Case Name: Calvin W. How, and others, Complainants, vs. Charles I. Kane, impleaded with George Cogswell, Defendant
Court: Wisconsin Supreme Court
Jurisdiction: Wisconsin
Decision Date: 1850-06
Citations: 2 Chand. 222
Docket Number: 
Parties: Calvin W. How, and others, Complainants, vs. Charles I. Kane, impleaded with George Cogswell, Defendant.
Judges: 
Reporter: Chandler
Volume: 2
Pages: 222–246

Head Matter:
Calvin W. How, and others, Complainants, vs. Charles I. Kane, impleaded with George Cogswell, Defendant.
Whore a partnership exists between two persons, one of whom is a dormant partner, and the creditors of the firm have obtained judgments against the ostensible partner, founded upon debts created upon the partnership account, upon which executions have been issued and returned nulla b'ona, a bill in equity, against both partners, will be sustained, upon the allegation that the dormant partner had, by fraudulent connivance with the ostensible one, obtained the possession, and laid claim to, all the partnership assets, in fraud of the creditors; the relief which equity will give is to subject tho whole assets to tho payment of such debts.
In such a case, discovery of partnership effects will be enforced, though judgments had been obtained against the ostensible partner alone; and those effects will be decreed to be applied in satisfaction of such debts.
A dormant partner is liable in equity, if not in law, for partnership debts, to the extent of assets which he derived from the partnership, and which can be traced to his possession; and ho must, in equity, resp'dnd to a claim thus set up. But where judgments have been obtained against tho ostensible partner alone, equity will not hold the dormant partner, (on a bill filed against both, in the nature of a creditors suit) liable personally, beyond the assets he has appropriated to himself and which he withholds from the creditors, but to that extent he is liable to respond in equity.
A demurrer interposed by a defendant in a creditors bill, alleging for cause, that the execution issued on the judgment obtained in the law Court, was madfe returnable on a day out of term, without any order of the Court to that effect, will not be sustained. The defendant should have applied to the Haw Co'wrt to have the process set aside and then have set up that as A 'defence to the bill.
A Court of one Jurisdiction will not review or decide upon the regu larity of the mesne or final process, issued by another Court, having general jurisdiction. If the process or proceedings of the latter Court are claimed to have been irregular, application should be made to the Court in which they occurred, to set them aside.
A demurrer to a bill will not be sustained for the cause that a judgment, upon which it was founded, was obtained in the District Court, under the Territorial Government, subsequently to the adoption of tho State Constitution, but before the State was admitted into the Union by the act of Congress. Until the State was ad* mitted into the Union, the jurisdiction of tho Territorial Courts attached, and continued until tho State Government had become organized. It is a heresy to maintain that one established jurisdiction can become defunct until succeeded by somo othor, which shall be established by force of law. There can be no interregnum. Judgments and all other Judicial proceedings had, under the Territorial Government, aro of force, up to the timé of tho admission of the State and tho organization of the Judiciary under tho Constitution.
This was an appeal by the defendant; Kane; from the decision of the Circuit Judge of the Third Circuit upon a demurrer put in by him to the complainants bill:
The defendant, Kane, put in a separate demurrer to complainants bill, assigning causes, which are designated in the opinion of the Court, and therefore, need not be set out pro forma. The counsel for the defendant, Kane, also assumed to assign other causes of demurrer ore ienus, which were coupled with the causes assigned upon the ree-cord, and were urged at the same time therewith. The right to do this was objected to by the counsel for the complainants, until the final hearing of the cause, or at least, not until the written demurrers should have been decided by the Court, adverselyto the demurring party. The opinion of the Court sufficiently shows that the causes of demurrer assigned ore ienus werenot considered, or decided..
The general principles of the bill ape referred to in the opinion of the Court, and.it is-not decreed necessary to enlarge such statement by the insertion of/ the special acts of fraud alleged, and which, are not pertinent to the matter of the written demurrers. It is proper, however,, to. state that the bill does allege that in the formation of' the copartnership,_ it was. specially agreed by the defendant, that the n$pne of the defendant Kane, should not be used, and that all the liabilities cr.eated, should be in the name of the defendant, Cogswell, and that the name of Kane should be concealed as a party in interest, and that this arrangment was acted upon in the .creation of the debts n?adp with the complainants and others; and that until the lleged-fr.audulent assignment and transfer of the copart-nership effects, by Cogswell to Kane,. Kane assumed to be merely a cleric to Cogswell; and that the assignment by Cogswell.was in fraud of creditors, and merely color-able, to protect, the property for their mutual benefit;«and¡ that aftqr such pretended sale and assignment the part-, nership continued as before, Cogswell then claiming and pretending, to.be the.clerk and Kane the principal.
