Court Opinion

ID: 8527224
Source: CourtListenerOpinion
Date Created: 2022-11-23 10:57:23.682529+00
Date Added: 2024-06-11T16:51:40.684076
License: Public Domain

dissenting opinion oe
MR. JUSTICE WOLF.
My dissent in this case is based on the ground that, as a general rule, an individual partner cannot be joined in a suit against the firm on a partnership liability and, furthermore, that if there is an exception like insolvency the complainants did not bring themselves within the exception.
Section 237 of the Spanish Code of Commerce provides (translation mine) :
“The private property of the general partners, not included as part of the assets on the formation of the partnership, cannot be seized in execution for payment of the debts of the partnership until discussion of the assets of the partnership has been had.”
*841The majority opinion, as I understand it, accepts this provision of the Code of Commerce, bnt holds that it is no obstacle to joining a general partner in a suit against the firm. The court decided in "effect that the judgment rendered against both the firm and the individual partner does not operate equally against them and that-no execution can proceed against the property of the individual partner until a discussion of the assets of the partnership has been had. My contention, however, is that, barring possible exceptions like insolvency, the liability of an individual partner is a conditional and not a pure one and. that the condition is only fulfilled after a discussion of the assets has been had and hence that he is not individually liable to suit before discussion. The judgment against the partnership, followed by a discussion, mákes the property of the general partners subject to execution without the necessity of an independent suit, both according to section 237 of the Code of Commerce, supra, and section 127, as follows:
“All the members of the general copartnership, be they or be they not managing partners of the same, are personally and jointly liable with all their property for the results of the transactions made in the name and for the account of the partnership, under the signature of the latter, and by a person authorized to make use thereof. ’ ’
A mere reading of these sections, it seems to me, is enough to show that the obligation of an individual partner is conditional and not pure, and hence he is entitled to the benefit of section 1081 of the Civil Code, as follows:
“In conditional obligations, the acquisition of rights as well as the extinction or loss of those already acquired, shall depend upon the event constituting the condition.”
A creditor has no rights against an individual partner until the conditions established in sections 127 and 237 of the Commercial Code are fulfilled.
In Porto Pico, as in Louisiana, a partnership is an en*842tity similar to a corporation in the United States. Tliat it is such an entity seems to be undisputed in Porto Pico and the cases in Louisiana which assert it are numerous: Newman v. Eldridge, 107 La. 315-320, where it was said that the firm is a legal entity distinct from its members; Stothart v. W. T. Hardie, 110 La., 696, where it was said that a partnership was defined as a contract creating a distinct person from those who compose it. Similar and even stronger pronouncements are to be found in Paradise v. Gerson, 32 La. Annual, 532; Raymond v. Palmer, 41 La. Annual, 433; The Succession of Pilcher, 39 La. Annual, 362.
It is true that partners are bound in solido, but in solido only means that each partner is ultimately bound and does not change a conditional obligation to a pure one until the condition is performed. The words “in solido” also mean that each partner is equally bound among themselves, but such words necessarily do not mean that the liability of an individual partner is equal to or runs parallel to the liability of the firm itself, especially before discussion. The majority opinion relies on cases from the Philippines, but these cases do not show the steps by which the Philippine court arrived at its conclusion and hence do not satisfy my mind.
Also the majority opinion refers to section 1111 of our own Civil Code as follows:
"A creditor may sue any of tbe joint debtors or all ol them simultaneously. The action instituted against one shall not be an obstacle for those that may be brought subsequently against the others, as long as it does not appear that the debt has been collected in full.”
Of course, if a partner is a joint debtor with the firm there is no doubt that under various provisions of the codes all or any of the joint debtors may be sued, but if, on the other hand, as I maintain, his obligation is conditional, he is not a'joint partner in the sense of the statute. He has *843no individual liability and no joint liability until after discussion. Section 1111 lays. down tbe general rule which., under familiar principles of legal interpretation, would have to yield to the more specific provisions of a special law like the Code of Commerce.
I regret that I did not have before me at the time of the consultation over this case section 1600 of the Civil Code, it is as follows:
“Partners are not jointly bound with regard to the debts of the partnership, and none of them can bind the others by a personal act, if they have not granted him a power therefor.
“The partnership is not liable with regard to third persons for an aet which one partner may have performed in his own name or without a power from the partnership therefor; but it is liable to the partner in so far as said acts have benefited said partnership.
“The provisions of this section shall be understood without prejudice to the provisions of rule first of section 1597.”
This section is taken from the chapter on Partnership and is harmonious with the provisions of the Code of Commerce. It distinctly says that partners are not jointly bound with regard to the debts of the partnership. Any force which section 1111 might have to make persons in general jointly liable would be overcome in a case of partners by the distinctive provision of section 1600.