Court Opinion

ID: 6543895
Source: CourtListenerOpinion
Date Created: 2022-07-19 22:18:01.002125+00
Date Added: 2024-06-11T15:55:54.774187
License: Public Domain

Hughes, J., (after stating the facts). The precise question in this case has not been decided in this court. Following the decided weight of authority, it is held in Richardson v. Adler, 46 Ark. 43, that “the members of an insolvent firm are not entitled to the exemptions allowed by law, out of the partnership property, after it has been seized to satisfy the demands of the creditors of the firm.” The court said: “The interest of each partner in the partnership assets is his portion of the residuum after all the liabilities of the firm are liquidated and discharged. Property belonging to the firm cannot be said to belong to either partner as his separate property. It is contingent and uncertain whether any of it will belong to him on the winding up of the business, and the settlement of his accounts with the fixm. ‘Joint property is deemed a trust fund, primarily to be applied to the discharge of partnership debts, against all persons not having a higher equity;’” citing Pond v. Kimbal, 101 Mass. 105; Gaylord v. Imhoff, 26 Ohio St. 317; Giovanni v. First National Bank of Montgomery, 55 Ala. 305; in re Handlin, 3 Dill. 290. As affecting the question involved, the statute of Ohio exempting personal property is substantially like ours, which provides that; “the personal property of any resident of this state, who is married or the head of a family, in specific articles to be selected by such resident not exceeding in value the sum of five hundred dollars, in addition to his or her wearing apparel, and that of his or her family, shall be exempt from seizure on attachment, or sale on execution, or other process from any court, on debt by contract.” Sand. &.H. Dig., § 3716; Const, art. 9, § § 1, 2. In the case at bar the appellant filed no schedule claiming his exemption in specific articles. In the opinion in Gaylord v. Imhoff, the Ohio Supreme Court said: “Looking alone to the language of the section above quoted, we find nothing to justify the inference that the legislature, in passing it, was intending to provide for other than individual debtors, and for the exemption of their individual property from sale on execution; and, when construed in connection with the law relating to partnerships, as it had always stood and still stands, we are convinced that it could not have been the intention of the lawmaker to bring partners or partnership property within the operation of the section in any respect. Dealing with the statutory right, and excluding equitable considerations, which have no place here, our convictions are based upon the fact that the right of exemption, and the mode of exercising it prescribed by the statute, are wholly inapplicable to partnership property or the rights of the partners therein, and inconsistent with the rights of their creditors in relation thereto. * * * The language of the section points unmistakably to property owned individually. The selection of the exempted property is to be made by the execution debtor, and the property selected is to be appraised and set off to the debtor. ‘Partners are joint tenants in their stock in trade, * * * * and no partner has an exclusive right to the joint stock.’ 3 Kent, 37.” It will be seen by examination of this opinion of the Ohio court and the case of Richardson v. Adler, Goldman & Co., 46 Ark. 43, that Judge Smith, who delivered the opinion in the latter case, adopts and relies upon the reasoning and the principles laid down in the Ohio case. It seems to us that the reasoning in those cases applies to the case at bar with as much force as it does to those cases. We think the doctrine sound, and supported by the weight of' authority. In the case of McCoy v. Brennan, 61 Mich. 362, it is held that partners can, during the existence of the partnership, claim an individual exemption in partnership property, when taken under legal process for partnership debts. The same is held in Chapman v. Kelly, 60 Mich. 438. Some other states hold the same. The idea advanced to support, in part, these cases is that the exemption statutes should receive a liberal construction in' harmony with their humane purpose. Such cases are Stewart v. Brown, 37 N. Y. 350, 93 Am. Dec. 578; Blanchard v. Paschal, 68 Ga. 32, 45 Am. Rep. 474; Servanti v. Lusk, 43 Cal. 238. In opposition to the doctrine of these cases, the weight of authority sustains the rule that partners cannot, during the continuance of the partnei’ship, claim an individual exemption in the partnership property. Giovanni v. First National Bank, 55 Ala. 305; Bonsall v. Comly, 44 Pa. St. 442; Guptil v. McFee, 9 Kas. 30; Baker v. Sheehan, 29 Minn. 235; Prosser v. Hartley, 35 id. 340; State v. Bowden, 18 Fla. 17; State v. Spencer, 64 Mo. 355; Richardson v. Adler, 46 Ark. 43; Wise v. Frey, 7 Neb. 134; Gaylord v. Imhoff, 26 Ohio St. 317; White v. Heffner, 30 La. An. 1280; in re Handlin, 3 Dillon, 290; Pond v. Kimball, 101 Mass. 105. The rule is said to rest upon the principle, well recognized in the decisions, that the title and ownership of partnership property is in the partnership, and neither partner has any exclusive right to any part of it. Our constitution and statute provide that the debtor shall be entitled to claim his exemption in specific articles, to be selected by him. As we have seen, this he cannot do while the partnership continues, as the property does not belong to him individually. When the debts of the partnership are paid, if any surplus of partnership property remains, he can claim his exemption in his part of this surplus. Had he asked that the creditors be brought in, and the partnership debts be settled, and account be had between him and his co-partner, and his interest in the surplus, after paying the debts of the partnership, ascertained, it is probable that the court should have done this. The cases in our court to the effect that the debtor claiming exemption must claim specific articles are numerous. The burden to show that property, claimed as exempt, is exempt is upon the claimant. He must bring himself strictly within the statute. The judgment is affirmed