OF THE RESPECTIVE RIGHTS OF EXECUTION CREDITORS OF THE FIRM, AND OF THE PARTNERS INDIVIDUALLY, IN RELATION TO THE JOINT AND SEPARATE EFFECTS OF THE PARTNERS.

IN THE MATTER OF SMITH, AN ABSCONDING DEBTOR.

In the Supreme Court of New York.

JANUARY, 1819.

[REPORTED, 16 JOHNSON, 102-109.]

Upon an execution against a partner for his separate debt, which is levied upon partnership property, no more is transferred to the purchaser than the partner's interest, or his proportion of the surplus of the joint property remaining after payment of the partnership debts.

By virtue of a warrant of attach ment, issued by N. Williams, commissioner, under the act for relief against absent and absconding debtors (1 N. R. L. 157), the sheriff of Ontario seized sundry goods, wares, and merchandises, belonging to P. S. Smith and William Soulden, who were partners in trade, and which, at the time of seizure, were in the hands of Trueman Smith, in a store occupied for the purpose, at *Geneva, where he was selling them for the account of Smith & Soulden; also, the books [*458 of account in the same store, and one hundred and forty-six dollars and seventy-three cents, in cash, belonging to S. & S.

Under a second attachment, directed to the sheriff of Oneida, the sheriff of that county seized the books of account and papers of S. & S. as copartners, and also claiming goods belonging to S. & S., so far as they could be held under the attachment, they being already subject to an execution issued against S. & S. at the suit.

of Thomas Beekman.

One of the attachments was for the separate debt of Peter S. Smith, and the other for the partnership debt of S. & S.

Talcot, in behalf of Soulden and Smith, moved to set aside the attachments, and that the property taken by the sheriffs under them be restored.

He contended that the attachments, on the face of them, were irregular. The sheriff is commanded to attach not only the property of Smith, but all the property, real and personal, of S. & S. If any attachment would lie at all, it can only be against the separate property of the absconding debtor. The books of account and papers have also been taken.

But the act does not contemplate the issuing of an attachment in the case of partners, where one absconds, but the other remains within the State. It speaks throughout of an individual debtor. The case of a vessel, mentioned in the 21st section of the act, is the only one in which the Legislature appear to have thought that partnership property was to be taken; and it is provided, that if any person shall give security for the appraised value, the vessel is to be discharged. If the act is applicable to this case, it must be equally so in the case where one of several partners is absent or resident abroad; and it will be in the power of a creditor, to the amount of one hundred dollars, to break up the most respectable commercial house in the State. It is true, the court, in the case of Cyrus Chipman (14 Johnson, 217), have said that an attachment might issue against the property of an absent or absconding partner; but in Crispe v. Perrit (Willes, 471), to which the court was referred, and on which their decision seems to be founded, is not analogous. In McComb v. Dunch (2 Dallas, 73), the Philadelphia Court of C. P. held, that partnership property could not be attached to answer the separate debt of one of the partners.

There can be no doubt that this is a proper motion. A third person, whose goods have been taken by a sheriff, under an execution, may apply to the court, by motion, to have the goods restored to him (Tidd's *Pr. 935). It is for the protection and advantage of the sheriff, as it is more summary and less expensive than an action against him.

*459]

Wells and J. Lynch, contra. There is a suit pending in the Court of Chancery, where all the questions relative to this property will be properly decided. The applicants here do not state, in their notice, to whom the property is to be restored. There was a claim to the property put in by a person of the name of Van Santfort, before the sheriff, and the jury decided against him. Besides, the property is already under execution, and S. & S. have no right to demand its restoration.

