Bixler & Correll v. Kresge & Green

Opinion by Mr. Justice Green, The act of June 12, 1879, P. L. 176, gives a preference in the distribution of the proceeds of sheriff’s sales of saw logs, or of sales made by assignees for the benefit of creditors, for all moneys due for cutting, skidding, hauling and driving of saw logs, limiting the amount to $200 to any one laborer. In this case there was a sale by the sheriff under executions, of a stock of saw logs and lumber inter alia, and two laborers gave notice to the sheriff of their claims, in due form as required by the act. Charles Eschenbaugh claimed a lien for two hundred dollars, and Edwin Keiper claimed a lien for fifty dollars for work done within the statute. The notices to the sheriff were in due form and sufficiently described the character and particulars of the claims. The auditor found as a fact that the work was done to the full amount of the claim in both cases, and this finding was affirmed by the learned court below. The appellants claim that the evidence upon which the auditor acted was not sufficiently definite to justify his findings. While it is certain that a strict compliance with the provisions of the statute is requisite to maintain these claims for preferences, it does not seem that there is aity particular grade of proof required different from what would be necessary in ordinary cases. Having read the report of the auditor, and the testimony of the men, each one of whom swore positively that the amount claimed by each was certainly due for work actually done by each, we are satisfied of the truth of the fact and see no occasion to revise the findings of the auditor on this subject. Common laborers do not keep books of account for the work they do, setting down each day the amount of work they have done. Their employers keep such books in which the time made by the men is daily credited, and if any mistake is made by the men in the claims they present, it is in the power of the employers to correct them at once. In this case the auditor reports that one of the employers was present and the other within easy reach and neither was called to disprove either of the claims. [414] We are satisfied with, the report of the auditor upon this branch of the case. On the question of the alleged partnership between Kresge and Oscar Green the auditor finds upon the testimony taken before him and not contradicted, that as between the men themselves there never was an}'- actual partnership. That while it is true Green permitted himself to be held out to the world as a partner, and therefore if he were of age he would be liable as such, in point of fact he was merely a hired man working for fixed wages and had no interest in the business or its profits or losses. He also finds that Green contributed no money or property to the concern, and that while he signed some notes given for a stock of store goods, he paid nothing on the notes, and being a minor who repudiated his obligations on account of his minority, he was subject to no legal liability upon the notes. The auditor also finds that the tract of timber land in Tunkhannock township was purchased by Kresge and the title taken in his own name, and that he also bought a portable sawmill in his own name, paid all the money that was paid both for the sawmill aud on the land, and conducted all the lumber operations in his own name. These being the facts and the present contest being a contention between individual and partnership creditors, the familiar doctrine becomes applicable that partnership creditors must work out their claims through the equity of the partner. If the partner has no equity there is nothing to support the claims of the partnership creditors to the assets in question as against the creditors of the individual partner who is the real owner of the assets. In York County Bank’s Appeal, 32 Pa. 446, there was a written agreement between the partners, establishing an actual and subsisting partnership, which was subsequently conducted publicly with all the usual indicia of a partnership. But one of the partners had in fact not paid in any part of the capital, and the assets of the firm were in reality contributed by the other partner, whose property they were prior to the partnership. It was held that an individual execution creditor of the partner who owned the assets, was entitled to preference in. the distribution of the proceeds of the sale of the property of the firm over a partnership execution creditor. Thompson, J., [415] delivering the opinion, said, “ Between partners themselves the' assets of the firm constitute a fund for the payment of their liabilities, and each member has an equity which he can enforce to accomplish this result and, of consequence, a lien on the property to this extent. . . . When a creditor levies on the property of a firm, his execution fixes and attaches to this right to the same extent that it existed in the partners, and hence the preference over a separate execution creditor in the distribution. All this is predicable of a case of joint property only. But where there was no joint property, the rule has nothing to operate on. The mere name is not enough in such a case— there must be an equity. If that equity never existed, a creditor’s execution could not attach to any right amounting to a lien, to have the assets appropriated to a partnership debt. That Moore has no interest in the firm property is found by the auditor. . . . This being so the property levied on was individual property in fact though seized in the firm’s name. The appellant cannot work out his equity through the partners, for they as such did not exist, inter se, and the individual owner could not give him this right over a prior execution against him individually.” All this, and more, was said of a case in which there was an actual partnership fully agreed upon and really carried on for a number of months. But in the case at bar there never was a partnership as between the alleged partners, and this tñe auditor finds as a fact upon undisputed testimony. In addition to that Green never furnished anything to the firm, and therefore acquired no title to the firm property. He either signed or indorsed some notes with his individual name, but he paid nothing on them. On the contrary he was paid a monthly compensation for his services as clerk or assistant. It is too plain for argument that as between Green and Kresge there never was, and never was agreed to be, any partnership relation. In point of fact Green never contributed a dollar of money or anjr article of property to the partnership, and he never agreed, or intended, to do anything of that kind, nor could Kresge expect him to do so. The notes on which his name appeared not only were never paid by him in whole or in part, but they did not appear on their face to be firm notes, and his liability could never be more than an individual liability. But such as they were, he was a minor when he gave them, he [416] had a legal right to repudiate them, and he actually did repudiate them, as soon as he attained his majoritju We find it-impossible to discover in the testimony, any proof of the existance of any real equity in Green as a partner, and therefore there is nothing upon which to build up a right on the part of any firm creditor to seize upon any firm property, as against an individual execution creditor of Kresge, who had acquired a prior lien upon the goods. York County Bank’s Appeal was repeated and reaffirmed in Scull’s Appeal, 115 Pa. 141, where the facts were much stronger in favor of the firm creditors than they are in the present case. A careful reading of the whole record in the present case, including the arguments of the learned counsel on both sides, convinces us of the entire correctness of the conclusions reached by the auditor and the learned court below. The decree of the court below is affirmed and appeal dismissed at the cost of the appellants.