Pahlman, Ex'r, etc., et al. v. Graves.

fifth day of October following, the firm of Rossiter, Pahlman & Smiths, made a general assignment for the benefit of creditors, constituting Francis A. McIntyre assignee-that the assignee had not, at the time of these proceedings in court, closed up the business of this trust, and had then in his hands the assets so assigned to him, which, however, are insufficient to pay the liabilities of the firm. Rossiter died on the 25th of February, 1858. On the third of March, 1859, Graves commenced suit in the Circuit Court of Cook county, against Pahlman and the Smiths, as surviving partners, on these notes, and on the 13th of April following, obtained a judgment against them, as surviving partners, for five hundred and fifty-three and 37-100 dollars and costs of suit, and on the 14th of April he caused execution to be issued on the judgment, and placed it in the hands of the sheriff of Cook county for collection. The sheriff demanded of the defendants in the execution the payment thereof, or the surrender of property in satisfaction. The defendants declined to pay it, and said they had no property to surrender in satisfaction. The sheriff, being unable to find property, returned the execution to the clerk's office, on the 12th of July, 1859, in no part satisfied.

On the 19th of September following, Graves filed his claim upon these notes in the County Court of Cook county, for allowance, against the estate of Rossiter, deceased, and on the 19th of October, due notice thereof having been given to Pahlman, the sole executor under the will of Rossiter, the judge of the said court, in accordance with the practice of that court upon claims of this nature, and presented under these facts, allowed the claim against Rossiter's estate to be paid, as follows: "class number four," Riley M. Graves, two notes, and interest, $568.70. From this order the executor appealed to the Circuit Court of Cook county. The estate of Rossiter had been represented to the County Court by the executor as insolvent, and it was so entered for record in the County Court, and that claims of Rossiter's individual creditors, to a large amount, had been proved against his estate.

The Circuit Court, upon these facts, found for Graves, and assessed the damages at six hundred and eleven and 50-100 dollars, and entered judgment therefor, to which finding and judg ment, Pahlman, the executor, excepted, and appealed to this court, and assigns for error the assumption and exercise of jurisdiction by the County Court in the cause, when, by law, it had no jurisdiction; in rendering a judgment for Graves, when by the law of the land it should have been rendered in favor of the executor; and because the court declined to dismiss the proceed ings, as by law it should have done.

Pahlman, Ex'r, etc., et al. v. Graves.

We remark here, there is no motion in the record to dismiss the proceedings, in either court.

The argument in this court has been principally directed to the question of jurisdiction in the County Court; the appellant contending, that before Graves could go upon the individual estate of Rossiter, he was bound, his debt being a joint debt of the partnership, first to proceed against and exhaust the joint fund. That the separate estate of Rossiter is for the benefit of his separate creditors, the joint creditors having no claim upon it, except for such residuum as may remain after the separate creditors have been satisfied. This court, in Ladd v. Griswold et al., 4 Gilman, 36, say, that at law the individual debts of one partner, and the partnership debts, are placed on the same footing, and are to be paid, pari passu, out of the assets. The general rule by which courts of equity are governed, in the administration of the assets of deceased and insolvent partners, is, if there be partnership property, and also separate property of a partner, the partnership debts are to be paid out of the proceeds of the joint estate, and the individual debts are to be paid out of the proceeds of the separate estate. The joint and individual debts are to be kept distinct, and the assets derived from the two estates are to be marshaled accordingly. The joint creditors have no claim on the fund arising from the separate estate, until the individual debts are satisfied; and on the other hand, the separate creditors can only seek payment out of the surplus of the partnership effects, after the satisfaction of the joint liabilities. Such is unquestionably the rule in equity, where there is a joint and a separate estate to be distributed among joint and individual creditors. 1 Story Eq. Jur., sec. 675; 3 Kent's Com. 64; Story on Part., sec. 363; Wilder v. Keeler, 3 Paige, 167; Mc Culloh v. Dashiell, 1 Harris & Gill, 96.

If, however, the court say, there is no joint fund to which the joint creditors can resort, and no solvent partner from whom payment can be enforced, they should be allowed to participate equally with the private creditors, in the estate of the deceased partner.

How are the facts in this case? The partnership effects had been assigned by the firm to McIntyre "for the benefit of creditors," and are admitted to be insufficient to discharge the firm liabilities, and that the trust was not closed at the time of the suit, the assignee having in his hands the assets undisposed of.

The case fails to show what the value of the assets were, nor does it show that the claim of Graves was included in the assignment. It will be a fair inference from what is agreed and proved in the case, and all such inferences the court has a right to draw, that as Graves was a creditor at the time of the

Pahlman, Ex'r, etc., et al. v. Graves.

assignment, and the assignment made "for the benefit of creditors," generally, without any preferences, that Graves' debt was included within it. Now here is a joint fund though inadequate, to which Graves must first resort, and receive his pro rata, before he can thrust aside the separate creditors, and claim a share of the separate estate of the deceased partner. For the purpose, then, of a fair and equitable adjustment of the joint and separate claims, the assignee of the firm should be a party to the proceedings, and the burden lies upon the claimant against the joint estate to bring him in. The joint and separate debts are to be kept distinct, and the assets derived from the two estates are to be marshaled accordingly.

We do not think, with the appellee's counsel, that issuing an execution and having it returned nulla bona against the surviving partners, acquitted him of his whole duty in the premises. The joint fund being first liable for his debt, it was his duty to proceed against the assignee who had it, by bill in equity, and subject it to the payment of so much of the debt as his ratable proportion of it would discharge.