In Mersereau v. Norton (15 Johnson, 179), the court decided,

that the property of an absconding debtor, which he has, as a tenant in common of a chattel, with another, might be seized and sold by the sheriff, under an attachment; but although the sheriff seizes the whole, he can sell only an undivided moiety, and the vendee becomes a tenant in common with the other cotenant, or part owner. There seems to be no reason for any distinction between partners and tenants in common of a chattel. In the case of a partnership, there is a survivorship, for the special purpose of settling the partnership concerns; but the surviving partner is merely a trustee, as to the moiety of a deceased partner. In Moody v. Payne (2 Johnson's Ch. 548), the chancellor takes it to be settled law, that the interest of one partner in the copartnership property, may be taken and sold under an execution, on a judgment against such a partner, for his separate debt; and he dissolved the injunction which had been issued in that case, to stay the sale by the sheriff, who had seized the partnership property. If the partnership property may be seized and sold on execution, why may it not, also, be seized under an attachment, which is a kind of anticipated execution against a debtor who has withdrawn himself from the reach of the ordinary process of law? In Mersereau v. Norton, this court considered an attach-ment in the same light as an execution.

T. A. Emmet, in reply. Proceedings against a bankrupt, as in Crispe v. Perrit, are on the ground of criminality; and there may be some supposed analogy, as to criminality, between a bankrupt and an absconding debtor. But the statute makes no distinction between an absent and absconding debtor. Both are placed on the same footing. They are not, therefore, to be regarded as criminal. Again; bankruptcy dissolves the partnership; but can the temporary absence of one partner, or his absconding to avoid legal process in a particular case, have that effect? How, then, does the case of a bankrupt apply? The consequences *of [*460 applying the statute to the case of partners, may, as has been suggested, be of the most serious nature. Some of the most opulent commercial houses here, have partners resident abroad. If the chancellor, in Moody v. Payne, and the judges in every other case, have felt and expressed the very great inconvenience and embarrassment arising from the seizing of partnership property by execution, for the separate debt of one partner, why increase the inconvenience by suffering partnership property to be

attached under this act? An execution does not, necessarily, put a stop to the partnership business; but an attachment, under which all the property, real and personal, of a partnership, with their books of account, papers, &c., is seized, must have that effect. If the act had contemplated the attachment of partnership property, surely there would have been some expressions to show such an intention; and the act would have provided, that the partnership debts should be first paid out of the property. The provisions of the act are, that the property or its proceeds, is to be divided, ratably, among all the creditors, without distinction or preference. If we look at the different sections of the act (sec. 3, 5, 10, 20, 21), it is apparent that partnership property was never intended to be attached.

This proceeding is not in the nature of an anticipated execution; it is rather a sequestration. The law, in regard to executions against partnership property, is inconvenient and hard enough; but the doctrine now contended for, goes to the destruction of the partnership. It is more extensive, and more injurious, in its effects than bankruptcy. It goes farther than the bankrupt law of any commercial country in the world.

PER CURIAM. Where an execution is issued for the separate debt of one partner, it has been the constant practice to take the share which such partner has in the partnership property;(1) but it has been settled, at least since the case of Fox v. Hanbury (Cowper, 445), that 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 partner.(2) The sheriff, therefore, does not seize the partnership *effects themselves, *461] for the other partner has a right to retain them, for the payment of the partnership debts. (Moody v. Payne, 2 Johnson's Ch. 548.)(3)

(1) Vide Backhurst v. Clinkard (1 Shower, 169); Heydon v. Heydon (1 Salkeld, 392); Anon. 1 Comyn's Rep. 277; Holt, 302, 642; Pope v. Harman (Comberbach, 217); Tissard v. Warcup (2 Modern, 279, 280; 12 Id. 446); Jacky v. Butler (Ld. Raymond, 871). -[Note by the Reporter.]

(2) Vide, also, Eddie v. Davidson (Douglas, 650, 651); Smith v. Stokes (1 East, 367); Wilson v. Gibbs & Conine (2 Johnson, 282); Taylor v. Fields (4 Vesey, Jr., 396); Chapman v. Koops (3 Bosanquet & Puller, 289); Parker v. Pistor (3 Id. 288).—[Note by the Reporter.]

