President v. Wilkins

The opinion of the Court was read at the ensuing September term in Lincoln, as drawn up by '

Mellen C. J.

The jury have found that the note signed by Ira Fish, George D. Varney and Isaac' Wendall, on the 27th of December, 1827, and payable to the Commercial Dank, was not given fora partnership debt; and therefore the attachment made by Fillebrown, on the 29th of April, 1828, in the plaintiff’s suit upon that note, had no legal priority to the attachments made by the same officer, of the same property, in the three suits of A. J. Wendall v. Isaac Wendall; Asa Perkins v. the same, and Mark L. Hill v. Ira Fish, subject to which attachments was that of the Commercial Dank; because they were all prior in point of time. The report states that judgments were duly recovered in all the four actions abovementioned ; that executions were duly issued on all the judgments, and placed in the hands of Fillebrown, for service, within thirty days next after judgment; that the plaintiff’s execution was returned in no part satisfied; and that the other three executions were never returned. The report also states that after allowing and deducting all payments made on the execution of A. & J. Wendall v. Isaac Wendall; Perkins v. the same; and Hill v. Ira Fish, there is a balance due on them, greater in amount than the value of all the goods attached in said suits. Therefore, admitting for the present that Fillebrown had a right to sell all the goods on those three executions, if he had sold them, it is evident that nothing would have remained to be applied towards satisfaction of the plaintiff’s execution ; and in such a case, the return of the Bank’s execution in no part satisfied, would have occasioned no damage to the Bank, nor subjected the officer to any thing beyond a mere nominal liability. The reason is obvious. But Fille-brown did not sell the property which he had attached, on those executions or on either of them, towards payment of the debts due to the attaching creditors ; and if he had a legal right so to sell them, then, by neglecting so to do, he at once rendered himself liable to those creditors to the full value of the property so attached, in the same manner as if he bad sold the goods, but neglected legally to'account for the proceeds; and, being thus responsible, as' above supposed and stated, it is contended by the counsel for the *32defendant, that Fillebrown cannot be held accountable to the plaintiff for the same property, and thus be twice chargeable for its amount. In answer to this argument, and for the purpose of destroying its force and effect, it was contended at the trial, as is stated in the report, that those three creditors, by their conduct and delay, had released and waived all claim of damages against Fillebrown, for his neglect to satisfy their executions out of the property attached, as far as it would have satisfied them. But the jury, to whom this question of implied release^- waiver was submitted, have by_ their verdict negatived the idea of any such release or waiver. And now, on the principles of law assumed, why do not the facts, thus stated, constitute a legal and decisive defence ? In the case of Rich al. v. Bell, 16 Mass. 294, the facts were these. Bell, a deputy sheriff, attached certain personal property of Gulliver, at the suits of Washburn and twelve other creditors. On the same day, several other creditors of Gulliver, the last of whom were Rich Of al. commenced their actions, and Bell attached the same property in each suit. Between the time of the attachment of Washburn and others, and the time whén the last attachments were made, an agreement was entered into between Washburn and others and Gulliver, as to the disposition of the property attached; and before the return day, all the attaching creditors, except Rich ol- agreed that the property should be sold at auction, and Bell sold it accordingly. Rich ly al. contended that such proceedings on the part of those creditors and Bell, amounted to a dissolution of their prior attachments, and left the attachment of Rich fy al. in full force ; and that so Bell was responsible to them in damages to the amount of their demand. The court admitted, that the conduct of the officer was contrary to law, and that he was liable in damages ; but they observed that if he had kept the goods and sold them upon execution, the plaintiffs would literally have gotten nothing; and merely nominal damages were allowed. This case goes the length of deciding that, in the case before us, the Bank could not, at most, be entitled to recover any thing beyond nominal damages. There is one particular in which the two cases differ. In Rich *33al. v. Bell, the conduct of Bell, which subjected him to nominal damages, was expressly assented to by the prior attaching creditors; and of course, he could never have been liable in damages to them ; whereas, in the case at bar, the prior attaching 'Creditors were not assenting to' and approving the neglect of Fillebrown; nor have they ever released or waived their claim on him for damages for the consequences of it ; and upon the foregoing facts, -and according to the assumed principles on which we have thus far proceeded, he is to be considered as standing responsible to them in damages. Whether the foregoing distinction, and the other facts which remain to be examined, will relieve him from even nominal damages, will be a subject of inquiry in the course of this opinion.

