F. R. Patch Mfg. Co. v. Capeless

• Decision Date: 11 May 1906
• Citation: 79 Vt. 1,63 A. 938
• Court: Vermont Supreme Court
• Parties: F. R. PATCH MFG. CO. v. CAPELESS et al.

63 A. 938

79 Vt. 1

F. R. PATCH MFG. CO.

v. CAPELESS et al.

Supreme Court of Vermont. Rutland.

May 11, 1906.

Exceptions from" Rutland County Court; John H. Watson, Judge.

Action by the F. R Patch Manufacturing Company against John B. Capeless and others. Judgment overruling a demurrer to the declaration, defendants except. Affirmed and remanded.

Argued before ROWELL, C. J., and TYLER, MUNSON, WATSON, POWERS, and MILES, JJ.

Marvelle C Webber and Orion M. Barber, for appellant. Butler & Moloney, for appellees.

WATSON, J. The declaration shows that on or about the 15th day of November, 1902, the plaintiff brought its action in Rutland county court against Protection Lodge, No. 215, International Association of Machinists, in its associate name, by serving process on its president as authorized by section 1099, V. S., Protection Lodge, No. 215, being an unincorporated association consisting of five and more persons, having a president, clerk, and treasurer; that a trial was had in said action at the March term, 1903, of that court, and a verdict for damages recovered in favor of the plaintiff and against said Protection Lodge and judgment had thereon, which judgment was thereafter affirmed in the Supreme Court; that execution was issued on the judgment against the property of Protection Lodge, No. 215, and thereafter the same was returned wholly unsatisfied, and so remains; and that the defendants in the present action were associates and members of said Protection Lodge, No. 215, at the time of the commitment of the grievances for which the damages were recovered, and at the time the trial was had, verdict recovered, and judgment obtained as above stated. Section 1099, V. S., under the provisions of which Protection Lodge, No. 215, was thus sued in its associate name and service of process made upon its president, reads as follows: "A partnership, or an unincorporated association or joint stock company, consisting of five or more persons having a president, other principal officer, clerk or treasurer may sue and be sued in its firm, associate, or company name, and service of process against such partnership association, or company, made upon either of such officers shall have the same force and effect as regards the joint rights, property, and effects of the partnership, association, or company as if served upon all the partners, associates, or shareholders." The present suit, which may be regarded as supplementary, is brought against alleged associates and members of Protection Lodge, No. 215, for the amount unpaid on that judgment, upon section 1183, V. S., which reads: "If execution on a judgment obtained against a partnership, association, or company in its firm, associate or company name is returned unsatisfied in whole or in part, a suit for the amount unpaid may be brought against any or all of the partners, associates, or shareholders upon their original liability, provided that only one such suit shall be brought and maintained at the same time, and if the execution issued in the last named suit is returned unsatisfied in whole or in part, subsequent actions may in like manner be maintained for the amount unpaid."

At common law an unincorporated association, as regards its rights and liabilities, is fundamentally a large partnership. The relation of the members composing it is to each other and to the outside world, that of partners. Walker v. Wait et al., 50 Vt. 668; Burnes v. Pennell, 2 H. L. Cas. 497. Partnership debts are the debts of each partner in solido (3 Kent's Com. 32; Cutler v. Estate of Thomas, 25 Vt. 73), and at law both separate and joint creditors may attach either separate or joint property and sell it on execution in satisfaction of their judgments without regard to equities existing between their debtors. But in equity partnership effects must be applied in satisfaction of partnership debts and liabilities in preference to debts due creditors of the individual partners; and to the extent that partnership debts and liabilities are not fully paid by the joint property, they stand the same as other debts against each partner's separate estate. Bardwell v. Perry, 19 Vt. 292, 47 Am. Dec. 687; Washburn v. Bank of Bellows Falls, 19 Vt. 278; Barton National Bank v. Atkins, 72 Vt. 33, 47 Atl. 176. It is also a well-established rule that a firm or unincorporated company must sue and be sued in the names of its individual members, however numerous they may be. Dicey on Parties, 147, 266. Yet as we have seen, by section 1099, V. S., any partnership, unincorporated association or joint-stock company falling within its provisions, may sue and be sued in its firm, associate, or company name, and that service of process made upon either of its officers named in that section shall have the same force and effect as regards the joint rights, property, and effects of the partnership, association, or company as if served on all the members. That section of the statute and the section upon which this action is brought, in their original form, were parts of the same Act No. 71, p. 71, Laws of 1882, and must be construed together.

Such partnerships, associations, and jointstock companies may be, and often are, not only composed of many different members, residents of different states and countries, but constantly changing by some dropping out and others coming in. Manifestly this statute was enacted for the practical convenience and benefit of the partnership, associations, and companies to which it relates, as well as for the convenience and benefit of creditors, in bringing and prosecuting suits. In operation it inures also to the more substantial benefit of the individual partners, associates, and shareholders. We do not consider whether or not the procedure therein provided is exclusive. But surely when the statute is invoked to enforce liabilities against partnerships, associations, or companies, the members have the benefit of equity principles in that the joint property must first be taken to satisfy judgments, and it is only for the amount unpaid when executions against such property are returned wholly or in part unsatisfied that suits can be brought against the individual members and their separate property taken. In the first instance the obligation of each partner to the others and to creditors is in nature contractual at common law. By section 1183, partners, associates, and shareholders are made individually liable to execution creditors for the amount of a judgment unpaid after an execution against the joint property has been returned...