Court Opinion

ID: 6314671
Source: CourtListenerOpinion
Date Created: 2022-02-18 20:23:36.073221+00
Date Added: 2024-06-11T08:59:10.165938
License: Public Domain

The Supreme Court affirmed the decree of the Common'. Pleas on October 1st, 1883, in the following opinion, per
Sterrett, J.:
That a partner who is specially indebted to the firm ofj which he is a member for borrowed money may discharge! that indebtedness by payment in cash or its equivalent in] property transferred to the firm, or secure the payment thereof by specific pledge of real or personal property, is a proposi-! tion that requires neither argument nor citation of authority. If he may pay or secure the payment of such indebtedness in; either of the modes, stated, why may he not secure it by con-i fessing a judgment in favor of the firm, and thereby create & lien that may be enforced against his individual real estate to the extent at least of his actual indebtedness ? It is not a sufficient answer to say that a valid judgment cannot he thus confessed because a mechanic’s lien can not be enforced or a civil action successfully prosecuted by a firm agaiust one of it's members, or vice versa. These are both ad versa ry proceedings, and the rights springing from the partnership relation may be interposed as a technical defence. But confession of judgment is the voluntary act of the defendant himself, who *349has a perfect right to admit his liability, waive all technicalities, and by confessing judgment, create a lien .in favor of the firm against his individual real estate. Nor is it an insuperable objection that in so doing he appears upon the record in the somewhat anomalous position of defendant and at the same time one of the plaintiffs. Practically a copartnership is an entity capable of owning property which belongs, not absolutely to either partner,- but in which each has simply a resulting interest, a right to an account, which may be recognized by the voluntary act of his copartner, or enforced by bill in equity or other appropriate proceeding. It is also an interest which may be seized and disposed of by his individual creditors in the manner provided by the Act of April 8, 1873, P. L. 65. That mode of proceeding was open to appellant, but, inasmuch as the firm was insolvent, it would have availed him nothing. Again, as was said in McCormick’s Appeal, 5 P. F. Smith, 252, a debtor partner is as much a debtor individually to his firm for what it has advanced to him as he would be to any other creditor, and, being the firm’s debtor, why may he not voluntarily become its judgment debtor? When, a specific indebtedness by a partner to his firm is recognized, and he is willing to secure the same by judgment or mortgage, there is- no good reason why he should not be permitted to do so. In the event of a sale of the land bound by the judgment or mortgage, and purchase of the same by the firm, a resulting interest would be vested in the debtor partner, but in case of insolvency that interest would amount to nothing so far as he and his individual creditors are concerned, the firm assets being applicable to the partnership creditors.
. The learned judge was clearly right in the conclusions stated in his opinion, and in view of the fact that the firm was insolvent and actually indebted to Jones, the solvent partner, for money advanced -by him to pay its liabilities, in a sum considerably greater than that realized on the judgment, there was no error in awarding the balance of the fund to him.
Decree affirmed and appeal dismissed at’ the costs of the appellant.