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the partnership property first applied to the discharge of the partnership debts, and no partner has any right except to his own share of the residue, and the joint creditors are, in case of insolvency, substituted in equity to the rights of the partners, as being the ultimate cestuis que trust of the fund, to the extent of the joint debts.' Story, Eq. Jur. § 1253."

Though the partnership is being wound up, an individual member is not entitled to an exemption or homestead out of the partnership property. Kingsley v. Kingsley (1870) 39 Cal. 665; Weinrich v. Koelling (1886) 21 Mo. App. 133; Brady v. Kreuger (1896) 8 S. D. 464, 59 Am. St. Rep. 771, 66 N. W. 1083.

In Kingsley v. Kingsley (Cal.) supra, it appeared that a certain piece of property belonging to a partnership, was set off as homestead to the estate of a deceased partner. The court held that no homestead could be claimed by one of the partners out of the partnership property, saying: "It is very clear that property which was held as partnership property could not have then been converted by one of the parties into a homestead."

In Weinrich v. Koelling (1886) 21 Mo. App. 133, it appeared that a son of plaintiff was a partner of defendant. Being in embarrassed circumstances, he fled. Being indebted to his father, he assigned all the property he claimed as exempt to him in the firm property, for which the suit was brought. The question then became material whether he was entitled to an exemption out of the property of the partnership which was being wound up. The court held that while the property remained partnership property there could be no exemption therein. It was also held that a claim of exemption could only be exercised on seizure or threatened seizure. The court said: "If the judgment were treated as resting exclusively on E. H. Weinrich's claim to exemption, the plaintiff's claim would fail, because the record fails to disclose that this money was ever seized, or threatened to be seized, for the payment of the assignor's individual debts. The seizure of the property by the receiver

was one to subject it to the payment of the partnership liabilities only. While it remained partnership property, E. H. Weinrich could claim no exemption therein, because in this state no right of exemption is recognized in partnership property. State ex rel. Billingsley v. Spencer (1877) 64 Mo. 355, 27 Am. Rep. 244. When it ceased to be partnership property, and became the individual property of E. Η. Weinrich, in the hands of the receiver, then E. H. Weinrich could claim no exemption therein until there was either a seizure, or a threatened seizure, of the property, to subject it to the payment of his individual debts."

In Brady v. Kreuger (S. D.) supra, it appeared that the defendant was in possession of certain realty, which was the property of a copartnership which had been dissolved, the plaintiff having purchased the other partners' interest therein. The wife of a former partner claimed a homestead therein, defendant being in possession at her request. The court held that a partner was not entitled to a homestead in partnership property. It was said: "The real property in controversy being partnership property, no homestead rights therein could be acquired by Mr. and Mrs. Kipp, as against the copartner. Section 4034, Comp. Laws, provides that 'each member of a partnership may require its property to be applied to the discharge of its debts, and has a lien upon the shares of the other partners for this purpose, and for the payment of the general balance, if any, due to him.' Real estate belonging to a copartnership is subject to the same rule as the personal property of such copartnership. Betts v. Letcher (1890) 1 S. D. 197, 46 N. W. 193. In the case at bar the plaintiff, as part of the consideration for the sale to him by Kipp of his interest in the copartnership property, agreed to pay the partnership debts and save Kipp harmless therefrom. To hold that a partner, by obtaining possession of, and using as a residence, partnership real estate, could acquire a homestead right therein, as against his copartner, would lead to great injustice and wrong by one partner to his copartner. We think both the spirit and policy of the law are clearly against such a claim. If Kipp could not have claimed this property as homestead property, as against the plaintiff, his wife would occupy no better position than her husband."

b. Application of rule.

1. Bankruptcy or insolvency of firm. Where bankruptcy or insolvency proceedings are instituted against a partnership, or an assignment for the benefit of creditors is made by it, the individual partners are not entitled to claim an exemption or homestead rights in the partnership property.

