Walter v. Herman

62 S.W. 857, 110 Ky. 800, 1901 Ky. LEXIS 135

• Court: Court of Appeals of Kentucky
• Decided: May 8, 1901
• Status: Published

Opinion

Opinion op the court by

JUDGE WHITE

Reversing.

On December 5, 1898, the appellee, Martin Herman, obtained an attachment against William J. Wilmer and Berry Wilmer, late partners doing business as Wilmer Bros. On this attachment two insurance companies were served as garnishees. On December 7, 1898, the appellant, the Pease Company, obtained an attachment against William J. Wilmer, doing business as W. J. Wilmer & Co., under which the same two insurance companies were served as garnishees. By agreement, the insurance companies paid into court $1,440 in full of their indebtedness to W. J. Wilmer & Co. for loss by fire of a stock -of goods. In the action by Herman, the appellant, Walter, filed a petition to be made a party, alleging that the firm of W. J. Wilmer & Co. was composed of W. J. Wilmer and appellant, Anton Walter, Jr., and that as such partners they suffered the loss by fire, and that firm was entitled to the benefit ■of the proceeds paid into court. He also pleaded that the firm of W. J. Wilmer & Co., as thus composed, was indebted to the Pease Company the claim sued on by it, as well as a claim to himself individually, and had no assets, outside the insurance proceeds, save $10 or $12 in accounts. Appellant then asked that the proceeds of the insurance be paid on the partnership debts, first to the Pease Company debt, and next to himself as an individual creditor. An issue was presented as to whether Walter was a member of the firm of W. J. Wilmer & Oo., and upon trial before a jury it was determined he was, and so adjudged by >the court. Subsequently, the court rendered judgment that Walter’s claim of $356.60 was valid against the firm of W. J. Wilmer & Co. Upon reasons and motion to set aside the two above judgments, the court declined to do so, and -held that the property ($1,440) was voluntarily in court, as neither the attachment of Herman nor the Peaise Company reached it, as one was against W. J. and Ben Wilmer, partners, as Wilmer Bros., and the other against W. J. Wilmer as W. J. Wilmer & Co. However, the court declined to direct its receiver to pay the fund to Walter on his debt adjudged to him, or to the Pease Company on his written order. After further pleading as to the priority of the claims of Herman oyer the Pease Company, the case was submitted, and the court adjudged that that of Herman was. superior, and directed the payment to him of his claim in full, and directed the remainder to be paid to the Pease Company. The latter judgment, from which this appeal is prosecuted, was rendered in January, 1900, the former judgment having been rendered prior to May, 1899.

It is clear from the record that the Pease Company was a creditor of the firm of W. J. Wilmer & Co., composed of Wilmer and Walter; and as such firm creditors, outside of any question of priority of attachment, that company is entitled to be first paid out of the insurance money paid Into court that was the sole asset of that firm, because appellee Herman was not a firm creditor, but was a creditor of an entirely different firm of Wilmer Bros., composed of W. J. and Ben Wilmer. We are also of opinion that the judgment on the verdict of the jury as to whether appellant Walter was a member of the firm is conclusive of that question, as is also the judgment in Walter’s favor for his debt of $856.60 as against the firm. From neither of these judgments have appeals been prosecuted, and they therefore stand unquestioned. The question, then, presented is as to the rights, of Walter, to whom the firm of w'hich he was a member owed a debt, and Herman, an individual creditor of Wilmer. The rule of priorities is thus stated by Mr. Parsons (section 402 of his work on Partnership): “While solvent partners can not prove against the joint fund to the prejudice of joint creditors, because they are liable to those creditors, they may prove against the joint fund,.in competition with the several creditors, to whom they are liable. Indeed, their rights are prior to those of the several creditors, for those creditors can have the right of their debtor to the joint fund only after all claims upon it are satisfied, and among these the claiimis of the other partners. ... It follows, therefore, that the several creditors of each one will be postponed, so far as the joint assets go, not only to the joint creditors, but to the claims of the co-adventurers for balances due from their companies arising out of the adventure.” This well-settled principle of partnership is decisive of the right of Walter to the sum of $356.00, adjudged to him prior to any claim of appellee Herman, which the trial court refused. We are of opinion that the judgment appealed from is erroneous, and it will be1 reversed, and cause remanded for judgment directing the payment out of the fund in court, — the debt due the Pease Company first; then the debt of Walter; and, if any. remain, the share of Wilmer, upon settlement of the partnership, to appellee, Herman; and for'proceedings consistent herewith.

Petition for rehearing and for modification of the judgment by appellee overruled.