Richardson v. Adler, Goldman & Co.

Smith, J. Adler, G-oldmau & Co. recovered a judgment against J. R. Richardson & Bro., a firm composed of John R. and Joseph B. Richardson, for $3,559.59. An attachment, which had been previously levied upon all the property of the firm, as well as the individual property of the partners, was at the same time sustained. Upon the issue of a special execution for the sale of the attached property, the said John R. and Joseph B. filed, in the office of the clerk of the court from which the execution issued, their separate schedules under the exemption laws, setting out all the partnership assets, as well as their own private property, and claiming the exemptions which pertain to heads of families, viz.: a homestead and $500 worth of personal property, which they selected. The clerk granted a supersedeas as to all of the property so claimed as exempt. And the judgment creditor moved' the circuit court by petition to quash the supersedeas. The grounds of the several motions were that part of the personal property claimed by each of the defendants was partnership property; that John R. was not at any time a-married man, nor the head of a family; nor was Joseph B. such at the time the attachment was levied ; and moreover that Joseph B. was not in any sense the owner of the house and lot claimed by him as a homestead. The evidence tended to show that John R. had been living in a house built by him on his own land, and had been keeping house there for a number of years before this controversy arose. He had no wife nor children ; but a widowed sister, who was in feeble health, and measurably dependent on him for support, resided with him. The residence claimed by Joseph B., as a homestead, had been built with partnership funds on a lot of four acres in the town of Melbourne, which belonged to John R., and had been occupied by Joseph B., his wife and her sister, for several years. But his wife having died, the establishment had been broken up before the attachment was levied, the house was rented, and the sister in-law sent off' to board. But he had married again after the rendition of the plaintiff’s judgment and was living in the house when he filed his schedule. There was no contract in writing between the partners in relation to the lot, but a parol understanding that, when the partnership should be wound up, Joseph B. was to take the house and some ground as part of his share of the assets of the firm. He claimed one acre around and near the house. The circuit court found the facts to be : That John R. Richardson was a resident of Arkansas, was the head of a iamily, and was entitled as such to hold the property claimed as a homestead, as well as all the personal property, except a mule and planing machine and fixtures, which he could not hold as exempt because it was partnership property. The supersedeas was therefore quashed as to the partnership property, and sustained as to the other personal-property and the homestead. From its judgment both parties appealed. In the other case the court stated the facts to be: First. That Joe B. Richardson was not a married man, nor head of a family at the time of the levy of the attachment and the rendition of the judgment. Second. That the land upon which the said residence claimed as homestead was situated, was, at the date of the-schedule filed, the property of John R. Richardson, and that appellant had no title, legal or equitable, thereto. That the residence thereon was partnership property. And it declared the law to be that appellant was not entitled to claim the homestead, nor the partnership personal-property above named. That of the property attached he was entitled to claim as exempt the amount of two hundred dollars’ worth, and no more, but discharged the supersedeas in toto. Richardson appealed. 1. Quero. Whert must <‘iaimea.. It is doubtful whether, after a judgment of condemna-1. tion m the attachment suit, it is still competent for the defendant to set up his claim of exemption out of the property attached. The safer course is to move the court, while the suit is pending, to quash so much of the sheriff’s return as shows a levy of the writ upon exempt property ; as was done in Grubbs v. Ellison, 23 Ark., 287. Compare on this point, Drake on Attachment, sec. 244 a; Waples on Attachment, pp. 164-7; Thompson on Homesteads and Exemptions, sec. 826; State v. Manly, 15 Ind., 8; Perkins v. Bragg, 29 ib., 507; Haas v. Shaw, 91 ib., 385; State, ex rel. Kahoon v. Krumpus, 13 Neb., 321; Close v. Sinclair, 38 Ohio St., 530; Willis v. Matthews, 46 Texas, 478; with the reasoning of the court in Turner v. Vaughan, 33 Ark., 454; Miller v. Sherry, 2 Wallace, 237; Haynes v. Meek, 14 Iowa, 320. But since the creditor has not pleaded the previous adjudication in bar of the debtor’s subsequent claim to hold a portion of the property as exempt, nor insists here upon any. benefit thereof; since, moreover, section 3006 of Mansfield’s Digest is somewhat ambiguous in regard to the time and manner of claiming and ascertaining exempt property which is attached; and since the parties and their counsel and the court below have acted upon the supposition that the claim may be preferred at any time before the property is actually sold, we pass this question without determining it. 2. ExempTNone of ^Mp^property' The members of an insolvent firm are not entitled to exemptions, allowed by law, out of the partnership property after jt has been seized to satisfy the demands of creditors of the firm. This proposition is well settled both upon reason and authority. The interest of each partner in the partnership assets is his portion of the residuum after all the liabilities of the firm are liquidated and discharged. Property belonging to the firm cannot be said to belong to either partner as his separate property. It is contingent and uncertain whether, any of it will belong to him on the winding up of the business and the settlement of his accounts with the firm. “ Joint property is deemed a trust fund, primarily to be applied to the discharge of partnership debts, against all persons not having a higher equity. A long series of authorities has established this equity of the joint creditors, to be worked out through the medium of the partners ; that is to say, the partners have a right inter sese, to have the partnership property first applied to the discharge of the partnership debts, and no partner has any right, except to his own share of the residue, and the joint creditors are, in case of insolvency, substituted in equity to the rights of the partners, as being the ultimate cestuis que, trust of the fund to the extent of the joint debts.” Story's Eq. Jur., sec. 1253; Pond v. Kimball, 101 Mass., 105; Gaylord v. Imhoff, 26 Ohio St., 317; Giovanni v. First Nat. Bank of Montgomery, 55 Ala., 305; In re Handlin, 3 Dillon, 290. 3. Right hen' To sustain the finding of facts, that John R. Richardson was the head of a family at the date of the levy of the attachment, while Joseph B. was not — the record contains abundant testimony. The subsequent marriage of Joseph B. had no effect on the rights of the parties. The lien relates back to the levy of the attachment, creating from that moment an inchoate charge, which was per-* fected by the rendition of judgment and which could not foe divested by any change in the status of the parties. Frellson v. Green, 19 Ark., 376; Harrison v. Traden, 29 ib , 85; Huxly v. Harold, 62 Mo., 516. Furthermore, Joseph B. Richardson was not the owner of the house and lot claimed by him as a homestead, within the meaning of section 5, of article 9, Constitution -of 1874. The legal title of the tract of four acres, of which it formed a part, stood in the name of his partner, who had, very recently before, treated it as his own by executing a deed of trust upon the whole of it. And the house was built with partnership funds. The verbal contract between the partners was too loose and indefinite to give any rights which a court of justice would protect and enforce. No price was mentioned, and the dimensions of the lot were not fixed. The consummation of the purchase depended upon two conditions : First, a settlement of the partnership ; and second, that upon such settlement something should be due Joseph B. as his share of the assets. Neither of these contingencies has arisen. No settlement of the partnership has been had; nor are there any effects to be divided between the partners, the concern being largely in debt. The judgments in both cases are in all things affirmed.