Court Opinion

ID: 5142631
Source: CourtListenerOpinion
Date Created: 2022-01-01 17:20:14.801501+00
Date Added: 2024-06-11T08:24:37.493244
License: Public Domain

Townsend, J.
The appellants have filed five specifications of error, which are as follows: ‘.‘The court below erred: First, in overruling plaintiffs motion for new trial; second, in sustaining the demurrer of the defendants to the original complaint of the plaintiffs; third, in instructing the jury, at the conclusion of the testimony of T. J. Carlisle, to *169return a verdict for the defendants; fourth, in refusing to set aside the verdict because it was contrary to the evidence; fifth, in refusing to set aside the verdict because it was contrary to the law.
There are discussed in this case by counsel practically only two questions, and upon their decision rests the result of this case, at least so far as this appeal is concerned:
Non-Joinder of parties. 1. Can the appellants, plaintiffs below, maintain this action, as appears from this record? The court below held that the action could not be maintained except by joining S. C. Blake, the.third partner. The action is for damages for a trespass upon partnership property by the appellee, defendant below, levying upon and taking into his possession said property under a writ of attachment against the one partner, S. C. Blake, and in which the appellants, who were the other two members of the partnership, were not parties. The appellants contend that this question must be raised by defendant by plea in abatement, -or by way of apportionment of the damages on the trial, where the action is ex delicto, and we are of the opinion that this is the correct rule. ‘ ‘Again, this action can be maintained in its present form by one of the partners. In actions in form ex delicto, and which are not for the breach of the contract, if a party who ought to join, be omitted, the objection can only be taken by plea in abatement, or by way of apportionment of the damages on the trial; and the defendant cannot, as in actions in form ex contractu, give in evidence the non-joinder as the ground of nonsuit on the plea of general issue, or demur, or move in arrest of judgment, or support a writ of error, though it appear on the face of the declaration or other pleadings of the plaintiff that there is another party who ought to have joined; and if one of several part owners of a chattel sues alone for a tort, and the defendants do not plead in abatement, the other part owners may afterwards sue alone for *170the injury to their individual shares, and the defendants cannot plead in abatement of such action. 1 Chit. Pl. (4th Am. Ed.) p. 56; Colly. Partn. § 671; Gibson vs Stevens, 7 N. H. 352; Newman vs Bean, 21 N. H. 93. ” Garvin vs Paul, 47 N. H. 164; Deal vs Bogue, 20 Pa. St. 228; Pascal vs Ducros, 41 Am. Dec. 294. The same question has quite recently been before the Court of Civil Appeals of Texas in Leonard vs Worsham, 45 S. W. 336, and the court say: “It is contended on the part of Worsham that L. Leonard, Sr., was a necessary party to this suit. The answer to this is that he failed to have the court act upon his exception to the petition for nonjoinder, or to plead the matter in abatement, but himself caused him to be made a party to the suit. In order to prevent a multiplicity of suits, the'joint owners of personal property may be required to bring a joint action for the recovery of damages thereto, but, if the defendant fails to insist upon his right to abate the suit, and the recovery in behalf of a part owner is limited by the extent of his interest in the property, the objection of nonjoinder should be disregarded. May vs Slade, 24 Tex, 205; Rowland vs Murphy, 66 Tex. 534, 1 S. W. 657; Freem. Co-Ten. § 358; 1 Suth. Dam. (2d Ed.) § 134.”
*171Attachment. Partnership property. *1702. Was the seizure of these goods legal, or did it constitute a trespass? In a suit against one member of a partnership for his individual debt, and a judgment in such action, and execution upon said judgment, the only possession that the officer can take of parnership property is under section 3016, Mansf. Dig. (section 2131, Ind. T. Ann. St. 1899), as follows: “When a claim is asserted by the joint owners or partners to the property levied upon, the officer shall not, by virtue of his levy, deprive the joint owners or partners of the possession of the property levied upon, except for the purpose Of making an inventory thereof and having the same appraised. ” Can an absolute possession of the partnership property be taken by an officer under an attachment, *171in the first instance, to secure the payment of such a judgment as against the other partners? We do not think such possession is contemplated by the attachment statutes of Arkansas. It is, at this day, clear beyond question that the only interest a single partner has in partnership property that can be sold to satisfy his individual debt is his interest in the surplus after the discharge of all partnership indebtedness, and an adjustment of the equities of the members of the firm upon a final accounting. This interest is indefinite and uncertain. It may be more or less, or nothing at all. An examination of the authorities of the different states shows great differences of opinion in the method to be pursued by the officer in subjecting the individual