John and James Tucker v. Oxley, Assignee of Moore Bankrupt

• Citation: 3 L.Ed. 29,9 U.S. 34,5 Cranch 34
• Parties: JOHN AND JAMES TUCKER v. OXLEY, ASSIGNEE OF T. MOORE, A BANKRUPT
• Decision Date: 01 February 1809
• Court: United States Supreme Court

9 U.S. 34

5 Cranch 34

3 L.Ed. 29

JOHN AND JAMES TUCKER v. OXLEY, ASSIGNEE OF T. MOORE, A BANKRUPT.

February Term, 1809

ERROR to the circuit court of the district of Columbia, sitting at Alexandria, in an action of assumpsit for goods sold and delivered, brought by Oxley,

assignee of Thomas Moore, a bankrupt, against the plaintiffs in error. Upon the general issue, the jury found a verdict for the plaintiff below for 143 dollars and 33 cents, subject to the opinion of the court upon the following case:

Thomas Moore, the bankrupt, carried on the trade and business of a vendue master in copartnership with one Henry Moore, which copartnership was on the 31st of March, 1802, dissolved on the terms that Thomas Moore should collect the balances due to, and pay the debts due from the joint concern as far as the joint property would extend. Thomas Moore carried on the trade and business of a vendue master on his separate account from that time until the 2d of September following, when he became bankrupt, and a commission being duly awarded and issued against him, he was duly declared a bankrupt according to the laws of the United States then in force concerning bankrupts; under which the plaintiff was duly appointed assignee.

While Henry and Thomas Moore carried on the business of vendue master in partnership, they became jointly indebted to the defendants, John and James Tucker, in the sum of 106 dollars and 49 cents, being the balance of account due to the defendants, for their goods sold by H. and T. Moore, at vendue. After the dissolution of the partnership, and while Thomas Moore carried on business on his separate account, the defendants, the Tuckers, at different times, from the 19th of April to the 22d of July, 1802, knowing that the partnership was dissolved, and that Thomas Moore carried on business on his separate account, purchased of him at vendue, goods to the amount of 113 dollars and 12 cents, which goods were charged to the defendants, the Tuckers, in the separate books of Thomas Moore, without credit being given to the defendants for the joint debt due to them from Henry and Thomas Moore. Thomas Moore being examined as a witness, proved that he intended, at the time of selling the goods to the defendants, to give them credit for the joint debt due to them from Henry

and Thomas Moore, but nothing was said or agreed on the subject, between him and the defendants, nor was any such credit ever given before his bankruptcy. This action is brought for the price of the goods so sold and delivered by Thomas Moore in his separate capacity. If the court should be of opinion, upon the case stated, that the defendants are entitled to have the joint debt due to them by Henry and Thomas Moore deducted from the sum claimed in this action, the verdict was to be reduced to 16 dollars and 63 cents, and judgments to be entered accordingly

The opinion of the court below being, that the joint debt could not be set off against the separate claim of the bankrupt, judgment was rendered for the plaintiff for the larger sum; whereupon the defendants brought a writ of error.

C. Simms, for the plaintiff in error.

All contracts with partners are joint and several; and every partner is liable to pay the whole. In what proportion the others are to contribute is a matter merely among themselves. The plaintiff may bring his action at law against any one of the partners, and can only be compelled by plea in abatement to join them all. 5 Burr. 2613. 1 Esp. 117.

By the 42d section of the bankrupt law, (vol. 5. p. 74.) it is declared, that where there hath been mutual credit given by the bankrupt and any other person, or mutual debts between them, the assignee shall state the account between them, and one debt shall be set off against the other, and the balance of such account, after such set-off, and no more, shall be claimed or paid on either side respectively.

Lord Chancellor Hardwicke, in Edwards's case, 1 Atk. 100. doubted whether, under the statute relating to mutual debts, a debt due from A. to B. could be set off against a debt due from B. to A. and C. In that case C. was not in any manner liable to B. for the debt due from A. to B.

But in the present case, Thomas Moore was liable to the Tuckers for the debt due to them from Henry and Thomas Moore, and the Tuckers might have compelled payment from Thomas alone.

The clause in the act of parliament, 5 Geo. II. relating to mutual credits, and which is the same as the 42d section of our bankrupt law, has received a very liberal construction. 1 Atk. 228. Ex parte Deeze. 1 Atk. 230. Ex parte Charles Prescot.

By the 34th section of the bankrupt law it appears that a partnership debt may be proved on a separate commission against one of the partners. By that section it is declared, that the 'bankrupt shall be discharged from all debts by him due or owing at the time he became bankrupt, and all which were or might have been proved under the commission;' with this proviso, 'that no such discharge of a bankrupt shall release or discharge any person who was a partner with such bankrupt, at the time he became bankrupt, or who was then jointly held or bound with such bankrupt, for the same debt or debts from which such bankrupt was discharged as aforesaid.'

And it may be laid down as a general rule, that a debtor of a bankrupt may be allowed to set off any debt due from the bankrupt which he could have proved under the commission. Coop. B. L. 247.

Jones, contra.

The debt for which this action was brought against the Tuckers, was contracted long after the dissolution of the partnership of Henry and Thomas Moore. It was, and yet stands, charged against them on the separate books of Thomas Moore.

It is neither a mutual debt, nor a mutual credit. They are claims in different rights

It is a general principle, in cases of bankruptcy, that the joint funds are to be applied to the discharge of the joint debts, and the separate funds to the discharge

of the separate debts. The separate creditors can only come upon the joint fund for their debtor's share of the surplus, after paying the joint creditors; and the joint creditors can only come upon the separate fund for the surplus, after payment of the separate creditors.

A joint creditor can only prove under the separate commission for the chance of that surplus, and to assent to or dissent from the allowance of the certificate. Cooke's B. L. (4th edit.) 237. 244. 250. 3 Vez. jun. 238. Ex parte Elton. 4 Vez. jun. 837. Ex parte Abell.

There is no statute in Virginia which authorizes set-off. The question depends entirely upon the 42d section of the bankrupt law of the United States, which is precisely like the 28th section of the act of parliament of 5 Geo. II. c. 30. Cooke's B. L. 541. 544.

It is clear that the separate creditors cannot come upon the joint fund until all the joint creditors are paid; it is...