Summary
In Hall, supra, 117 Ohio St. 247, 158 N.E. 191, the Supreme Court indicated that at least since 1846, creditors had possessed the ability to sue a partnership and execute against the individual partners by setting forth the judgment and the insufficiency of partnership property to satisfy the judgment.
Summary of this case from Heinz v. SteffenOpinion
No. 20339
Decided June 22, 1927.
Partnenship — Action to make individual partner party to judgment against firm — Section 11651, General Code — Pleading and proof of insufficient partnership property, necessary.
A creditor who has secured a judgment against a partnership in its firm name, cannot bring an action to make an individual partner a party to the judgment, under Section 11651, General Code, without pleading and proving that there is insufficient partnership property to satisfy the judgment.
ERROR to the Court of Appeals of Cuyahoga county.
Suit was brought by the Oldfield Company, the defendant in error, in the circuit court of Etowah county, in the state of Alabama, against the Buck-Hall Motor Company, a partnership composed of Bester L. Buck and Wilbur L. Hall, which suit was on an account claimed to be due the plaintiff. Hall was made a party defendant thereto. On August 21, 1923, at the request of the plaintiff in the Alabama court, the court dismissed the action as against Hall, the plaintiff in error here, for failure of service, and rendered judgment against the partnership and in favor of the plaintiff for the amount claimed. This judgment was duly attested by the clerk of the Alabama court, and certified as having been rendered in a court of record having general jurisdiction.
On April 20, 1924, the Oldfield Company, the plaintiff in the Alabama court, filed its action in the court of common pleas of Cuyahoga county, Ohio, against Hall, setting forth the foregoing facts, that the judgment was obtained in a court of general jurisdiction in Alabama, and prayed that Hall be made a party defendant to the judgment in the Ohio suit.
There is no allegation in the petition in the Ohio case to the effect that the partnership had no property which would satisfy the judgment, or that any execution had been issued against such property and had been returned unsatisfied. The defendant, Hall, filed a general demurrer to the petition, which was overruled by the trial court. He later answered in the cause, admitting the corporate capacity of the plaintiff, but denying every other allegation contained in the petition. The cause came on to be heard before the trial court, at which trial the defendant Hall admitted that he was one of the persons composing the partnership doing business as the Buck-Hall Motor Company, and that he was such partner "at the time that the partnership had purchased merchandise from the plaintiff," for which judgment had been obtained in the Alabama court. The trial court therefore "adjudged and decreed that the defendant Wilbur L. Hall be and is hereby made a party defendant to the judgment as prayed for in plaintiff's petition."
This judgment was affirmed by the Court of Appeals, and the cause admitted to this court on motion to certify.
Mr. Louis Barnes and Mr. L.L. Campbell, for plaintiff in error.
Mr. Lawrence S. Sobel, for defendant in error.
Was the plaintiff in the Ohio suit entitled to maintain its action against the individual partner under Section 11651, General Code, without alleging in its petition that the partnership had no property sufficient to satisfy its judgment?
The judgment secured in the Alabama court was a judgment against the partnership in its firm name. The property of the individual partner cannot be sequestered by execution thereon if satisfaction can be obtained out of the partnership assets. Section 11664, General Code, provides as follows:
"An execution on a judgment rendered against a partnership firm by its firm name shall operate only on the partnership property."
Section 11651, General Code, provides:
"The members of a partnership, against which a judgment has been rendered by its firm name may be made parties to the judgment by action."
Both of those sections have their origin in the act regulating suits by and against partners, passed February 27, 1846 (44 O. L., 66, Sections 2 and 4). Section 2 of the original act provided that executions issued on partnership judgments should operate only on partnership property. Section 4 provided that if a plaintiff sought to charge the individual property of persons composing a firm, plaintiff could file a bill in chancery against its members, setting forth his judgment "and the insufficiency of the partnership property to satisfy the same." In the revision of 1880, Sections 2 and 4 of the original act were incorporated in the Revised Statutes, and were given separate numbering. The provisions of Section 2 are now found in Section 11664, General Code, while Section 4, embracing the authority to charge the individual partner, was incorporated in the revision as Section 5370, Revised Statutes, which is now Section 11651, General Code. In the revision the requirement that the creditor must allege the "insufficiency of the partnership property to satisfy" the judgment was omitted; but the provision of Section 2 of the original act was, in the revision, permitted to remain without substantial alteration. There is no doubt but that prior to the revision a creditor obtaining judgment against a partnership, who thereafter sought to charge the individual partner, was required to allege and prove that the partnership property was insufficient to satisfy the judgment. It was so held by the Nebraska Supreme Court in construing an act similar to our own. Ruth v. Lowry, 10 Neb. 260, 4 N.W. 977; Leach v. Milburn Wagon Co., 14 Neb. 106, 15 N.W. 232.
The rule generally applicable to earlier acts undergoing revision has been often stated by this court. In Conger v. Barker's Adm'r., 11 Ohio St. 1, referring to the rule peculiarly applicable to revised statutes, it was stated, at page 13:
"It is a well settled rule that in the revision of statutes neither an alteration in phraseology, nor the omission or addition of words, in the latter statute, shall be held necessarily, to alter the construction of the former act. And the court is only warranted in holding the construction of a statute when revised, to be changed, where the intent of the Legislature to make such change is clear, or the language used in the new act plainly requires such change of construction. Such was the holding of this court at the last term, in the case of Ash v. Ash and others, 9 Ohio St. 387. See also [ Van Camp v. Board of Education of Logan] 9 Ohio St. 418, for the authorities there cited."
And in State ex rel. Clough v. Comr's. of Shelby County, 36 Ohio St. 326, a part of the syllabus reads as follows:
"Where an act of the Legislature, or several acts in pari materia, have undergone revision, the same construction will prevail as before revision, unless the language of the new act plainly requires a change of construction, to conform to the manifest intent of the Legislature."
See, also, German American Ins. Co. v. McBee, 85 Ohio St. 161, 173, 97 N.E. 378.
Construing the provisions of both Sections 11651 and 11664, General Code, and giving a practical effect to each, we are unable to say that in the revision of the early partnership act there was any intention on the part of the Legislature of empowering a firm creditor to make the individual partner a party to the firm judgment without pleading and proving that there was insufficient partnership property to satisfy the judgment.
Since there appears to be no allegation in the petition in the Ohio suit that the partnership property was insufficient to satisfy the judgment, the petition did not state a cause of action against Hall, the individual partner, and the latter's demurrer to the petition should have been sustained.
The judgments of the lower courts are reversed and the cause remanded to the common pleas court for further proceedings according to law.
Judgment reversed and cause remanded.
ALLEN, KINKADE, ROBINSON and MATTHIAS, JJ., concur.