Court Opinion

ID: 9687458
Source: CourtListenerOpinion
Date Created: 2023-08-24 16:28:31.710272+00
Date Added: 2024-06-11T18:18:27.173202
License: Public Domain

Smith, J.,
dissenting.
The asserted obligations of the partnership are the kind for which members of a firm are liable jointly under the Uniform Partnership Act, § 67-315 (b), R. R. S. 1943. Plaintiff alleged painstakingly that C. E. Piper, the one partner not made a party defendant, was beyond the jurisdiction of Nebraska. Laying aside momentarily the features of the entity theory announced by the court, I think that causes of action were stated. See, Bowen v. Crow, 16 Neb. 556, 20 N. W. 850; Winters v. Means, 25 Neb. 241, 41 N. W. 157, 13 Am. S. R. 489; Restatement 2d, Conflict of Laws, Tent. Dr. No. 3, § 87, Comment f; Restatement 2d, Contracts, Tent. Dr. No. 2, § § 112 and 117.
Plaintiff is denied an adjudication on the merits because the firm is presumably solvent. That formula strangely enough derives color of support from equitable rules written into' statutes a century ago. Writ of execution on a judgment against the firm itself is issued against partnership property. If the judgment is not satisfied, the creditor may file a bill in equity against the partners. The prescribed allegations of the bill are the judgment and the insufficiency of partnership property. §§ 25-313, 25-314, and 25-316, R. R. S. 1943. An alternative remedy for the creditor’s benefit —not an obstacle to a direct action against partners— *100was probably intended. See, Herron v. Cole Bros., 25 Neb. 692, 41 N. W. 765; Roggenkamp v. Hargreaves, 39 Neb. 540, 58 N. W. 162; Ruth v. Lowrey, 10 Neb. 260, 4 N. W. 977.
The problem is complicated by a variant of the partnership definition in the uniform act. A partnership is ¡an association of persons organized as a separate entity to carry on a business for profit. § 67-306, R. R. S. 1943. The definition, which is associated with an entity-aggregate dichotomy, emphasizes quasi-corporate relations. The provision for joint liability of members to partnership creditors strongly suggests a primary liability. In any event the ambiguities of procedural and substantive law should be considered in light of the justification offered in the majority opinion.
Does the businessman intend primarily to extend credit to the firm? Two writers gave negative answers in 1915. See, Williston, “The Uniform Partnership' Act * * *,” 63 U. Pa. L. Rev., 196, 209; Lewis, “The Uniform Partnership Act * * *,” 29 Harv. L. Rev., 158, 166; Lewis, “The Uniform Partnership Act,” 24 Yale L. J., 617, 639. An affirmative answer is not obvious even in 1967.
The need of a partner for protection against inroads on firm assets: should be evaluated with other considerations. By hypothesis the firm is solvent in some sense. A general partner runs the risk that he will be compelled ultimately to pay all partnership debts. The partnership creditor in pursuit of a remedy will at times view this need with a healthy skepticism, which I share.
McCown, J., joins in this dissent.