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partnership creditors and certain indi-
vidual creditors, has been held valid.
Kirby v. Schoonmaker, 3 Barb. Ch. 46,



VOL. I.



16



50. — In Vermont, the creditors of the
partnership, in attaching partnership
property, are at law entitled to no pre-
ference to creditors of an individual
partner. Reed v. Shepardson, 2 Verm.
120; Clarky. Lyman, 8 Verm. 290. But
in equity the partnership effects are
pledged to each partner until he is re-
leased from all his partnership obliga-
tions, and are first chargeable with the
claims of the partnership creditors, not-
withstanding prior attachments of the
separate creditors. Washburn v. Bank
of Bellows Falls, 19Verm.278; Bardwell
V.Perry, 19 Id. 292.

(A) Pierce v. Jackson, 6 Mass. 242.
In this case an attachment of partnership
property for a partnei-ship debt was held
to prevail over a prior attachment of the
same property for the separate debt of
one of the partners. Parsons, C.J. "At
common law, a partnership stock be-
longs to the partnership, and one partner
has no interest in it but his share of what
is remaining after all the partnership
debts are paid,*he also accounting for
what he may owe to the firm. Conse-
quently, all the debts due from the joint
fund must first be discharged, before any
partner can appropriate any part of it to
his own use, or pay any of his private
debts ; and a creditor to one of the part-
ners cannot claim any interest but what
belongs to his debtor, whether his claim
be founded on any contract made with

[181]



175*



THE LAW OF CONTKACTS.



[book I.



feated by the mere insolvency of the firm, although the part-
nership creditors *have commenced no action for the recovery
of their debts, {i) But where one partner is dormant, the cre-
ditor of the other is not then postponed in his attachment of
the stock in trade, to a creditor of the same firm who has dis-
covered the dormant partner, and makes him defendant, {j)



his debtor, or on a seizing of the goods
on execution." Phillips v. Bridge, 1 1 Id.
249; Newman v. Bagley, 16 Pick. 572;
Allen V. Wells, 22 Pick. 450; Trow-
bridge V. Cnshman, 24 Id. 310; Com-
mercial Bank v. Wilkins, 9 Greenl. 28;
Smith V. Barker, 1 Fairf. 458 ; Douglas
V. Wmslow, 20 Maine, 89. Weston, C J.
" The interest of each partner is in his
portion of the residuum, after all the
debts and liabilities of the firm are liqui-
dated and discharged. Equity will not
aid the separate creditor, until the part-
nership claims are first adjusted. And
they will interpose to aid the creditors
of the firm, when a separate creditor
attempts to withdraw funds, in regard
to which they have a priority. In this
State, and in Massachusetts, a separate
creditor may attach the goods of a firm,
so fur as his debtor has an interest in
them, subject to the paramount claims
of the creditors of the firm." — Tappan
r. Blaisdell, 5 N. H. 190. Richardson,
C.J. . "According to the old cases in
the courts of law, the separate creditor
took the goods of the partners, and sold
the share of his debtor, without inquiring
what were the rights of the other part-
ners, or what was the real share of each.
Blackhurst v. Clinkard, 1 Show. 1 69 ; 1
Salk. .392 ; Comyns's R. 277. But the
true nature of a partnership seems to
have been better understood in more
modern times, and it is now settled that
each partner has a lien on the partner-
ship property, in respect to the balance
due to him, and the liabilities he may
have incurred on account of the partner-
ship." Morrison v. Bipdgett, 8 N. H.
238; Page v. Carpenter, 10 N. H. 77;
Dow r. Say ward, 12 Id. 276 ; Brewster
V. Hammett, 4 Conn. 540; W^ashburn
V. The Bank of Bellows Falls, 19 Verm.
278; In the Matter of Smith, 16 Johns.
102 ; Bobbins v. Cooper, 6 Johns. Ch.
186. But where a partnership was dis-
solved, and a creditor of the partnership
afterwards took the joint and several
note of the individual partners, held,

[182]



that he could not be regarded as a cre-
ditor of the partnership, and entitled to
preference as such. Page v. Carpenter,
10 N. H. 77.

