Jarvis v. . Hyer , 15 N.C. 367 ( 1833 )

There was a mercantile firm in the city of New York, composed of four partners, viz.: Garrett Hyer, Walter E. Hyer, Alexander Brimmer and Jacob Burdett; they traded under the name and style of "Hyers, Brimmer Burdett." Dawson, as one of the firm of Platt L. Wicks Co. (of North Carolina), became indebted to the said firm in New York. Garrett Hyer and Alexander Brimmer died, leaving Walter Hyer and Jacob Burdett, surviving partners — these two formed a new firm in New York, and traded under the name and style (368) of "Hyer Burdett." The latter firm became indebted to the plaintiff, a citizen of North Carolina, who to recover his debt, sued out an attachment against the estate, debts and effects of "Hyer Burdett." Dawson was summoned as garnishee; who admitted that he was indebted to the firm of "Hyers, Brimmer Burdett." The question was, could the plaintiff have a judgment of condemnation of the money in the hands of the garnishee, to the satisfaction of his debt, against "Hyer Burdett?"

Upon these facts judgment pro forma was rendered in favor of the garnishee, and the plaintiff appealed. On an attachment issued for a debt due from a separate partner, who has absconded, or resides out of the State, the sheriff can take only the separate property of the absconding or absent debtor; he cannot seize the partnership effects; for the other partner has a right to retain and dispose of them for the payment of the partnership debts, Matter of Smith, 16 John., 109. In Lyndon v. Gorham, 1 Gallison, 367, it was determined, that a debtor to a partnership, cannot be held, or made liable as garnishee, for the several or joint debt of one of the partners. The corporeal property of a partnership, cannot be taken in execution to satisfy the several debts of one partner, unless such partner would have an interest in the property after settlement of all accounts, and then to the extent of that interest only. The sheriff, therefore, does not seize the partnership effects themselves; for the other partner has a right to retain them for the payment of the partnership debts, 16 John., 106; Moody v.Payne, 2 John. Ch., 548; Fox v. Hanbury, Cowp., 445. 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, which are first to be (369) paid. In Fisk v. Herrick, 6 Mass. 271, the Court said: "We have several times decided that a debt due to a partnership, is not necessarily goods, effects, or credits of either of the partners;" a creditor of an individual partner cannot attach such a debt, unless it shall appear on examination, that a balance is due from the firm, to such partner. In Massachusetts, they have no court of chancery, distinct from the courts of law; therefore, the accounts there, are taken in the courts of law, to prevent a failure of justice.

Partners are at law, joint tenants of their debts and merchandise, Gow., 66. But, jus accrescendi, or right of survivorship, does not hold, except sub modo, and for a special purpose, to enable the surviving partner to get in the debts and settle the affairs of the firm. For (subject to the liability of the surviving partner to pay the debts due from the firm, and his right to collect the debts due to the firm), the executor of the dead partner is a tenant in common with the surviving partner, of all the property in possession belonging to the firm; and the instant any joint chose in action is reduced into possession by the legal process of the survivor, the right of the executor to his distributive share attaches subject to the debts as aforesaid, Gow., 384; 3 Lev., 290; 1 Ld. Ray., 340. If the separate creditors of the surviving partner could seize and sell under execution, or could attach the supposed share of the survivor in the firm, for their satisfaction; so as to enable the vendee to take immediate possession of the property, unencumbered with the debts of the firm; the whole of the property and effects of the firm, might be swept away and exhausted by the private debts of the survivor; and then the creditors of the firm, would resort to the private estate of the dead partner, for satisfaction of their debts; — this would be most unreasonable. The private estate of the dead partner is liable to the creditors of the firm, only, in case the effects of the firm, in the possession of the surviving partner, are exhausted. The rule of law, (370) therefore, which subjects the whole of the partnership effects, first, to the payment of the creditors of the firm, is founded, not so much upon the rights of the creditors of the firm, as for the purpose of protecting the private estate of the dead partner.

In this case, the debt due from the garnishee to "Hyers, Brimmer Burdett," must first go to pay the creditors of that firm. We see that on a settlement of the accounts of that firm, there cannot be any part of the money now in the garnishee's hands, which will belong to "Hyer Burdett." The case states that the firm of "Hyers, Brimmer Burdett," was immensely indebted, and did a losing business, and that both of the defendants are indebted to it. We think that the cases on this subject are decisive of the question against the plaintiff. What is here said, is not to be considered as impairing the doctrine of set-off, as laid down in the cases of Frenchv. Andrade, 6 Term, 582, and Slipper v. Stidstone, 5 Ib., 493. We think this process of attachment was not intended to be applied to a case in which the Court is unable in its judgment, to do justice to all the persons interested, and much less to one in which a decision for the plaintiff is seen to do positive injustice to third persons, not before the Court.

PER CURIAM. Judgment affirmed.

Cited: Taylor v. Arthur, 33 N.C. 409.