Roberts v. . Oldham and Others

Dick, J. The rule that partnership property cannot be> subjected to the separate debts of the partners until after all the partnership debts are paid, is so well settled by numerous, and uniform adjudications, that it is unnecessary to refer to-authorities. It may be regarded as a first principle of law. In this case it appears that the sheriff had in hand three executions against Oldham, Denmark & Co., for the partnership debts; and several other's against Alex. Oldham, one of the partners of said firm, for his individual debts. The property of the firm was levied on and sold, and the. fund in controversy realized. After bringing the fund into the Court, below, the sheriff asked instructions from Ms Honor as to its. proper distribution. His Honor ordered the sheriff to pay the money to the partnership creditors pro rata. From this-order, the present plaintiffs appealed to this Court. The appellants assigned two causes of objection to the-order of his Honor. First, The executions of Murphy are on alias fi. fa.’s, and on the originals he had indulged the defendants. These alias fi. fa.’s are of the same teste with the other executions. This places the claimants on terms of equality in this respect. Palmer & Co. v. Clark, 2 Dev. 354; but Murphy has superior rights to all the claimants except Bruce' and Cook, because his executions are for partnership debts,, and the funds to be distributed are partnership effects. The second objection is, that Murphy has a mortgage on the' separate property of Alex. Oldham, amply sufficient for the security of his said debts; and he ought to be required to. resort to such property for payment. Murphy is entitled to assert his right to both funds until *299 bis debts are paid. He can properly claim bis pro rata share of the present fund, and resort to bis mortgage for the residue-of his debts. The sale of the equity of redemption by other parties, does not affect the claims of Murphy, or materially change the equitable rights of the appellants. The equity of marshalling is a personal one against a debtor, and does not bind the paramount creditor. If however, the paramount creditor resorts to the doubly charged fund, the puisne creditors may be substituted to his rights, — but these rights cannot, in this case be administered. Adams’ Eq., 271. Questions of this kind were formerly determined in a Court of Equity, but as the separate and peculiar jurisdiction of this Court has been abolished, it may be that the appellants can find appropriate relief under provisions made in the Code of Civil Procedure. The order of his Honor is affirmed, with costs against the appellants, and the sheriff will pay the money as directed. Pee Curiam. Judgment affirmed.