Court Opinion

ID: 8296426
Source: CourtListenerOpinion
Date Created: 2022-10-17 11:07:54.899835+00
Date Added: 2024-06-11T16:44:05.809151
License: Public Domain

Freeman, J.,
delivered a dissenting opinion.
In 1876 complainant filed an attachment bill in the-Chancery Court at Knoxville claiming a debt due individually from F. L. Fossick, a resident of the State-of Alabama. It was charged that the debtor had no-property in the State known to complainant except a debt due from W. W. Woodruff, and this debt was attached. Woodruff answered, but it turned out the-debt was shown by him to be due not to F. L. Fos-sick individually, but to a firm in the State of Ala*135bama known as E. L. Fossick & Co., composed of F. L. Fossick and his two sons, we believe, engaged-in some business connected with the sale of marble in some of its forms. F. L. Fossick appeared by attorney and filed a plea that said attachment had not been levied by garnishment or otherwise upon the property, estate, or effects of himself, that he had no-property in the State subject to process of attachment, but that the debt attached as due from Woodruff was not due to defendant, but to the firm of F. L. Fos-sick & Co., giving the name of the firm, and that they were doing business in the State of Alabama, and all non-residents of the State of Tennessee. This-plea stands to the original bill, no disposition having been made of it by the court, or its action invoked upon it in any form.
Complainant, however, asked and obtained leave of the court, and did file wliat is called an amended and: supplemental bill, but which is in fact, as I think, only an original bill against the firm of F. L. Fos-sick & Co., seeking to wind up and settle said firm in our State, based on the fact alone that one of the members of the firm owed complainant an individual debt, and that on information and belief there would-be found a balance in his favor on taking the partnership account which complainant insisted to have applied to his debt.
A motion was made by attorneys of defendant to this bill to dismiss for want of jurisdiction of the persons of the defendants, which was sustained. From this decree alone an appeal in error is prosecuted to *136this court. The action of the court on these facts is alone before us.
The supplemental matter in this case is nothing more than the fact of a partnership charged, the names of' the partners, where the firm is, to-wit, in Alabama, with an averment of belief that on settlement of the firm a balance will be found in favor of the individual debtor, and a prayer for discovery of the terms of the partnership, the amount of the capital put in by each, and then a prayer that the firm be settled up, account had of its condition, and ascertainment of the interest of the debtor, and then an appropriation of that interest to complainant’s debt.
This court has held that the interest of a partner in a firm may be sold for his individual debt. Haskins & Reynolds v. Everett, 4 Sneed, 532. The court says, in giving that opinion, “The purchaser, however, ■only takes the interest of such judgment debtor after the settlement and adjustment of the partnership accounts, and not in proportion of the property sold. What that interest is cannot genally be ascertained until a final settlement and adjustment of the partnership concerns. The effect of the sale and purchase is only to place the purchaser in the shoes of the partner whose interest he buys, and make him a tenant in common with the other partners. This is a necessary consequence of the rule that each partner has a lien on the partnership property as well for the debts due by the firm as his own share and proportion thereof. The judgment creditor or. purchaser must take the interest sold subject to all such liens and *137claims. To ascertain the interest sold, the purchaser or the other partners may file a bill for the settlement of the partnership.” The court adds, “ The great uncertainty of the value of this interest does not effect the principle.”
If the creditor chooses to avoid this he may, or the sheriffj Avith his consent, may file a bill in advance of the sale and ascertain with exactness the interest of the partner before the sale. The court, however, is here treating the case of levy of an execution Avhich is necessarily based on a judgment, and involves the necessity of jurisdiction of the parties.
Judge Story lays doAvn the same doctrine with more distinctness in vol. 1, Eq. Jur., sec. 677. In such case, he says, “the judgment creditor can levy not on the moiety or individual share of the judgment debtor in the property as if there Avere no debts of the partnership or lien on the same for the balance due to the other partner, but he can only levy on the interest of the judgment debtor, if any, in the property after payment -of all debts and other charges therein.” He then goes on to say that the sale does not transfer any part of the joint property to the vendee so as to entitle him to take it from the other partners, for that Avould be to place him in a better situation than the partner himself. But it gives him, properly speaking, a right in equity to call for an account, and thus entitle himself to the interest of the partner Avhich shall, upon such settlement, be ascertained to exist.
Mr. Parsons, in his Avork on partnership, in the *138discussion of the question of attachment of the interest of a member of a firm, lays down the general' rule to be “that the separate interest of a partner is not open to an attachment in a foreign jurisdiction. He suggests reasons why circumstances might create an exception to the rule (see secs. 355-6), then gives as his conclusion that such an interest ought to beheld subject to such process. Sec. 357. But he does not intimate that more than this interest can be so attached, nor does any decision or writer that we have-seen hold such a view. It would be contrary to principle, as well as unjust, it appears to us, to hold that the property of others could be attached because a man associated with them had incurred a debt.
If these principles be correct, and there can be no question, both on general authority and our own decisions, of this, then it seems clear to me this supplemental bill cannot be sustained. It is but an attempt by way of supplemental matter to have the account taken and firm settled up before or in order to an appropriation of the interest of the debtor when it can be ascertained. If the purchaser who buys what is levied on but stands in the shoes of the partner, it is because the levy but fixes on that interest and no more, for he gets all the officer takes, -and the officer only gets, by the levy of execution, the interest of the partner — an attachment only fixes a lien on it. If the levy only puts the officer or the purchaser in the shoes of the debtor partner, the question is, could the partner, being a non-resident, come here and file a bill to wind up this partnership on *139tbe facts alleged? This would not be pretended. Why? Simply because tbe court has no jurisdiction-of tbe parties, and cannot get it. How is it possible, then, that a party with a simple lien fixed on the interest of the debtor can get higher than his debtor? The lien of the attachment gives the right to have the property or interest on which it is fastened sold when the debt is ascertained. When that sale takes place the purchaser only gets a right to an. account and settlement of the firm. How can there be more in the creditor before the sale than goes to-the purchaser under the sale?
