(b) Jointly for all other debts and obligations of the partnership, but any partner may enter into a separate obligation to perform a partnership contract."

Sections 13 and 14 refer to cases of tortious character or breach of trust.)

§ 614. (Partnerships, Sec. 55.) Partners liable in toto.

(Note: It is fundamental in partnership law that liability of each partner is unlimited and that claims against the partnership are collectible from his separate assets by way of execution, that is if A, B and C, partners, owe X, $1,000, X getting a judgment against A, B and C may have execution levied on A's property to satisfy the judgment, whether B or C are insolvent or not. In equity or bankruptcy the right of partnership creditors to proceed against individual assets is hereafter stated.)

B. Remedies of Creditors.

(a) Where no Judicial Proceedings are in Progress to distribute assets.

§ 615. Right of firm creditor against firm property.

§ 616. Right of firm creditor against individual property.

§ 618. Right of creditor of individual partner against firm assets.

(Note: The subject matter of the above sections is perhaps better explained by a statement than by cases, although cases follow this note as illustrations.

(a) Right of firm creditor against firm property. A firm creditor has no right against firm property unless he establishes some lien upon it by contract, attachment, judgment, execution or levy. If he gets a judgment against the partners he may levy on their assets, which include, of course, the firm property. He is not interested in the claims of other creditors, unless they get prior or concurrent liens, or unless they put the firm in bankruptcy (or other receivership). This is made clear by thinking of an individual indebtedness. Suppose John Smith has a claim against Peter Jones in the sum of $1,000. Peter Jones owns an automobile. Peter Jones also owes X, Y and Z various amounts, they being general creditors, that is, having no security or lien on this car, and no judgment., Smith obtaining judg

ment may subject this car to the payment thereof. The other claims are unestablished by judgment and when established may theoretically be satisfied out of other assets, present or future. X, Y and Z may put Jones into bankruptcy if he is insolvent and has committed an act of bankruptcy, and thereby put all the creditors, including Smith, before the court. But we are not now assuming this to be done. Creditors of partners have the same situation as creditors of individual so far as rights at law are concerned.

(b) Rights of firm creditors against individual property. A firm creditor of M, N and O, partners, who gets a judgment against M, N and O may take the joint assets of M, N and O or the individual assets of M to satisfy his debt. If he is before a court of equity or bankruptcy where all assets are marshalled for distribution among all creditors, partnership and individual, other rules prevail, but we are not now assuming that situation.

(c) Preference of creditors. A partnership may at law prefer one creditor over another, and allow an individual creditor to be preferred over partnership creditors. If bankruptcy intervenes in apt time the preference may possibly be set aside. And see, for preference of firm creditors over individual creditors and vice versa in bankruptcy proceedings, the following sections.

(d) Right of creditor of individual partner against firm assets. A creditor of a member of a firm has no rights against the firm assets, for such assets belong to the firm and not to the individual. But he has a right against the member's interest in the firm, which is what that member would get in case of liquidation. Therefore if M, N and O own a stock of goods worth $15,000, M's interest may actually be nil, for the firm may owe $16,000. The individual creditor of M may reach this interest whatever it is worth, and the Uniform Act provides for a charging of this interest by the court and the appointment of a receiver of his share of the profits. See Sec. 28 of the Act.

In all of the above discussion we are considering cases that are not before a court of bankruptcy or other court of equity. In that case all the assets and all the creditors are before the court for purposes of equitable jurisdiction and other rules prevail.)

Case 612. Stout v. Baker, 32 Kan. 113.

Facts: Stout brings replevin against Baker, a sheriff, to recover a buggy that Baker has seized under a judg

ment against Stout and Wingert, copartners, and he alleges that such buggy does not belong to Stout and Wingert, but to him, Stout, personally.

Point Involved: Whether under a judgment against partners, sued as partners, the individual property of one of the partners may be taken to satisfy such judg ment:

HURD, J.: We think an execution on it might be legally levied upon the partnership property of both, or the individual property of either.

*

Question 612: State the facts, question presented and Court's decision in this case.

Case 613. Newhall et al. v. Buckingham, 14 Ill. 405. Facts: Newhall and Co. were creditors of Hoyt and to enforce their debt sued out an attachment which was levied upon the stock of goods of the firm of Hoyt and Haskins. The sheriff took possession of the goods. Haskins shortly afterward made an assignment of the firm's goods to Buckingham and Buckingham brings suit, contending that the goods of the firm were wrongfully seized for the individual debts of a member of the firm.

