Court Opinion

ID: 3527119
Source: CourtListenerOpinion
Date Created: 2016-07-05 22:39:20.759634+00
Date Added: 2024-06-11T09:36:04.867249
License: Public Domain

I can not assent to the doctrine that the sheriff, under an execution against one partner for his individual debt, can seize the goods of the partnership so as to sever the possession from the other partners and deliver it to an execution vendee.
Partnership property is the primary fund for the payment of partnership debts, and one partner has no share in the partnership property except what remains after the payment of all debts and liabilities of the firm, and each partner has the right to have the partnership property applied to the payment of the joint debts before any one of the partners or his vendee or individual creditor can claim any right thereto. Neither partner has a separate interest in any part of the property belonging to the partnership, though each has an undivided joint interest in the whole; but this interest is not in any particular portion separate from the mass. The right of one partner to the possession of the whole is to hold for the benefit of the firm, and he has no right to sever any specific portion and hold it for his own use or to the exclusion of the other partners. On what principle then can the sheriff, by an execution against one partner for his private debt, take partnership property from the possession of the solvent partners and transfer it to the purchaser at the execution sale, and thus clothe him with rights superior to those which the debtor partner could assert, and place him in a better position than the partner himself? It is conceded in the opinion of a majority of the court that the purchaser only acquire the share of the debtor partner after the payment of the partnership liabilities, which may or may not be of any value. Then why take the possession from the solvent partners, who are not in default, who are entitled to administer the firm assets for the payment of the joint debts, and who have not only their own interest in the property, which should secure them the possession of it, but a lien in equity on the debtor partner's interest, and on the whole stock for whatever the concern may owe them on a final account ? The exercise of the power claimed for an execution against one partner will *Page 85 
often be at the expense of the ruin of the others. For the right to seize the whole stock and remove it to the sheriff's sale room is not controlled by the extent of the debtor partner's interest in the whole, but by the amount of the execution; and though the sheriff sells only the insolvent partner's interest, it is said that he may sell in parcels to different purchasers and deliver possession of each lot as sold. If then an execution is issued against one partner who has a small interest in a large establishment, and the sheriff may seize and take away from the other partners the whole stock and sell it in parcels — a paper of needles to one, a bolt of cloth to another, and so on until the whole stock is sold and distributed to a thousand purchasers, who may be insolvent and reside in different parts of the country — although the purchasers only take the interests of the debtor partner, they get the possession of the property, and it would be poor comfort to the other partners, after they are ruined, to tell them that they may institute proceedings in equity against the various purchasers and restrain them from disposing of the property until the partnership affairs are settled and the interest ascertained which they had acquired. The "moral effect" which an execution armed with such dangerous power carries, is to bankrupt the solvent partners, or compel them, at the risk of being ruined, to pay the debt of their insolvent partner. This cruel remedy is not necessary to prevent a debtor from placing his means in a partnership and defying his creditors, because the law furnishes a remedy consistent with the just rights of creditors and of the other partners.
Cases may be found in the books on both sides of this question, and the opinion of the court is abundantly sustained by authorities; but I think the doctrine, which is most just and consistent with reason, policy and the rights of all concerned, is, that the sheriff only sells the undivided and unascertained contingent interest of the debtor partner, and not in any specific part of the partnership property, but only his contingent interest in the stock and profits, which will be ascertained after the settlement of the partnership accounts and the payment *Page 86 
of the partnership debts. The levy should be made of the debtor's interest in the whole stock, and the sheriff should not take away any specific part of the partnership goods, nor the whole, because the other partners have property in every part as well as the whole. The sale will operate as a dissolution of the partnership, and the vendee will become a tenant in common with the other partners substituted to the rights of the judgment debtor. The sale will carry the debtor's unascertained contingent interest, whatever it may be; but it will not give the vendee any right to a division or separate possession, though it will give a right to call for an account and thus entitle himself to the interest of the debtor partner, which will be ascertained on a settlement of the partnership affairs. The purchaser, taking in right of the debtor partner, will take nothing more than an intangible interest, which can not be made available until the surplus is ascertained by an account. (Morrison v. Blodgett, 8 New Hamp. 238; Sitler v. Walker, Freem., Miss., 77; Deal v. Bogue, 20 Penn. State 228.) "The sheriff can sell only the actual interest which such partner has in the partnership property after the accounts are settled, or subject to the partnership debts. The separate creditor takes it in the same manner as the debtor himself had it and subject to the rights of the other partners. The sheriff therefore does not seize the partnership effects themselves, for the other partner has a right to retain them for the payment of the partnership debts." (In the matter of Smith, 16 Johns. 106.) "The purchaser takes it in the same manner as the debtor has it and subject to the rights of the other partner, who has a right to retain the possession of the partnership effects for the payment of the partnership debts. The sheriff, therefore, sells the mere right and title to the partnership property, but does not deliver possession." (Crane v. French, 1 Wend. 313.) "The sheriff could only sell the interest of Goulding in the partnership property, but neither the sheriff nor the purchaser would have any right to the possession of the property. The other partner would have the right to retain *Page 87 
possession till the partnership debts were paid." (Dunham v. Murdock, 2 Wend. 554.)
In my opinion, the execution against N. Childs did not operate as a lien on the property of D. J. Childs and N. Childs, so as to prevent the other partner from selling it; and the plaintiff, having purchased the mules from D. J. Childs before the levy, acquired a title which could not be defeated by a subsequent levy and sale under the execution against the other partner, and I am therefore in favor of reversing the judgment.
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