E. G. Ryan <$• J. Hqllidqy,. for the defendant Kane.
J). IE Chandler 8f II. S. Orion., for. the complainants.
To sustajn thp,demurrers, the,copnsel for the defend-, ant. Kane, made and argued the following points:
First. This, is not a. Creditor’s Bill, seeking to reach the property of the judgment debtor in, the,hands, of a third person. It is either a Bill seeking to establish in Equity, the origina}, liability of a dormant partner; or it. is a bill by the judgment creditors of an individual partner, seeking payment of the debtor partner’s,separate liability opt of the partnership.
I. The frame of 'the bill, in the stating and charging parts, and in the prayer, all'consistent and uniform, seems to settle the first proposition,'th'at it is exhibited to enforce the original liability of Káne as ;a dormant partner of Cogswell. In the stating part, 'the whole seems framed on this idea. So is framed the charging part. So is the prayer. It seems impossible to resist this conclusion. And if this be the construction'of the Bill, it is clearly bad.
II. This i's seeking-in Equity the appropriate function of a Court of Law, to enforce the payment of 'a simple contract debt against the parties primarily liable upon it. There is no precedent for it. Benny vs. Martin, 4- Johns. C. R. 566; Washington, J. in Willirfgs vs. Consequa, 1 Peteis C. C. 302; Wiggins vs. Armstrong, 2 Johns. C. R. 144; Angelí vs. Draper, 1 Vein, 399; Shirley vs. Watts, 3 Atk. 200; Bennett Vs. Musgrave, 2 Yes. 51; •Balch vs. Wastalí, 1 P. Wms. 445; Mitford’s Eq. pi. 115; •Baker vs. Biddle, 1 Baldwin, 417.
It is noticeable and important that there is no averment ■in the Bill, that the complainants were ignorant of the -partnership, at the time's of the recovery of the judgments. If at the time of the 'suits brought against Cogs-well, they had notice of the partnership, they had a right of election, to make the dormant partner a party or not. Story's Partnership, § 241 and note.
For all that appears by the Bill, they exercised that election and discharged Kane. This even seems -to be apparent in the case of all of the judgments, exceptone, for they were obtained within twenty -day's of filing the bill. There is here -no pretence "of mistake. Even admitting that they had 'no notice of the partnership before judg ment, it may still be questioned whether, after the recovery against Cogswell, there is any remedy at law against Kane. It is believed that there is not. Srqith vs. Black, 8 Serg’t &B,awle, 142; Ward vs. Johnson, 13 Mass. 148; Robertson vs. Lynch, 18 Johns. 451; Sheehy vs. Mande-ville, 6 Crgnch, 253, 2 Cond. R, 362.
But it seems very certain that whether there be a rem,* edy at law or not, this, bill cannot be sustained- on the ground now considered. For if there be, then clearly Equity will leave the complainants to it. And if there be not, then there is no foundation for Equity to act upon. There is no equitable liability growing out of’ partnership which is not founded on a legal liability, except as be-* tween the partners.
It is lately a common, but erroneous idea, that Equity has a remedy in every case of doubtful legal right. Equity creates no now rights, except on some special grounds of jurisdiction, within npne of which this Bill comes: h only enforces rights existing at law, which the Courts of law are inadequate to enforce. Nor, so far as this Bill seeks to enforce Cogswell’s liability, as an original debt against Kane, is there any hardship in this I — - For the credit was given to Cogswell, and to him only.
III. In the present view of the.Bill, it is multifarious. Several judgment creditors may indeed unite in one bill against their common judgment debtor and his trustees, for a discovery of his. property and satisfaction o.f their judgments. Story’s Eq. pi. § 286. But that is a peculiar case, very different from this. That is the case of persons who have severally ascertained their rights, at law, and who come into equity for a common satisfaction of them. This is a cg.se, as against this defendant, of per sons claiming fo be his several creditors, and seeking to enforce against him their several rights in one Bill. The claims of the complainants are several, distinct and independent. There is no privity or community of right between the complainants. This defendant is not bound by the judgments, and may make distinct and different de-fences against the complainants. The facts of purchase and notice may be different. If the case put by the bill affords any remedy, some may prevail and some fail on the facts of each case. There is no common right, no joint claim, in the complainants; and the bill is multifarious. Story's Bq, § 279; Harrison vs. Hogg, 2 Vesey, 823; Boyd vs. Hoyt, 5 Paige 65; Yea ton vs. Lennox, 8 Peters, 123.
