Court Opinion

ID: 4914016
Source: CourtListenerOpinion
Date Created: 2021-09-22 00:06:14.362104+00
Date Added: 2024-06-11T08:13:47.368518
License: Public Domain

Me. Justice Raney
delivered the opinion of the court:
The appellee obtained judgment for $331.40 against Louis C. Apley, and issued a writ of garnishment to appellant, who, in answer to the writ, set up that it was not at the time of the service thereof indebted to the defendant, Apley, “ except in so far as he might be interested in an *53indebtedness of this garnishee of $500 then due to the firm of Wilkins & Apley, composed of the defendant and one James Wilkins, and that it has not since the service of the. said garnishment been indebted to him nor them, as aforesaid,” &c. The reply or “ traverse ” to this answer is: •“ That the said $500 in said answer mentioned was and still is due said James Wilkins and defendant from the garnishee on account of a loss by fire of certain furniture owned by said Wilkins and defendant, and insured by the garnishee, which said Wilkins and the defendant used for the purpose of conducting a gaming business, and for no other purpose, and that except for such gaming purposes the defendant and Wilkins were not copartners.” Appellant demurred to this reply, and the demurrer was overruled and final judgment entered against appellant.
The contention of the appellee is in effect simply that as the furniture upon which the insurance money is due to Wilkins and the defendant, Apley, was used by them for the sole purpose of conducting a gaming business, and as ■except for such gaming purposes the defendant and Wilkins were not partners, the partnership rights and the •status of Wilkins and Apley as partners are to be considered to have no existence and consequently that theyshould be considered as tenants in common of the insurance money or debt due them by the insurance company.
The best considered authorities hold that a debt dpe a partnership cannot be garnished by a creditor of one of the partners. The garnishment laws afford no means for ascertaining such partner’s interest and they do not even make other partners.parties; the interest of each partner in partnership funds is only what remains after the partnership .accounts are taken; and unless upon such an account the partner be a creditor of the fund he is entitled to nothing, and if the partnership be insolvent the same result follows. *54The effects of the partnership may be wanted to pay its debts, and on a settlement of accounts the particular partner to whose individual indebtedness it is sought to apply, through garnishment, a part of the debt due the firm may be found to be a debtor to the partnership. The conditions of the partnership and interests of .the respective partners' are unknown, and the ordinary machinery of a court of law is not only not adapted to*the ascertainment of such condition and interests, but an attempt to make them so would prove not only anomalous, but also impracticable. Drake-on Attachments, §§567 to 571.
It is true -that a court of equity will not enforce an illegal contract, but this has not been regarded as necessarily involving the proposition that when the illegal venture has been consummated, resulting in profit, and one of the parties to the project has appropriated to-himself the results, that chancery would not call him to an account aud compel him to do justice to his excluded partner. Brooks vs. Martin, 2 Wall., 70.; McBlair vs. Gibbes, 17 IIow., 232 ; Sharp vs. Taylor, 2 Phillips, (22 Eng. Chan.) 801, and cases cited.
In DeLeon vs. Travino, 49 Texas, 88, it was hold that although a contract may be illegal it does not follow that it is illegal or immoral for the parties to it, after its completion, to fairly settle and adjust the profits and losses which have resulted from it. The facts were that during the late war between the States, parties in Brownsville, Texas, formed in 1864 a partnership for the purpose of shipping merchandise from Matamoras, in Mexico, to Texas, with a view to obtaining cotton. Afterwards, in 1866, the parties on settlement adjusted their accounts, and one executed his notes to the others, and upon being sued pleaded the illegality of the venture, but it was held that such illegality did not attach to the notes, and that it was no de*55fence. The notes were given, not for profits, but in liquidation of the portion of losses and merchandise which, on the settlement, DeLeon was found to be due the appellees, Travino & Bro.
The authorities referred to maintain, not only that when in an illegal venture there have been profits made, an account may be had in equity of them by one partner against the other who has them and is seeking to appropriate them to himself, but also that where there has been a loss in the venture, and an adjustment of the accounts between the partners and an obligation given by the debtor partner to the other, that an action may be maintained on such obligation.
It seems to us that not only are we asked to assume that no relief can ever be given by the courts to one partner should he claim that he is entitled as against the other to more than half of the fund where the purpose or business of the partnership is illegal, but also to assume in this case from the mere allegation of an illegal purpose or character of business, that Apley will contest Wilkins’ right to more than half even if it be that the latter is in fact entitled to more, instead of amicably yielding to him the entire fund if it be that Wilkins is entitled to it. We do not know, nor can we leani in this proceeding, whether Wilkins is entitled to half or more, or to all of this indebtedness of the insurance company, nor whether Apley contests his claim, whatever it may be. Wilkins cannot be heard, either by himself or through another, to assert his claim, whatever it may be, nor to contest the alleged illegality of the partnership. The pleadings admit that a partnership has in fact been formed and its actual existence, that the insurance contract was made with Wilkins and Apley as partners, and that the insurance money is regarded by the company to be due to them as partners, but *56the appellee seeks to invalidate the rights of Wilkins as a partner by an allegation of an illegal purpose or character of the business, and this in a proceeding to which Wilkins is not a party, and thus to annul the partnership and deprive him of what may be his rights in the money and to appropriate his property to the payment of another’s debts without an opportunity to be heard. This cannot be done, even if it be true that equity should not grant relief, as was done in Brooks vs. Martin, and other cases cited. To sustain this garnishment is to condemn Wilkins as to his rights in the partnership without an opportunity to be heard, aud it may be take his property without due process of law.
The judgment is reversed, and the case will be remanded with directions to enter judgment sustaining the demurrer.