It has been said by the counsel for the plaintiff, that the question of waiver, before mentioned, was a question of law, and should have been decided by the court. If there was próof of such waiver, it was of a circumstantial character, and we think the jury were the proper tribunal to draw inferences from any facts in relation to 'the point; but if we entertained any doubt as to the merits of this objection, it would not change our course of proceeding, or lead us to set aside the verdict on that account ; inasmuch as, in OUr opinion, no facts exist in the case which would have authorised the jury or would now authorise the court to infer a release or waiver of the right of action of the first three attaching creditors against Fille-broivn, if they had any such right. Again it has been urged that, as the demands of those three creditors were not against the firm, but only against two individual members of the firm, the property of Varney could not legally have been seized on either of those executions, but the same was liable to be seized on the execution of 'the Bank, because that ran against all three of the individual members of the firm ; that of course the priority of the attachment of the creditors of Isaac Wendall and Ira Fish could not interfere with or impair the plaintiff’s subsequent attachment, in respect to the property which belonged to Varney; and so, in this respect, the instruction of the presiding Judge was erroneous. On the other hand, it has been contended that, as the firm was deeply insolvent, *34the bank had no right, in virtue of their execution, to seize one particle of the property of the firm ; in reply to which it is said by the counsel for the plaintiff, that for the same reason the three first attaching creditors had no right, by virtue of their executions against two of the firm, to seize one particle of the property of the firm : and that the consequence is that Fillebrown’s neglect to sell the goods attached upon those executions, did not render him liable in damages to those creditors, and that in this view of the subject also the instruction of the presiding Judge was incorrect. If the objection above mentioned is good against the plaintiff’s execution, it is equally so against the executions of the three first attaching creditors ; for neither of those executions, nor the plaintiff’s was against the firm. If the officer, Fillebrown, had no legal authority by virtue of the execution of the plaintiff to seize and dispose of the property of the firm, he surely was guilty of no malfeasance or neglect of duty, and is not responsible in damages ; and this presents a sufficient defence against the action ; because it appears that at the time the plaintiff’s action was commenced and the attachment was made, the firm was deeply insolvent. It is a well settled principle of law that a creditor of one of the members of a copartnership can claim only his just share, after all the partnership debts are paid. 2 Johns, 280; Goodwin v. Richardson & al. 11 Mass. 469 ; Upham v. Nash, 9 Mass. 490. In Fox v. Hanbury, Cowp. 445, Lord Mansfield says, “ no person deriving under a partner can be in a better condition than the partner himself j” and he cites the opinion of Lord Hardwicke in Skip v. Harwood. “ If a creditor of one partner take out execution against the partnership effects, he can only have the undivided share of his debtor, and must take it in the same manner the debtor himselfNad it, and subject to the rights of the other partner.” And the same doctrine is laid down 4 Fesey, 396, where the court say, “ the right of the separate creditor under the execution, depends upon the interest in the joint stock.” In the matter of Smith, 16 Johns. 102, the court say, “ where an execution is issued for the separate debt of one partner, it has been ^he constant practice to take the share which such partner has in *35the partnership property ; but it has been settled, at least since the case of Fox v. Hanbury, Cowp. 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 sheriff therefore does not seize the partnership effects themselves, for the other partner has a right to retain them for payment of the partnership debts.” In Moody v. Paine, 2 Johns, ch. 548, the chancellor refused an injunction to stay execution till' an account was takén ; saying that'as the sheriff could sell only the interest of the one partner, subject to the rights of the partnership creditors, there would be no harm in suffering the separate creditor to go on at law; for if any sacrifice should be made by reason of the uncertainty of that interest, it could only affect the separate creditor. Lord Eldon in the case of Watson v. Taylor, 2 Ves. Beams, 299, 300, went further and said, that “if courts'of law have followed courts of equity, in giving execution against partnership effects, I desire it to be understood that they do not appear to me to adhere to the principle, when they suppose that the interest (of one partner) can be sold, before it is ascertained what is the subject of sale_and purchase.” In Chapman v. Koops, 3 Bos. Pul. 288, it is stated by the court that by law the creditor of any one partner may take in execution that partner’s interest in all the tangible property of the partnership, and will thereby become a tenant in common with the other partners; but the officer cannot interfere with the property or effects themselves. Church v. Knox, 2 Conn. 516; Cram v. French, 1 Wend. 311; Dunham v. Murdock, 2 Wend. 554 ; Gilmore v. N. A. Land Co. 1 Peters, 460. But the levy under the execution transfers no joint property, but merely gives a right to an account. The joint properly must be delivered from the joint debts ; and if the joint estate be insolvent, the separate creditor cannot reap the fruits of his judgment. Taylor v. Fields, 4 Ves. 639. S. C. 15. Ves. 559, in note; Goto on Partnership, 224, 225. “If the sheriff be called upon to discharge his dut}'', he is bound to seize and sell whatever interest the individual partner may have in the joint property ; if he do not possess any *36interest, the sheriff must return nulla bona.” Goto 226. In the above cited case of Taylor v. Fields, the sheriff had seized all the partnership effects, under an- execution against one of the partners ; and, on being indemnified by the joint creditors, gave up the partnership effeetsj. and the creditor of the separate partner, brought an action against the sheriff for a false return. On a bill filed, it appearing afterwards, on an account taken of the interest of the separate partner, that there was no balance due him, after payment of the partnership debts, a perpetual injunction was granted, to restrain the suit against the sheriff In thé case at bar, the insolvency of the firm proves, that the plaintiff’s debtors h.ad no interest in the property of the firm liable to the bankas execution.