II. This may be considered a bill by the judgment creditors of an individual partner, seeking payment of his separate liability out of the partnership funds. Ad; mitting -this defendant’s original liability with Cogswell, at law, that liability has b«en merged in the judgments. Smith vs. Black, 9 Serg. & Rawle, 142; Ward vs. Johnson, 13 Mass. 148; Robertson vs. Lynch, 18 Johns 451; Peters vs. Sanford, 1 Denio, 224. And the separate judgment creditors of Cogswell stand in the same relation to the partnership, as if their claims had been originally separate demands against him. Especially if this is the result of an election, which was binding on the defendants. And in the absence of all allegation to the contrary, the Court is to assume that it was by election. Now the separate judgment creditors of a partner, have only two modes of reaching the partnership assets.
1st. By levying execution on the interest of the debtor partner, and filing a bill in the name of the Sheriff or creditor,'pending'the levy, against 'the partnership, for a discovery of the partner’s interest, and then selling it; or 2d — By selling it without' suíóh discovery, when the right óf calling the partnership'to an account vests in the purchaser. Story’s Partnership, 261'~264. Neither eourse has here been pursued, and the complainants have missed their true remedy.
There is another vie'v of this bill, in which it cannot be sustained as a creditor's bill. When a judgment creditor has exhaused his remedy at Jaw, he is permitted by modern practice, aided by statutes, to seek a discovery of his debtor’s property in equity, and the application of it to the satisfaction of the judgment. Pie may thus reach the debtor’s property in the hands of trustees or stake-holders, making them parties. But this remedy reaches only the separate property of the judgment debt- or. It is a peculiar remedy, strictly limited to its appropriate uses. And it would be an innovation, wholy unsanctioned by authority or precedent, to extend it so as to readi the property of a partnership of which the judgment debtor is a member. This defendant is not alleged to have separate property of the judgment debtor; he is alleged to have property of a subsisting partnership, composed of himself and the judgment debtor. And to reach such property, is not the office of a creditor’s bill. If Kane is a trustee, he is the trustee, not of Cogswell, but of the partnership. The bill discloses the fact that there are other original creditors of the partnership. — , These other creditors may now be, or hereafter become judgment creditors against both defendants. And it is not the duty of the Court to give priority to the separate judgment creditors of one partner over the joint credi tors of the partnership, whether the separate 'creditors became so by election or by laches.
III. The equitable jurisdiction of fraud, Will not be found to aid this bill. The mere allegation of fraud does not give Equity jurisdiction. The case must be brought within some settled rule of equitable'interposition against fraud. Here it is •’sought t'o charge Kane with the debts contracted by Cogswell. And it is very clear that none of the facts alleged, happening subsequetly to the -accruing of those debts, aid the jurisdiction of the Court, on the ground of fraud. The case must be taken on the facts as they were when the debts were contracted by Cogswell. And these'facts, as alleged, are simply that there was a partnership between the defendants, Cogs-well being the ostensible and 'Kane a dormant partner.-^This is not fraud in fact, or in law. The relation of a dormant partner to the ■partnership, and its creditors, is of such ordinary occurrence, thas it has long been settled and sanctioned by the highest judicial authorities. Coll-yer on partnership, 3, 62, 393, 424, &c; Story’s partnership, §63,80, 159, &c. Nor, as these authorities show, is there any distinction between dormant and secret partners, except in a single point irrelevant to this case. There was then no fraud in the dormant partnership of ¡Kane; nor in the secrecy of his relations to the partnership. Nor any hardship on the complainants, for the credit was given to Cogswell aloné. Certainly, according to the state of facts set up in the bill, Kane was liable with Cogswell, if the 'creditors saw fit to hold him so; but they had the election to discharge him and pursue Cogswell alone, as they have done. Collyer, 424. Bat the mere suppression of his name at the time of the con~ tracts, is sanctioned by ancient commercial practice, and a long train of judicial decisions. And the Court will notice that the bill states no. fraudulent device or intent in the formation of this first state of partnership, or in the incurring of the liabilities by it. All the. fraudulent imputations of the bill are reserved for the second state of partnership, when Kane became the ostensible and Cogswell the seoret partner.
It is not now necessary to discuss how far these imputations of fraudulent intent might, or might not sustain a bill similar to this, seeking to hold Cogswell liable for judgments obtained against Kane. It is sufficient to say, that they cannot aid the jurisdiction of the Court in this case for relief on foot for prior contracts, on the ground of fraud. The concealment of Kane’s partnership at the time of the purchases by Cogswell from the Complainants, is not such fraud as calls for the aid of a Court of Equity. Story’s Eq: §204, 220.
