Jones v. Thompson

California Supreme Court Jan 15, 1859Published

Before: Baldwin

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Holding. The court held that a partner's interest in partnership property is subject to levy and sale for his individual debts, and that the petition for an injunction in this case failed to establish sufficient grounds to restrain such a sale. Additionally, the court ruled that a decree ordering a private sale of firm property is erroneous.

Issues

Whether the interest of one partner in partnership property is subject to levy and sale for his individual debts.
Whether the petition for an injunction against the sale of partnership assets was supported by sufficient facts.
Whether a court may order a private sale of partnership property.

Disposition. reversed and remanded

Quotations verified verbatim against the opinion

“The interest of one partner in partnership property is such an estate under our statute as may be sold for his debts ; it is a legal estate in chattels.”

“The petition does not show any facts upon which the injunction was properly granted.”

“The decree is also erroneous in ordering a private sale of the firm property.”

Synopsis

Appeal from the Third District, County of Monterey.

The facts as disclosed by the opinion of the Court, are as follows :

This bill was filed in the District Court of the Second District, on the fourth day of April, 1856. The bill charges a partnership between the plaintiff and defendant, and prays an account. Thompson was the only defendant to the bill, and filed his answer denying the allegations of the bill. Neither the bill nor answer is verified.

Shortly after this time, plaintiff filed a petition in the District Court, setting forth the complaint, and also that Lewis T. Burton and Harvey B. Blake had obtained judgment in the First District Court, against A. B. Thompson, the defendant, and that execution had issued on the judgment, and been levied on certain cattle, the property of plaintiff and defendant Thompson, and that the Sheriff was threatening to sell the property by virtue of the execution. The petition prayed that the plaintiffs in the execution, Burton and Blake, might be made parties to that proceeding, and that an injunction might be issued against Burton and Blake and the Sheriff of Santa Barbara county, enjoining and restraining them, their agents and attorneys, from proceeding to sell or otherwise dispose of any of the cattle, horses and other property levied on. On the twenty-sixth of June, 1856, an injunction was granted according to the prayer of the petition, by the Judge of the Second District. On the twenty-seventh June, Burton and Blake appeared in Court and asked for a dissolution of the injunction, and that their names might be stricken from the record. The motion for the dissolution of the injunction was denied. Afterwards, on motion of the plaintiff’s attorney, the cause was removed to the Third Judicial District, on the ground of incapacity of the Judge, he being related to the plaintiff.

On the twenty-sixth day of April, 1858, the Court entered a final decree, by which a receiver was appointed, and ordered to take immediate possession of the property, and to sell so much of it at private sale as would bring the sum of $7,370, and costs of suit and charges of the receiver, and divide the remaining property and cattle on the island between Jones and Thompson, and ordering the injunction to remain in full force and effect against Burton and Blake and the Sheriff.

Baldwin, J., delivered the opinion of the Court—Terry, C. J., and Field, J., concurring.

Several errors are assigned by Burton and Blake, who are the appellants here. They are met, however, at the threshold, by the objection that they have no standing in Court, because the respondents’ counsel say they are not parties to the record. We think the objection is not good. The petition was certainly a very irregular way to get them into the cause, but it is an irregularity of which the respondents cannot complain. The petition, though not entitled of the cause, was filed among the papers as a part of the record related to the subject matter of the suit, and was acted on by the Judge as a portion of the pleadings, and the final decree refers expressly to the injunction granted on the petition and in pursuance of its prayer, and makes that injunction perpetual. Being affected directly by the judgment, it certainly does not lie in the mouth of the plaintiff below to say the [198]defendants, Burton and Blake, are not parties to it and have no right of appeal.

It is contended that the cattle, etc., of the partnership is not the subject of levy and sale by the Sheriff, on an execution against Thompson,one of the partners. We think the rule is otherwise. The interest of one partner in partnership property is such an estate under our statute as may be sold for his debts ; it is a legal estate in chattels. It is true that, as between the partners, the interest of each is only the residuum of the property left after the settlement of the firm debts; and that the rights of firm creditors and the several partners are paramount to the claims of separate creditors of the firm.

But this interest of the partner thus defined, is held by the weight of authority subject to levy for his debts. Story on Partnership, (sec. 263) thus states the rule : “ In cases of this sort, therefore, the real position of the parties, relatively to each other, seems to be this : The partnership property may be taken in execution upon a separate judgment and execution, against one partner ; but the Sheriff can only seize and sell the interest and right of the judgment partner therein, subject to the prior rights and liens of the other1 partners and the joint creditors therein. By such seizure the Sheriff acquires a special property in the goods seized; and the judgment creditor himself may, and the Sheriff, also, with the consent of the judgment creditor, may file a bill against the other partners for the ascertainment of the quantity of that interest, before any sale is actually made under the execution. The judgment creditor, however, is not bound, if he does not choose, to wait until such interest is so ascertained, but he may require the Sheriff immediately to proceed to a sale, which order the Sheriff is bound by law to obey. In the event of a sale, the purchaser at the sale is substituted to the rights of the execution partner, quoad the property sold, and becomes a tenant in common thereof; and he may file a bill, or a bill may be filed against him by the other partners, to ascertain the quantity of interest which he has acquired by the sale.”

Jones v. Thompson

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