In the case of Lyndon v. Gorham & trustee, 1 Gallison 367, Story J. says, “ If upon the whole it appears that the judgment debtor had only a nominal interest, I do not think that a greater interest can be conveyed under the execution ; and, if the partnership be insolvent, that any interest can be conveyed.” On this principle what could Fillebrown have sold on the plaintiff’s execution ? What interest could have passed by the sale S How could the plaintiff have been in any degree benefitted by the sale ? And why, in such circumstances, should he be considered as having acted contrary to bis official duty ? In Fisk v. Herrick trustee, 6 Mass. 271, the court say, “ Before either partner can claim rightfully to his own use or for the payment of his debts, any of the partnership effects, the partnership must be solvent, and he must 'not be a debtor to it.” As in that case it did not appear that it was solvent, the court would not adjudge Willet and Bullard as trustees of Herrick, one of the partners, merely because they were indebted to the firm. This case shows that the mere insolvency of a partnership is enough to defeat the claims of the creditors of one of the firm, though the creditors of the firm, have commenced no action, or in any manner'asserted their claims. In Pierce v. Jackson, 6 Mass. 242, the facts were that an officer, who was the defendant, attached certain personal property in a suit against the firm of Kentor v. Von Horten. Afterwards, on the same day, he at*37tached the same property in an action against one of the firm ; and afterwards on the same day he attached the same in another action against the firm., Judgment was recovered in all the actions, and executions were duly issued and delivered to the defendant within thirty days. The property was sold on the execution in the first suit ; and after satisfying that execution, a balance was remaining in his hands, which he applied towards satisfying the execution against one of the firm. The court decided that the surplus, according to the settled principles of law, in such eases, should be applied towards satisfying 'the last execution; but as it appeared that the last judgment was fraudulent, they ordered a nonsuit. “ It seems, therefore,” the court observed in the last action, “ very clear, that chattels which cannot lawfully be seized on execution, cannot lawfully be attached ; and as the right to seize chattels on execution remains as at common law, so must the right to attach by. original writ depend on the common law, and therefore, the right of attachment, given to creditors, can have no influence on this question,” In Rice v. Austin, 17 Mass. 197, it appeared that the defendant, as sheriff, had attached certain timber, which, he contended, was the property of Lindsay, and not of the plaintiff; but if not wholly Lindsay's, still he contended that it belonged to the plaintiff and Lindsay as copartners. The court observed, “ It does not follow necessarily that a creditor of Lindsay might lawfully take partnership property ; that must depend upon the solvency of the company ; and upon the question whether any surplus remained for the separate partners, after payment, of his debts to the company, and the debts of the company to the world.” In that case It appeared that Mice was a large creditor of the firm, and that it was insolvent. Yet it does not appear that he had, or, indeed could have brought any action on his demand against the company. In Phillips & al. v. Bridge, 11 Mass. 242, the plaintiffs claimed damages for an alleged neglect of one of the defendant’s deputies, in not satisfying an execution against Jones, one of the firm of Jones and JYoyes, out of certain property attached. The same had been previously attached in a suit against the firm. The court said the defendant ought not *38to be held to pay damages beyond the value of the property, after deducting the amount of the debt of the company.