partner’s interest. In Arkansas it has been held that the individual property of an innocent partner is not subject to attachment at the instance of a firm creditor for the fraud of a co-partner. Worthley vs Goodbar, 58 Ark. 1, 13 S. W. 216. In Bartlett vs Grocer Co., 45 S. W, 1063, the Supreme Court of Arkansas, in discussing the rights of creditors to partnership assets, lay down the doctrine that “creditors of insolvent partnerships have an equity in the firm assets entitling them to payment in preference to creditors of individual members of the firm, which cannot be extinguished by a general assignment by the firm for the benefit of creditors,” and quote as-the correct doctrine the Supreme Court of the United States in Hollins vs Iron Co., 15 U. S. 385, 14 Sup. Ct. 130: “Whenever, a partnership becoming insolvent, a court of equity takes possession of its property, it recognizes the fact that in equity the partnership creditors have a right to payment out of these funds in preference to individual creditors, as well as superior to any claims of the partners themselves;” and the court say this is an old and firmly established doctrine of equity, recognized generally in the works on partnership and equity jurisprudence, and in the adjudications of many courts, and cite Story, Partn. § 376; 1. Pars. *172Partn. §§ 382, 946, etc.; Colly, Partn. § 920; Smith, Eq..§ 547, note 2; 2 Lindl. Partn. § 692; 2 Bates, Partn. § 825; 2 Pom. Eq. Jur. § 1046;Story, Eq. Jur §§ 1207-1253; 2 Beach, Mod. Eq. Jur. § 788; Bish. Eq. § 515; Inbusch vs Farwell, 1 Black, 566; Murrill vs Neill, 8 How. 414; Crooker vs Crooker, 52 Me. 267; Treadwell vs Brown, 41 N. H. 12; Whaling Co. vs Borden, 10 Cush. 458; Hill vs Beach, 12 N. J. Eq. 31; Simmons vs Tongue, 3 Bland, 356; Converse vs McKee, 14 Tex. 20; Murray vs Murray, 5 Johns. Ch. 72 et seq.; McCulloh vs Dashiell, 1 Har. & G. 99; Giovanni vs Bank, 55 Ala. 310; Davis vs Howell, 33 N. J. Eq. 72; Ex parte Crowder, 2 Vern. 706; Ex parte Cook, 2 P. Wms. 500; Ex parte Hunter, 1 Atk. 223, 227, 228; Ex parte Elton, 3 Ves. 242, note; Bish. Insolv. Debtors, § 167. We think the correct doctrine to be that the officer cannot take possession of the partnership property to the exclusion of the possession of the innocent partners under an attachment against one of the partners, and, if he does so, he commits a trespass, for yrhich he can be called upon to respond in damages. See 2 Bates Partn. p. 1089, § 1106; Wap. Attachm. p. 183; Sanborn vs Royce, 132 Mass. 594; Russell vs Cole (Mass.) 44 N. E. 1057; Duborrow’s Appeal, 84 Pa. St. 404; Garvin vs Paul, supra; Haynes vs Knowles, 36 Mich. 407; Sirrine vs Briggs, 31 Mich, 443; Hutchinson vs Dubois, 45 Mich. 143, 7 N. W. 714; Deal vs Bogue, supra; Morrison vs Blodgett (N. H.) 29 Am. Dec. 653; Pascal v. Ducros, supra. In George, Partn. pp. 141-152, § 58, the whole question is fully discussed, and the learned author arrives at the same conclusion, after an elaborate consideration of the authorities and the principles involved. But the attachment statutes of Arkansas, in our judgment, do not contemplate the seizure of the partnership property by the officer in an attachment against one of the partners. In the case at bar the positive provisions of the statute were not complied with, because no bond was exeT cuted to the appellants. Section 312 Mansf. Dig. (section *173334, Ind. T. Ann. St. 1899). See, also, Shinn, Attachm. §§ 153, 168. Section 320, Mansf. Dig. (section 342, Ind. T. Ann. St. 1899), directs the mode of making a levy by attachment, The second and third subdivisions are as follows: “Second. Upon personal property, capable of manual delivery, by taking it into his custody and holding it subject to the order of the court. Third. Upon other personal property, by delivering a copy of the order, with a notice specifying the property attached, to the person holding the same; or, as to a debt or demand, to the person owing it; or, as to stock in a corporation, or property held, or a debt or demand owing by it, to the chief officer, or to the secretary, cashier, treasurer or managing agent thereof, and by summoning the person or corporation to answer as a garnishee in the action. The sheriff shall deliver copies to and summons such persons as garnishees as plaintiff may direct.” The first clause of the third subdivision it would seem was contemplated in levying upon the interest of one partner in a partnership.
Attachment. procedure. To permit a creditor of one partner to seize the entire property of the firm to the exclusion of the other partners is permitting a creditor of the partner to do what the partner himself cannot do. This is absurd in principle, and these Arkansas attachment statutes, in our judgment, never contemplated such a proceeding. Whether section 324 (346) was intended to cover partnership assets we do not undertake to say. We are of the opinion that the original complaint was good, and the demurrer to the same should have been overruled; but, if section 324 (346) does apply, then no bond was given as is required by said section, and the marshal was not authorized to levy and take possession of the property to the exclusion of appellants. We are therefore of the opinion that the judgment of the court below should] be reversed, and the cause remanded for further proceedings.
Clayton and'Thomas, JJ., concur.