(?■) Pierce v. Jackson, 6 Mass. 242;
Fisk V. Herrick, G Id. 271. In the latter
case the court said : " Before either part-
ner can rightfully claim to his own use,
or for the payment of his own debts, any
of the partnership effects, the partner-
ship must be solvent, and he must not
be a debtor to it." — Rice v. Austin, 17
Id. 206 ; Commercial Bank v. Wilkins,
9 Greenl. 28 ; Lyndon v. Gorham, 1
Gall. 368. " The general rule undoubt-
edly is, that the interest of each partner
in the partnership funds is only what re-
mains after the partnership accounts are
taken ; and unless, upon such an ac-
count, the partner be a creditor of the
fund, he is entitled to nothing. And if
the partnership be insolvent, the same
effect follows."

(j) The reason of this exception to
the general doctrine is, that the public
rely on the personal credit of the osten-
sible owner, and not on that of the
dormant partners. Lord v. Baldwin,
6 Pick. 348, 351. " The case before
us is that of a dormant partnership,
which is necessarily, from its very cha-
racter, unknown at the time the lia-
bility is incurred. All the creditors
sold their goods or made their contract
with the ostensible, visible partner ; they
trusted to him personally, and to the
goods upon which he was trading, as
his. The dormant partner is brought
to light by ex post facto investigation ;
and he is made responsible, not because
he was trusted, but because he secretly
enjoyed the profits of the business. Now
in such case, the reason for giving pre-
ference to such creditors as may first
discover his liability, so that stock osten-
sibly belonging to the visible partner
shall first be applied to the satisfaction
of their debts, does not exist." . . .
" The question now is, whether, when all
the creditors have trusted the man of



CH. XII.]



PARTNERSHIP.



•176



But this would seem not to be the case where the first at-
taching creditor's debt had no reference to the partnership
business, and the debt of the second creditor had such re-
ference, (k) The same *rule is applied to attachments by-
trustee process, and to direct attachments. (/)

Formerly, both in England and in this country, the princi-
ple of moieties prevailed. That is, the private creditor took
the proportion of the partnership stock which belonged by-
numerical division to his debtor, (m) But now, both there



business and apparent owner of tlic
goods, any one of them, who is behind
the rest in his attachment, shall sup-
plant tliein and gain priority because
he lias discovered this concealed liabi-
lity. At the time the debt was created,
he stood upon the same footing witii
the rest ; lie trusted John Brown and
the goods in his possession ; so did they.
They have taken possession first of the
fund whicii was held out to the public
as the means of credit ; arrd it might be,
and proliably was in this very case, that
the goods attached are the identical
goods which they sold to the party
sued. There would be then no pre-
tence of equity, and we think not of
law. in allqwing a preference founded
upon no meritorious distinction of cir-
cumstances." French v. Chase, 6 Greenl.
166. The authority of the two preced-
ing cases is fully attirmed in Cammack
V. Johnson, 1 Green, Ch. 1G.3. See also
Van Valen v. Russell, 13 Barb. 590.

(k) Witter v. Richards, 10 Conn. 37.
This case determines that a first attach-
, ing creditor, who has dealt with a part-
ner in the course of the business of Ike part-
nership, hut at the same time in igno-
rance of its existence, shall not be post-
poned to subsequent attaching creditors,
to wiiom the dormant partners were
known when the business transactions
took place, or subsequently disclosed
before their attachments, but that he
shall be postponed if his claims did not
arise from a partnership transaction,
while that of the subsequent attaching
creditor did. The court distinguish
Lord V. Baldwin from the case before
them, and remark : '■ The result in that
case is perfectly compatible with the
decision in this; and it is apparent that
the court meant only to decide the case
before them ; for they say, ' AVhether a
private creditor of his could seize pro-



perty so situated, and hold it against
the ostensible owner, is a question of a
very different nature.'" 351. See Al-
len V. Dunn, 15 Maine, 292.

