Pearce v. Cooke

• Decision Date: 21 January 1881
• Citation: 13 R.I. 184
• Parties: EDWARD PEARCE v. GEORGE L. COOKE et al. Administrators.
• Court: Rhode Island Supreme Court

13 R.I. 184

EDWARD PEARCE v. GEORGE L. COOKE et al. Administrators.

Supreme Court of Rhode Island.

January 21, 1881

A copartnership composed of A. and B. was dissolved by the death of A. A.'s estate was represented insolvent by his administrators, and was insufficient to pay his private debts. B. then made a voluntary assignment of the firm property and of his own for the benefit of creditors.

A creditor of the firm obtained judgment against B., the surviving partner, took out execution, and had it returned nulla bona . He then presented his judgment to the commissioners on A.'s estate as a claim against it. They rejected the claim, whereupon the creditor brought an action for the amount against A.'s administrators under Gen Stat. R.I. cap. 175, § 12.

Held, that the trusts of B.'s assignment being still unsettled the creditor was entitled to have his execution returned nulla bona .

Held, further, that under Gen. Stat. R.I. cap. 193 § 30, the creditor was entitled to prove his judgment against the estate of A.

Held, further, that under Gen. Stat. R.I. cap. 193, § 30, joint debts must be paid pari passu with separate debts by the representatives of the deceased joint debtor.

ASSUMPSIT brought under Gen. Stat. R.I. cap. 175, § 12.[¹] On demurrers to pleas and replication, jury trial being waived as to the questions of fact raised.

James Tillinghast, for plaintiff.

Charles Hart, for defendants.

POTTER J.

The plaintiff is a creditor of the late firm of Albert Dailey & Company, which consisted of Albert Dailey and William B. Pearce, a son of the plaintiff. Albert Dailey died, and his estate was represented insolvent by his administrators, the defendants. The plaintiff obtained judgment against the surviving partner, and had the execution returned nulla bona . He then presented his claim to the commissioners on Dailey's estate, who rejected it, and he now sues the administrators. The pleas are:

1. That after Dailey's death the surviving partner assigned all the firm property to E. S. Jackson; that a large property passed by the assignment, and the trusts thereof are not yet performed nor settled, and that there has been neither inventory nor account. To this plea the plaintiff demurs.

2. That the plaintiff's claim was a firm debt, and that said Dailey's estate is insufficient to pay his private debts. To this plea the plaintiff demurs.

3. That it was a firm debt, and said plaintiff has not resorted to nor exhausted the firm property before resorting to Dailey's separate property. To this plea the plaintiff replies that Pearce, the surviving partner, assigned all the firm property, and the officer therefore could not reach the property of the firm. To this replication the defendant demurs.

4. That the plaintiff did not pursue the surviving partner to final judgment and execution. On this the plaintiff joins issue.

5. That the firm never promised, & c. On this the plaintiff joins issue.

There are some settled principles of law and equity which, perhaps, had better be stated before we consider the effect of certain provisions of our own statutes.

On the death of a partner, the sole right of a creditor to sue at law is against the surviving partners. The debt ceases to be a debt recoverable against the deceased at law. While the partners are alive the debt is joint, but, on the decease of a partner, the debt is considered in equity as joint and several, and a bill in equity can be filed against the representatives of the deceased, without waiting to collect the debt of the survivors, making, of course, the other partners, & c., parties; Story on Partnership, § 362; although some authorities say that he cannot proceed first against the estate of the deceased without showing some necessity for so doing. Lawrence v. Trustees of the Leake & Watts Orphan House, 2 Denio, 577, 589.

Such being the rules at law and in equity, what is the effect of Gen. Stat. R.I. cap. 193, § 30, which is as follows:

" The representatives of one jointly bound with another for the payment of any debt, or for performance or forbearance of any act, or for any other thing, and dying in the lifetime of the latter, may be charged by virtue of such obligation in the same manner as such representative might have been charged, if the obligors had been bound severally as well as jointly: Provided, that the plaintiff shall first pursue the surviving debtor to final judgment and execution."

The obvious effect of this seems to be to make the estate of the deceased partner liable at law in the first instance in the same manner as it would be in equity.

When the statute uses the words " the representatives… may be charged," it must be construed to mean that the estate of the deceased in the hands of the representatives is to be charged. The statute makes the debt the several debt of each party. The remedy of the representatives of the deceased against the surviving partner it is not necessary now to consider.

But it is contended that if the estate of the deceased partner is to be liable for the partnership debts in the first instance, it is only to be liable after the separate debts have been paid.

The statute has made the estate of the deceased liable at law in the first instance, as it would be in equity. Did it intend to do anything more?

It seems to be settled as a general rule in bankruptcy and in equity that where there are joint funds they shall be first applied to the partnership debts, and that only the surplus shall be liable for the separate debts of a partner; while upon the question whether when there is both joint and separate property, the separate property of a partner shall be first applied to his separate debts, see Story on Partnership, § 363; Collyer on Partnership, § 920; 3 Kent Comment. *64, *65; 1 Story Eq. Juris. § 675; Wilder v. Keeler, 3 Paige, 164, 172; Egberts v. Wood, 3 Paige, 517, 527; Tucker v. Oxley, 5 Cranch, 34; Gray v. Chiswell, 9 Ves. Jun. 118, 124; Ex parte Kendall, 17 Ves. Jun. 514; Cowell v. Sikes, 2 Russ. 191, 196; Murray v. Murray, 5 Johns. Ch. 60, 74; Rodgers v. Meranda, 7 Ohio St. 179; Davis v. Howell, 33 N.J.Eq. 72; 34 N.J.Eq. 292.

In the old Roman law if a man carried on two trades, the debts and affairs of the two concerns were kept separate. Story on Partnership, § 365. And as to the recognition of these doctrines by our own court, see the opinion of Ames, C. J., in Tillinghast, Receiver, v. Champlin et al . 4 R.I. 173, 189.

There have been some exceptions made to these general rules growing out of particular...