Court Opinion

ID: 3402270
Source: CourtListenerOpinion
Date Created: 2016-07-05 19:14:12.68951+00
Date Added: 2024-06-11T13:40:30.437087
License: Public Domain

1. The individual interest of a partner in partnership assets is no more than his interest in the surplus effects of the partnership that remain after all the debts of the partnership have been discharged.Drexel Furniture Co. v. Bank of Dearing, 178 Ga. 33 (172 S.E. 30), and cit. The principle was applied In re Stewart, 23 Fed. Cas. 51, holding: "No individual exemption can be allowed out of the partnership estate at the expense of the joint creditors." See also Jensen v. Wiersma, 185 Iowa. 551 (170 N.W. 780, 4 A. L. R. 298, 308, and cit.)
2. Under the foregoing principle, if the individual interest of a partner in partnership assets such as a stock of goods should be set a part by the court of bankruptcy under a claim of homestead exemption, and should be asserted against the stock of goods as partnership assets which, before adjudication in bankruptcy, had been levied upon under a distress warrant for a partnership debt due for rent, such asserted interest in the particular property should yield to the partnership debt.
(a) The instant case differs from Harris v. Visscher, 57 Ga, 229, in which the property in question was real estate, and did not involve a case in which a creditor of a member of a firm of copartners in virtue of an assignment was seeking to apply partnership assets to payment of the individual debt of the copartner.
(b) Whether the transferee of the right of homestead exemption as collateral security for the individual debt of the partner had the right in *Page 616 
virtue of the transfer to file the claim for exemption in the court of bankruptcy would not affect the case, and will not be decided.
3. Though conflicting as to the value of the property, the evidence did not demand a finding that the levy was excessive.
4. The creditor of the partnership should not have been delayed at the instance of the creditor of the individual partner; and the judge did not err in refusing to enjoin the sale of the partnership assets for the partnership debt. Judgment affirmed. All the Justices concur.
Two persons purporting to act as individuals and principals jointly executed a promissory note payable to a bank. The note contained the clauses: (a) "Each of us . . waives for self and family all homestead and exemption rights either may have as against this debt or any renewal hereof." (b) "Should any of us be adjudged a bankrupt before paying this debt, we authorize the holder to proceed in the name of each such bankrupt to have set apart and to receive from the trustee in bankruptcy any homestead exemption permitted by law, and to receive same however it may be set apart; and we assign to the holder enough of any homestead exemption that may be set apart to pay this debt in full." The makers of the note were copartners doing mercantile business under a firm name. A distress warrant for rent "now due and unpaid" was issued, on December 24, 1932, against the firm, returnable to the State court, and was levied upon assets of the firm. On January 11, 1933, the firm and both members thereof, on their voluntary petition, were adjudicated bankrupts. No claim of homestead exemption for either member of the firm was made in the schedule in bankruptcy. The bank, acting under the above-quoted power expressed in the note, applied, in the names of the makers of the note, to the court of bankruptcy to have property set apart to each maker as head of a family, and to have the property applied to payment of the debt. Certain of the property so claimed as exempt was property scheduled as individual property of each member of the firm, and other property so claimed as exempt was the undivided interest of each member of the firm in the stock of merchandise scheduled by the firm. On this claim of exemption the property was set apart by the trustee and duly reported to the referee in bankruptcy. An order was passed on February 8, 1933, specifying a date at which objections to the report would be heard. On *Page 617 
February 14, 1933, the bank, in its own right and in right of the makers of the note, instituted suit in the State superior court against the plaintiffs in the distress-warrant and the sheriff, alleging facts substantially as stated above, averring that the levy was void as excessive, and praying (a) for injunction to prevent disposal or interference in any way with plaintiff's rights in the property claimed as exempt, before final allowance of exemption, and, after such allowance, that injunction continue for such purpose; (b) that plaintiff have judgment for the property so claimed as exempt, and that the levying officer be required to surrender possession of the property to plaintiff; (c) for gereral relief. Afterward, on motion of the trustee in bankruptcy and a creditor, the claims for homestead exemptions as filed by the bank in the bankruptcy case were disallowed by the referee in bankruptcy and ordered to be expunged from the record in that court. Exception was taken to this order. An amendment to the petition in the State court, setting forth these facts, alleged that in due time said order of the referee would be taken on said exception for review by the judge of the United States district court, that a final judgment on said claim could not be had before the day advertised by the sheriff for sale of the property, and that in order to preserve and protect the plaintiff's rights the defendants should be enjoined from selling the property under the distress warrant until final adjudication of the claim for exemptions in the bankruptcy court. The amendment was allowed. A general demurrer to the petition was interposed. The defendants filed an answer in which it was alleged, among other things: (a) that the property levied upon had never been in possession of the sheriff in virtue of the levy of the distress warrant, and had never been in possession of the court of bankruptcy; (b) that the claim for exemption in the bankruptcy court had not been made by the makers of the note; that under the laws of Georgia such claim of exemption must be made in person by the makers of the note, and power to make the claim could not be delegated to the bank; (c) that in view of liens for certain amounts of taxes, and the amount of the rent due as set forth in the distress warrant, the officer did not abuse his discretion in levying upon the property. At interlocutory hearing the judge rendered a judgment in which, after expressing his opinion of the law applicable to the case, he ordered that the defendants be restrained from having the sale *Page 618 
on the day advertised under the distress warrant, and directed that the officer readvertise the property for sale under the distress warrant and in accordance with the judgment of the State court to which the distress warrant was returnable. The plaintiff excepted.
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