Mowbray v. Lawrence — 13 Abb. Pr. 317

Majority

p. 317

MOWBRAY a. LAWRENCE.

Supreme Court, First District ;

Special Term, October, 1861.

Headnote

Sale, "upon Execution, oe the- Individual Interest oe, one Partner.—Injunction.

The court will not interfere by injunction to restrain the sale of the interest of one partner in copartnership property, under a judgment and execution against such partner for a debt due from him individually,- where- there are no’ averments in the complaint to show that the debtor in the execution has not some interest in the property-levied oh,: after the Satisfaction of the partnership-debts, and after deducting the interest of the solvent partners from the partnership estate.

If one of several partners has an interest in the assets of the partnership over and above the claims of his, copartners, and those of the creditors of. the partner-

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ship, there is no reason for the court to interfere by injunction to restrain a sale of his interest in the partnership property, upon execution on a judgment against such partner individually.

Demurrer to a complaint.

This xx'as an action brought to restrain the defendant, John Kelly, sheriff of Mew York county, from selling the interest of the defendant, Lawrence, in the property of the firm composed of the defendant, Lawrence, and the plaintiff, upon an execution against Lawrence alone. The defendant, Lawrence, did not contest the action. The defendant, Kelly, demurred to the complaint.

Nelson Smith, for the plaintiff.

—I. Where the separate creditor of one of the partners has taken goods in execution in discharge of his separate debt, the other partners may file their bill against the debtorqjartner and the sheriff, for an account and injunction. (Story on Part., § 264 ; Taylor a. Fields, 4 Ves., 396 ; Matter of Smith, 16 Johns., 102 ; Wilson a. Conine, 2 Ib., 280 ; Beavan a. Lewis, 1 Sim., 419 ; Scrugham a. Carter, 12 Wend., 131 ; Eden on Inj., 31.)

II. It is true that in Moody a. Payne ( 2 Johns. Ch., 548 ), a contrary doctrine was held; but at the time of this decision the rule at laxv did not permit the sheriff to deliver the whole partnership property to the purchaser at a- sale by him on an execution against-one partner, while the rule is now established that the sheriff may, on such an execution, seize the whole co-partnership property, sell the interest of the execution-debtor, and deliver the whole property to the purchaser. This might work irreparable injury to the right of the other partners. The rule in Moody a. Payne should not therefore be followed.

A. J. Vanderpoel, for the defendant,

Kelly, cited Philips a. Cook ( 24 Wend., 389 ) ; Waddell a. Cook ( 2 Hill, 47 ) ; Moody a. Payne ( 2 Johns. Ch., 548 ).

The authorities in this State are adverse .to the interference of a court of equity, by injunctioii, to restrain the sale of the interest of one partner 'in copartnership property, on judgment and execution against such partner to recover a debt

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due from him individually. (Moody a. Payne, 2 Johns. Ch., 548 ; Phillips a. Cook, 24 Wend., 389 .)

In the case of Phillips a. Cook, although an action at law, the English authorities, upon which ours are founded, are carefully reviewed by Judge Cowen, and he comes to the conclusion that the remedy of the solvent partner, where he has been injured by such a levy, is to proceed in. equity against the purchaser at the sheriff’s sale, for the purpose of ascertaining the interest which the purchaser has acquired, or which the debtor owned in the property at the time of the sale, and that the creditor has an absolute right to have the interest of his debtor in partnership property sold on execution, which neither a court of law or equity ought to restrain. (See, also, Colnyer on Part., 4 Am. ed., § 831, note 2.)

The purchaser acquires only the interest which the debtor has in the partnership property, after the payment of partnership liabilities, and the protection of the rights of the other partners.

In the present case there are no averments in the complaint to show that the debtor, in the execution, had not some interest in the property levied on after the satisfaction of partnership debts, and after deducting the interest of the plaintiff from the partnership estate.

It is stated that the «liabilities are $18,000, and that the plaintiff contributed $11,000 to the joiiit-stóck'; but it is not stated what was the amount or value of the contribution of the debtor Lawrence, or what is the present value of the partnership estate.

There are no means of determining, from these averments, that the debtor has not an interest which the creditor should be allowed to reach by a sale on his execution.

If the debtor has an interest in the assets of the partnership over and above the claims of partnership creditors and of the plaintiff, there is no reason at law or in equity for interfering to stay the sale.

■ The plaintiff should at least make it appear by his complaint that there was no such interest to be reached by levy or sale. (Story on Part., § 264.)

Judgment for the defendant Kelly on the demurrer, with costs.