Kennedy v. McKee/Opinion of the Court

by by John Marshall Harlan

United States Supreme Court

142 U.S. 606

Kennedy  v.  McKee

As no brief has been filed in behalf of the defendants in error, and as we are not informed by the record of the precise ground upon which the court below proceeded, we will restrict our examination of this case to the single ground upon which the plaintiff in error questions the correctness of the judgment. After referring to the provisions of the above statute, he says that the only ground upon which the invalidity of the assignment of January 23, 1884, can be asserted is the failure to embrace in it the private property of all the members of the firm as welll as the property of the partnership. We take this to be a concession that the deed did not pass the private property of the individual members of the firm. This concession was, we think, required by a reasonable interpretation of that instrument. The words used import an assignment by the firm of only firm property to pay the debts due by the firm to such creditors as would accept the provisions of the deed; so that the inquiry is whether the statute relating to assignments for the benefit of creditors embraced such a deed as the one in question. We lay out of view the allegation in the petition that no property was owned by Moseley Bros., or by any of the members of the firm, that was not conveyed by the deed, except such as was exempted from sale by law, because the officer, having in his hands an attachment against property so conveyed, can only be guided, in the absence of actual notice, by the legal effect of the deed. As said in Donoho v. Fish, 58 Tex. 164, 166, 167, 'a deed which purports to convey only such property as the makers thereof own as copartners cannot be held to pass the title to any other without making for the makers of the deed a contract which they never intended.' Besides, the allegation referred to does not distinctly state that the several partners owned no property in their respective individual rights. It is rather the statement of a legal conclusion, namely, that all the property which the assignors owned, whether as partners or in their respective individual rights, not exempt from forced sale, was conveyed by the deed of assignment; whereas, as we have stated, the words of the deed do not embrace any property, except such as the firm of Mosely Bros. owned.

In Donoho v. Fish-which was the case of an assignment by a partnership of partnership property for the benefit of such creditors as would accept its provisions and release the debtors-the court said: 'Such an assignment is not contemplated by the act, even if there were no restriction in it upon the right of all creditors to participate in the proceeds of the sale of the property by requiring a release of the debtor; for the act contemplates that all of the property, real and personal, of the debtors making the assignment, except such as is exempt from forced sale, whether the same be partnership property or such as is owned by each partner in his own individual right, shall pass by the assignment. The law does not undertake to make assignments for debtors. It provides how an assignment may be made, and aids and makes complete an assignment which evidences an intention of the debtor to comply with its provisions.' After observing that if the deed of assignment purported to convey all the property belonging to the members of a firm, however defective in form, it would pass not only the property each partner owned in his individual right, but also such as they owned in partnership, the court proceeded: 'If, however, copartners could, under the act, make an assignment of partnership property only for the benefit of the creditors of the firm alone, there would be an insuperable objection to such an assignment containing a clause requiring a release of the debtors by the creditors as a condition to the right to participate in the proceeds of the assigned property. * * * He who wants the benefit of the act by which he seeks to be released from his just debt, without full payment, must comply with the act by conveying to the assignee all of the property required to be conveyed, whether the same be owned by him individually or as a member of a firm; and if he does not do so by the terms of his deed, aided by the law, his assignment is void, and interposes no obstacle to creditors in collecting their debts by usual process.'

Subsequently, in Coffin v. Douglass, 61 Tex. 406, 407, the supreme court of Texas said: 'In the case of Donoho v. Fish, 58 Tex. 164, it was held that an assignment made by partners which did not purport to pass title to all the property owned by the partnership, and by the members thereof in their separate rights, and not exempted from forced sale, could not be sustained as a valid assignment under the act of March 24, 1879.' So in Still v. Focke, 66 Tex. 715, 723, 2 S. W. Rep. 59: 'A partnership may make an assignment for the benefit of creditors; but in such case the property of the partnership, and the property of each member of it, which is subject to forced sale, must pass by the assignment.' See, also, Turner v. Douglass, 77 Tex. 620, 621, 14 S. W. Rep. 221.

It is, however, contended by the plaintiff that Donoho v. Fish and the other cases cited were cases of deeds of assignment of firm property only, which required creditors, accepting their provisions, to discharge the debtors from their respective claims; whereas the deed here in question did not exact releases from the accepting creditors. There is no good reason, it is argued, why a deed which does not require releases from creditors as a condition of participating in the benefits of an assignment 'should not stand good for such property as it conveys for the benefit of all the creditors alike, rather than be subjected alone to the demands of a single attaching creditor.' We cannot assent to the interpretation so placed by plaintiff upon the cases cited. It may well be doubted whether the requirement in the deed of assignment, that the proceeds of the property shall be applied to the payment and satisfaction of the firm's indebtedness 'in the proportion of the respective claims of such of our creditors as shall accept these presents,' does not import that such creditors must release the assignors; otherwise, the reference to accepting creditors was meaningless. Independently of this view, the supreme court of Texas distinctly holds, in the cases cited, that the statute in question did not contemplate an assignment by partners for the benefit of creditors of partnership property only; that is, such an assignment is not provided for by, and cannot be administered under, that statute. An assignment of that character may be valid as between the assignors and the creditors who accept its provisions. But no reason is given other than the one above stated which we deem insufficient-why such an assignment would be an obstacle in the way of creditors who do not accept its provisions* from collecting their debts in the ordinary modes prescribed by law, or why the marshal might not, in the discharge of his duty, have levied the attachments in his hands upon the property in dispute, subject, it may be, to the rights of creditors who accepted the proceeds of the property covered by the deed. The issue in the present action is not, and could not be, whether Crow, Hargardine & Co. and Goodbar, White & Co. had sufficient grounds for suing out their attachments against the property of Moseley Bros., nor as to the duty of the marshal to execute them by levying upon any property or interest in property that was subject to an attachment issued against the property of that firm. The issue is as to the authority of that officer to seize, as the property of the firm of Moseley Bros., the particular property embraced by the deed of January 23, 1884. We have seen that no title passed to Doyle, the assignee, in virtue of the statute regulating assignments for the benefit of creditors; and, as the contrary view is the only ground upon which the correctness of the judgment below seems to be questioned in this court, we need not consider the case in any other aspect.

Judgment affirmed.

Notes