The County Court has no jurisdiction to entertain such a bill on such a case. What this court said in Rodgers v. Moon, in 19 Ill. 349, and in Dixon v. Buel, Adm'r, 21 ib. 204, was not intended to assert the doctrine contended for by appellee, that the County Court has a general equitable jurisdiction in cases where third parties are required to be brought in, and conflicting interests composed and settled. The conflicting claims of copartnership and separate creditors have long been a fruitful source of litigation,, and it would be unreasonable to confide them to the control of that court. The cases referred to, show mere money demands, in which no party but those before the court had any interest, and no conflicting claim existed. The affairs of a copartnership have ever been considered peculiar subjects of chancery jurisdiction, where all matters pertaining to them can be thoroughly investigated, and complete justice done.

We think the County Court had not jurisdiction to investigate and allow this claim, and subject the separate property of the individual deceased partner to the payment of a joint debt, for which a fund existed for its payment, and the Circuit Court should so have decided.

The judgment of the Circuit Court is reversed.

Judgment reversed.

Gray et al. v. Morey.

JOHN GRAY, THOMAS WEST, and HENRY S. MISNER, Plaintiffs in Error, v. SMITH MOREY, Defendant in Error.

ERROR TO COOK.

During the progress of a trial, a new bond in replevin may be substituted for the original, with a change of sureties, for the purpose of making a witness of one of the sureties on the first bond.

A person to whom a plaintiff in replevin has given a note for money, with which to purchase the property replevied, out of the proceeds of which the note was to be paid, after the payment of the note, is a competent witness for him.

A defendant in an execution under which replevied property was taken, who has been discharged from the judgment against him, may be examined for the defendant in replevin, without producing his release.

THE affidavit of Smith Morey, defendant in error, as the foundation of this replevin suit, states that he is the owner and lawfully entitled to the possession of certain cattle, of the value of seven hundred and fifty dollars; that John Gray, Thomas West and Henry S. Misner have wrongfully taken and unlawfully and wrongfully detain the same from him; and that said cattle have not been taken for any tax assessment or fine levied by virtue of any law of this State, nor seized under any execution or attachment against Morey; and that he is about to replevy said property.

The declaration alleges the taking and wrongful detention of property, and lays damages at $800.

Replevin bond executed by Smith Morey, Theron Potter and Mr. Castle for self and firm of Castle & Shepard.

Pleas, Non cepit-Non detinet. Property in Gilbert Follansbee; and that property was taken by John Gray, as sheriff, under an execution issued upon a judgment in favor of Thomas West, who sued for the use of the defendant, Henry S. Misner, against Gilbert Follansbee; and that under that execution property was taken as property of Gilbert Follansbee.

The replication alleges property in plaintiff.

The jury found the issues of property for the plaintiff, and also found that there should have been a demand upon the defendant for the property before the commencement of this suit. Motion for a new trial overruled.

There was a judgment on the verdict that plaintiff have and retain possession of the goods and chattels replevied, and that the defendants have and recover of the plaintiff their costs and charges by them about their defense expended, and have execution therefor.

The counsel for the plaintiff below moved to substitute in place of the original replevin bond on file, which bond is in the usual

Gray et al. v. Morey.

form, executed by Smith Morey, Mr. Castle, of the firm of Castle & Shepard, for self and firm, and make a new bond, omitting the name of Shepard, one of the sureties therein, and substituting Samuel Shackleford as surety in said bond in the place of Castle & Shepard.

The defendant's counsel opposed the motion, and objected to the filing of a new bond and to the change proposed by the plaintiff, on the ground that it lessened the security of the bond, and, generally, that the court had no power to change or alter it. The court overruled the objection, and permitted a new bond, executed by Smith Morey, M. B. Castle and Samuel Shackleford, and the counsel for the defendants excepted.

Shepard was then called as a witness for plaintiff, and on his voir dire, testified: I reside at Sandwich, DeKalb county; am a partner of M. B. Castle; the firm name is Castle & Shepard; our place of business is at Sandwich; we deal in lumber and exchange. My partner, Mr. Castle, is one of the plaintiff's sureties on the replevin bond in this case. Castle & Shepard furnished the money with which the cattle in controversy were purchased. We took the plaintiff's note for the money, and it was understood and agreed that the note was to be paid out of the proceeds of the sale of the cattle. After the cattle were replevied they were sold, and out of the proceeds of the sale the amount of the note was paid to Castle & Shepard, and the note canceled and delivered up to plaintiff.

The defendant's counsel objected to the admission of Shepard on the ground of interest, and because, being a partner of Castle and one of the sureties on the replevin bond, and the proceeds of the sale of the cattle having been paid to Castle & Shepard, he was jointly interested with Castle in the result of the suit. Objection overruled.

Upon his examination in chief, witness testified:

I know the plaintiff, Gilbert Follansbee; a few days before the cattle in controversy were bought, Morey asked me to let him have some money to buy a lot of cattle. This was between the 8th and 12th of February; we were to furnish money and charge one-fourth per cent. for use in the way we discount grain buyer's checks. The amount of the note was to be fixed after cattle came in; as quick as cattle came in, Morey gave his note for the amount-$718 and some cents. Morey paid the note out of the proceeds of the sale of cattle. The cattle were shipped to Chicago on the morning of the 16th; part of the money had been drawn out on checks prior to giving noteabout $400 or $500; checks were drawn by Follansbee and Morey. When Morey gave the note, he took about $100 out himself-afterwards a check came in for the balance. The note

1