(^) Fisk V. Herrick, 6 Mass. 271;
Church V. Knox, 2 Conn. 514; Barber
V. Hartford Bank, 9 Id. 407 ; Lyndon w.
Gorham, 1 Gall. 367 ; Mobley v. Lom-
bat, 7 How. (Miss.) 318.

(m) Hey don v. Hey don, 1 Salk. 392.
" Coleman and Heydon were copart-
ners, and a judgment was against Cole-
man, and all the goods both of Coleman
and Heydon were taken in execution,
and it was held by Holt, C. J., and the
court, that the sheriff must seize all, be-
cause the moieties are undivided ; for if
he seize but a moiety, and sell that, the
other will have a right to a moiety of
that moiety. But he must seize the
whole, and sell a moiety thereof undi-
vided, and the vendee will be tenant in
common with the other partner." Jacky
V. Butler, 2 Ld. Rayra. 871. "Two
joint partners are in trade. Judgment
was entered against one of them; and,
upon a. fieri facias, all the goods, being
undivided, were seized in execution ; and
upon application to the King's Bench
by him against whom the judgment was
not, the court held that the sheriff could
not sell more than a moiety, for the pro-
perty of the other moiety was not affect-
ed by the judgment, nor by the execu-
tion." Bachurst v. Clinkard, 1 Show.
173 ; Marriott v. Shaw, 1 Comvns, 277;
The King v. Manning, 2 LI. 616. "If
A., B.,and Care partners, and judgment
and execution is sued against A., only
his share of the goods can be sold. It is
true, the sheriff' may seize the whole, be-
cause the share of each being undivided,
cannot be known; and if he seize more
than a third part, he can only sell a
third of what is seized, for B. and C.
have an equal interest with A. in the

[183]



177*



THE LAW OF CONTRACTS.



[book I.



and here, the rule is well settled that if partnership effects
can be taken either by attachment or on execution to secure
or satisfy the debts of one of the partners, this can be done
only to the extent of that partner's interest, and subject to
the settlement of all partnership accounts, (n) The levy of
execution does not give the creditor a separate possession of
the goods. The *indebted partner had no such possession
himself; and the levy gives to his creditor only that which
the debtor had ; and that is a right to call for an account,
and then a right to the balance which may be found to be-
long to him upon a settlement. And it must still be re-
garded as unsettled, whether a sheriff levying an execution
of a separate creditor on. a partner's interest, can take any,
and if any what, actual possession of the partnership pro-
perty, (o) Considering the great diversity of authority, and



goods seized ; but the sheriff can only
sell the part of him against whom the
judgment and execution was sued." See
Eddie v. Davidson, Doug. 650; Pai'ker
V. Pistor, 3 B. & P. 288 ; Wallace v.
Patterson, 2 Har. & McHen. 463 ; Lyn-
don V. Gorham, 1 Gall. 367 ; McCarty
V. Emlen, 2 Dall. 278 ; Church v. Knox,
2 Conn. 514. The same rule is recog-
nized at law in Vermont, but not in
equitv. Eeed v. Shepardson, 2 Verm.
1 20 ; 'Clark v. Lyman, 8 Id. 290 ; AYash-
burn V. Bank of Bellows Falls, 19 Id. 278.
(n) Fox 1-. Hanbury, Cowp.445 ; Ed-
die V. Davidson, Doug. 650; West v.
Skip, 1 Ves. Sen. 239 ; Hankey v. Gar-
ratt, 1 Ves. Jr. 236 ; Taylor r. Fields, 4
Id.396; Young w.Keighley, 15Ves. 557;
7/! re Wait, 1 Jac. & Walk. 608, Lord
Eldon ; Dutton v. Morrison, 17 Ves.
193 ; Commercial Bank v. Wilkins, 9
Greenl. 33 ; Doner v. Stauffer, 1 Penn.
198; Winston v. Ewing, 1 Ala. {N. S.)
129 ; Story on Part. § 261 ; Collyer,
§ 822, note; Aiile, note (h) ; Crane v.
French, 1 Wend. 311 ; Tappan v. Blais-
dcll, 5 N. H. 190 ; Burgess v. Atkins,
5 Blackf. 337, 338. Dewey, J. " The
general rule of law is, that in levying
an execution against one partner for his
separate debt, the officer may take pos-
session of all the joint property of the
firm, in order to inventory and appraise
it. He has no authority to divide it ;
he can only sell the joint interest of the
debtor, whatever it may be, and the