(3) There appears to have been some difficulty as to the manner in which the separate

*We have considered an attachment under the act for

relief against absent and absconding debtors, as analo- [*462

creditor of one partner was to take his execution against the share of such partner, in the joint property of the firm; and the courts of law and equity seem not to have clearly understood each other on the subject. According to the old cases, at law, the separate creditor took the whole of the joint property, and sold an undivided moiety of it, and applied the funds to the payment of his debt, without giving himself any concern about the rights of the other partner, or previously ascertaining what was the interest or share of each. Since the case of Fox v. Hanbury, the courts of law have professed to follow the principles of the courts of equity. (Croft v. Pyke, 3 P. Wms. 182; Ex parte Ruff, 6 Vesey, Jr., 126, 127; Ex parte Williams, 11 Id. 5; West v. Skip, 1 Vesey, Sen., 239, 243.) In Taylor . Fields (4 Vesey, Jr., 369), the facts of which case are more fully stated in a note to Young v. Keighly (15 Id. 559, 560). Ch. Baron McDonald, in delivering the opinion of the court, says, that an assignee, or executor, or separate creditor, "coming in the right of one partner against the joint property, comes into nothing more than an interest in the partnership, which cannot be tangible, cannot be available, or be delivered, but under an account between the partnership and the partner; and it is an item in the account, that enough must be left for the partnership debts." In Eddie v. Davidson, the Court of K. B. directed that it should be referred to a master to take an account of the share of the partnership effects to which the other partner was entitled, and that the sheriff (who had sold the whole partnership effects under an execution against one of the partners) should pay over to his assignees part of the money, equal to the amount of his share. But the Court of C. B. (3 Bos. & Pull. 288, 289,) refused to direct a reference to their prothonotary, to ascertain what was the interest of the separate partner, in the partnership effects, the whole of which had been seized by the sheriff, or to stay the execution, until an account could be taken of the several claims on the property. They said, that all the difficulties were to be encountered in equity; that the safest line of conduct for the sheriff to pursue, was to put some person into possession of the defendant's share, as vendee, leaving him and the parties interested to contest the matter in equity, where a bill might be filed. They did not consider, that they had any authority or jurisdiction to order an account to be taken. In Dutton . Morrison (17 Vesey, Jr., 193– 205), Lord Eldon understands the rule to be, "that upon an execution against one partner, or the quasi execution in bankruptcy, no more of the property which the individual has should be carried into the partnership, than the quantum of interest, which he could extract out of the concerns of the partnership, after all the accounts of the partnership were taken, and the effects of that partnership were reduced to a dry mass of property, upon which no person, except the parties themselves, has any claim." In Watson v. Taylor (2 Ves. & Beames, 299, 300), Lord Eldon, in the course of the argument, inquired, "how the sheriff executes the writ under a judgment against one partner, according to the present doctrine of the courts of law, that he takes the interest of the partner. Is not that a dissolution of the partnership?" Mr. Cooke as amicus curie, said "the way in which the sheriff executes the writ in practice, is by making a bill of sale of the actual interest." Lord Eldon observed, "if the courts of law had followed the courts of equity, in giving execution against partnership effects, I desire to have it understood, that they do not appear to me to adhere to the principle, when they suppose that the interest can be sold, before it is ascertained what is the subject of sale and purchase." King . Sanderson (1 Wightwick, 50). In The King v. Rock (2 Price, 198), where partnership property was seized under an extent for a debt due to the crown from one of the firm, the court refused to grant on an amoveas manus, in the first instance, but directed a reference to the deputy remembrancer, to report an account of the joint and separate property, and to ascertain the clear surplus and proportion of each party; and, afterwards, security being given to answer the crown's debt, so far as it should appear, on the account, that the crown was entitled, they ordered an amoveas manus to be issued. In Moody v. Payne (2 Johnson's Ch. 548), the chancellor refused to grant an injunction,