IV. Considered as a creditor’s Bill, this bill is fatally defective for several reasons. A creditor’s bill is permitted only when a creditor has exhausted his remedy at law, by the due return of an execution unsatisfied. And it is immediately founded on the return of nulla bona by the Sheriff. In Storm vs. Waddell, Vice Chancellor Sanford calls these “ Bills of unsatisfied judgment a,nd execution creditors.” Hendricks vs. Robertson, 2 Johns. C. R. 283; Williams vs. Brown, 4 ib. 682; McDermott vs. Strong, ib, 687; BrinkerhoiT vs. Brown, ib. 671; Cassidy vs. Meacham, 3 Paige 311; Clarkson vs. De. Peyster, ib. 320; Mcllwain vs. Willis, ib. 506. Affirmed by Court of Errors, Dec. 1832. Child vs Brace, 4 ib. 314; Reed vs. Wheaton, 7 ib, 663; Merchant’s Bank vs. Griffith, 10 ib, 5,19. And this, jurisdiction goes upon the principle of lien. See the cases, quoted and a full review of them in Storm vs. Waddell, 2 Sanford R. 494. There must then be, in order to sustain a creditor’s hill, a judgment unsatisfied; an execution duly issued and returned unsatisfied; an exhausting of all remedies at law; and alien to be enforced.
1st. Here is no judgment in the case of the complainants, Van Burén & Churchill. It is not alleged -in the bill to have been recovered at any term of the District Court. Nor was there then any Territorial District Court existing. The State Constitution was adopted on the 2d Monday of March, 1848. And from thence the Territorial Courts of the United States ceased to exist.
2d, Here is no, allegation that the Judgments were docketed. The type construction of our law is that there is no lien on Real Estate until the judgment is docketted. And the omission is fatal. Wheeler vs. Heermaps,, 3. Sanford 597. And this is understood to have been held by the Territorial Courts. See form in 3, Hoffman’s pr, 224.
3d. Here are po executions duly issued and returned unsatisfied. All process was then to be made returnable on the first day of the next term, unless otherwise directed by the Judge. These were not return days. Any direction of the Judge to change the regular return days, should be of record, and the record of it should appear. These writs were then returnable on no lawful return day. An,d were not writs, but void. The rule requires the corpplainants to exhaust their remedies af law. A return of nulla bona before the return day would be insufficient. Cassidy vs. Meacham, 3 Paige 311. So ■when éxé'cution is issued to another county 'than of th'e defendant’s residence. Wheeler vs. Heermans, 3 Sanford ;f>87. 'Reed vs. Wheaton, 7 Paige 663. And it is a mere mockery to say that the issuing of those executions proforma, returnable within one or two days, contrary to the statutory provision, ‘exhausted ‘the remedy at law against Cogswell.
4th. There should have been an averment that the bill whs not exhibited by collusion with the judgment debtor. See form 3 Hoffhia'n’s Pr. 225. This is essential; for otherwise the Court Would be called upon in th'e natne of a-fictitious or originally real creditor, finder judgments controlled by the judgment debtor, to do indirectly what the Court would not do direhtly. This averment isdue to’the integrity of the Court. And this is believed a prope'r "chse to enfdree it in.'
V. The order of the Circuit 'Court to answer over is wfong. The o'rder directs the bill‘to he taken pro'confesso, unless fully answered within a specified time. This order 'is Unu'sual and improper. After overruling one demurrer to the whole Bill, we had the right to demur an'd ‘plead,or deinur and answer,or answer and plead. Mitford’s Eq. pi. 16. And it is improper to order that the bill be taken pro confesso unless fully answered. The order to answer should be that the bill be answered or taken pro confessó, leaving the complainant to his exceptions if neessary.
The bodnsel for the complainants, made and argued this following 'points:
The first cause of’demurrer is insufficient. The objection made by it is, that the execution in favor of Van Burén and Churchill 'wdS made retfimable un a day which by law it could not be, -íntliout a special order of the Court from which it issued,
This cause of demurrer, presents aja.igsue of/act., whether the order of the Court was procured op not. It assumes a fact which is not alleged in the bill. A demurrer, to be good, cannot perfprm such a, function. It is a, speaking demurrer.
Granting the execution was irregularly issued, or returnable,, the demurring defendant should have applied to the Court in which it was issued to have it set aside. This Court will not hear an impeachment of the regularity of the process of another Court, where it is the basis or an integral part of the bill filed h.ere. V^illiams vs. Hoge-boom, 8. Paige, 469; Sanford vs, Sinclair, 8 Paige, 373. To the same point, Shottenkirk vs. Wheeler, 3 John. Ch. Rep., 275; Campbell vs. Fayrall, Lloyd, & Gpold, (Temp. Plunkett), Yol. 1, 888.
