Court Opinion

ID: 6235260
Source: CourtListenerOpinion
Date Created: 2022-02-17 20:31:03.513602+00
Date Added: 2024-06-11T08:58:01.816363
License: Public Domain

Mr. Justice Sharswood
delivered the opinion of the court,
*384The verdict of the jury, under instructions from, the court, in which we find no error of which the plaintiff has any right to complain, has established that the premises never were the partnership property of Schlager, Hillers & Barnes. This dispenses with the necessity of considering either that question or the knowledge or notice of the plaintiff.
The question in the cause is then reduced to this, whether the sale by the receiver under the order of the court did pass the separate interest of Wesley D. Barnes, to the purchaser, clear and discharged of the lien of the judgment, in favor of the plaintiff below.
Undoubtedly on a judgment at law against a partnership for a firm debt, the separate property of each partner may be levied upon and sold, and the purchaser will take a title clear of the lien of judgments. The same result must follow in a sale under a decree of a court of equity for the payment of money. By the Act of Assembly of March 29th 1859, Pamph. L. 289, it is declared, “ that decrees in equity for the payment of money, shall be and constitute a lien on the real estate of the defendants or debtors named in the decree, in the manner, for the like period, and with the same force and effect as the lien of judgments rendered by and in the common-la,w courts of this Commonwealth.” But the decree for the sale by the receiver in this case was special, “ the following described property of the late firm of Schlager, Hillers & Barnes.” As to the members of the firm who were parties to the bill, that decree was conclusive that the premises were partnership property. They could have been heard in opposition to the decree and to the confirmation of the sale. They would be estopped from alleging as against the purchaser that it was 'not partnership property, and the sale would of course pass whatever interest each one of them had in it. But how are the rights of the plaintiff below, whose judgment was a lien upon the undivided third of the property of one of the partners, held by him according to the paper title, and as the verdict establishes, as a tenant in common, to be affected ?' It is not pretended that it could have bound an adverse title. The title of a third person not a party to the proceeding could not have been divested by the sale. When the judgment of the plaintiff below was entered, its lien attached upon the title of Wesley D. Barnes, as a tenant in common of real estate. No act of Wesley D. Barnes, after that, could change its character so as to affect or injure the lien. If he had agreed and put it upon record, that the land should be partnership property, that could only affect subsequent creditors who w;ould have constructive notice of it. For all purposes connected with the partnership, e-xcept sale and conveyance under the stringent provisions of the Statute of Frauds, that change is from real to personal property. As to all third persons not parties to the proceeding *385in equity, and not therefore bound by the decree, it remained an open question whether the premises sold under the order were or were not “ property of the late firm of Schlager, Hillers & Barnes.” The bill was merely for an account of the partnership business “ and to pay over to the complainant whatever may be justly due them therefrom, and that a receiver may be appointed to take charge of and wind up ,the said business.” It is the equity of each of the partners that the partnership assets shall be applied in the first instance to the payment of partnership debts, that they may be relieved from their individual liabilities for those debts, which gives partnership creditors any right to priority of payment. The fund raised by the sale under this order must have gone to the payment of firm debts. William H. Barnes, the plaintiff below, would have had no right to participate in the fund. So far as he was concerned it was the same thing as if the sale had been of the right, title and interest of an entire stranger. The estoppel upon the parties to the bill, which concludes them from averring anything against the force and effect of the decree, does not close his mouth. On the whole, then, we find no error in this record.
Judgment affirmed.