Thompson et al. v. E. Tinnin.
An execution against an individual member of a copartnership, to satisfy his separate debt, may be levied upon whatever interest he has in the property of the copartnership at the time of the levy. A court of equity interferes in the matter only to ascertain that interest by an account, if necessary, between the partners, and to appropriate it to the payment of the debt.
After the levy of an execution on partnership property, to satisfy a separate debt of one partner, the copartners cannot dissolve the partnership, make a settlement of their joint effects, in which the debtor-partner is paid for *57his share an amount in property (other than that levied on) greater than the amount of the executions, and thereby defeat the levies so made.
Where a special verdict is not only not responsive to the pleadings in some respects, but, regarded with reference to the objects of the suit, is also incomplete, it will not sustain a judgment of the District Court based upon it, nor authorize a final disposition of the cause by a decree in this court.
Appeal from Travis. Tried below before Hon. A. W. Terrell, one of the district judges.
This was an injunction suit, brought by Tinnin to enjoin sales under levies made by virtue of executions upon certain partnership property of petitioner and his partner, E. Irvine, to satisfy judgments against said Irvine, which were the separate debts of the latter.
The petition alleged, that said partnership was formed on the 16th day of April, 1857; that in September, 1857, executions were issued to satisfy three several judgments against said Irvine, one of which was in favor of J. B. Powell, for the sum of $69 90, and the other two judgments being in favor of Thompson & Barnes, for the sums respectively of $60 40 and $64 75; which executions were then levied upon a horse, buggy, and harness, two other horses, and a wagon and harness, belonging to himself and said Irvine as partners; their copartnership business being, among other things, that of keeping a livery stable.
The petition further alleged, that since said property was levied on, he was informed, and believes, that said Irvine was insolvent, and owed many debts; which facts were unknown to him when he entered into said copartnership; that since the formation of the same they have contracted various debts, which petitioner will have to pay out of his separate means, unless the partnership property be held liable to the satisfaction of partnership debts, before it may be subjected to the payment of the individual debts of said Irvine, contracted before the existence of the partnership; said individual debts being sufficient in amount to absorb *58the whole interest of said Irvine in the property and assets of the firm of Tinnin & Co.
The said creditors and Irvine were made parties defendant, and the plaintiff prayed for a writ of injunction, restraining said Thompson, Barnes, and Powell from selling the property levied on, until a settlement and an account should he taken between himself and Irvine, and the partnership debts of the firm of Tinnin .& Co. paid. The petition also prayed for the settlement of the partnership affairs between plaintiff and Irvine, and for a judgment against the latter for $2,500.
The writ of injunction was granted and issued, restraining said judgment-creditors from further proceedings by virtue of the executions aforesaid against the property levied on.
The answer of Thompson & Barnes and Powell denied the plaintiff’s allegations, and, for a special answer to the facts, alleged that the property levied on was the separate property of Irvine, and not that of the partnership, and that if there was such a thing as a partnership between plaintiff and Irvine, the property levied on was used before and after-the levy by the latter as his private or separate property, and as such disposed of by him on his own separate account; that in fact the pretended partnership was a sham, intended to cover, under the firm-name, the property of Irvine,, to avoid the payment of debts; that the plaintiff knew, before the formation of said pretended partnership, the notorious insolvency of Irvine, and knowingly and designedly entered into said pretended partnership, with the intention thereby to cover up and conceal Irvine’s property; that said Irvine owned the property levied on whilst formerly residing at Seguin, and on the faith thereof obtained credit and contracted debts, to satisfy which the same was seized.
The court submitted special issues for the finding of the jury, as follows:
*591. Were the levies of executions, as alleged, made upon the properly described in the-petition?
2. Did á partnership exist at the time of said levies between Tinnin and Irvine, and was the property levied on owned at the time of the levy by Tinnin and Irvine as partners ?
3. Has said partnership been dissolved; and, if so, upon what terms ?
4. Was the partnership between Irvine and the plaintiff entered into to cover up and conceal the property of Irvine from his creditors; or, in other words, was it a sham partnership, entered into for a fraudulent purpose ?
5. Was the firm of Tinnin & Irvine indebted at the time of suing out the injunction in this cause ?
6. Did the partnership assets exceed the partnership indebtedness at the time of the levies;' and, if so, hour much?
7. Did the plaintiff, at the time of forming the partnership with Irvine, know of the individual indebtedness of said Irvine?
8. Was the injunction sued out from a well-grounded féar, or the honest belief that the property levied upon was indispensable to enable said plaintiff to discharge said partnership indebtedness ?
To which the jury responded, in their special verdict, as follows:
Interrogatory 1. We believe, from the evidence before us, that the property, to wit, 1 dun horse and buggy, 2 horses and a wagon, with harness, levied on, is the properly described in the petition.
Int. 2. We answer the second interrogatory in the affirmative: that a partnership existed between the parties at the time of the levy, and that the property levied upon was owned by them as partners.
