Porch v. Arkansas Milling Company

• Decision Date: 05 February 1898
• Citation: 45 S.W. 51,65 Ark. 40
• Parties: PORCH v. ARKANSAS MILLING COMPANY
• Court: Arkansas Supreme Court

45 S.W. 51

65 Ark. 40

PORCH v. ARKANSAS MILLING COMPANY

Supreme Court of Arkansas

February 5, 1898

Appeal from Carroll Circuit Court in Chancery, Western District EDWARD S. MCDANIEL, Judge.

STATEMENT BY THE COURT.

The appellee recovered a judgment against the appellant, procured the issuance of an execution thereon, and had the same levied upon the individual interest of the appellant in the fixtures and furniture in a drug store, which were the partnership property of the appellant and J. H. Crook. The appellant notified the officer who levied the execution that the property levied upon was owned by himself and J. H. Crook jointly as partners. The constable who levied the execution had the property levied upon appraised by three persons under oath, as required by law, and gave the defendant, Crook notice of the levy, and Crook served notice on the constable in writing, claiming that the property levied upon was partnership property, and that he was the owner of one-half of the same. The constable returned the execution, and stated in his return the facts, and returned with the execution his inventory and the appraisement of the property levied upon to the justice of the peace who had issued the execution.

The appellee filed his complaint in equity to subject the appellant's interest in the property to a sale to satisfy his debt, and alleged that the appellant, Porch, owned no property in Arkansas, except his interest in the drug store and that, after paying all the firm debts of Porch and Crook out of the firm assets, there would remain enough that the half interest of said Porch would equal or exceed the chattels levied on by the constable. A copy of the appraisement was attached to the complaint of appellee. These proceedings were had under the sections 3060 to 3065 inclusive, of Sandels & Hill's Digest (title "Execution.") The appraisement of the property amounted to $ 2,045.24. The indebtedness of the partnership was ascertained to be $ 1,346.32.

The appellant, Porch, claimed his exemption in the residue of all the property, which was in excess of the partnership indebtedness,--stating that he was a married man, the head of a family, a resident of the State of Arkansas; that all of the personal property owned by him, including his interest in the property of said co-partnership, and all the moneys, goods, accounts, credits or effects of any kind do not exceed in value the sum of five hundred dollars. Wherefore he claimed that the same are exempt to him, under the laws of the State of Arkansas, and are not subject to sale under the execution of the plaintiff; and concluded with a prayer for supersedeas, and that the plaintiff's complaint be dismissed for want of equity, and for general relief.

Plaintiff filed the following demurrer to the answer of Porch:

"The plaintiff, by its attorney, comes and demurs to the separate answer of said defendant, J. S. Porch, and says: First, said answer is not sufficient in law to constitute a defense to this action; second, said answer does not state what personal property, nor all of it, that is owned by defendant Porch, and claimed as exempt from levy and sale; third, said answer does not set out said claim of exemption in specific articles of personal property, as required by law."

The court sustained the demurrer, and Porch saved proper exceptions. He declined to plead further, and the court gave judgment against him for $ 113, interest and costs, and ordered that the interest of Porch in the drug store, which was valued at $ 2,045.25, less the firm debts of $ 1,346.32, be sold.

Defendant excepted, and prayed an appeal, which was granted.

Judgment affirmed.

O. W. Watkins, for appellant.

The levy of execution gives no lien superior to the right of the owner of personal property to claim such property as exempt. 23 Ark. 287; 33 Ark. 462; 46 Ark. 47; 54 Ark. 193. One of a co-partnership has a right to claim his exemptions out of the assets of the firm, if they be in excess of the firm liabilities. 37 N.Y. 350; Thompson, Homesteads and Exemptions, § 216; 44 Mich. 86; 68 Cal. 32; S. C. 45 Am. Rep. 233; 44 Mich. 86; S. C. 38 Am. Rep. 232; 60 Mich. 433; 61 Mich. 362; S. C. 1 Am. St. Rep. 589; 41 Ark. 94; 54 Ark. 9; 57 Am. St. Rep. 437. Exemption statutes are to be liberally construed. 38 Ark. 112; Thomp. Hom. & Ex., § 731.

Geo. C. Christian, for appellee.