From a review of the foregoing decisions, it seems to have been considered as a circumstance of no importance whether the creditors of the firm, where it was insolvent, had recovered judgment and were enforcing the collection of their demands; or had ever commenced actions for the purpose ; or, if they had, in what stage those actions were, at the time of the decision; and in several of them, the claim of a creditor of one or more individual members of the firm, was resisted and disallowed, because it did not appear Whether the firm was solvent or not. Such being the principles of law applicable to the present cause, merely in the view which we have thus far taken of it, we might close our opinion here, without an examination of the other grounds of defence on which the counsel for the defendant have relied. But it may be more satisfactory to the parties that we should express our opinion on all the points presented in the argument, and we therefore proceed.

It appears that Fiske & Billings, on the 2d of May, 1828, commenced an action against Fish, Farney and Isaac Wendall, and attached the same property which had been before attached in the suit of the bank against them; that at June term following, they recovered judgment in that action, for $15,995,06, for a debt justly due from the firm to the said Fiske Billings ; and that the goods so attached were afterwards sold by them at private sale, by the consent of Fillebrown, and the proceeds of the sale were by the consent of the said firm, appropriated in part payment of the debt so due to Fiske & Billings. This part of the defence is placed on the ground that the plaintiff’s attachment, though prior in point of time, could not have, and did not have any legal operation as against Fiske & Billings, inasmuch as they were creditors of the firm, and that the debt due them must be paid out of the partnership property, as far as that property would go. This general principle of law is admitted to be correct; but it is contended by the plaintiff’s counsel that Fiske & Billings could not avail themselves of the benefit of the principio in the manner in which they proceeded ; *39that the property should have been sold at auction on execution, and not voluntarily surrendered by Fillebrown into their possession and placed, under their control. It cannot be denied, that if Fiske & Billings had placed their execution in the hands of another officer and he had demanded the property of Fillebrown, received it, and sold it on the execution, Fillebrown would have been justified in having given up the property for the purpose; and, we apprehend, would have b'een answerable in damages had he. refused so to do. Why then should Fillebrown be considered as having violated his duty in placing the property in the hands of Fiske & Billings for the purpose of sale and legal appropriation ; or why should they lose the benefit of the principle of law which entitled them to the property, merely by selling it themselves at private sale by the express consent of the owners of the property, and also of Fille-brown ? - He proceeded on the presumed or well known fact, that the debt due to Fiske & Billings was a partnership debt. It was such a debt. But on this point we will advance no further; having, in the preceding part of this opinion, anticipated most of the principles and authorities, which would otherwise, be properly applicable here.

