First Nat. Bank of Clinton v. Brenneisen

• Decision Date: 18 February 1889
• Citation: 10 S.W. 884,97 Mo. 145
• Parties: First National Bank of Clinton, Appellant, v. Brenneisen
• Court: Missouri Supreme Court

10 S.W. 884

97 Mo. 145

First National Bank of Clinton, Appellant, v. Brenneisen

Supreme Court of Missouri

February 18, 1889

Appeal from Henry Circuit Court. -- Hon. J. B. Gantt, Judge.

Affirmed.

W. S Shirk and R. E. Lewis for appellant.

(1) Section 447, Revised Statutes, 1879, did not authorize the circuit court to fix the rights and priorities of the different attaching creditors of Brenneisen, and of the partnership firm of Brenneisen & Goff. The defendants were not the same. Yet the court below undertook to enlarge its powers under said section and settle the conflicting rights of different creditors against different defendants, viz Brenneisen individually, and the firm of Brenneisen & Goff. This it could not do. Swallow v. Duncan, 18 Mo.App 623. (2) The firm of Brenneisen & Goff had been dissolved for about ten days when appellant's attachment was levied. Brenneisen retained his old stock in the Clinton store. It was his individual property at the time the appellant's attachment was levied. Story on Part. secs. 358, 359; City v. Wiley, 35 Iowa 330; Giddings v. Palmer, 107 Mass. 269; Parsons on Part. 346, note g. (3) But even if the property attached might be called partnership property, the court in this proceeding had no authority to apply the doctrine that firm property must first be applied to firm debts. That doctrine is only a principle of administration, adopted by courts where from any cause they are called upon to wind up the firm business. A firm creditor as such has no prior lien on the partnership assets. State v. Thomas, 7 M. A. 205; Schmidlapp v. Currie, 55 Miss. 597; Level v. Farris, 24 Mo.App. 445; Schackelford v. Clark, 78 Mo. 491; Sparham v. Hubbal, 10 Metc. 309. (4) Appellant attached substantially the same goods which furnished the basis of Brenneisen's credit with the bank. As a matter of naked right as well as law, it was entitled to satisfaction of its debt out of the proceeds of these goods. State ex rel. v. Thomas, 7 Mo.App. 205.

A. Haynie and S. E. Price for attaching creditors of respondent.

(1) Section 447, Revised Statutes, 1879, authorized the circuit court to fix the priorities of the different attaching creditors of the firm and the individual members of the firm. Said section gives the court an equitable jurisdiction to settle and dete rmine all controversies which may arise between any of the plaintiffs in relation to the property and the priority, validity, good faith, force and effect of the different attachments. Said section, however, applies only to several proceedings in attachment, and such was the holding of the court in the case of Swallow v. Duncan, 18 Mo.App. 623. (2) The fact of dissolution, the firm being insolvent, and a partition of the stock among the several members of the firm, can give neither partner any interest in the part taken by him until the firm creditors are paid. The right of the firm creditors to be paid out of the firm assets, in preference to the individual creditors, is not impaired by a dissolution, and as against them the partition is a nullity. Phelps v. McNeely, 66 Mo. 554; Julian v. Rightsman, 73 Mo. 569; Shackelford's Adm'r v. Clark, 78 Mo. 491; Parsons on Part. 346, note g, 502, note l; Story on Part. 97, 327, 360; Tenney v. Johnson, 43 N.H. 144; Flannigan v. Alexander, 50 Mo. 50; Ackley v. Staehlin, 56 Mo. 561; State ex rel. v. Spencer, 64 Mo. 355. (3) The attachment by a separate creditor of a portion of his debtor's interest in the partnership, or of the goods themselves, is vacated by the insolvency of the partnership, which leaves in the partner no interest, and requires all the property to pay the partnership debts. Parsons on Part. 360, 361.

OPINION

Brace, J.

This is a controversy between the plaintiff, who is an individual creditor of C. H. Brenneisen, who is named the respondent, and certain creditors of Brenneisen & Goff, a firm of which the said C. H. was a member.

The plaintiff, on the fifth of February, 1885, in an action commenced by him in the circuit court of Henry county against C. H. Brenneisen, sued out a writ of attachment and caused the same on that day to be levied on a stock of goods then in possession of said Brenneisen, in McBeth's building, in the city of Clinton, in said county. Subsequently, a number of the creditors of Brenneisen & Goff, some on the same day some on the next, and some several days thereafter, in actions commenced in the same court, severally sued out writs of attachment and caused them to be levied upon the same goods, as the property of said firm. Afterward, on the petition of the plaintiff and the other attaching creditors, a receiver was appointed, the goods sold, the proceeds received and held by the receiver subject to the order of the court. In the meantime, all the attaching creditors obtained final judgment in their several actions, whereupon the plaintiff filed its motion in said court praying for an order directing the receiver to pay plaintiff out of the proceeds of the sale of said attached property the amount of his judgment, interest and costs as a prior attaching creditor, and at the same time, the attaching creditors of the partnership firm of Brenneisen & Goff filed their motion, claiming that the property seized and sold was the property of said firm and subject to the payment of the partnership debts, to the exclusion of the individual debts of the members of the firm, and praying for an order restraining the receiver from paying out of said proceeds any of the judgments of the individual creditors of the partners until the judgments of the several creditors of the firm of Brenneisen & Goff are fully paid. These motions were submitted and heard at the same time; the motion of the bank was overruled, and the motion of the attaching partnership creditors sustained; the court...