Court Opinion

ID: 3608209
Source: CourtListenerOpinion
Date Created: 2016-07-05 23:53:06.060071+00
Date Added: 2024-06-11T07:45:34.344494
License: Public Domain

[EDITORS' NOTE:  THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] *Page 541 
In addition to proving the return of nulla bona upon the execution, to entitle the plaintiff to recover it was necessary for him to prove that the execution debtors had property out of which the execution, or some part thereof, might have been collected. The execution was against two of three partners. There was no proof tending to show that either of them had any property subject to levy except their interest in the partnership stock of goods, amounting to about $6,000. The execution was received by the defendant for collection on the 27th of February, 1867, and a levy made upon the interest of the debtors in the stock on the 28th. *Page 543 
This was sufficient prima facie to establish a right of recovery. In answer to this case the defendant proved that, in March thereafter, several attachments against all the members of the firm were placed in his hands for service; that he levied the same upon the stock, and that thereafter judgments were recovered and executions issued against all the partners to the defendant for collection, to an amount much larger than the value of the goods of the firm, which the defendant sold and applied upon the last mentioned executions. The first inquiry is whether this was a defence to the case made by the plaintiff. No question is made as to the right of a sheriff to return an execution unsatisfied when all the property liable thereto is incumbered by prior liens to an amount greater than its value. All the property subject to the execution in the present case was the interest of the debtors in the property of the partnership. This interest was subject to levy and sale upon the execution. (Smith v. Orser,42 N.Y., 132.) But the title acquired by the purchaser would not be any absolute interest in the property; the remaining partners having a right to have the whole applied, if necessary, to the payment of the debts of the firm. (Walsh v. Adams, 3 Denio, 125;Scrugham v. Carter, 12 Wend., 131, and cases cited; Story on Partnership, § 97.) The right of the plaintiff, under his execution, was subordinate to the right of the other partner, and also to those of the firm creditors, to have the property applied in payment of the partnership debts, if necessary for that purpose. When the attachments and executions against all the members of the firm came to the hands of the sheriff, and the attachments had been levied, they constituted liens upon the property prior to that of the plaintiff against two of the members of the firm, although the latter was first received and levied. (Coover's Appeal, 29 Penn. St., 14.) The sheriff was therefore right in applying the proceeds of the sale upon the executions against the firm. (See authorities above cited.) But it was insisted by the counsel for the appellant that it was the duty of the sheriff to sell the interest of the execution *Page 544 
debtors upon the plaintiff's execution; and that for the breach of this duty the plaintiff had a right to recover. There are two answers to this. 1st. He received the attachments and executions against the firm within sixty days after the receipt of the plaintiff's execution. These constituting liens upon the entire property, and it being the duty of the sheriff to sell the property absolutely thereon, and the liens exhausting the whole, there was nothing remaining to sell upon the execution of the plaintiff. Had it become the absolute duty to sell upon the plaintiff's execution before the receipt of the process against the firm, the case might have been different; as, had the property been sold upon the plaintiff's execution prior to that time, the interest of the execution debtors would have passed to the purchaser, subject, nevertheless, to the rights of the firm creditors to its application to the payment of the debts of the partnership. 2d. The entire property being insufficient to satisfy the prior liens, the plaintiff sustained no injury by a failure to sell the interest of the debtors upon his execution, unless such a sale would have produced something to apply thereon. The referee found as a fact, in substance, that it would not have produced anything. It is insisted by the counsel for the appellant that this finding was wholly unsupported by evidence. The fact that the firm sold $1,000 of the goods after the levy of the plaintiff's execution, before the process against the firm came to the hands of the sheriff, the proceeds of which were retained by them, has no bearing, except that this amount must be included in the assets of the firm in determining whether there would have been any interest remaining to the purchaser of the goods at a sale upon the plaintiff's execution, after payment of the partnership debts from the assets of the firm, for the reason that the prior liens would much more than absorb this, together with the property remaining unsold. The mode of determining whether any and what interest would have been acquired by a purchaser of the property, had it been sold under the plaintiff's execution, is to take an account in equity of the other assets and *Page 545 
of the debts of the firm, and, in case the firm debts are paid from the other assets, the purchaser would be entitled to the execution debtor's proportion of the property purchased, or in what should remain after payment of such debts. The counsel for the appellant insists that the unconflicting evidence proved that the other assets of the firm would have paid the firm debts, leaving sufficient of the stock of goods, if sold under the execution, to pay the whole or some part of the execution. The answer to this is that it was not so proved. The assets consisted largely of debts, either notes or accounts (the evidence does not show which) due the firm; that two years had elapsed, during which efforts had been made for the collection of the debts, during which about three-fifths only had been realized. Under such circumstances there is no presumption that the residue of the debts were of any particular value; much less, that they were all good and collectible. Such presumption would be contrary to nearly universal experience in such cases. While it is held in some cases that the presumption is that a debtor is solvent, yet it ceases when the debt is long past due, and unavailing efforts for its collection have been made. The defendant having shown that the prior liens were sufficient to exhaust all the property subject to levy, including the thousand dollars sold by the partnership, the onus was upon the plaintiff to show that it sustained injury by such sale. This they failed in doing. The counsel insists that he was entitled to recover for the reason that it appeared that all the partners were liable for the payment of the debt upon which the judgment was recovered. The answer to this is that he had taken judgment against two only, not as jointly indebted with the third partner, but as his only debtors. It is entirely clear that, under this judgment, he could not interfere with the property of the third, though liable for the payment of the debt. In any view, the plaintiff failed to show any right of recovery. It being the duty of the sheriff to sell the property upon the executions against all the partners, which were more than sufficient to absorb all the property, including that sold *Page 546 
by the partners, and there being no proof of a surplus applicable to the payment of the plaintiff's debt, in case none had been so sold, the plaintiff sustained no injury by the acts of the defendant under its execution. The judgment must be affirmed, with costs.
All concur, except CHURCH, Ch. J., not voting.
Judgment affirmed.