Ivey v. Gatlin , 194 Ga. 27 ( 1942 )

1. A partner who, for cash and in good faith, buys and takes a transfer of his partner's entire interest in a partnership business, after a judgment is obtained by a third person against the selling partner individually, but before any garnishment or other collateral proceeding is taken to seize the interest of the selling partner, is not charged with a lien of such ordinary judgment.

2. Applying the foregoing principles, there was no error in sustaining the defendant's demurrer and dismissing the action.

No. 14096. MAY 26, 1942. On November 12, 1941, Willie Lee Ivey brought his petition against John P. Gatlin. Ivey alleged, that on March 6, 1940, he obtained a judgment for $350.35 against W. J. Rivers individually, who was an equal partner with Gatlin in a partnership business, and that on the . . . day of October, 1940, Gatlin bought Rivers' interest in the partnership business, paying therefor, $1,000 in cash; that Gatlin had knowledge of the judgment, and his purchase was charged with a lien thereof; that about four months after the sale Rivers left the town and State, and was insolvent, not having returned any property for taxation in two years; that Ivey has no means of collecting his judgment by direct levy; and that he will be without remedy unless "this court of equity takes some steps to protect him, since it has been held that a judgment can not be levied directly on a partner's interest in a partnership." He prayed: "that this court will provide some means, which in its judgment is most proper, to enforce plaintiff's rights, either by appointing an auditor, agent, or receiver to examine into the facts and ascertain the real value of the property belonging to Rivers as a member of the said firm on the date that plaintiff's judgment was taken."

It appears that the defendant filed a special plea of res judicata, setting up a previous adjudication of the same issues between the parties, and that a motion to strike such plea was overruled by the judge; but the plea itself was not disposed of, nor was this ruling on the motion to strike excepted to pendente lite. Instead of further action in reference to such plea the judge proceeded to hear the demurrers to the petition, and upon the grounds urged dismissed the action. Thus the matter for review has nothing to do with the question of res judicata, but leaves the case to be tested on its merits by the demurrer, the grounds of which were: that no cause of action was set out; that no facts were alleged which would authorize or justify a recovery against the defendant in any amount; and that a copy of the alleged judgment was not set out or attached. 1. The question is whether or not a cause of action is stated in the petition which alleges that a purchase by the defendant, John P. Gatlin, for cash, of the entire interest of his partner, W. J. Rivers, in a partnership business, is charged with a lien of a judgment previously obtained by the plaintiff, Willie Lee Ivey, against Rivers individually, because of Gatlin's knowledge of the judgment, so as to authorize the relief prayed, to wit: "that this court will provide some means which in its judgment is most proper, to enforce plaintiff's rights, either by appointing an auditor, agent, or receiver to examine into the facts and ascertain the real value of the property belonging to W. J. Rivers as a member of said firm on the date that plaintiff's judgment was taken." Generally judgments obtained in the courts of this State bind all property of the defendant, both real and personal, from the date of the judgment, except as otherwise provided by the law. Code, § 110-507. "To authorize a sale of personal property, there shall be an actual or constructive seizure. A future interest in personalty may not be seized and sold, but the lien of judgments shall attach thereto so as to prevent alienation, before the right to present possession shall accrue." Code, § 39-1310. The interest of a partner in the partnership assets may be reached by a judgment creditor by process of garnishment served on the firm, and shall not be subject to levy and sale. § 75-315. In the present case the purchase of the partner's interest was made several months after the judgment against the selling partner individually was obtained, and before the present suit was instituted. There is no allegation of fraud, or prayer for a money judgment against the partner making the purchase. It affirmatively appears from the petition that process of garnishment or other means of lawful seizure of the judgment debtor's assets in the partnership had not been employed before the alleged transfer, or the institution of this suit. In Citizens Bank Trust Co. v. PendergrassBanking Co., 164 Ga. 302 (138 S.E. 223) it was held: "A judgment against a partner is not a lien upon his individual interest in the firm property, and such interest is not liable to levy and sale under execution upon such judgment, even after dissolution, but must be reached by process of garnishment.Willis v. Henderson, 43 Ga. 325; Anderson v. Chenney,51 Ga. 372; Ferris v. Van Ingen, 110 Ga. 102 (4) (35 S.E. 347); Civil Code (1910), § 3190." In Fidelity Deposit Co. v. Exchange Bank, 100 Ga. 619 (28 S.E. 393), the court held: "While a judgment in this State, in a general sense, binds all the property, both real and personal, of the person against whom it is rendered, the lien of such judgment, in the special sense which prevents the alienation of the property of the debtor after its rendition, attaches only to such property of the debtor as is capable of seizure and sale under execution based upon such judgment." The contest in the case last cited was between an assignee of a debtor and a judgment creditor of the assignor-debtor of a fund to be paid by commissioners of the court upon sale of property in receivership. It was held: "Choses in action are not subject to seizure and sale under execution based upon ordinary judgments, and can only be reached by the judgment creditor through a garnishment, or some other collateral proceeding; and inasmuch as such garnishment or collateral proceeding is necessary to fix the lien of the judgment so as to make it effective, an assignment of the chose in action by the debtor before the institution of such collateral proceeding passes to the assignee the property of the debtor in the chose in action assigned, freed from the lien of a general judgment previously rendered against the assignor." Cf. Armour PackingCo. v. Wynn, 119 Ga. 683 (46 S.E. 865); Fourth NationalBank v. Swift, 160 Ga. 372, 376 (127 S.E. 729).

Applying the foregoing principles to the instant petition, there was no error in sustaining the demurrer and dismissing the action.

Judgment affirmed. All the Justices concur.