A fi. fa. haying a wrong teste or return, or a misde-scription of the Court in the name of which it is issued, or m.ade returnable, or, other errors, is not rendered void, but voidable only and may be amended. Williams vs. Rpgers, 5. John. Rep.,_ 163, and cases there eited.; Scott vs, Shaw, 13 John. Rep., 378; Cramer vs. Yanalstyne, 9. John. Rep., 388; Hone.us. Mosely, 2 Edwards’;Rep.; At-kipson vs. Newton, 2 Bos. & Puller’s Rep., 336, Campbell vs. Cumming, 2 Rurrough’s Rep., 1187; Phelps us, Ball, 1 John, cases, 31; Laroche vs. Washburn et al, 2 Tprm Rep., 737; BjsselJ, vs. Kipp, 5. John. Rep., 100; Jackson, ex. dem„ &c., vs. Walker.et al., 4 Wendell, 462; Mclnlire vs. Rowan, 3 John. Rep., 144.
But the defendant Kane, who alone defends in this, suit, is., not a party to any of the executions upon which, this bill- is filed, and cannot set up any error in the issuing p£ the executions or the return thereof. A stranger to a, judgment or execution cannot set up any defence to its validity. Bisseli vs. Kipp, 5 John. Rep., 89, and cases there cited.
The second cause of demurrer is likened to the first, •with the exception of the objection that no irregularity in the executions is alleged, except as respects the return day of them; and as to that, it alleges the same objections. This cause of demurrer is also subject to the same objection as the first, as a speaking demurrer.
Those parts of the first and second demurrer, which we claim are. speaking, are such of them as allege facts, not patent upon the face of the bill, but dehors it; and which, if of any avail to have been stated, would have told efficiently in an answer to the bill; but cannot by Way of demurrer.
A speaking demurrer is that which states some fact which does not appear in the bill, and which is necessary to support,the demurrer. It cannot state what is not alleged in the bill without being subject to be overruled.— Mitford’s Chancery Pleadings, 213 (original paging;) Story’s Equity Pleading, 352, sections 447; 448 and 449; S. S. & W. Kuypers, Ex’rs, &c., vs. the Ministers, Elders, &c., of Reformed Dutch Church; 6 Paige, 570; 2 Vesey, Jr., 83; 2 Vesey, 245; Lube, 340; 1 John. Ch. Rep., Verplanck vs. Caines, 57.
The two causes of demurrer above referred to, are applied to different and distinct parts of the bill; but neither one of them to the whole; although they both profess be put into the whole bill; and if bad as to the whole they must fail, and be overruled. It is admitted that distinct demurrers may be put into distinct parts of the bill; but they must so purport on the face of them. Story’s Equity Pleading, 349, sections 443 and 444, and authorities there quoted.
The third cause of demurrer assumes, upon the matters of the bill, to claim for the demurrant, as a matter of law, all exemption from liability on account of the judgments in favor of complainants, because judgments have been recovered against Cogswell alone; and that hence he, Kane, is released from any claim 'made upon him by the “ bill.” The principle here asserted is a fallacy; and the sooner it is dissipated shall we arrive at the truth.
A party complainant, in a creditor’s bill, may join with the judgment debtor, any other persons whose acts are in hostility to his rights; or any person who has possessed himself of the property of the judgment debtor, sought to be reached by the bill, and in which he is alleged to have an interest, and which cannot be reached, by reason of fraudulent concealment; or which is alleged to have been fraudulently assigned and covered up.
The bill charges that Cogswell and Kane, by the willing consent and co-operátion of both, have fraudulently invested Kane with the \t?hole property to which the creditors -were entitled, and wrongfully withholds it from them.
The question of Kane’s liability, upon the principle of his having been a partner with Cogswell, at the time the debts were contracted, and at the time Cogswell gave his individual responsibility therefor, is not the point now to be decided. We have the right, by this bill, to sift the consciences of the parties, and to compel them to discover the alleged fraud by which the property has been covered up, and to disgorge what belongs to us; and we are not to be put aside by technicalities, shifts, devices, or leger demain. We haye a. right to probe, their rottenness to the bottom, and to gather the honest fruit 'which may be disclosed by thp purification.
Though the bill charges Kane to haye been originally liable, as a, joint debtor with Cogswell, and is still legally and equitably liable to be enforced, yet we have the right to discovery of the property in his hands which is covered up, and in which Cogswell is interested, whether Kane is exempt from liability, by reason of the recovery of the judgment against Cogswell, or not.
In accordance with the principle here assumed, the following authorities ar.e cited: Boyd & Suydam vs. Hoyt & Pearce], 5 Paige. 65; Edmiston vs. Lyde, 1 Paige, 637; 1 Barbour’s Practice,. 158; Stafford vs. Mott, 3 Paige, 100; 2 Barbour’s Pr., 156; J-eroy vs. Rogers, 3 Paige, 234; McDonald vs. Strong, 4 John. Ch. Ilep., 687; Wright vs. Hitchcock et ah, 3 Munford’s Rep., 521; Jones vs. Henry,' 3 JLittell’s Rep., 427; Donovan vs. Finn, Hopkin’s Rep., 59-85; Weed et al. vs. Pierce et at, 9 Cowen’s Rep., 722; Hendricks vs. Robinson, 2 John. Ch. Rep., 298; 2 Equity Digest, p. 45, § 41; Johnson vs. Gilbert, 3 Connecticut Rep., 166; Middleton Bank vs. Russ, 3 do. 135; Cam-mack vs. Johnson, 1 Green’s N. Jersey Rep., 164; Bryan vq. Knickerbocker, Barbour’s Rep., 409; do.. 34.
ft is no objection to a bill, that it prays for too much relief. Though it does so, the Court will grant such part of the relief as is compatible.
