Court Opinion

ID: 4926401
Source: CourtListenerOpinion
Date Created: 2021-09-24 00:57:23.165923+00
Date Added: 2024-06-11T08:14:21.433274
License: Public Domain

Mellen C. J.
delivered the opinion of the Court.
It appears by the report of the Judge, that before any of the attachments of the logs therein mentioned were made, the firm of James Babcock if Co. was insolvent. That several of those attachments were made at the suit of creditors to the firm; and several at the suit of creditors of individual members of the firm. It further appears by the agreement of June 13th, 1826, made and signed by all the members of the firm, by the defendants and by the plaintiff, who was the attaching officer, that the logs above-mentioned were placed in the hands of the defendants for the purposes particularly specified in that agreement ; and that after payment by them of the debts due to the attaching creditors of the firm, a balance of $125, remained in their hands, which they claimed a right to retain to satisfy certain demands which they had against some of the individual members of the firm, in virtue of the terms and special provisions of said agreement; but the verdict was returned in favour of the plaintiff for said sum of $125 and interest; the whole amounting to $161, 87. We are well satisfied that if the plaintiff can by law maintain this action, he is entitled to recover neither more nor less than the amount mentioned in the verdict.
The disclosure of the defendants, made in the action of Isaac Smith against them as trustees of James Babcock Co., and which is referred to in the report as a part of the report, if competent evidence, certainly is not competent to establish facts, except as against the plaintiff in that action; but they cannot derive facts from that case, and use them in the present action as evidence, merely because they constitute a part of their disclosure. But the action of Isaac Smith against them as trustees, and the disclosure, both of which are referred to, are legal evidence of the claim of Isaac Smith as a creditor of the firm *465of James Babcock & Co. and of his pursuit of legal measures for the purpose of obtaining satisfaction of his demand out of the company funds, which he has caused to be attached and bound by the service of the process, provided there are any in the hands and possession of the defendants on which a legal lien can operate in his favour. — As the firm of James Babcock & Co. were insolvent before any of the attachments were made, it is perfectly clear, as a general principle of law, that the company debts must be paid out of the company funds, before creditors of the individual members of the company can be permitted to apply any part of those funds in payment of their demands : On this point, and in support of this principle, in its application in various circumstances, we refer to the case of the Commercial Bank v. Wilkins, lately decided in this county, but not yet reported, and to the numerous cases there cited and commented upon by the Court. The question principally requiring our consideration is, whether there are any peculiarities in the present case which relieve it, in respect to the plaintiff, from the influence and control of the general principle above stated ; for, if not, we do not perceive on what grounds he can be entitled to retain the verdict.
Several objections have been urged on the part of the plaintiff against the prevalence of the motion for a nonsuit for the reasons stated in the report. In the first place it has been said, that Moses Babcock, at the time of the attachments, was not one of the firm of James Babcock Co. It appears that James made a contract with him, before the attachments were made, by whieh Moses became equally interested with him; and, if one of a firm cannot introduce a new partner without the consent of the other partners, still they may afterwards assent to it; and in the present case this was done; for, in the agreement of June 13th, 1826, all four of the persons are named and described as composing the firm of James Babcock Co. Besides, all the attachments made in suits against the firm, would be liable to the same objection. Again, it has been objected that as the trustee process was not commenced until after the present action had once been tried in this Court, and, of course, after issue had been joined, it can have no legal influ*466ence in the decision of this cause, or even be regarded by the Court; and the cases of Howell v. Freeman and trustee, and Kidd v. Sheppard and trustee, have been cited in support of the position. In the former case, the. process was not served on the trustee until after a report of referees was made, in an action against him by Freeman, the principal, which was agreed to be final, and the report was against the Alleged trustee. In these circumstances the trustee process was not sustained. In the latter case, the writ was served on the trustee while the action of the principal was pending against him and before verdict ; but he did not attempt to guard against it until after the verdict was returned; and he then moved for a stay of execution, but the motion was denied. The language of Parsons C. J. that a trustee process came too late, if served after issue joined, in a direct action by the principal against the trustee, was not called for by the facts in either of the before mentioned cases, and could have had no influence in the decision; nor can we perceive why that circumstance should form a criterion. It is an event which settles no rights and imposes no legal liabilities. In the present case, the process was served long before the last trial, and, according to the course of practice, the defendants might have moved for leave to amend their plea and obtained it, and thus availed themselves of the commencement and pendency of the trustee process. Whether the pleadings were amended as above or not, does not appear by the report: but it does appear that the disclosure of the defendants was made at Oct. term, 1831, and that the present action was tried at the last October term, 1832 ; and in the report before us, the disclosure composes a part of the report, so far as the same is competent evidence ; and in the argument, there was no intimation against its competency as being inadmissible on account of the state of the pleadings. Indeed, both actions are brought before us in such a manner that we may at once settle the rights of all concerned ; and such seems evidently to have been the intention. —Again it has been urged that, the above-mentioned balance of $ 125, being a part of the proceeds of the logs attached, was under attachment in the hands of the defendants, as the agents of the plaintiff who attached them, and therefore *467could not bo the subject of a trustee process, any more than they would have been in the hands of the plaintiff himself. The answer to this objection is, that the company being deeply insolvent, the individuals of the firm had no property in the company funds till the company debts were paid ; and consequently the attachment of the logs in the suits against certain members of the firm, was inoperative as against Isaac Smith, who was a creditor of the firm. For the law is settled, that property which cannot be seised on execution, cannot be attached on the mesne process. Commercial Bank v. Wilkins, and cases there cited. There was nothing, then, to prevent the effectual arrest of the above balance of the company funds, by means of Isaac Smith’s trustee process. This answer is also an answer to the objection as to the time when the trustee process was served ; because the balance could not be lawfully applied -to satisfy executions against certain individual members of the firm. The action cannot be maintained, a nonsuit must be entered, but no costs can be allowed to the defendants.