Point Involved: Whether a partner's interest in the firm is subject to levy on execution; whether the sheriff in selling such interest can take manual possession of firm assets; whether he can seize some or must seize all of the firm assets.

TREAT, C. J.: "It was held in Bachurst v. Clinkard, 1 Shower, 173, that on an execution against one of two partners, the sheriff might seize the partnership property, and sell the share of him against whom the writ issued. In Pope v. Haman, Comb. 217, Holt, C. J., said: 'Upon a judgment against one copartner, the sheriff may take the goods of both in execution; and the other copartner hath no remedy at law, otherwise than by retaking the goods, if he can; for the vendee of the sheriff becomes tenant in common with the other copartner.'

In Heydon v. Heydon, 1 Salk. 392, on an execution against one partner, which had been levied on the partnership goods, the Court remarked: "The sheriff must seize all, because the moieties are undivided; for if he seize but a moiety, and sell that, the other will have a right to a moiety of that moiety; but he must seize the whole, and sell a moiety thereof undivided, and the vendee will be tenant in common with the other partner.' In Parker v. Pistor, 3 B. & P. 288, an execution against one partner was levied on the partnership goods, and the partnership creditors moved the Court to give the sheriff time to return the writ, until an account could be taken of the claims against the firm; but the Court refused the application on the ground, 'that it was a very plain case at law, and that all the difficulties were to be encountered in equity; that the safest line of conduct for the sheriff to pursue was to put some person in possession of the defendant's share as vendee, leaving him and the parties interested to contest the matter in equity.' In the recent case of Johnson v. Evans, 7 M. & G. 240, the Court uses this language: 'It is undoubtedly true, that in order to make, and for the purpose of making, the execution effectual against the share of the debtor partner in the joint property, the sheriff must seize the whole, the shares of the two partners being undivided. Such seizure of the whole, it is obvious, arises from the necessity of the case; just as if a man purchases an undivided moiety of a chattel that is indivisible, he cannot in any way take possession of that moiety without taking possession of the whole.'

"The English courts uniformly hold, that, on an execution against one partner, the sheriff may seize the partnership goods, and sell the share of the partner against whom the process issued. As respects the property taken, the partnership is dissolved, and the purchaser becomes a tenant in common with the other partner. He, however, acquires the share of the debtor partner subject to the right of the remaining partner, and through him of the partnership creditors, to have the property

applied, so far as it may be necessary, to the payment of the joint debts. But this right is an equitable one, and cannot be enforced at law. The weight of authority in the United States is decidedly the same way.

"The cases of Morrison v. Blodgett, 8 N. H. 238, 29 Am. Dec. 653, and Deal v. Bogue, 20 Pa. St. 228, 57 Am. Dec. 702, deny the right of the sheriff to seize the partnership goods on an execution against one partner. But these cases are clearly against the current of the authorities. They are innovations upon the well-established legal rule; and are the result of attempts by courts of law to administer a principle of equity. They virtually prevent the individual creditors of a partner from subjecting his share in partnership property to the payment of their debts. What remedy have such creditors against the share of their debtor in partnership goods, unless the goods can be seized, and his interest in them sold on execution? In order to sell that interest, the officer must, for the time being, have the custody of the property. A levy would be ineffectual, if the property is to remain in the possession and subject to the control of another. From the necessity of the case, the officer must be allowed to reduce it into possession. The authority to sell a chattel or any interest therein on execution, necessarily includes the power to take possession thereof for the purpose. There are, indeed, inconveniences growing out of the seizure of partnership property for the individual debts of a partner. They are, however, unavoidable. They are incidents of this kind of title to property. They must be borne, or separate creditors may be without any effectual remedy for the collection of their debts. Their debtor may have no individual estate, and still be entitled to a large surplus in the joint estate after the affairs of the partnership are adjusted. The same inconveniences may arise in the case of tenants in common of a chattel; and yet the law is firmly settled, that on an execution against one of them, the sheriff may take exclusive possession of the chattel in order to sell a moiety thereof. Melville v. Brown, 15 Mass. 82; Reed v. Howard, 2 Metc.