Court Opinion

ID: 6422990
Source: CourtListenerOpinion
Date Created: 2022-06-25 12:01:32.747099+00
Date Added: 2024-06-11T15:51:51.488994
License: Public Domain

Devens, J.
This is a bill in equity, under the Pub. Sts. c. 157, § 15, to vacate proceedings in insolvency, being in the nature of an appeal from the decree of the judge of probate and insolvency for the county of Essex, declaring insolvent the partnership of which the plaintiff Pelletier, a minor, had been a member with Couture, the first-named defendant, and ordering a warrant to issue against the partnership property, and also against the separate estate of Couture. The other defendant was the messenger in insolvency. Pelletier and Couture had dissolved their partnership (which was engaged in the furniture business) on November 15, 1887. Thereafter, some difficulty having arisen between himself and Pelletier as to.the payment of a certain claim, Couture filed a voluntary petition that the partnership should be declared insolvent. On the return of- the order of notice, Pelletier filed a motion that all proceedings should be stayed and vacated, so far as any property of his was concerned, alleging himself to be a minor. Before any adjudication was made by the judge, a guardian was appointed for him j and thereafter a warrant was directed to issue against the stock and property of the partnership, and against the separate estate of Couture. It was not disputed that Pelletier was a minor, who had originally put three hundred dollars into the firm, and that he had to this extent contributed to the fund from which its assets were derived.
The first question, therefore, is whether upon this proof it was within the power of the judge to issue a warrant against the property of the partnership, the plaintiff contending that his interest therein could not thus be affected. After the formal dissolution of a partnership, and when the mutual authority of the partners to bind each other has ceased, if there are partnership assets to be administered, and partnership debts to be paid, to some extent and for some purposes the partnership must still continue to exist. It has therefore been held, that under such circumstances the creditors of a partnership may institute proceedings in insolvency in invitum, and also that one partner after such a dissolution may by his sole petition commence proceedings in insolvency so as not only to affect his own property and that of the firm, but-also the separate property of his late partner. Parker v. Phillips, 2 Cush. 175. Thompson v. Thompson, 4 Cush. 127, 131.
*271In the case at bar, no warrant was issued against the separate estate of the petitioner, but it is his contention that, by reason of his minority, no warrant could properly have issued against the partnership property, as it was his although in connection with Couture, and that, even if the firm could be declared insolvent, his interest in the partnership property could not be taken to pay the debts of the firm. The plaintiff had, however, no property in any specific assets affected by the warrant against the firm, even if his money had .passed into them and they had been purchased to some extent by it and by the credit thereby obtained. The partnership property (irrespective'of his minority) could not have been attached as his. Sanborn v. Royce, 132 Mass. 594. Nor could it have been devoted to the payment of his private debts, except subject to the claims against the partnership. He had an interest in it to receive therefrom only what might remain after these were satisfied. Peck v. Fisher, 7 Cush. 386. Nor, if the plaintiff repudiated the debts which had been incurred in the purchase of this partnership property, as he did before the judge of probate, by alleging his minority and denying his liability therefor, could he properly assert any title to the partnership assets, or interest therein. This he does by urging that on account of that title or interest no warrant could issue against them.
A minor cannot discharge himself from the debt, and yet hold the property which has been obtained by incurring the debt. If he avoids his contract, and refuses to pay the price of goods which have been sold to him, the sale is annulled, and the property revests in the vendor. Chandler v. Simmons, 97 Mass. 508, 514. If he enters into business with another as a partner, and contracts are made and assets thus obtained, he may deny his liability on the contracts by which they have been obtained, and release himself from the debts thus incurred. He will thus throw the liability for the whole debts on his partner, and make such partner solely responsible, but the assets thus obtained should be devoted to the satisfaction of the contracts by which they have been procured. Having placed the whole responsibility on another, having extricated himself from all liability, to allow him to retain the property, or to assert and maintain a title to it, or any portion of it, until the debts are satisfied, would be manifestly unjust.
J. F. Quinn, for the plaintiff.
C. Sewall, for the defendants.
If the judge of the insolvency court might, under- proper circumstances, have ordered a warrant to issue against the property of a firm of which a minor had been a partner, and we are of opinion that he could, the plaintiff does not show any reason why this authority was not properly exercised. The petitioner does indeed allege that “ it does not appear that said copartnership, upon the evidence adduced before the said judge of probate and insolvency, was insolvent.” He does not, however, furnish us with a copy of the evidence taken before the judge, so that we can determine this. Nor, if he did, is the question here in a proceeding of this character whether the judge of probate and insolvency rightly decided upon the evidence before him that the firm was insolvent, but whether the firm is in fact insolvent. Nowhere in his petition does the petitioner assert it to be solvent, nor did he so contend in the hearing at bar. That there was evidence before the judge of probate and insolvency tending to show that it was insolvent appears from the fact, that, even if the nominal amount of assets exceeded the debts, all the property of the firm had been under an attachment which was undissolved.
Whether the petitioner — who has apparently sought to raise the question whether a warrant could issue against the property of a firm of which he as a minor had been a member — has any such interest in the matter that he can object to the firm being declared insolvent after having repudiated its debts, and after having been allowed to extricate his separate estate from liability therefor, may be doubted. Assuming that he may, unless the firm is solvent, no injustice can have been done him by the decree of the judge ordering a warrant to issue against its property. This proceeding is intended to remedy only substantial errors. See Thompson v. Thompson, 4 Cush. 127, 133, 134, where a warrant had issued upon the voluntary petition of one partner without notice to the other,— the statute not then being explicit on this point, — and it was held that, before the decree was finally suspended or vacated, it was to be ascertained whether the partnership was not in fact insolvent, and whether the allegation of insolvency was not in fact well founded. Bill dismissed.