In re Safady Bros.

228 F. 538, 1915 U.S. Dist. LEXIS 1001
CourtDistrict Court, W.D. Wisconsin
DecidedDecember 27, 1915
StatusPublished
Cited by5 cases

This text of 228 F. 538 (In re Safady Bros.) is published on Counsel Stack Legal Research, covering District Court, W.D. Wisconsin primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In re Safady Bros., 228 F. 538, 1915 U.S. Dist. LEXIS 1001 (W.D. Wis. 1915).

Opinion

SANBORN, District Judge.

The question of exemptions in these cases has been referred to the court by the referee. Both firms petitioned for voluntary bankruptcy July 23, 1915, each partner claiming $200 exemptions in each firm. Shortly before a partnership execution had been levied against Safady Bros. & Sartell. It was found on the hearing of the matter that the two stores carried on by the two partnerships constituted the same business, so far as the Safadys were concerned, and they are therefore only entitled, at the most, to one exemption each, and Sartell to one also. The important question concerns the effect to be given to the Uniform Partnership Act, adopted by the Wisconsin Legislature July 8, 1915, as chapter 358, Laws of 1915.

By the Wisconsin law in force before the latter date each merchant or trader belonging to a partnership, in case of a seizure of the property on execution or attachment, or any other mesne or final process, was entitled to a $200 exemption out of the partnership stock in trade. Section 2982, Wisconsin Statutes; O’Gorman v. Fink, 57 Wis. 649, 15 N. W. 771, 46 Am. Rep. 58. Under this statute it was the duty of tire trustee to set off the exemption to each partner. In re Friederick (D. C.) 95 Fed. 282; In re Friedrich, 100 Fed. 284, 40 C. C. A. 378. Whether this exemption has been taken away by the Uniform Partnership Act is now the question to be decided. From the words used it is argued that the Legislature intended to take away the individual partners’ exemptions only where the firm property was seized on attachment, a comparatively infrequent occurrence, leaving the earlier statute to govern all other situations, including execution, supplementary proceedings, creditors’ suits, bankruptcy, and assignments for creditors. An examination of the provisions of the act is therefore necessary, in order to determine what construction should be given it, as a whole. The particular section (1724m21) referring- to exemptions provides that, where partnership property is attached for a partnership debt, the partners, or any of them, or the representatives of a deceased partner, cannot claim any right under the homestead or exemption laws.

The Uniform Partnership Act was under consideration by the Conference of Commissioners on Uniform State Laws from 1902 to 1912 or 1913, and the first state to adopt it was Pennsylvania, in 1914. A, number of explanatory articles have recently appeared in the law magazines, including a criticism by Judson A. Crane, of the Harvard Law School, 28 Harvard I,aw Review, 762, and Mr. Lewis’ answer, in current numbers of the same publication. It was drawn by William Draper Lewis for the Conference, based on the incomplete work [540]*540of the late James Barr Ames, Dean of the Harvard Law School, and on the English Partnership Act, drawn by Sir Frederick Pollock. It is an attempt to codify the existing common law on the subject, rather than to change that system; but where the rules are conflicting it chooses the one supposed to be the better.

[1] Since the Bankruptcy Act (Act July 1, 1898, c. 541, § 6, 30' Stat. 548 [Comp. St. 1913, § 9590]) adopts the state laws on the subject of exemptions, and as tire recent act has not yet been construed by the Wisconsin court, the courts of bankruptcy must apply it for themselves. It was drawn to secure as far as possible uniformity among the states as to the substantive law of partnership, how formed,, how changed during its existence, and how dissolved, the precise legal relation between partner and partner, partner and firm, firm and creditor, partner and creditors (firm and individual), marshaling assets between creditors and between partners, legal relation of outgoing and incoming members and the rights and liabilities of the estates of deceased or bankrupt members. All such relations are most carefully worked out, and described in terse, clear language, without repetition or amplification. It is evident from the text, as well as the history of the subject, that the bill was drawn with the utmost care and pains, not only to reach an important general result, but with fit details strictly combined, so as to present a harmonious and consistent whole. Construction should not be overcritical. If, on applying the act to-the varying vrules found in different states, obscurity in language should appear, as will undoubtedly be the case, the meaning of doubtful parts should, if possible, be gathered from its general purposes. Upton v. United States, 19 Ct. Cl. 49. The general purpose of the act must' be gathered from its language; when this is found, and is plain and unmistakable, particular words may be ignored, if out of harmony with the general purpose, unless they were used by way of proviso or exception, or indicate a positive intent inconsistent with the general spirit. Gardner v. Collins, 2 Pet. 92, 7 L. Ed. 347.

[2] By the former Wisconsin law a partner had no exemption in the-firm property as such, because there could not be an exemption in an undivided interest or tenancy in common. West v. Ward, 26 Wis. 579. On seizure by attachment, execution, or insolvency, each partner was permitted to sever his interest and claim $200 exemption in the partnership stock. O’Gorman v. Fink, supra. The right to make such severance or division was the foundation of the exemption right. This-right of severance is taken away by section 21 (original section 25) of ■ the Uniform Partnership Act, here copied in full. It reads:

“1. The property rights of a partner are his ..rights in specific partnership, property, his interest in the partnership, and his right to participate in the management.
“2. A partner is co-owner with his partners of specific partnership property holding as a tenant in partnership.
“3. The incidents of this tenancy are such that:
“(a) A partner, subject to the provisions of this chapter and to any agreement between the partners, has an equal right with his partners to possess specific partnership property for partnership purposes; but he has no right to possess such property for any other purpose without the consent of his partners.
[541]*541“(b) A partner’s right in specific partnership property is not assignable except in connection with the assignment of the rights of all the partners in the same property.
“(c) A partner’s right in specific partnership property is not subject to attachment or execution, except on a claim against the partnership. When partnership property is attached for a partnership debt the partners, or any of them, or the representatives of a deceased partner, cannot claim any right under the homestead or exemption laws.
“(d) On the death of a partner his right in specific partnership property vests in the surviving partner or partners, except where the deceased was the last surviving partner, when his right in such property vests in his legal representative. Such surviving partner or partners, or the legal representative of the last surviving partner, has no right to possess) the partnership property for any but a partnership purpose.
“(e) A partner’s right in specific partnership property is not subject to dower, curtesy, or allowances to widows, heirs, or next of tin.”
Section 1724m21.

The partner’s interest in inalienable, and is not subject to dower or family rights.

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Bluebook (online)
228 F. 538, 1915 U.S. Dist. LEXIS 1001, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-safady-bros-wiwd-1915.