[184]



purchaser will stand in the place of the
debtor, and hold the same interest in
the joint concern which he held."

(o) In Scrugham v. Carter, 12 Wend,
isi, it was held that replevin does not
lie against a sheriff in such a case for
taking the property and removing it to
a place of safe custody, and the remedy
of the other partners is to obtain an
order staying proceedings until an ac-
count be taken in equity. In Burrell v.
Acker, 23 Id. 606, he was held author-
ized to take joint possession, with the
other partners, of the partnership pro-
perty, after the levy and before the sale,
but whether he was entitled to exclusive
possession Avas not decided. The sub-
ject was fully discussed by Mr. Justice
Cowen, in Phillips v. Cook, 24 Wend.
389, and it was decided that, on an exe-
cution at law against one of two part-
ners, the sheriff'mightlawfnlly seize, not
merely the moiety, but the corpus of the
joint estate, or the whole, or so much of
the entire partnership effects as might
be necessaiy to satisfy the execution,
and deliver the property sold to the pur-
chaser ; and if he purchases with notice
of tlie partnership, he takes subject to
an account between the partners, and to
the equitable claims of the partnership
creditors. It has since been held that he
is equally subject to an account whether
he had such notice or not. Walsh v.
Adams, 3 Denio, 125. The same eases
athrm his power to deliver all the



CH. XII.]



PARTNERSHIP.



178



consequent uncertainty, as to this power of the sheriff, the
question seems to call for statutory provisions ; but in the



goods of the partnership to the pur-
chaser. Birdseye v. Ray, 4 Hill, 158,
affirms Phillips v. Cook, so far as it re-
lates to the seizure of the whole of the
joint estate by the sheriif on an execu-
tion against one partner for his separate
debt. But the sheriff subjects himself
to an action if he sells the entire pro-
perty in the goods of the copartner-
ship or any thing more than the debtor
partner's interest in them. Waddell v.
Cook, 2 Hill, 47, and note; Walsh v.
Adams, 3 Denio, 125. — In New York,
it is held that neither a court of law nor
of equity will stay execution at law
against the joint estate for a separate
debt until an account be taken. Moody
V. Payne, 2 Johns. Ch. 548 ; In re Smith,
16 Johns. 106, note ; Phillips v. Cook,
24 Wend. 389. See Reed v. Howard,
2 Met. 36. But this rule has been dis-
approved. Cammack v. Johnson, 1
Green. Ch, 168. — In Alabama, the
sheriff is held justified in taking exclu-
sive possession of the goods of the firm
until the aid of a court of equity is suc-
cessfully invoked. Moore v. Sample, 3
Ala. (N. S.) 319.— In New Hampshire,
the right of the sheiiff to take possession
of partnership property, levied on for the
private debt of a partner, has been de-
nied after an elaborate examination of
the^question. Gibson v. Stevens, 7 N. H.
352, 357. Parker, J. " The specific pro-
perty of a partnership cannot be law-
fully taken and sold to satisfy thej pri-
vate debt of one of the partners. His
creditor can have no greater right than
the debtor himself has individually,
which is a right to a share of the sur-
plus. This is the necessary result of the
doctrine, that the partnership property
is a fund in the first place for the pay-
ment of the partnership debts, and that
the interest of an individual partner is
only his share of the surplus. 5 N. H.
1 92, 193, 250 ; 9 Conn. 410. There are
difficulties in selling the interest of one
partner upon an execution. Courts of
equity first direct an account, which
courts of law cannot do ; and if tlie in-
terest of one partner may be sold upon
an execution at law, it must be left to an
account afterwards. Gow on Part. 246
d seq., 254. And a question may arise
in such case, whether the sale operates
as a dissolution of the partnership be-
16*



