Court Opinion

ID: 3910547
Source: CourtListenerOpinion
Date Created: 2016-07-06 09:39:17.366429+00
Date Added: 2024-06-11T07:42:34.298465
License: Public Domain

When the majority opinion was filed I was inclined to a disagreement on account of the fact that the fund impounded was a partnership fund, and that estoppel should not apply. Since then, in studying the recitations in the replevy bond, I rather doubt that the assertion by Franklin and the sureties in said bond are of unqualified ownership of the fund garnished, and that it may be no more than a statement that he is desirous of replevying any debts garnished under the writ for the purpose of releasing from the lien of the writ any debts, "if any," owing by the garnishees and belonging to Franklin at the date of the garnishment. If so, the judicial inconsistency of one claiming a fund and then asserting ownership in another might not apply. However, as I construe the opinion of the court, it is really based upon the ground of estoppel. I am inclined to think the same should not apply to this record for the following reasons: The statute in terms permits the defendant debtor, after he has replevied the garnishment fund, to present any defense the garnishee could have presented; and Justice Moore suggested, in McRee v. Brown, 45 Tex. 508:
"If it was a partnership debt, it is held in many courts that he could not be forced to pay it on a separate writ of garnishment; and if he has done so, without a proper effort to protect himself, he is not entitled to relief."
I assume as the law that ordinarily a partnership claim cannot be impounded to pay a partner's individual indebtedness. Raley v. Smith, 73 S.W. 54; Gilmore on Partnership, § 141, p. 420, and numerous cases cited; Bates on Partnership, vol. 2, § 1103. It is not proper to withdraw the funds of a partnership and appropriate same to pay the private debts of an individual partner. It would give the individual creditor of an individual partner, by an action at law, a greater right than the partner debtor himself would have in withdrawing the funds to pay the individual debt, unless probably it is one of salary, agreed upon as compensation in the partnership agreement. It is true that there is no creditor's lien upon the partnership funds except as worked out by subrogation to the individual partner's lien upon the assets to pay the partnership debts; but I take it that, in a general sense, Individual partners owe a duty to creditors and in a particular sense to the other partners composing the firm; in fact each partner owes to the other the strictest fidelity, as to partnership assets, based upon the doctrine of agency. A partner cannot bind a firm by giving a note to pay a separate debt; and Bates says (volume 1, § 410), it is a fraud on the firm to use a partnership asset to pay his separate creditor, and when a creditor who impounds a partnership debt by holding it would obtain a greater right from his debtor than the debtor partner could himself give by contract, I take it that ordinarily it would be the duty of the partner to show the credit garnished belonged to the partnership. I do not really understand that this statute, giving the right of defendants to replevy, would prevent a partner from replevying because the debt garnished was a partnership asset; it is broadly given to all defendants, and after the replevy is made the garnishee is released from the litigation, ex. cept nominally. The defendant debtor is then in the garnishee's shoes, and it is his right — I take it in this case it is his duty — to present the defense which Justice Moore suggests is the duty of the garnishee to present. If the fund is a partnership fund, attempted to be appropriated to pay an individual debt, it seems to me it is certainly some one's duty, and I know of no other person more appropriate than the real defendant after the garnishee is released. Though not shown in this record that the expressions used in this bond were mere inconsiderate recitations, still to say that a partner, by using such recitations, though construed as claim of individual ownership, would prevent him from performing his real duty to the partnership, and exhibiting the real truth of the character of the asset to me is rather a harsh doctrine, and when, as in this case, it is indubitably shown without protest that the credit is a partnership fund, I do not think that estoppel should apply when the partner is performing his duty to others in setting up the real facts. If it could be said that it should be shown that the individual debtor, as the partner, did not *Page 642 
have a balance owing to him at that particular time, I think the true rule is that:
"The garnishment will not be sustained unless the plaintiff shows that after payment of the partnership debt there will be a balance." Bates on Part. vol. II, p. 1087.
Mutual balances between partners are a fluctuating quantity and a judgment on any one item against an individual partner in a going concern, it seems, would not settle much unless you put the partnership out of business, with an accounting in the garnishment suit by ascertaining what that balance would be.
It happens in this case that the other partner is also a garnishee, and only answered, as indicated in the majority opinion, as to the $30 credit in the bank deposited to Franklin. The opinion is not placed upon the ground that he is bound by the estoppel, being a party garnishee, but the assertion may be suggested by the condition. Usually, one a garnishee has nothing to do with, and is not a party to, the contentions that may arise as to other garnishees and other impounded credits. I do not see how it could be said that the other garnishee in this case is bound by the recitals of the bond in so far as any litigation to be initiated by him as an actor is concerned. When the replevy bond is executed and filed the garnishee is released from the litigation. As I view it, if the garnishee had the right to set up this defense, and the real defendant, after the filing of the replevy bond, had the same right, and if in this character of case it was his duty to protect the partnership funds, and though the whole fund may not have belonged to him (though in law each partner has the right of possession), the recitations in the replevy bond should not wholly control the right and duty, as applied to the conditions of this record. It is not appropriate to argue behind the decided cases, but I do not think any case has gone this far.
The $30 advanced by Hill to his partner, Franklin, to pay a partnership debt was probably an advancement to the partnership business, and I think this whole case upon the judgment of the trial court should have been affirmed.
                        On Motion for Rehearing.