowed a dividend to the prejudice of the joint creditors. On the contrary, the cases before cited shew that this cannot be done. (¡And if the creditor cannot himself appear as a creditor of the joint estate, his assignee cannot. It is admitted on this record, that the several debts, upon which the plaintiff claims, were assigned to him on the 1st September, 1620, for a valuable consideration then paid. And this was done with full knowlege, on his part, that the firm of John Brandt & (¡Jo., in New-Orleans, had suspended payment; He can, therefore, have no greater rights than the persons who made the assignment. Nemo plus juris in alium transferre potest quam ipse habet. D. 50. 17. 54. The attempt now made is to do that indirectly, and by means of an assign-J J . ment, which Johnson Ward could not do directly. They could not diminish the joint fund by appearing as creditors in their own names, but they strive to do it in the name of their assignee. But this assignee is subject to the same equity, and can claim nothing to which they were not entitled. But it is not contended that the debt due to Wards & Johnson, though nominally due to them, was, in fact, due to the plaintiff, having been assigned to him upon settlement. No private agreement of the parties can, however, alter the nature of this case ; and for all that appears, Johnson Ward are solvent and able to pay the plaintiff, without having recourse to this estate. This statement is also inconsistent with another part of the plaintiff’s agreement, that these debts were assigned for a consideration then paid. The Civil Code has also been cited to shew that a partner may be a creditor ©f the partnership. There is no doubt of this amongst solvent .partners. But where the partnership is insolvent, and the partners are bound in solido, this cannot be admitted.
All the doctrine of distinct trades turns up on the English bankrupt laws, the effect of which 1 have considered.
The plaintiff, moreover, contends, that he' ^as a Privilege upon the estate of John Brandt and Henry Foster. The consignments spoken of were made to John Brandt & Co., and the firm is debtor, and not the separate estate of the partners in New-Orleans. This privilege is attempted to be maintained upon the principles of the case of Clay vs. his creditors, decided in this court. The observations of the court must be taken with reference to the matter before it. That was a case of pledge. There can be no doubt, that in case of a deposit or pledge, the depositor or pawnor has a privilege; because the articles have not been delivered for the purpose of sale, the property remains in the original owner, and the depository or pawnee has been guilty of breach of trust in disposing of them. But this case is different. The goods were consigned to Brandt & Co. for the purpose of being sol<|. So long as they remained in specie, they werej the property of the consignors and might have been taken by them. So, if they had been changed for specific property, or for notes which remained with the factors, these would have been the property of the consignors. But in selling the goods, the factors have merely executed their trust; the property is gone, and the proceeds having come into their hands, they are merely debtors for the amount. The law has given no privilege in such case, and although the judge of the first district has done it,I cannot believe that this court will follow the example. From the circumstance of no appeal ha ving been taken from the decision of the cases of Gillespie vs. the syndics of Laid-law, and the syndics of Walmar vs. Phillips, it must not be inferred that the doctrines of the district judge were acquiesced in by me. Other circumstances prevented the appeal, which need not be stated here. The plaintiff’s counsel is mistaken in supposing that the commerce of New-Orleans would be favoured by establishing such a privilege as is here contended for. On the contrary, it would destroy the credit of all commission merchants.
f The last question respects the mortgage. At one time the plaintiff contends that John Brándt andr Henry Foster had the sole management of the concerns of the partnership, and at another, that the Kentucky partners may mortgage the partnership property here. This mortgage may have an effect upon any °f mortgagor’s separate property in Louisiana, but it does not concern the defendants. It can certainly have no effect upon the property of John Brandt and Henry Foster; and no authority has been shewn for Johnson and Ward to hypothecate the property of John Brandt Sr Co. I have shewn they could not sell their interest to the prejudice of the general creditors. An assignment by one partner of joint property, to secure his separate debt, must be subject to the joint debts. Cooke, B. L. 529. It is said that this mortgage was given for a present consideration. But this consideration does not appear to have been for the partnership, but for the said Johnson and Ward alone. And if Johnson & Ward were solvent, the firm was insolvent.
Livingston, in reply.