Int. 3. The partnership has been dissolved, by Tinnin *60assuming all liability, taking the assets, and paying to Irvine $600, in a house and lot.
Int. 4. We do not believe it a fraudulent partnership, from the evidence before us.
Int. 5. We believe they were indebted at the time of suing out the injunction.
Int. 6. We suppose the partnership assets exceeded their liabilities, from the fact of Tinnin paying Irvine $600 for his interest; and that .their assets exceeded their liabilities by twice that amount, say $1,200.
Int. 7. There is no evidence that Tinnin knew of Irvine’s indebtedness at the time of the formation of the partnership; therefore, from the petition, we must say he did not.
Int. 8. In consequence of the proof made by Irvine, that the property—buggy and horse, wagon and harness, &c.— that was levied upon having been paid or given to Billingsley in part payment for the house, we cannot see how fears could have been entertained by plaintiff, Tinnin, of his inability to pay liabilities of the firm, or that the property levied on was actually necessary to pay the firm debts, as they could have been paid without it.
Upon this verdict the court gave judgment for the plaintiff, decreeing the injunction to be perpetual, and rendered judgment against Thompson & Barnes for the costs of suit.
There was no statement of facts. The appellants, Thompson & Barnes and Powell, assigned as error, that the court erred in rendering judgment in favor of the appellee upon the verdict of the jury.
Roberts, J.
—Can partners, after a levy of executions on partnership property, to satisfy a separate debt of one partner, dissolve the partnership, make a settlement of their joint effects, in which the debtor partner is paid over, for his share, an amount in property (other than that levied *61on) greater than the amount of the executions, and thereby defeat the levies so made?
The judgment in this case is founded on the affirmative of this interrogatory proposition.
The verdict of the jury states that the property levied on belonged to the partnership, which was in existence at the time of the levy, and that “the partnership has been dissolved by Tinnin assuming all liabilities, taking the assets, and paying to Irvine (the execution-debtor) $600 in a house and lot.”
It was said by Lord Eldon that, “according to the old law, (I mean before Lord Mansfield’s time,) the sheriff, under an execution against partnership effects, took the undivided share of the debtor, without' reference to the- partnership account; but a court of equity would have set that right, by taking the account, and ascertaining what the sheriff ought to have sold.” (Waters v. Taylor, 2 Ves. & Beames, 300, 301.)
This proposition of Lord Eldon embraces the whole law upon the subject, so far as it is now necessary to be considered. It admits such a levy to be legal, and that it attaches upon whatever interest in the property the debtor has at the time of the levy, A court of equity interferes in the matter only to ascertain that interest, by an account, if necessary, between the partners, and to appropriate it to the payment of the debt. (Story on Part., § 263; 1 Story Eq., § 677.)
To have justified a perpetual injunction in this case, it should have been first found that Irvine’s interest in the partnership concern, at the time of the levy, amounted to nothing.
It is true, that the verdict does not sustain the special ground of defense against the injunction-suit, that the partnership was a sham pretense. It is equally true that the petition of Tinnin does not lay any foundation for a per*62petual injunction, except by taking an account of the partnership, and ascertaining that Irvine’s interest therein amounted to nothing. The subsequent settlement of the partnership concerns, by Tinnin and Irvine, embraced in the issue submitted to the jury, and to which they responded in the 4th answer, as above quoted, was not averred in the petition or answer, or in any way brought before the court for adjudication by the pleadings of the parties.
The special issues found by the jury, which were within, and responsive to, the pleading, (the 4th being left out of. view,) may show that Tinnin had the right to bring the suit, not to defeat the levy altogether, but to ascertain Irvine’s interest; so that that alone, if any, may be subject to the executions. As against the execution-creditors, Irvine could not make a release, sale, or other disposition of his interest, if any he had, in the partnership effects, so as to defeat the lien, which they acquired by the levy at the, time it was made.
A subsequent settlement between them may be evidence ' that he did have an interest at that time, which.was subject to the levy, the ascertainment of which is the only legitimate foimdation of the suit on the part of Tinnin.
The laboring-oar is in his hands; he is seeking relief from the due and regular course of the law; and to defeat the levy entirely, he must call for an account, having relation to Irvine’s interest at the time of the levy, and must show that, then Irvine had no interest beyond that which would be absorbed by the then existing liabilities of the firm, and which must be shown by an actual liquidation' and closing settlement of the affairs of the firm, through the facilities and means furnished by and under the control of the court of equity itself.
The verdict is not only not responsive to the pleadings in some respects, but is also incomplete, considering the objects of the suit,—objects alone which authorize such *63a suit—and, therefore, does not sustain the judgment rendered, nor ascertain facts in issue which authorize a disposition of the cause hy a final judgment here. The judgment must be reversed, and the cause remanded for new trial and further proceedings.
Reversed and remanded.