fore the time limited by the articles of
copartnership, or whether the other part-
ners are authorized to carry on the trade,
and account at the expiration of the
term. If the sheriff can sell only the
interest of the partner, and not the
goods, he must be liable, if he make
actual seizure of the specific property,
either to the partnership or the other
partners. Wilson v. Conine, 2 Johns.
280. Especially, if he sell the whole, as
in this case. 1 Gall. 370 ; 15 Mass. 82."
Morrison v. Blodgett, 8 N. H. 238.
Parker, J. " If the sheriff cannot sell
an interest in specified portions of the
goods of the partnership, there seems to
be no reason why he should levy upon
those goods, and deliver them to the
vendee, or why he should in fact reduce
them into possession. If ' in truth the
sale does not transfer any part of the
joint property so as to entitle him ' (the
vendee) ' to take it from the other part-
ner,' (I Story's Eq. 626,) on what prin-
ciple is the sheriff authorized to^seize
and hold to the exclusion of the other
partners, what his vendee, after a sale of
the interest of the debtor is perfected,
cannot take from them "? If the sheriff
sells ' only the interest of such partner,
and not the effects themselves,' (1 Wight-
wick's Ex. R. 50, cited 2 Johns. Ch.
549,) upon what ground shall he seize
the effects which he is not to sell ? If
' the creditors of the partnership have a
preference to be paid their debts out of
the partnership funds before the private
creditors of either of the partners,' and
this 'is worked out through the equity
of the partners over the whole funds,'
(1 Story's Eq. 625,) that equity should
prevent them from being deprived of
the means of payment by reason of such
seizure by the sheriff, who can neither
sell the goods, nor pay the creditors, and
against whom they cannot proceed, so
long as he may lawfully hold the goods."
. . . "In Smith's case, 16 Johns. 106,
the court after saying that the separate
creditor takes the share of his debtor in
the same manner as the debtor himself
had it, and subject to the rights of the
other partner, add. ' The sheriff there-
fore does not seize the partnership effects
themselves, for the other partner has a
right to retain them for the payment of
the partnership debts.' And in Cram v.
[185]



179"



THE LAW OF CONTRACTS.



[book I.



absence of such provisions, and on general principles, it would
seem that the sheriff cannot take or give, by sale, specific pos-
session of the partnership property. He takes and can sell
only the right and interest of the indebted partner to and in
the whole fund.

Different rules and modes of practice prevail in different
parts of this country. But wherever it can be done, the
better and safer way would probably be for the writ to be a
trustee process, or in the nature of a foreign attachment, and
this should be served on the other partners as alleged trustees,
and a return made by the sheriff" that he had attached all the
* right and interest of the partner defendant in the stock and
property of the partnership. So, after sale on execution, the
sheriff" should convey to the purchaser all the right and in-
terest of the indebted partner in the stock and property of the
partnership. And the purchaser would then have the right to
demand an account, and a transfer to him of whatever balance
or property would, upon such account, have belonged to his
debtor, and perhaps, have the same right of possession, (p)