From a recurrence to the facts, it will readily be perceived, that in order to decide upon the rights of the parties, the first inquiries will be — what was the nature of the partnership between J. Brandt and his associates, in the business carried on under the name of John Brandt & Co.? And what were the obligations which resulted from 0 it, as well as the partners towards each other, as of the whole towards those with whom ,, , -i, -x 'they dealt r
The only evidence we have of the nature of the partnership, is contained in the first fact stated in these words — “ the late firm of John Brandt & Co. was formed for the purpose of doing commission business, as factors, in the city of New-Orleans, and was composed of John Brandt and Henry Foster, William Ward and James Johnson; the business of the said firm was transacted by John Brandt and Henry Foster, who resided in New-Orleans, whilst the said William Ward and James Johnson resided, as they did, during the whole period of said partnership, in Kentucky.”
What species of partnership is to be inferred from these facts? Let us first consult our statute law on this point. It first {Civil Code, 388, 390) divides partnership into universal and particular — this clearly comes under the latter division. By the tenor of the 12th, 13th and 14th sections, taken in connection it would appear that, a subdivision was made of particular partnerships, into such as were commercial, and such as were made for other pur poses — the 12th, declaring that an association r ... ° for a joint interest in a specified thing, and its profits was a particular partnership, and the 13 th, extending the definition, so as to embrace a like agreement relative to a particular undertaking, the exercise of some trade (metier) or profession. These seem to exclude commercial partnerships, for the 14th article, and those which follow it, give us separate rules, as relating to them.
There are three kinds of commercial partnerships established, says the text: ordinary partnerships, (la société en nom collectif) corporate partnership, (ceñe en commandite) special partnerships, (annonyme ou inconnue.') Are there any others ? It would seem not: for I believe it is a good rule of construction, that when a statute enumerates particularly the objects which it means to establish, that every thing not enumerated, is meant to be excluded. Let us then examine the definitions given by the same law, of each of these, and see whether we come within either.
1. The ordinary, (société en nom collectif) “ this is entered into by two or more persons, respecting any commerce whatever, to carry on the said commerce, in the name of all the partners; the one under consideration, as I , , shall presently more fully shew, was not respecting any commerce; but if it were, it does not come within this definition, for it was not to be “ carried on in the name of all the partners.” This partnership also relates plainly to one having stock to be used in trade, for by the 16th article it is to consist of what each of the partners has put in the common stock.
2. The corporate partnership, (société en commandite) “ is that in which one of the contracting parties carries on alone, and in his own name, the commerce for which the other contributes a certain sum, which belongs to the partnership under the condition of a certain share in the benefits or losses, without however his being liable to be answerable for losses beyond the amount brought by him into the partnership/* .
This article is not clearly expressed: does it mean that the corporate partnership is only such an one as is created by an agreement containing stipulations that the business shall be carried on in the name of one only, that a certain sum should be contributed, and that the unknown partner should be liable to that amount only ? Or does it declare that such re- strictión of liability is the consequence attached by law to an agreement tor carrying on trade in the name of one, by a fixed contribution of capital to be furnished by each? I should be inclined to adopt the first of these suppositions: but whether the one or the other is suctioned by the eour-t, the contract before them cannot come within the definition; because, as I hope to shew, it does not relate to commerce. But I confess, that if the partnership between Brandt and his associates, be considered as a commercial partnership, and to come within either of those definitions, contained in the Code, this is the -only one in which it can find a place.
2. The special partnership (société anonyme ou inconnue) is the only one which remains to be examined. “It is that by which two or more persons do agree to become partners in a certain speculation, (dans une certaine négo-ciation) to be made by one of the partners in his own name simply.” No argument is necessary to shew that this relates to a particular operation of commerce. The purchase of a cargo, the making a single trading voyage, &c., with which the partnership began, and ends, and that therefore, the one under consideration bears no resemblance to it.
I infer therefore, that this partnership comes 1 _1 within neither of the divisions established for commercial partnerships by our law. ..
. What then is its legal character r 1 answer, a particular partnership coming under the definition contained in the 13th article, for the exercise of a trade or profession. Not a commercial partnership. The object of this association was, by the statement of facts, ‘‘ for the purpose^ of doing commission business as factors'.”
What is a. factor ? Is he a trader or a merchant? No, be is the agent of a merchant,, he is no more a merchant than his book-keeper, or than the clerk of a lawyer is a counsel-lor. Lex Mercatoria Americana, 388. “ A factor is a commercial agent, transacting the mercantile affairs of other men, in consideration of a fixed salary, or a certain commission.” The same definition is given in Livermore on Agency, 68.