We will now proceed to notice and examine some objections which have been urged against this branch of the defence. We do not consider the other judgment which was recovered by Fiske Billings, At June term, 1828, against Fish only, as of any importance. It was for almost the same sum as that which was recovered against the three, composing the firm. Only that judgment is relied on. The reason of its existence was explained at the trial; no fraud was proved respecting it; certainly none was found by the jury ; and on no other ground can a judgment be collaterally examined. At any rate, the case finds that the whole amount of the judgment relied on, was due from the firm. It has been objected with some confidence that the judgment last mentioned is to be considered as void, in consequence of the addition of the sums of $6000 and $500, to the sums that were due when the judgment was recovered and therein included; the above sums not being then due, nor till *40some months after. They were incorporated, however, by the express consent of the parties to the judgment. As between them, the transaction was perfectly fair and honest. In support of the objection the case of Clark v. Foxcroft, 7 Greenl. 348, has been cited. It is true that in certain cases, such as that and those there mentioned, the introduction of a new cause of action, or the increase of the demand beyond its amount when the action was commenced, will operate to destroy an attachment and let in subsequent attachments ; but the objection and the principle are not applicable here. The plaintiff’s attachment, though an ineffectual one, was prior to that of Fiske if Billings. They did not claim a right to the property attached, by priority of attachment, but by priority of title, because their demand was against the firm. Besides, for the reasons already assigned, we are satisfied that the rights of Fiske Sf Billings, in respect to the appropriation of the property attached, would have been the same, if their demand had not passed in rem judicatam.

The next objection which has been urged has reference to thé 'admission of the affidavit of Mr. Rogers, as to the facts to which the above named Fiske would testify, if present; or in other words, the objection is, that Fiske was not a competent witness, but should have been excluded on the ground of interest. We might at once dispose of this objection by saying that the testimony is of no importance, and that the defence is established by facts, proved by the records and other witnesses against whom no objection was made. On this principle, we should not grant a new trial, even if we were satisfied that the testimony was inadmissible. But we are of opinion that the objection is not well founded. The principle of law on the subject of incompetency of witnesses on the ground of interest is stated in these words in 2 Stark. Evid. 744. “The interest to disqualify must be some legal, certain and immediate interest, however minute, in the result of the cause, or in the record, as an instrument of evidence, acquired without fraud.” Now as Fiske Sf Billings have in their hands the proceeds of the goods attached, and which they claim a right to hold, nothing can be more *41clear than the position, that if Fillebrown, or the firm, should commence an action against them to draw the money out of their hands, the verdict and judgment in the present action, would not be legal evidence on the .part of Fiske & Billings, to sustain the defence. On this ground Fiske could not have been -inadmissible an account of having any interest in the record. No direct and certain advantage could result to him by reason of a decision of the cause in favor of the defendant. 2 Stark. 746. It materially differs from the cases of Schillinger v. McCann, 6 Greenl. 364, and Pingree v. Warren, ib. 457. In those cases, a decision of the cause in favor of the party calling 'the witnes’s, would have sécúréd to him a certain advantage, or shielded him from a certain loss. But beyond this, it appears by the report, as before observed, that the property attached was Sold and appropriated in payment of the debt due from the firm to Fiske §• Billings by the express consent of Fillebrown and the firm. On what principle,then, should either of them be permitted to recover the money back ? Could Fille-broivn maintain an action for the money? Hé placed the property in the hands and under the control of Fiske Billings, and would the law imply a promise on their part to pay to him the proceeds of the sale, to indemnify him for doing an act-, if it was unlawful and a violation of h'is official duty, and from the consequences of such act? 5 Mass. 385; ib. 541. 4 Mass. 370. Could the firm

maintain any action after they had assented to the receipt of the proceeds of the lumber by Fiske Billings, and an appropriation of such proceeds in payment of a debt they owed to'Fiske & Billings? A recovery of judgment by the plaintiffs in such an action would seem to be a legal anomaly. Besides, an action brought either by the company or by Fillebrown, might be effectually re* sisted by showing, in the defence, that the proceeds of the lumber had been appropriated in exact accordance with legal principles, as well as the agreement of all concerned. Could any other creditor of the company, or of any one or more of the members of the company maintain a trustee process against Fiske Billings ? Certainly not. A disclosure, showing the nature and amount of their1 *42claim originally against the company, and of their right to the proceeds of the lumber in their hands, and the insolvency of the company, would at once present a legal ground on which they must be discharged. Judgment on the verdict.

Weston J. being related to Fillebrown, the defendant in interest, did npt sit in this cause.