Walsh v. Adams

3 Denio 125

• Court: New York Supreme Court
• Decided: May 15, 1846
• Status: Published

Opinion

By the Court, Jewett, J.

The defendant, as sheriff, seized and sold the entire property in question, as the individual property of Christie, and delivered it to the purchaser. It has turned out that the plaintiff was a partner of Christie, and that the property belonged to the firm, each partner having an equal share at the time of the levy and sale.

(b)

I consider it well settled that upon an execution against one of several copartners, the sheriff may take the goods of the partnership in execution, and sell the individual share or interest of the defendant, and that in so doing he may take possession of, remove and deliver the entire property taken, to his vendee. (Phillips v. Cook, 24 Wend. 389; Waddell v. Cook, 2 Hill, 47, note a.) As soon as the goods are taken in execution, the partnership, as it respects those goods, is at an end, and the creditor becomes a tenant in common with the other partners and so continues until the sale. (Skip v. Harwood, 2 Swanst. 587; Chapman v. Koops, 3 Bos. & Pull. 289; Collyer on Part. 474.)

The sheriff, by virtue of his levy, has a special property in the goods which enables him to maintain trespass or trover for them, and is deemed the legal agent for the sale. (Collyer on Part. 474.) When the goods are sold by the sheriff, the purchaser becomes a tenant in common with the other partners. (Fox v. Hanbury, Cowp. 449; Heydon v. Heydon, 1 Salk. 392; Phillips v. Cook, sup.) He is entitled, not to the goods of the partnership, but to the interest in the goods of the partner against whom the execution was, encumbered with the joint debts of the partnership, and subject to account for the full value in favor of partners, or through them to creditors. (See the cases last cited, and Doner v. Stauffer, 1 Penn. R. 198; Story on Partn. § 263; Pierce v. Jackson, 6 Mass. 242; 3 Kent's Com. 37.) (c)

The right of the separate creditor depends upon the interest which each partner had in the partnership property, and such creditor can have nothing but what his debtor had therein; (Ex parte King, 17 Ves. 115;) and neither party has any thing separately, in the corpus of the partnership effects; but the interest of each is only his share of what remains after the partnership accounts are taken ; (Church v. Knox, 2 Conn. R. 523 ; Ex parte Hamper, 17 Ves. 407;) and this whether the purchaser had notice of the partnership or not.

I am aware that the late Mr, Justice Cowen, in Phillips v. Cook, (sup. at p. 399,) referred to Hoxie v. Carr, (1 Sumn. 181,) as authority for his remark that " a purchaser [of partnership effects on execution against one partner] without notice holds discharged of the lienand again at p. 407, " if they are partnership goods and that known to hit, [the purchaser] equity will under the circumstances hold him to account for the full value in favor of partners, or through them to their creditors.” The remark that the accountability of the purchaser of chattels on execution of the interest of one partner in the goods, depends upon notice, I think) with great deference, is not supported by the principles of the case to which the learned judge referred. The principle alluded .to was there applied to a purchase of real estate of a copartnership, the title to which was vested in one partner. It was held, that in pases where the real estate ;is purchased for partnership purposes, and on partnership account) it is wholly immaterial, in the view of a court of equity, in whose name or names the purchase is made, whether of one partner or all, whether in the name .of a stranger or of one of the firm. In either case—let the legal title be vested in whom it may—it is in equity deemed partnership property, and the partners are the cestuis que trust. A court of law may, n'&y must view it, in general, only according to the legal title; and if the legal title is vested in one partner, a bona fide purchaser from him.of the real estate, having no notice, either express or constructive, of its being partnership property, will be entitled to hold it free from any partnership claim- But if the purchaser has ..such notice he is clearly bound by the trust, and takes the property cum onere, like every other purchaser of a trust estate.” (1 Sumner, 182,192. See also 3 Kent’s Com.38, n. a.)

Although the sheriff may seize the whole, because the share of each being undivided cannot be known, he can sell only the part of him against whom the judgment and execution was had, without subjecting himself to enaction by the injured party for such wrong. (Wheeler v. McFarland, 10 Wend. 318; Waddell v. Cook, and Phillips v. Cook, sup.) (d)

As to the question of damages, I entertain ;no doubt but that the general rule must control the-question in this case. Under that rule the plaintiff was entitled to recover the value of his undivided share in the property converted by the defendant, irrespective of the question whether the partnership was or was not solvent, and without regard to the state of the partnership accounts.

New trial denied.

In the absence of proof to the contrary, each partner is presumed to be equally "nterested in the partnership funds and property. (Gould v. Gould, 6 Wend. 263; Peacock v. Peacock, 16 Ves. 49 ; 3 Kent's Com, 6.)

In Garbett v. Veale, (5 Adolph. &. Ellis, N. S. 408,) goods belonging to a copartnership were taken on a fi. fa. against one of the two partners, and before the sale both partners became bankrupt. The assignee under the commission took the goods out of the hands of the sheriff and sold them, upon which the creditor in the fi. fa. brought an action for money had and received against the assignee, and had a verdict. The court of king’s bench, however, held that the action could not be maintained until an account had been taken, which they said could not be done in a court of law, except by consent of both parties, and directed a nonsuit to be entered

And see Johnson v. Evans, (7 Mann. & Gra.240.)