The English bankrupt laws which embraced within their purviewany merchant, or other person using or exercising the' trade of merchandise, by way of bargaining, exchange, rechange, bartery, chevisance, or otherwise, in gross, or by retail, or seeking his or her tradei. or living by buying and selling,” from the 13th of Elizabeth, to the 5th of George II, these expressions were not construed to include factors, or brokers, until they were included by name, in the last mentioned statute. Cooke’s bankrupt laws, 48. lb. statutes prefixed to 7th edition, 161, for the statute of Elizabeth. Ib. 64, for statute of George II:
Brokers and factors, then were not considered as merchants, or persona exercising “ trade or merchandise, seeking their living by buying and selling.” Then they were not engaged in commerce; for the trade of merchants, the business , of buying and selling is commerce; then partnerships formed for fac-torship, are not commercial partnerships, but the one under consideration was made ‘⅛ for the purpose of doing commission business as factors.” Therefore the one under consideration is not a commercial partnership.
If I have succeeded in shewing that this is not a commercial but a particular partnership, the next inquiry is, what are the obligations arising from it, as between the partners to each other, and as respects them collectively, and individually, as respects those with whom they deal ? Our law surely is explicit, and leaves no room*for doubt or cavil: some of the obligations of the partners to each other will be hereafter applied, at pre- . . . , , ..... sent my object is to shew that m this particular partnership, the partners are not bound in solido : this is clearly expressed in. .the whole of the 2d section, Civil Code, 396-8; particularly by. the 43d and 44th articles; and in the 45th, it is even provided, that even when the debt is contracted by one of sueh partners, in -the name of the whole, and-for their use, unless it be proved that he had special power so to do.
Having ascertained the nature of the partnership and its effects, we may . consider the facts on which the controversy arises.
John Brandt and Henry Foster reside in New-Orleans, and carry on the whole of the business. James Johnson and William Ward make consignments to them of produce, their separate property, to be sold as their factors. The house of Wards fe Johnson, consisting of David L. Ward, the plain tiííj James Johnson and William Ward, also make consignments of the same nature, and for the same purpose. The house of E. P. Johnson & Co. consisting of E. P. Johnson and William Ward, also make • consignments to the said John Brandt & Co. at NewrOrleans, to be sold as their factors. That Brandt & Foster are indebted to the ’ partnership in a large sum. Finally, Lee White also made such consignments, and for the same purposes.
All these consignments were received by John Btandt and Henry Foster, the two acting partners, who resided at New-Orleans.-— And goods were sold, but the money never remitted, and all these demands are regularly vested by assignment in the plaintiff!
Brandt &. Foster, in the name of the company of John Brandt & Co., and in their individual capacities, applied for a respité, under the laws of this state, which they obtained, and not complying with the terms of the respite, they were afterwards compelled to a forced sftrrender of their property.' The partnership of John Brandt & Co. was'dissolved, and public notice thereof given at the time the respite was applied for. .
These are all the facts necessary for the determination of the first question, which is, whether the plaintiff in this cause is'entitled to come in with the other creditors of the partnership, for all bhe sums assigned to him, as aforesaid. The defendants contended, that for . . all those which were originally due to the partners of the house, he must be postponed until the other creditors are paid. To support this, he quotes Cooke’s Bankrupt Law, 500, 503, Hunter’s case. This case proves directly the reverse; for Hunter there having borrowed, or rather taken money belonging to his brother, and lent it to the partnership of which he was a member, the amount was considered as part of his separate estate, and was divided among his separate creditors, he, individually having also become bankrupt; it is true, Cooke says a contrary determination had taken place; he quotes in the margin several cases to prove this, but confesses he has not been able to obtain a note of any of the cases, except one.