An individual debtor cannot claim exemptions out of partnership assets. Thompson, Hom. & Ex. §§ 194, 196, 197, 198, 199; 101 Mass. 105; 9 Kas. 30; 1 Phil. Rep. 353; 39 Wis. 574; 26 O. St. 317; 44 Pa.St. 442; 3 Lea (Tenn.), 75; 46 Ark. 43; 64 Mo. 355; 3 Dillon, 290. One claiming exemptions must designate specifically the articles claimed. 48 Ark. 213; Sand. & H. Dig., § 3721. The burden of establishing an exemption right is on the one alleging it; and he must bring his claim clearly within the limits of the statutory exceptions. 52 Ark. 547; 36 Ark. 298; 43 Ark. 20; 33 Ark. 459-464; 62 Ark. 542; 55 Ark. 447.

HUGHES J. BATTLE, J., dissenting.

OPINION

HUGHES, J., (after stating the facts.)

The precise question in this case has not been decided in this court.

Following the decided weight of authority, it is held in Richardson v. Adler, 46 Ark. 43, that "the members of an insolvent firm are not entitled to the exemptions allowed by law, out of the partnership property, after it has been seized to satisfy the demands of the creditors of the firm." The court said: "The interest of each partner in the partnership assets is his portion of the residuum after all the liabilities of the firm are liquidated and discharged. Property belonging to the firm cannot be said to belong to either partner as his separate property. It is contingent and uncertain whether any of it will belong to him on the winding up of the business, and the settlement of his accounts with the firm. 'Joint property is deemed a trust fund, primarily to be applied to the discharge of partnership debts, against all persons not having a higher equity;'" citing Pond v. Kimball, 101 Mass. 105; Gaylord v. Imhoff, 26 Ohio St. 317; Giovanni v. First National Bank of Montgomery, 55 Ala. 305; in re Handlin, 3 Dill. 290, 11 F. Cas. 421.

As affecting the question involved, the statute of Ohio exempting personal property is substantially like ours, which provides that; "the personal property of any resident of this state, who is married or the head of a family, in specific articles to be selected by such resident not exceeding in value the sum of five hundred dollars, in addition to his or her wearing apparel, and that of his or her family, shall be exempt from seizure on attachment, or sale on execution, or other process from any court, on debt by contract." Sand. & H. Dig., § 3716; Const. art. 9, §§ 1, 2.

In the case at bar the appellant filed no schedule claiming his exemption in specific articles.

In the opinion in Gaylord v. Imhoff, the Ohio Supreme court said: "Looking alone to the language of the section above quoted, we find nothing to justify the inference that the legislature, in passing it, was intending to provide for other than individual debtors, and for the exemption of their individual property from sale on execution; and, when construed in connection with the law relating to partnerships, as it had always stood and still stands, we are convinced that it could not have been the intention of the lawmaker to bring partners or partnership property within the operation of the section in any respect. Dealing with the statutory right, and excluding equitable considerations, which have no place here, our convictions are based upon the fact that the right of exemption, and the mode of exercising it prescribed by the statute, are wholly inapplicable to partnership property or the rights of the partners therein, and inconsistent with the rights of their creditors in relation thereto. * * * The language of the section points unmistakably to property owned individually. The selection of the exempted property is to be made by the execution debtor, and the property selected is to be appraised and set off to the debtor. 'Partners are joint tenants in their stock in trade, * * * * and no partner has an exclusive right to the joint stock.' 3 Kent, 37."

It will be seen by examination of this opinion of the Ohio court and the case of Richardson v. Adler, Goldman & Co., 46 Ark. 43, that Judge Smith, who delivered the opinion in the latter case, adopts and relies upon the reasoning and the principles laid down in the Ohio case. It seems to us that the reasoning in those cases applies to the case at bar with as much force as it does to those cases. We think the doctrine sound, and supported by the weight of authority.

In the case of McCoy v. Brennan, 61 Mich. 362, 28 N.W. 129, it is held that partners can during the existence of the partnership, claim an individual exemption in partnership property, when taken under legal process for partnership debts. The same is held in Chipman v. Kelly, 60 Mich. 438. Some other states hold the same. The idea advanced to support, in part, these cases is that the exemption statutes should receive a liberal construction in harmony with their humane purpose. Such cases are Stewart v. Brown, 37 N.Y. 350, 93 Am. Dec. 578; Blanchard v. Paschal, 68 Ga. 32, 45 Am. Rep. 474; Servanti v. Lusk, 43 Cal. 238.

In opposition to the doctrine of these cases, the weight of authority sustains the rule that partners cannot, during the continuance of the partnership, claim an individual exemption in the partnership property. Giovanni v. First National Bank, 55 Ala. 305; Bonsall v Comly, 44 Pa. 442; Guptil v. McFee, 9 Kan. 30; Baker v. Sheehan, 29 Minn. 235, 12 N.W. 704; Prosser v. Hartley, 35 Minn. 340; State v. Bowden, 18 Fla. 17; ...