Peoples' Bank v. Shryock

48 Md. 427, 1878 Md. LEXIS 119
CourtCourt of Appeals of Maryland
DecidedMarch 26, 1878
StatusPublished
Cited by2 cases

This text of 48 Md. 427 (Peoples' Bank v. Shryock) is published on Counsel Stack Legal Research, covering Court of Appeals of Maryland primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Peoples' Bank v. Shryock, 48 Md. 427, 1878 Md. LEXIS 119 (Md. 1878).

Opinion

Brent, J.,

delivered the opinion of the Court.

The appellees, having obtained a judgment against William H. Trego, issued upon it an attachment by way of execution. This attachment was laid in the hands of the People’s Bank of Baltimore, to bind the interest of the defendant, Trego, in a sum of money standing upon the books of the bank to the credit of the firm of Trego -& Kirkland, of which firm Trego was a partner.

The question then arises, is a debt due to a co-partnership liable to attachment at the suit of a creditor of one of the partners ?

If the attachment had been laid upon the tangible effects of the firm, there would be no doubt of the right to do so, for all the authorities concur that the property of a firm may be sold for the debt of one of the partners. When sold the vendee purchases and is substituted to nothing more than the interest of the partner, which afterwards becomes the subject of ascertainment by a proper adjustment of the respective interests of the partners. The rights of co-partners and creditors of the firm' are not thereby sacrificed or disturbed. But where a debt is the subject of attachment, the judgment, if obtained against the garnishee, changes the right to the fund without any settlement of partnership accounts, and vests in the attaching creditor an absolute claim to the payment over to him of so much money. In Drake on Attachment, sec. 567, the author says, “The attachment of a debt due to a [434]*434co-partnership, in an action against .one of the partners, is justly distinguishable from the seizure on attachment or execution of tangible effects of the firm for the same purpose.” He refers to the case of Winston vs. Ewing, 1 Ala., 129, and this case is a very strong one upon the question now presented for our decision. There it was sought to subject the debt due to a firm to an attachment issued against one of the partners. The Court held that this could not be done. The property of the partnership, it was conceded, was liable to execution and sale for the separate debt of a partner, the vendee under such sale becoming tenant in common with the other partner. But it was otherwise held in regard to a debt due. The Court says, “it has been expressly adjudged that the interest of one partner in a debt due to the partnership cannot be subjected by process of attachment, to the satisfaction of the separate debt of that partner, without showing from the state of the partnership accounts, as between the partners and with reference to the indebtedness of the partnership, what the right or interest claimed amounts to.” The authorities cited are 6 Mass., 276; 1 Gall., 361; 2 Conn., 514, and 4 Conn., 540, and they conclusively show that an attachment like the present would not be maintained in the Courts of either Massachusetts or Connecticut. In Lyndon vs. Gorham, 1 Gallison, 361, decided by Judge Story; that learned Judge says, “In order to adjudge the trustee responsible in this suit, it must be decided that the funds of one partnership may be applied to the payment of the debts of another partnership, upon the mere proof that the principal debtor has an interest in each firm. If this be correct, it will follow that a separate creditor of one partner will have greater equitable as well as legal rights than the partner himself has. The general rule undoubtedly is, that the interest of each partner in the partnership funds is only what remains after the partnership accounts are taken; and unless upon such an [435]*435account the partner be a creditor of the fund, he is entitled to nothing.” In Johnson vs. King, 6 Humph., 233, it is said, “The question in this case is, whether an execution creditor of one member of a partnership, is entitled to a judgment in a garnishment proceeding, against a debtor to such partnership. This question we decide in the negative. Such debt belongs to and is assets of the partnership, primarily liable to the satisfaction of partnership debts. If a judgment were given at law, upon the garnishment proceeding against the debtor to the partnership, to satisfy the separate liability of one of the partners, it would unjustly abstract a portion of the fund primarily belonging to the objects and purposes and creditors of the concern. And in such garnishment nothing can be done but to give or refuse the judgment. The Court has no power to impound the debt, until by the adjustment of all the partnership affairs, it shall appear whether the separate debtor of the execution creditor has any and what interest in the general surplus, or in the particular debt so impounded. Such proceedings cannot take place at law.”

We have quoted at length from this case, because the views there expressed seem to he specially appropriate to the case before us. The proceeding of attachment in this State is essentially a legal proceeding and in no way appropriate to ascertain and settle the equitable rights between the garnishee and defendant, or to ascertain by adjusting the partnership affairs, the true interest of the defendant in the fund attached. The only judgment which could be given against the garnishee would be for a proportion of the money due the partnership, — that proportion to be measured by the number of the members composing the firm, — the amount due the attaching creditor. This would certainly be against the weight of authorities in this country, and in most cases productive of the greatest injustice.

In the cases of Sheedy vs. The Second National Bank, Garn., 62 Missouri, 18, and Myers vs. Smith, et al., 29 [436]*436Ohio, 120, both decided in 1876, it was held that partnership demands, cannot be garnished for the separate debt of one of the partners. And to the same effect are the decisions in Vermont, New Hampshire, New York, Louisiana and Mississippi. See Drake on Attachment, (4th edition,) sec. 570, and notes. The exception to this rule is, where equity powers have been conferred by statute upon the common law Courts, and when by virtue of such powers, they can compel a settlement of the partnership for the purpose of ascertaining whether one of the partners has such an interest in a particular debt due the firm, as to justify its appropriation to the payment of his individual indebtedness. As no such powers have .been conferred upon the common law Courts of this State, the exception cannot be applied to an attachment here.

The only eases in this country in which it is claimed a contrary doctrine is held, and to which we have been referred, are the cases of McCarty vs. Emlen, 2 Dallas, 277; Knox vs. Schepler, 2 Hill, 595, and Wallace vs. Patterson, 2 H. & McH., 463. The case of McCarty and Emlen is a very old one, having been decided in 1797. If it has not been expressly overruled, it certainly has been very much shaken. by the case of Knerr vs. Hoffman, 65 Pa., 126, in which the opinion of the Court was delivered by Judge Sharswood. So much so, that the doctrine it announces can hardly be considered as the present recognized doctrine of the Courts of Pennsylvania. And in this view we think we are strengthened by what is said by Judge Agnew in the case of Alter vs Brooke and Barrington, 9 Phila. Reps., 258. But apart from this, the doctrine announced in that case does not recommend itself to our judgment, and we are not disposed to adopt it. The case of Knox vs. Schepler, 2 Hill’s Reps., like the case in 22 Md.,

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Bluebook (online)
48 Md. 427, 1878 Md. LEXIS 119, Counsel Stack Legal Research, https://law.counselstack.com/opinion/peoples-bank-v-shryock-md-1878.