The general principle of the English law is, that the joint fund pays the joint; the separate fund the separate debt: this is decided in so many cases, that it is unnecessary to refer to them, and consistently with the plain dictates of justice, there could be no other. And yet the cases last quoted from Cooke seem to contradict this principle. If each estate pay its own debts, and if what is equally undeniable, one partner may, on account of a separate trade, be a creditor of the joint estate, it seems to follow, that a solvent partner, or his assignees, if he be insolvent, may prove his ¿⅜⅛⅛ against the joint fund. And then the cases quoted by Cooke are inconsistent with the general doctrine thus universally established. Yet, according to the principles of the, English law', they may be reconciled. Where all partners are indiscriminately liable for the whole of the partnership debts, it is evident that no one partner can have any interest in the joint fund, until all the debts of that fund are paid; therefore, the partner, tho’ a creditor, being by the English law also a debtor, in consequence of his liability as a partner, the law operates a kind of compensation between the two debts, and will not allow him to receive the one until he pays the ' other. There may be some propriety in establishing this rule under the English law, if it be established. There is, however, some reason to doubt on this subject, even in England, as will appear from a consideration of the following cases : Dig. Mod. Ch. C. 71, 203. 8 Ves. 456. Lex. Mer. Am. 641-2, from which it would seem to be established, that although a creditor partner, or his assignees, could not prove against the joint fund, when his credit . ,. . , , arose only from superior advances as partner yet, that the law was decidedly different where the credit arose from a separate trans- * action, trading in his individual capacity with the house of which he was a member. But our debts arose in this way; therefore, in England we should, as the representative of the separate partner, be allowed to prove against the joint fund. This point being more fully discussed in the argument of Mr. Grayson, I refer the court to that. But in this country, and the case before the court, it seems to me useless to enquire whether such be the law in England or not, because here, I flatter myself, I have shewn that the species of partnership which was entered into between the partners, did not involve any responsibility on the part of any of the parties for acts of the others; in other words, that they were not bound in solido.
What renders this more striking, is the nature of the partnership.
It is for ⅛4 carrying commission business as factors-” It is a principle that no undertaking of a partner can bind the partnership, unless it be one contracted in the course of that bu siness, for which the partnership was formed. 2 Cur. Ph. iIlustrada. 55, (62) In a partnership formed between workmen for building hou-ges though the whole would be liable on a contract made by one for brick or lumber’ surely they would not, if one of them chose to buy silk, laces, or perfumery. On this view of the law, who can be the creditors of a company of factors ? Only those whose debts arise in the course of factorage business — those who have entrusted them with goods to sell, and to whom they have not accounted for the proceeds — those who have placed money in their hands to purchase, and for whom the purchase has not been made; these are, in the nature of things, the only creditors which a company of factors can have. Those who sell goods, or land, or slaves to the factors, are not creditors of the company as such, though they may be creditors of all who compose the company, if all of them make the purchase, or authorise one of their number to make it. In the present instance, it is admitted, that all the partners, except Brandt and Foster, resided in Kentucky, and had no agency in contracting the debts. On this head then I come to this conclusion : “ That the debts represented by the plaintiff, being admitted to have arisen from merchandise or produce sent to the company for sale, those debts are properly chargeable against the company’s effects, and' that the decree ought to direct that no other creditors of John Brandt & Co. be admitted in concurrence with them, but such as have .debts arising in the same manner." "
If the court admits this principle, there will then be no necessity for considering the next point I made, viz: that the creditors of a factor, or even of a merchant, who may also act as a factor, are entitled to a preference over other creditors, if the debts arise either from money deposited with the factor to purchase, or from the proceeds of goods sold on commission ; it will be useless to consider this if none but creditors of this description be admitted to prove against the joint estate, because, being then the only creditors, they would, in that case, come in pro rata, and they would do the same if they were admitted as creditors privileged in equal degree. As it is, however, uncertain whether the view I have taken be the one which will concur with that to be taken by the court, I would refer them to the law cited in the case of Durnford vs. Se-ghers’ syndics, and to their decision, as well as the law referred to, in the case of Trimble vs. Clay's syndics, where it appears that money, or effects which may be changed into money, placed in the hands of another, subject to the order of the proprietor, and even with permission to use them if no interest be paid, forms a special deposit, and gives the owner'a privilege, immediately after the creditors, by hy-pothecation, but before those by simple contract.
There seems to me great reason that this privilege should attach in cases of factorage: it is in itself a transaction of the most fiduciary nature, quite as much so as that of a regular deposit. No other credit is given to the factor than that of confidence in his integrity, not as in other cases, on his capacity to pay: the property either of the thing confided to him to sell, or of the proceeds, is never vested in him, and he is as much guilty of a crime in morality if he appropriate the one or the other to his own use, as he would be if he took it without the consent of the owner, out of his possession. This transaction, therefore, comes precisely within the definition given by the Spanish law, and recognised by this court in the case above referred to. 9 Martin, 524.