If this be correct, then under the original bill you-have all the parties before the court who has any interest in that litigation, that is the debtor. You seek to sell his interest, he is before the court when you levy on that interest, or it may be so assumed for this case. No decree can be made in that case against the other partners, nor is their title sought to be in any way effected; no claim of right is sought, or could be made against them. Why, then, should they be made parties? It can only be for a purpose not involved in the original suit, and that purpose is one to which they have the right to object, as they have done in this case, and 'resist the jurisdiction. The fact that what is sought is presented in the form of a supplemental bill to the original, and as part of that proceeding can make no difference. The essential fact remains that this is a bill by a party in this State to wind up a partnership in another State, filed against parties not within the juris*140•diction of the court, and even when the court has no> rightful control. If the original bill does not show that it is but the interest of the partner in the firm that is sought to be subjected, let it be amended in that reference, and so perfected.
The only party concerned in that question is the debtor who alone represents that interest, the creditor •only taking or seeking to have a decree against his individual interest after the partner’s interest has been separated from it, and a right on the part of the purchaser of such interest by being placed in the shoes ■of the debtor to have an account to ascertain what that interest is. The other partners are not necessary parties for the objects of the original bill; the purposes of the supplemental bill are such as the court has no power to effectuate or adjudicate against the ■claim of the parties.
I think the radical error of the majority opinion is in assuming that this court has jurisdiction of the •subject matter of the litigation presented in the amended bill. The subject matter of the original bill is the •debt due from F. L. Fossick to Morrow, with an attachment alleged to have been levied on his property. The subject matter of the amended bill is to wind up and settle the partnership between F. L. Fossick and his two sons in the State of Alabama. This firm has no local existence in this State, nor can the court get jurisdiction of its subject matter by levying an attachment on the property of F. L. Fossick, or claimed to be his. What right can a debtor of F. L. Fossick have to litigate with other parties in *141order to sell his property ? What possible subject matter of this firm has the court jurisdiction of? It is conceded and laid down by all authority that you can only levy on the individual interest of a partner for his individual debt. You cannot levy on the property of the firm for the debt of an individual partner. If this be so, then no attachment is on the property of the firm, nor is that property the subject matter of the litigation. The original bill nor the-amended bill seek to appropriate the property of the firm, but only of F. L. Fossick. That is the subject matter of the litigation, and under cover of a claim against one partner, and an attachment against his property, by the holding of the majority, you acquire jurisdiction over another and different party, a non-resident of the State. On that principle you can always bring a party into court and get jurisdiction over him. You have but to levy an attachment on the property of a citizen, and then amend by making the party you wish a party by publication, and thus compel him to litigate with you in our courts. The simple question really in this case is, whether a debt due to a firm in this State gives or can give the court of this State jurisdiction to wind up the partnership because it is assumed the court has jurisdiction of it by reason of the levy of an attachment on the individual interest of a partner to pay his debt. Is this debt the subject matter of the partnership ? I think not. The other members of the firm may well say, we do not dispute your right to sell the interest and property of your debtor, with that we have nothing to do; you *142have no right, however, to make us parties to' that litigation in your court. And I can see no answer to it. The levy of an attachment on the individual interest of the debtor-partner surely can give the court no jurisdiction over the firm of which he is a member, unless you hold a levy on one man’s property will bring another into court. Yet this must be the basis, of the jurisdiction, for there is no other fact in the record on which it can rest.
The principle is conceded as a matter of course that if a bill does not contain material facts, or make such persons parties as are necessary in order to enable the court to do complete justice, complainant may supply these defects by amendment. But to do complete justice can only mean to settle the rights of ‘complainant and defendant, not the rights of complainant against other parties who are in this case not claimed to be debtors of complainant, and against whom no relief can be sought on the footing of having a debt against F. L. Fossick: He is the sole debtor, and his individual interest is alone to be affected by the decree. You can sell, but in doing so you can and do decree nothing against the other defendants. The effort, however, is, in this case, by selling the individual interest of F. L. Fossick, to give the court jurisdiction of the firm of F. L. Fos-sick & Co., and wind up a partnership existing in the State of Alabama. It seems to me the decree would be void when made under the .late decision of the Supreme Court of the United States in the Ore-gan case, Pennoyer v. Neff, Rep. vol. 5, 358, which *143holds that a State court can only take jurisdiction of parties non-resident to the extent of appropriating any property they may have within its jurisdiction, but that a personal decree against such parties is void for want of jurisdiction. This being so, if the parties resist or decline to submit to the jurisdiction, the decree has no force, and is useless; and if they decline to answer, and a decree pro oonfesso is taken, then how will you wind up the partnership? That is the object of the bill. Yon surely will not appropriate the entire property, that would be manifestly an outrage on justice. Would you, then, be compelled to do what I' have maintained you ought to do, that is, sell the interest of the parties, whatever it may be, and leave the purchaser to assert his rights? Your •effective jurisdiction at last depends on the consent of the defendants, so I think. If the object of the •original bill and amended bill is to appropriate the whole debt from Woodruff, as being the property of E. L. Fossick, then it must stand on that ground, and maintain that to be the fact. If so, then, there is no need to introduce partners who have no interest on that assumption. If this is not the fact, and the partners have an interest as a firm, they are not before the court, and the court has no power to bring them before it. This can only be done by levy of attachment on their property, alleging a debt due from them, or by personal service, and neither is claimed in this case.
I conclude, for these reasons, the decree of the Chancellor should be affirmed.