French, 1 Wend. 313, Chief Justice Sa-
vage, aftei' considering the subject, says:
' The sheriff therefore sells the mere
right and title to the partnership pro-
perty, but does not deliver possession.'
Vide also 5 N. H. 193 ; 2 Conn. 516,
517. The conclusion that the sheriff,
upon an execution against one partner,
is not to deliver to his vendee, and is
not to seize the partnership effects, is
sustained, therefore, not only by the
reason of the thing, after the adoption of
the general principle before stated, but
by express authority." The doctrine of
these cases is affirmed in Page v. Car-
penter, 10 N. H. 77 ; Dow v. Sayward,
12 Id. 271, 14 Id. 9. See Tavlor v.
Field, 4 Ves. 396 ; Johnson v. Evans,
7 M. & G. 240, 249, 250, Tuulal, C J.;
Collycr on Part. B. iii. ch. vi. sect. 10. —
In Newman v. Bean, 1 Foster, 93, it was
held, that an action might be maintained
against a third person who seizes goods
on execution belonging to a partnership,
for the debt of an individual partner,
and excludes the other partners from
the possession of them. See on this
subject 26 Amer. Jurist, Art. 3.

(p) Morrison v. Blodgett, 8 N. H. 254.
Parker, J. " Whether, under our pre-

[186]



sent laws, the creditor can do more
than return a general attachment of the
interest of his debtor in the partnership,
and summon the other partners as his
trustees ; and what are the effects of such
a sei'vice upon the rights and duties
of the other partners, and, of course,
upon the action of the debtor himself ?
Whether it can suspend his right to in-
terfere with the partnership property, so
long as the attachment exists, or whether
he may proceed to act as partner until
judgment and sale upon execution '?
And whether, after an attachment, the
creditor of any of the partners may main-
tain a bill in equity for an account be-
fore a seizure and sale of the interest of
the debtor on the execution "? are ques-
tions which may arise, but upon which
this case does not call for an opinion." —
Dow V. Sayward, 12 N. H.276. Upham,
J. "In the case of Morrison v. Blod-
gett, is a very elaborate examination of
this question by Mr. Chief Justice Par-
ker, and the opinion of the court is
strongly intimated that a general attach-
ment of the interest of a partner in a
firm may be made, though it is suggest-
ed that, in order to make the attach-
ment available, by obtaining a true



en. XII.]



PARTNERSHIP.



180



That the private creditors of one of the partners cannot
reach the partnership funds until the claims of the partnership
*creditors are satisfied, is now the almost universal rule both in
courts of law and of equity. But whether the private property
of a partner is equally preserved for his private creditors, is not
perhaps certain. At law, no such rule seems to be well esta-
blished. But where the partnership has failed, and the part-
nership property is held as a fund for the partnership creditors,
the justice of holding the private property of individual part-
ners for the exclusive benefit of their private creditors, is ob-
vious. Then each fund would be held separate ; the partner-
ship assets for the partnership creditors, and the assets of each
partner for his own creditors, and only the balance of each
fund, after the special claims upon it were discharged, would
be applicable to the claims of the other class, (q)



knowledge of the extent of the partner-
ship interest, it might be expedient or
necessary to summon the other parties
as trustees. We ai-e unable now to see
any better course than was there sug-
gested. There seems to be no good
reason for giving up the process of
attachment at law in such cases, as it
would probably in this mode be ren-
dered equally as effectual and prompt
as any other means of securing the in-
terest of the debtor that might be de-
vised. If a process in chancery should
be deemed more effectual, still it might
be desirable also to retain a right of
attachment at law. See also Page v.
Carpenter, 10 N. H. 77." S. C. 14 N.
H. 9,12. Parker, C. J. " Neither will
the fact that the interest of a partner is
of a nature that is incapable of actual
seizure, and of a reduction into posses-
sion, exempt it fi'om a seizure and sale
upon execution. Equities of redemp-
tion and other interests are of that cha-
racter, but are nevertheless subject to an
execution at law. It follows, then, that
the interest of the defendant in the pro-
perty of the stage company was liable
to attachment. Whatever may be the
subject of levy and sale, may be the sub-
ject of attachment. It is true tiiat there
is difficulty in securing the interest of
one partner by attachment, so that he
or his partners, through their right to



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