Court Opinion

ID: 8184963
Source: CourtListenerOpinion
Date Created: 2022-09-09 23:07:19.230579+00
Date Added: 2024-06-11T16:40:22.940822
License: Public Domain

Rewman, J.
This case arises out of the same failures and assignments as Thayer v. Humphrey, but in some of its circumstances differs from that case. The appellant was also a creditor of J. D. Putnam & Co., but he did not accept of J. B. Goss & Co. as a substitute for his original debtor. So *307he is not a creditor of either James B. Goss or J. B. Goss & Co.; and neither are in'any way liable for his claim. The appellant seeks to prove his claim against the estate of Alfred J. Goss in the hands of his assignee for the benefit of his creditors. It is answered to his application: “Your remedy is against the assets of James B. Goss, which are in the hands of his assignee for the benefit of his creditors.” And so he is turned away. It is not claimed that there are any firm assets of J. D. Putnam & Co. in- existence, nor that either partner is solvent, nor that the transfer to J. B. Goss & Co. did not pass the legal title to all the assets of J. D. Putnam & Co. to J. B. Goss & Co. But it is held that the right of the partners to have these assets applied first to the payment of the debts of the firm was reserved by the terms and conditions of the transfer. This is believed to be without a shadow of foundation in fact. It is put upon the ground that the transaction was for the purpose of applying the assets of the firm to the payment of its debts; and this in the teeth of all the evidence. The firm of J. D. Putnam & Co. was composed of J. D. Putnam and Alfred J. Goss. Both partners signed and published a notice of the dissolution of the firm, in which the public was notified that the same business would be continued by J. B. Goss & Co., who assumed all the debts of the firm; and the same business was in fact carried on at the same place by J. B. Goss & Co. for two years and upward. It does not seem necessary to say that the intent to have the business carried on with the same property is incompatible with the purpose to have the property applied to the payment of the debts. The greater part of the property received by J. B. Goss & Co. was the gristmill itself. J. B. Goss & Co. got nothing of value for the promise to pay the debts of the old firm, unless they got the right to carry on the business with the property received from the old firm. The real intention of the transaction is obvious. It was to make a novation of the *308debts of the old firm,— to substitute a new debtor in place of the old one. This was not altogether effected, because some of the old creditors did irot consent to the substitution. If the purpose was to apply the firm property to the payment of firm debts, the obvious way to make the purpose effectual was to make an assignment of it for the benefit of the firm’s creditors. It seems that this, clearly, was the ordinary case of a transfer of the firm’s assets for the purpose of a novation. In such a case all are agreed that the partners of the old firm lose their equity to have the assets transferred applied to the payment of the firm debts.
This case, too, is decided in the absence of parties and evidence necessary to its final disposition. The other side is not heard, as it must be before it can be bound by the decision. Non constat that, when these parties and their evidence are heard, J. D. Putnam & Co. will be found estopped, as against the creditors of J. P. Goss & Co., from claiming any right in this property of which they have held out J. B. Goss & Co. to be the owners.
The appellant, on the case as it now appears, should be admitted to share pari passu with the individual creditors of Alfred J. Goss, on the authorities cited in the dissenting opinion in Thayer v. Humphrey.
PiNNET, J.
1 dissent from the opinion of the court, and concur in the opinion of Mr. Justice NewMAN.