I come now to consider, whether if the plaintiff be either excluded from coming in a creditor of John Brandt & Co., or if the funds of the estate be insufficient to pay him, he cannot come upon the separate estates of J. Brandt and Henry Foster, who are debtors to the firm of J. Brandt & Co., and who are also insolvent, and represented by the same syndics. If the cpurt should be of opinion contrary to the argument sustained on this head, that all the members of this partnership are bound in solido, then there can be no doubt that the plaintiff must come in upon the separate estate of Brandt & Foster, after their joint fund is exhausted. But even if they should think, as I trust they will, that they are not liable in solido, still I think, from the circumstances of this case, the creditors of the joint fund of J. Brandt & Co, must come on the estates of John Brandt and Henry Foster.
1. It is stated in the fact, No. 12, that a part of this separate estate was paid for by the partnership fund.
2. John Brandt and Henry Foster were the only acting members of the firm, and it would hardly be permitted, that they should, by their own act? make themselves, in their private capacity, solvent, by appropriating the goods or money entrusted to the firm, while the firm was, by this very operation, rendered insolvent. Their case is different from that of the other partners: these last were not bound to the joint creditors, farther than their interest in the stock, because they never made any special agreement to that effect with any of the creditors; and because, in this species of partnership, the law does not imply it. But with respect to John Brandt and Henry Foster, the case is different, because they did make a special agreement with the creditors; they acted, they contracted the debt, and they shall never be permitted to get rid of their personal responsibility; every one, therefore, who contracted with them, though in the name of the firm, has a right to come on them individually, if the funds of the partnership fail. I conclude then that the plaintiff, if he be not paid the full amount of his debt, out of the estate of J. Brandt & Co., has a right to a dividend from the particular estate of John Brandt and Henry Foster.
Another question arises out of’the mortgage , . i „ „ mentioned in the statement of facts. By the 5th fact, it appears that purchases were made of real estate in the city of New-Orleans, and by the 11th fact, that on the 1st September, 1820, William Ward and James Johnson executed to the plaintiff, a mortgage on the property, for securing a debt of 56,000 dollars. There can be, I believe, no good reason to doubt of the validity of this mortgage, and that it will attach on the one half, which is the interest of the mortgagors in the property.
The first inquiry is, what interest William Ward and James Johnson had in the property? If it was partnership stock, they, as partners, had a right to dispose of it, and their mortgage would burthen the whole of the property. But I do not think it can be so considered.
Land purchased by a person in the joint names of himself and another, although he be not authorized to make the purchase, (or what is the same thing, by a partner of a house established for other purposes, in the name of the firm) is taken on the joint account, and is the property of all the partners; each has his individual share, and it is held subject to all the rules which are established for real property: it is to be transferred, incumbered and bequeathed in the same manner as if it been jointly acquired by the parties in any other manner; each owner may sell or incumber his share, independent of his associates. This doctrine is acknowledged in its fullest extent, by the decision in Smith vs. Kemper, 3 Martin, 626.
The court there say, “By the articles of co-partnership, the appellee had no right to buy real property for the firm, yet he did so ; what is to be the consequence ? It is not disputed, that when a man undertakes to buy a thing for another, without authority, the person for whom the purchase is made may avail himself of it.” The same point is decided, 11 Mass. Rep. 474. Now here John Brandt and Henry Foster make a purchase of real property in the name of J. Brandt & Co., that is to say, for John Brandt, Henry Foster, William Ward and James Johnson. William Ward and James Johnson agree, in the language of this court above quoted, to “ avail themselves of it.” The act then is complete, they are the owners of one half of the real property; and, of course, have the right to dis pose of that interest; they exercise this right , . „ . , „ . by mortgaging it tor a just debt. By what train of reasoning can this transaction be avoided ? Will it be said that the partners of the house at New-Orleans, having applied for a'respitet as in the name of the firm, prior to the date of the mortgage, it is, therefore, void ? If it should, I answer—
1. That William Ward and James Johnson did never apply for a respite; that they are still solvent, and ready to meet every legal engagement they have contracted; and that, therefore, they had a complete right to dispose, in what manner they pleased, of their joint interest in the real estate, which I hafe shewn, was not held as stock, but as property in common with the other persons composing the firm.
