Opinion
6 Div. 497.
October 20, 1921. Rehearing Denied November 17, 1921.
Appeal from Circuit Court, Walker County; J. J. Curtis, Judge.
W. F. Finch, of Jasper, for appellant.
Each member of a partnership is individually liable for partnership debts. 162 Ala. 304, 50 So. 137. Partnership creditors may pursue the adjudicated partners before, during, and after bankruptcy against the partnership, and a discharge of the partnership, or either one of the partners, when the other partners are not adjudicated bankrupt, does not discharge the other partners from liability for partnership debts. (D. C.) 184 Fed. 144; 157 Fed. 363, 85 C.C.A. 61, 17 L.R.A. (N.S.) 886, 13 Ann. Cas. 986; 50 So. 281. The bankrupt court could not, under the pleadings, administer the property of the other partners without their consent. 228 U.S. 695, 33 Sup. Ct. 701, 57 L.Ed. 1029, L.R.A. 1915E, 706, and authorities supra.
J. M. Pennington, of Jasper, for appellees.
The Bankruptcy Act settles this question. See Bankruptcy Act, § 5, pars. "a" and "c." 228 U.S. 695, 33 Sup. Ct. 701, 57 L.Ed. 1029, L.R.A. 1915E, 706.
Through the common counts, the appellant, Wagner Grocery Company, sued "Dodd-Cooner Mercantile Company, a partnership composed of Virgil Dodd, B. G. Dodd, O. B. Cooner, and Wiley Weaver, and B. G. Dodd, Virgil Dodd, O. B. Cooner, and Wiley Weaver." Among other pleas, the defendants interposed plea 9, which is reproduced in the report of the appeal. The court overruled plaintiff's demurrer to this plea, and the only assignment of error in fact insisted upon in brief is referable to that ruling. In a phase, at least, this plea set up the discharge in bankruptcy of "D. B. Dodd, doing business under the firm name of Dodd-Cooner Mercantile Company," and sought thereby to conclude plaintiff's right to remedy or relief against others named, who are alleged to have been members of the partnership called Dodd-Cooner Mercantile Company, now impleaded. The court below mistook the effect of the plea's averment of discharge in the bankruptcy court. Instead of alleging the adjudication of the bankruptcy of the partnership, on the partnership's petition to that end, and the partnership's discharge in bankruptcy, concluding other action to enforce the payment of this indebtedness, the plea avers only the petition in bankruptcy of D. B. Dodd individually, and the discharge of D. B. Dodd individually; the reference to the Dodd-Cooner Mercantile Company in connection with D. B. Dodd being but descriptive, designative of D. B. Dodd. In short, the bankruptcy court's jurisdiction was invoked and exercised in respect alone of the estate of D. B. Dodd individually, and not the estate of the partnership described in plea 9.
It may be the pleader intended to aver the adjudication of the bankruptcy of the partnership described in plea 9; but under the influence and presently deserved application of the familiar rule that, on hearing on demurrer, equivocal pleading is construed against the pleader, this possible purpose cannot be attributed to plea 8. The status averred in plea 9 is this: The adjudication of the bankruptcy of a member of a partnership, the discharge of such member, and the effort to assert that individual discharge in bankruptcy in favor of alleged comembers who were not before the bankruptcy court, or who were not brought under its jurisdiction in such individual proceeding.
The concrete case considered in Francis v. McNeal, Trustee, 228 U.S. 695, 33 Sup. Ct. 701, 57 L.Ed. 1029, L.R.A. 1915E, 706, is readily distinguishable from the status disclosed by plea 9. There "McNeal, trustee, in bankruptcy of a firm of which Francis was a member," sought to have the bankruptcy court, upon jurisdiction of the firm, extend its jurisdiction over the individual estate of a member of the firm; Francis having "consented and agreed to hand over his property according to the order of the court." In other words, the factor discriminating Francis v. McNeal, Trustee, from the status and judicial action described in plea 9, is that there the bankruptcy court acquired jurisdiction of the partnership, of which estate McNeal was trustee, while here jurisdiction over the partnership in question is not averred to have been acquired by the bankruptcy court. So the decision of the concrete case presented in Francis v. McNeal, Trustee, is not applicable to this appeal. But, in interpreting the Bankruptcy Act, particularly section 5h, the Supreme Court did affirm, in Francis v. McNeal, Trustee, the nonacquirement of jurisdiction of a partnership by a bankruptcy court, when the bankruptcy sought to be adjudicated was of an individual member, less than all, of the partnership. Lacey v. Cowan, 162 Ala. 546, 50 So. 281. This feature of the opinion in Francis v. McNeal, Trustee, requires the conclusion that the court erred in overruling the demurrer to plea 9.
The allegations of plea 9, asserting plaintiff's filing of its claim in the individual bankruptcy proceedings described, and the reception of dividends under the administration in bankruptcy of that estate, present no element of inconsistency, since D. B. Dodd's estate was individually liable for the firm debt, not as a surety, but primarily and directly (Francis v. McNeal, supra), and hence even the plaintiff, as a firm creditor, evinced no election and erected no estoppel by proceeding to claim and enforce its demand against the individual estate of the bankrupt, D. B. Dodd. The following texts and annotations treat phases of the subject under consideration: 20 R. C. L. pp. 1051-1053, L.R.A. 1915E, 706; L.R.A. 1915F, 669, 670; 2 Rowley on Part. §§ 686, 687, 706. It is to be noted that the Supreme Court, in Francis v. McNeal, destroyed, as possible authority, the majority view in Re Bertenshaw, 157 Fed. 363, 85 C.C.A. 61, 17 L.R.A. (N.S.) 886, 13 Ann. Cas. 986, in so far as it was in conflict with Vaccaro v. Bank, 103 Fed. 436, 43 C.C.A. 279.
The plaintiff was moved to take a nonsuit by the erroneous adverse ruling of the court. The judgment is reversed, and the cause is remanded.
Reversed and remanded.
ANDERSON, C. J., and SOMERVILLE and THOMAS, JJ., concur.