A demurrer put in to the whole bill, will be overruled, if any of the relief or discovery prayed for is sustainable. Kimberly vs. Sells, 3 John. Ch. R., 467. Leroy vs. Ved-der et al., 1 John. Cases, 417.;. kaight et al. vs. Morgan, et al, same book, 429,
If the defendant regards the prayer for relief too broad, he should demur to such part thereof as is not sound, and answer as to the residue. Whilbeck vs. Edgar ef al., 2 Barbour’s Ch. Rep,, 100.
Where a bill is filed for discovery and relief, against a party who is not liable as respects relief, but is bound to make discovery, a demurrer by him to the whole bill will be overruled. He should only demur to the relief, and discover by answer- as to the remainder. Wright vs. Dana, 1 Metcalf’s Rep.? 237.
The fourth cause of demurrer is a. general one, claiming that the complainants are not entitled to either disco-very or relief, as against the deipurring defendant, because the bill does not make such a case as to entitle the complainants to either.
It is confidently believed that the preceding authorities clearly show that the complainants are entitled to both; and that if the whole relief which is prayed for cannot be granted on the final hearing, a part of it, at least, must be; and that we are entitled to the discovery sought for, beyond a peradventure.

Opinion:
The Chief Justice.
Did the bill in this case depend upon its name, or any name, it would be difficult to sustain it. It is not, technically, a creditor's bill. The complainant's counsel, in answer to an inquiry from the bench, says, that it is not a bill in aid of an execution. And, as far as it seeks to subject the defendant Kane, personally, to a decree for the .payment of the judgments against his partner Cogswell, it is clear that it cannot be supported. Yet taken altogether, rejecting a good deal of the stating and charging part as impertinent, and denying the princi pal relief sought, we are of opinion that the bill should be sustained as to the discovery, and as to some portion of the relief, which it seeks.
The bill was filed by the complainants How and eight others, judgment creditors of the defendant Cogswell, in behalf of themselves and all other judgment creditors of Cogswell. It states that the defendants were partners in mercantile business; and that their partnership commenced in 1844. That Cogswell was the active, and only ostensible partner; that the debts on which the judgments were obtained were contracted on account of the partnership, and in the way of its business; and that executions have been issued on the judgments, and returned unsatisfied. It further states, that in 1846, Cogswell ceased to be the active and ostensible partner, Kane becoming* such; the business of the concern, however, continuing the same as before. That at about that time Cogswell, pretending to be insolvent, and being in dread of attachments against him, transferred, or pretended to transfer, all his interest in the concern to Kane, receiving therefor a consideration which is alleged to have been merely nominal; and that this transfer was made on the eve of attachments against Cogswell, for partnership debts, being about to be levied on the partnership property. That this property, or the avails of it, is now in the hands of Kane, and is in equity liable to the payment of the judgments; and the bill seeks to subjugate it to that purpose. The bill also claims that Kane, having been originally liable with Cogswell, as a partner for the consideration of all the judgments, and having now in his possession all the assets of the copartnership, is personally liable to a decree for the amount of the debts; and which decree, among other things, it prays.
The bill has been taken as confessed against CogswelL Kane has demurred; and has assigned as special causes of demurrer:
1st. and 2d. That the writs oí fieri facias on the several judgments were not returnable on the first day of any term of Court; nor were allowed, by any order of the Judge, to be made returnable on the days on which they were returnable; nor were returnable on any day, on which by law they could be made returnable, without such order; and that they were therefore void.
3d. That the bill sets up that the defendant Kane was Cogswell's partner, and jointly liable with him to the complainants, at the time of the accruing of the indebtedness, and of the recovery of the judgments; and that; therefore, the complainants have a complete remedy at law, and, consequently, none in equity.
4th. General want of equity in the bill;
Several other causes of demurrer have been assigned, or have been attempted to be assigned, ore terms, on the argument of the appeal.