2. I answer, that John Brandt and Henry Foster could, from the nature of the business they carried on, contract no debt, but by appropriating monies or effects entrusted to them for the purpose of purchase or sale; that if they did contract other debts in the name of the firm, neither the joint stock of the firm, nor the other partners, individually, would be liable for them ; and that, therefore, they could not, make the firm .insolvent for the purpose of delaying the .páyment of such debts; and as it does not appear that any other debt besides those in the hands of the plaintiff, arose oñ such deposits of produce or money, there is no evidence that the firm is insolvent, although it may be unable to pay the debts illegally contracted in its name by John Brandt and Henry'Foster.
- 3. I answer, that the mortgage was given more than three months before the petition for a forced surrender; and that, therefore, although my other reasons should be deemed insufficient, the mortgage must attach.
•⅛ The mortgage was given for a consideration accruing at the time it was executed.
Another point necessary to- be noticed in this case, is the place of residence of the parties. If they reside at different places, carrying on business in their separate names, they are not considered as partners, says our law, but mutually as principals and factors. 5 Par-tida, tit. 10. L 4, in notis (3) Si sint plures socii diversis locis exercentes, videntur invicem institutores et inviee preepositi. 2 Cur. Ph. illustrada, 46. (29) “ When two partners are in different places, the one cannot bind the other, unless for the part which belongs to him in the ny’s stock, unless there be an agreement between them to that effect, or when one is spe- , r cially appointed by the other. Thus, although the partnership were of a nature that would make the partners liable in sólido, this, circumstance would take away that liability.”
We conclude then, that the plaintiff,, in this cause, is entitled to a preference, over the creditors by simple contract, -and must come in pro rata with debts, if there be any, which arise from consignments. .
That he is entitled first to exhaust this privilege on the joint estate, and to come in for the balance on the separate estates of John Brandt and Henry Foster. .
That he is entitled to the proceeds of all the real estate contained in the mortgage, and of the personal estate mentioned therein as a pledge. And that he must come in for a dividend with the other creditors of the estate for all the balance due to Johnson and Ward, as creditor partners, independent of their credits arising from consignments.

Opinion:
Porter, J.
delivered the opinion of .the court. This action ought, in strictness, to have been cumulated with the other proceedings in the bankruptcy of Brandt & Co., and J. Brandt and H. Foster: however, as it has . - * been carried on to this stage, without the ob-O 7 jection being taken, we have considered the different questions raised in it.
The first is, what species of partnership was entered into between William Ward and James Johnson, of Kentucky; and Henry Foster and John Brandt, of New-Orleans ? Máriy of the other points urged in argument depend on the decision of this.
The articles of partnership state, that the .aforesaid persons had associated, " for the purpose of doing commission business as factors, in the city of New-Orleans."
The plaintiff's counsel contend, that this is a particular partnership, .coming under the définition contained in the 13th article of the Civil Code, 390, which declares, that where persons associate together for the exercise of some trade or profession, it is a particular partnership; in the French text, the words are, quelque metier, ouprofession.
The court must understand the expression, "to do commission business in New-Orleans, as factors," as it is to be presumed the persons who entered into the contract did, when they used it. To enable us to do this, the first rule of construction is to endeav-our to'ascertain what was the common intention of the parties, rather than adhere the literal sense of the terms. Civil Code, 270, art. 56.
Factors are those who are appointed to transact a particular business, in the name of another, and not in their own. Curia Philipica, Commercio, terrestre, lib. 1, cap. 4, n. 1.
Commission business is transacted in this city, not in the name of the principal, but in the name of the house to whom the property-is transmitted for sale. They dispose' of it as their own ; take bills payable to themselves for the price; and when they purchase, it is they who state themselves buyers, not the house in Philadelphia, London or Parb, who may have commissioned them.
The different members of the sentence taken together, convince us that the intention of the parties was to establish a commission house in this city, of the ordinary kind. The expression, " as factors," does not prove any thing else was contemplated; for. the meaning attached to the word factor, in com mon parlánce,is quite consistent with the other terms of the sentence, as we understand them.
