Coe v. Whitbeck , 4 Sarat. Ch. Sent. 19 ( 1844 )

Decided that where a debt is due to a copartnership at the time of the bankruptcy of one of the individual members of the firm, an action at law to recover the debt must be brought in the joint names of the solvent copartners and the assignee of the bankrupt ; as the legal title to the debt is vested in them jointly by .operation of law. But that the solvent partners have the right to bring the action in the names of themselves and the assignees of the bankrupt, without the consent of such assignees, upon giving them an indemnity against costs.

That in this court the assignee of a bankrupt copartner is a necessary party to a suit brought to recover a debt due to the firm at the time of his bankruptcy ; where such assignee takes a beneficial interest in the copartnership effects as a trustee for the separate creditors of the bankrupt. But that where the bankrupt is discharged from his debts and the co-partnership is insolvent, so that the solvent partners must necessarily apply the whole of the copartnership effects to the payment of the debts of the firm, and make up the deficiency of those debts out of their individual property, and that fact is distinctly stated in the bill, the asssignee of the bankrupt partner need not be made a party to a suit in chancery to obtain payment of a debt due to the firm.

The chancellor observed that where a judgment is recovered in a justice’s court, and the defendant has no real estate whatever, the filing of a transcript in the office of the county .clerk, for the purpose of obtaining an execution against real •as well as personal estate might perhaps 'be considered as a© •useless expense. But he decidéd that to entitle the plaintiff in the judgment to file a creditor’s bill, upon the return of an execution against the personal estate merely unsatisfied, ihere should at least he a distinct-averment in-the bill, that the de-defendant has no real estate which could have been reached and sold upon the execution if the judgment had been entered in the county -clerk’s -office,, and an execution issued thereon .against both -real and .personal property.

-when the plain-•law will be considered as not .exhausted.

The bill in this case stated the recovery of a judgment in the supreme court for $83,12 against the defendants, and the ' . . . . return oí an execution thereon unsatisfied; also, the recovery of a judgment before a justice for $33, five months after the return .of such execution, and the issuing of an execution on the latter judgment, against the defendant’s personal property merely, and .that the same was returned unsatisfied. The chancellor held that the amount of the judgment in the ■supreme court was not sufficient to give the court of chancery jurisdiction, and that the complainants had not exhausted their remedy at law as to the justice’s judgment.; so as to authorize the filing of a creditor’s bill; as the defendant might ¡have acquired real estate sufficient to satisfy the justice’s ju dgment after the return day of the execution issued ont of the supreme court.

Orders appealed from reversed. Motion to dissolve injunction granted, and the motion to appoint a receiver denied, with $10 costs; but without prejudice to complainants right to apply to renew injunction and appoint a receiver.