De Caussey & Anderson v. Baily & Pond

Watts, J. Com. App. Appellants’ first and second propositions are as follows: 1. That a partnership is a legal body, distinct from the individuals who compose it, having its own creditors and possessed of its own property, which equity will apply to the partnership debts in preference to the individual debts of the members of the firm. 2. And that upon the facts found by the special verdict of the jury in this case, the judgment of the court below ought to be reversed, and judgment rendered for the intervenors, Young Bros. & Co. In Converse v. McKee, 14 Tex., 30, it is said that “ The doctrine is too well settled to be now questioned, that partnership debts claim a priority of payment out of the partnership effects before the individual debt of one of the members of the firm, and McKee, [669] the solvent partner, liad a right to interfere and prevent the appropriation of the partnership effects to the payment of an individual debt of the members of the firm. The rule contended for by the appellants’ counsel, that creditors of the firm alone have a right to complain, is subject to the qualification that the solvent partner has also a right to interpose for his own protection, for he is liable for the Avhole copartnership debt.” Mr. Parsons in his Avork on Partnership, p. 375, says: “It seems to be admitted by Mr. Justice Story, who builds upon this theory almost all the remedy of the creditors, that partners ha\Te no lien unless in case of insolvency or dissolution; or certainly, that the creditors do not get their quasi lien, unless in these cases.” It would seem from a review of all the accessible authorities upon the question, that the preference accorded to firm debts, of payment out of firm assets, only exists in case of insolvency, or the dissolution of the firm. If the firm is insolvent, its creditors may invoke the rule. Upon a dissolution, a solvent member of the firm may interpose for his oAvn protection, where that is necessary, and have the firm assets applied to the firm debts. But the copartnership creditors Avill not be heard to complain of the application of firm assets to the payment of the individual debts of the members of the concern, unless it be made to appear that there is not enough copartnership property to satisfy both the firm and individual creditors. Rogers v. Nichols, 20 Tex., 726; Washburn v. Bank of Bellows Falls, 19 Vt., 278; Hubbard v. Curtis, 8 Iowa, 1; Stout v. Fortune, 1 Iowa, 183; Griffith v. Buck, 13 Md., 102; Story’s Eq. Jur., sec. 676. Here the intervenors asserted the insolvency of the firm of De Caussey & Anderson, and sought by their pleading an application, in this case, of the equitable doctrine that we have been considering. But the court did not submit to the jury an issue as to the insolvency of the firm of De Caussey & Anderson. Having failed to ask the submission of that issue," appellants must be held as having acquiesced in this action of the court. It is sufficient ansAver to the objections urged by appellants, that it does not appear from the finding of the jury that the copartnership of De Caussey & Anderson was insolvent. It is claimed that the attachment issued in this case ought to have been quashed, first, because there was no prayer in the petition for the writ; second, because the bond was made payable to J. McCarty & Co., and not to the members of the firm by name. There are no special grounds for the attachment stated in the petition; the prayer [670] therein is for “process.” The grounds for the attachment are set forth in the affidavit of appellees. We are of the opinion that it was not necessary that there should have been a prayer in the petition for the issuance of the writ of attachment. Tinder the provisions of the statute, this writ issues by the clerk as a matter of right when the proper affidavit and bond is filed. An obligation made payable to a firm is valid and binding upon the obligors, and may be sued upon and recovered" by the firm. The suit is against the firm of J. McCarty & Co., alleging that the firm was composed of J. McCarty, C. B. De Caussey and Tolbert Anderson. We are of the opinion that the bond was sufficient, and that the court did not err in overruling the motion to quash the attachment. We conclude, and so report, that the judgment ought to be affirmed. Affirmed. [Opinion delivered November 6, 1882.]