2d. For the understanding of this demurrer, it is necessary to refer to the bill more particularly than has been done in the general summary already given. It states that all the judgments, except that in favor of the complainants Van Burén and Churchill, were obtained in the Milwaukee Circuit Court, on the 3d day of September, 1849, and on which writs of fieri facias were issued the 5th of that month, returnable the 8th. And that the judgment in favor of Van Burén and Churchill, was obtained in the late Territorial District Court of Milwaukee County, the eleventh of May, 1848; and on which a fi. fa. issued September 20th, 1849, returnable the next day..
To this last judgment, the objection is interposed, ore tenus, that at the time of its rendition, May 11, 1848, there was in fact no Territorial District Court of Milwaukee County — the Territorial government, with all its machinery and incidents, having been abrogated by the adoption, by the people, of the State Constitution, in March preceding; and that, therefore, the judgment is absolutely void, as being coram non judtee.
It is to be borne in mind, that though our State Constitution was voted upon and adopted by our people, in March, 1848, it was not sanctioned by Congress, and the Territory admitted into the Union as a State, until the 20th of May following.
The objection to this judgment of- Van Burén and Churchill, raises the question — whether the adoption by our people of their State Constitution, did in fact, of itself, abrogate the Territorial government; and thus, ipso facto, constitute us a State ? or, whether that political change was effected only by Congress sanctioning our Constitution, and admitting us into the Union 1
This is a subject which is now convulsing the nation; but it is one on which I do not entertain, and never have had, a doubt.
I know no wilder or worse political or legal heresy, than this new-fangled doctrine of a Territory constituting itself a State; and being at the same time, within and without the Nation. The proposition involves a confusion of ideas, and cannot be expressed without a solecism in terms. Could such a tiling be conceived, and be carried into actual practice, it would be attended with the worst confusion, and the most disastrous results; first anarchy, and then the destruction of the Federal Constitu.? tion. By no means intending any disrespect to the very able and candid counsel who have argued for the defendant, I cannot countenance, even by an argumentative .denial, any such doctrine. It is of the same school, and involves the Same principles, as that of the right of secession — in plain, but bad English, the right of nullification, —a doctrine which has had but few disciples in our country, and none where free air is breathed. And of the two, I think it the worst. Politicians, even such as approach the grade of statesmen, may assert this doctrine, and pretend to believe it; and
" Coimncing others, half convinco thomsolvos — *'
but no American Judge, sensible of the obligations of his oath, and of his duty to our whole country, can give it any sanction. In our political system, a Territory can become a State only by the action and assent of the national government; and there is not, and cannot be, any such thing as an American State outside the Federal Union. With us, and probably with no people or government, is a claim of protection, equality, and fraternity, recognized, which is accompanied with a disclaimer of dependence, obligation, and allegiance.
Our Territorial Courts, and all the other machinery of our Territorial government, were in full, legal and effective exercise of their appropriate functions, until, on the 29th of May, 1848, the United States Congress, by approving of our Constitution, and admitting us into the Union, emancipated us from provincial pupilage, and made Wisconsin an integral part of the American Republic.
We therefore hold, that Van Burén and Churchill's judgment, as far as the objection of want of jurisdiction in the District Court is concerned, -was valid; and that all judgments obtained in the Territorial District Courts up to May 29th, 1848, if in other respects unobjectionable, are also valid. What may be the virtue and condition of judgments obtained during the interregnum between that time and the 28th of August, when the Circuits went into operation, it is not necessary nor is it proper to decide.
The first cause of demurrer assigned on the record, is that the executions were returnable out of term, without an order having been first obtained from the Judge, for-that purpose, as required by the statute. Waiving the objection that this demurer is speaking, in setting up matter not contained in the bill, the answer is, that this Court cannot take notice of such an irregularity. , Williams vs. Hogeboom, 8 Paige, 469. The executions were not void, but at most, voidable; and the proper course for the defendant, if he wished to be relieved from them, was to have applied to the Court from which they issued, to set them aside.
A further cause of demurrer was attempted to be assigned here, though not in the Court below, that the judgment in favor of the complainants, West, Oliver, and Charles, does not appear from the bill to have been founded on a partnership debt. Without deciding whether a demurrer, ore tenus, not resorted to on the argument below, can be entertained here on appeal, we think, taking the whole context of the bill, that this debt is in fact stated to have been that of the partnership. But whether this be so or not, is immaterial; as we are of opinion that the whole of the partnership property, if liable at all, is as much liable to judgments against Cogswell, the only ostensible partner, for his individual, as for hjs co- partnership indebtedness. And this brings me to the consideration of the only question of principle (except that of the jurisdiction of the late district Courts,) involved in this case; and that is—
Is the property belonging to two partners, (one of whqm is dormant and unknown) in their co-partnership capacity, liable on a judgment against the visible p.artqer 1
It is remarkable that upon a question like this, and which commercial transaction? must, or might, have often given rise to, but little authority is to be found.