Our law defines merchants — those persons wjj0 4,Uy arKl sell merchandize to maké profit' by it. Curia Philipica, lib. 1, cap. 1, n. 3.— Commission merchants, who have a house established in Ñew-Orleans,' and Who live by buying and selling those objects, which form the commerce of this place, come almost within the letter of the definition just given.
The Circumstance of the business not being carried on. in the name of all the partners, is presented as an objectioh against considering it an " ordinary partnership." Civil Code, 390, art. 15.
We understand the expressions in our Codé to mean the name which is given to the firm by the consent and approbation of the partners; the commerce is then carried on in the name of all ; and that jt is not of the essence of a commercial partnership, that the name of each of the partners should be inserted in the style of the house. In the French text, the words used for ordinary partnership, are la société en nom collectif. The article next succeeding that quoted in support of this novel idea, says, the stock consists of what is acquired in the partnership name, au nom so- . . dal; and in page 396, art. 37, n. 5, we learn that contracts signed, " such a one & co." gives the property to the partnership, although the purchase may have been made out of the monies of one of the partners.
As the plaintiff claims, as assignee of several persons, we shall first examine the right acquired from two of the partners of the house ©f Brandt & Co.
In the latter character he avers:—
1. That he has a right to prove the debt due to the separate partners by the firm, and to be paid pro rata with the other creditors.
2. That he is the only person who has proved that his claim arose from consignments on commission business, and therefore the only one who should be paid.
3. That as assignee of the partnership in Kentucky, of E. P. Johnson & Co., and Wards & Johnson, he has a right to prove the debts contracted with them, although some of the partners of these houses were members of that of Brandt & Co.
4. That consigning goods to a factor, does not vest in him the property of these goods, and that the consignor has a right to be paid in preference, even if the object has been r alienated.
5. That the debt due to him is privileged on the estate of J. Brandt and H. Foster; because they were agents to collect monies for persons not living in Louisiana, and the law has given a mortgage on the estate of those who administer the property of the absent.
6. That he is a creditor of J. Brandt and Henry Foster; because, when partners appropriate partnership funds to their own use, they become debtors to the other partners, not to the creditors of the partnership. And lastly, that the partners in the house of Brandt & Go., who resided in Kentucky, executed a mortgage in his favor, hypothecating for the security of the debt due him, all the real estate owned by them in Louisiana.
I. If the plaintiff was correct in this position, it would lead to very inconvenient results, and produce a circuity of actions, which the law abhors. The partners in whose name this claim is sought to be enforced, are bound in solido, to the other creditors of Brandt & Co. for the debts of that partnership, and liable s*t any moment to be sued for them. We can not therefore perceive the justice or legality r J J of permitting debtors to withdraw funds from their creditors or creditors agents, (for such the syndics are) unless they offer at the same time to discharge their debts. At the dissolution of a partnership, all debtsdue,mustbepaid before there is a division among the partners. Curia Philipica, lib. 3, cap. 3, sec. 46. 10 Martin, 435. The common law cases,quoted in argument, are quite opposed to the doctrine for which the appellant contends.
II. The claim to be paid on the ground that the present plaintiff is the only creditor who has proved that his debt arose from consignments, takes its rise from the idea which has here been already examined in the first part of the opinion : — viz. that this was a co-partnership of factors, in the limited sense in which that word may be understood. We have already seen that it must be considered, as an ordinary commercial partnership, for the purpose of transacting commission business. The law, as cited from the Curia Philipica illustruda, lib. 3, cap. 3, n. 62, seems to have been modified by the provision contained in the Civil Code, art. 41, n. 4, which declares that the partnership is bound by the debt, contracted in its name, even when that debt has not turned to its advantage; unless by the nature of the contract, it should appear that it had nothing to do with the affairs of the partnership. The question then is, have no other debts but those which arise from consignments relation to the affairs of the partnership ? We are not prepared to say so. When it forms a part of the business of a house, such as this was, to buy and sell; when those sales are made in its own name; when the credits which it receives in payment, are taken payable to itself, and must frequently be ne-gociated for the purposes of immediate remittance, or to meet the acceptance, come under for the consignors; when, in making purchases, it becomes necessary that it should be responsible in the first instance to the sellers : when all this, and much more, in the same way, must be done, to enable the house to carry on the business for which it was formed; it is to be presumed the partners knew that these means were necessary to the end they had in view: that they contemplated the exercise of them, and therefore, cannot now exclude all creditors, save those who forwarded goods to be sold on commission.
III. It is contended, that as assignee of the . ° partnerships in Kentucky, of E. P. Johnson Sc Co., and Wards Sc Johnson, the appellant has a right to prove, and be paid the debt contracted with those houses, although some of their members were also partners in the house of J. Brandt Sc Co.; and in this position we concur. It has been already decided that the private debt of one partner cannot be set off against that due the partnership. 1 Martin, 25, 4 ibid. 378. Yet this is what is attempted to be done here. The firm of Brandt & Co. owes E. P. Johnson & Co., and they resist payment, because some of the partners of the latter owe the former, or rather are responsible for their debts.
IV. The appellant next insists, that he has a privilege on the estate of the insolvents, in preference to mere chirographary creditors, because placing merchandize in the hands of a factor, does not transfer to him the property in it, and that the same privilege which exists on the thing, attaches itself to the proceeds, if the object be sold. The court thinks otherwise. The delivery of property to a factor, to be disposed of, confers a right to sell it, of course a sale bj him divests the proprietor of his title. The case of Clay vs. his creditors, 9 Martin, is not at all like that now before us. Pledging an object, neither alienates it, nor confers a power on the pawnee to do so, unless in default of payment. If sold otherwise, the law justly gives a privilege, for the owner is deprived of his property without his consent. In the case of Clay already cited, the court declared that when the property was in the hands of an insolvent, by virtue of a contract which did not transfer the owner's title to it, that there existed a privilege on the object, or if alienated, for its value. If the contract did transfer the title, that privilege was lost; and so we consider it, if the owner authorises an other to make the transfer, for then, in case the proceeds cannot be traced, the agent becomes personally indebted.
Y. The absent persons spoken of in our Code, in whose favour the law gives a mortgage on the property of those who administer their estate, are perhaps those who are declared absent, not those who are reputed such. But if they were the latter, the plaintiff's pretentions are not much advanced by such a construction.
It is insisted we must take the letter of the law, Code, 456, art. 20, and not look at its spirit. Be it so: — the expressions in English are, they who not *being tutors or curators, take on themselves the administration; in French, ceux qui se sont immiscis. These texts must be construed together, for the law was passed before the adoption of our constitution, and in both languages. 2 Martin's Digest, 98. So construed, there is not a doubt that the words used convey the idea, that the persons alluded to, are those, who without the consent of the proprietor, undertake to manage his estate: Who intermeddle with it.
VI. By the statement of facts, it appears that J. Brandt and H. Foster, owed to J. Brandt & Co. a large sum of money. That debt; like every, other due the partnership, passed to the creditors of the firm, in consequence of a forced surrender being ordered, and they, or their agents, have alone the right to receive it. The decisions cited on this point, ⅝ were given in cases where both the partner- ship and separate partners had become bankrupts ; they relate to the distribution óf the estate, between the different creditors of each,' and they have no application to an action like the present, where the partner who advances these pretentions, is solvent, and responsible f°r the partnership debts.
The last point presents no difficulty. The mortgage was executed in Kentucky, months after a respite had been accorded to the partnership here. A preference of this kind, could not be given by all the firm after that respite was applied for; it follows that it could not be accorded by a part of that firm, — otherwise each of the members, by acting individually, might alienate all the property of the partnership, although they could not do it collectively, which would be absurd. There is nothing in the argument that the partners in Kentucky were solvent: for though they might be so individually,yet as partners of Brandt & Co. they can* not be Considered such, and it was only ¿in the latter character they had the right to meddle with, alienate, or grant an incum-brance on this property.
There appears no difficulty in regard to the debt due to Lee White, and by him assigned to the plaintiff.
According to the principles just.laid down, the plaintiff is entitled to be paid equally with the simple creditors of Brandt & Co., for the debt assigned him by Lee White, E.P. Johnson & Co., and Ward & Johnson, viz. for the sum of nineteen thousand nine hundred and thirty one dollars, forty cents, and the appellee should pay costs.
It is therefore ordered, adjudged and decreed, that the plaintiff be placed on the tableau of distribution of the late firm of John Brandt & Co., as simple creditor, for the sum of nineteen thousand nine hundred and thirty-one dollars, forty cents; and it is further ordered, that the appellee pay the costs of this appeal.