The general doctrine, no doubt, is, that personal property in the possession, and subject to the control, of a debtor, and of which he is the ostensible owner, is liable for his debts. This rule, it is true, is suhjectjto many exceptions; some by the lenity and policy of the common law, and more by fraudulent legislation. But among these exceptions, I am not aware that thp latent right of a dormant partner is one. To say nothing of the original character of the debt; whether it may have been in fact contracted as a private one, or on account of the partnership, and in the course of its business; such a withdrawing from process of the debtor's property, or of that of which he was the apparent owner, and on the faith of which it may be presumed the credit was acquired, is not permitted, either by the common law or by any statute. It is a palpable fraud; and though by common law process the creditor may have redress by selling the property, and contesting the legal right in a subsequent action; yet where the parties confederate have involved it in such disguise and confusion than an execution cannot readily reach it, I can conceive of no possible objection to a court of equity lending its aid. It is the right of the creditor to Invoke that aid, and the dqty of the Court to grant it.
Now, what is this cááe 1 The 'defendants, Cogswell & Kano, form a partnership in 1844 — (I lay out of view all badges of fraud in the inception of the pártnership; the motives for Kane's being kept iii the background; and the roguish correspondence appended to, and made paid of, the bill) — by which they engage in mercantile business; Cogswell to be the known and ostensible partner, and Kane a secret and unknown one; the business to be conducted in the name of Cogswell alone, but for the equal and joint benefit of both'. Under this arrangement they continue in business for years) the ostensible partner contracting large debts in liis own name, but for the benefit of the partnership — among which debts are the judgments to enforce the collection of which this bill is filed. After these debts, or some of them, had become due, and attachments had been issued against Cogstvell, and were about being levied, he transfers, or attempts to transfer, the whole of the partnership property in his possession td his secret partner, Kane, without any consideration, or any actual change in their relations, as a mere manoeuvre to defraud, hinder, and delay their creditors, by making Kane, instead of Cogswell, the ostensible owner and active partner. Judgments are obtained against Cogswell; executions — the validity of which, for the purpose of this bill, we have already seen, is not to be called in question —ere issued; and the Sheriff) finding no property in the hands of Cogswell, returns them nulla bona. The specific property transferred by Cogswell, or its avails and equivalent, in the shape of real estate, it is alleged, is still in the hands of Kane.
The question then recurs — Is this property, thus situated, subject in equity to the judgments against Cogswell ? Wo think it is.
In the case of French vs. Chase, 6 Green, 166, the Chancellor of New Jersy held, that the prior right of á partnership creditor to be paid out of the common property, in preference to the separate creditor of the ostensible partner, did not exist in case of a dormant partnership; and that in such a case the whole of the partnership prcn perty, in the hands of the ostensible partner, was liable for his individual debts. This doctrine, in the absence of conflicting, or overruling, authority — and it is difficult to conceive how there can be any — ^we regard as the law; and we give it our unqualified sanction.
This view of the subject disposes of the objection, so confidently asserted, that a court of tequity cannot go behind the judgment at law, and enquire into its consideration. For, as has been already observed, it is wholly immaterial whether the debt wa's contracted by the ostensible partner in his partnership, or individual, capacity. And here I may remark, that the proposition, that you cannot go behind the judgment and enquire into its consideration, is subject to many qualifications and exceptions. Cases arising under our insolvent and exemption laws are familiar and in point.
We therefore hold that the Circuit Judge was right in deciding that Kane was bound to disclose, and account for, so much of the partnership property, and its avails in his hands, as was formerly in the possession of Cogswell while acting as the ostensible partner. And that, in the meantime, it was-proper he should be restrained by injunction from disposing of it.
It has already been observed, that as far as the bill seeks to subject the defendant Kane, personally, to a decree for payment of the judgments against Cogswell, it canno't*$e sustained. The complainants having elected to pursue Cogswell alone at law, and having merged their claims against the partnership in judgments against him alone, cannot now fall bach upon a court of equity for the purpose of asserting their original right. The law on this subject is too well settled to be called in question at this day: Smith vs. Black, 9 Serg. & Rawle. 142. And so are all the authorities, with one solitary exception; and that is the case of Sheshy vs. Mandeville, 6 Cranch. That case, great and deserved as is the respect and deference of the whole American bar and bench for the late illustrious Chief Justice of the United States, has never been regarded as law. It is one of the few — the very few — instances in which that great Judge erred.
One ground of the appeal is, that the defendant should not have been ordered to answer fully. It is almost always as a mere favor that a party demurring, and whose demurrer has been in the whole overruled, is allowed to .answer at all: and it is a matter of discretion with the Judge to impose such terms as the circumstances of the case may seem to warrant.
The decree of the Circuit Court must be affirmed with posts.
Decree affirmed.