United States. - Re Hafer (1868) 25 Phila. Leg. Int. 148, Fed. Cas. No. 5,896; Re Price (1870) 6 Nat. Bankr. Reg. 400, Fed. Cas. No. 11,410; Re Rupp (1870) 4 Nat. Bankr. Reg. 95, Fed. Cas. No. 12,141; Re Smith (1874) 2 Hughes, 307, Fed. Cas. No. 12,979; Re Tonne (1875) 13 Nat. Bankr. Reg. 170, Fed. Cas. No. 14,095; Re Handlin (1875) 3 Dill. 290, Fed. Cas. No. 6,018; Re Hughes (1877) 8 Biss. 107, Fed. Cas. No. 6,842; Re Corbett (1878) 5 Sawy. 206, Fed. Cas. No. 3,220; Re Croft Bros. (1878) 8 Biss. 188, Fed. Cas. No. 3,404; Short v. McGruder (1884) 22 Fed. 46; Re Lentz (1899) 97 Fed. 486; Re McCrary Bros. (1909) 169 Fed. 485; Jennings v. Stannus (1911) 112 C. C. A. 91, 191 Fed. 347; Re Abrams (1912) 193 Fed. 271; Re Vickerman (1912) 199 Fed. 589; Re Bundy (1914) 218 Fed. 711; Re Turnock (1916) 145 C. C. A. 179, 230 Fed. 985.

California. Cowan v. Their Creditors (1888) 77 Cal. 403, 11 Am. St. Rep. 294, 19 Pac. 755.

Illinois.-Fingerhuth v. Lachmann (1890) 37 III. App. 489; Wills v. Downs (1890) 38 Ill. App. 269.

Indiana.-Ex parte Hopkins (1885) 104 Ind. 157, 2 N. E. 587.

Maine. Thurlow v. Warren (1889) 82 Me. 164, 17 Am. St. Rep. 472, 19 Atl. 158.

Minnesota. Prosser V. Hartley (1882) 35 Minn. 340, 29 N. W. 156. Nebraska. Miller v. Waite (1899) 59 Neb. 319, 80 N. W. 907, affirmed on

rehearing in (1900) 60 Neb. 431, 83 N. W. 355.

New Mexico.-Re Spitz Bros. (1896) 8 N. M. 622, 34 L.R.A. 604, 45 Pac. 1122.

Ohio. Aultman v. Wilson (1896) 55 Ohio St. 138, 60 Am. St. Rep. 677, 44 Ν. Ε. 1092.

South Carolina.- Ex parte Karish (1890) 32 S. C. 437, 17 Am. St. Rep. 865, 11 S. Ε. 298.

Canada.-MacKinnon v. Beals (1917) 10 Alberta L. R. 503, 1 West. Week. Rep. 1328.

In Re McCrary Bros. (1909) 169 Fed. 485, one of the members of a bankrupt partnership claimed a homestead in a building owned and used as a store by the partnership, a part of which was occupied as a dwelling by the member claiming the homestead. The court held that a member of a partnership could not claim a homestead in partnership property, saying: "The statute of this state provides that 'no property, real or personal, held or owned by partners as partnership property, or purchased with partnership funds for partnership purposes, shall be subject of homestead or other exemption, as against соpartners of partnership creditors.' Ala. Code 1907, § 4166. The evidence was that the bankrupts, as partners, were carrying on a mercantile business under a lease, on the property now claimed as exempt by Wilson T. McCrary; that while so oосcupying the property they purchased it, paying for it with partnership funds and other partnership assets; and that they continued to occupy the property as a partnership store. Said Wilson T. McCrary at the same time lived on the land with his family from January, 1905. The deed of conveyance was made to said Wilson T. McCrary and Felix L. McCrary jointly, each owning an undivided half interest in the property. It was subsequently occupied and used in part as a store, carried on by said joint owners under the partnership name of McCrary Brothers. Wilson T. McCrary also occupied a part of the property as a dwelling for himself and family. If it was his individual property, the fact that he used a part of it as a store would not deprive him of his right to claim it as a homestead, and to have it exempt to him as such. But the property was purchased with partnership funds, so far as the same has been paid for. It is owned and held by Felix L. and Wilson T. McCrary, who are partners carrying on business as such on a part of it. There is no evidence that said Felix, an undivided half owner of the property and a partner, has ever consented to the exemption claimed by said Wilson. Moreover, no such claim was made by filing the same in the probate court prior to the filing of the petition in bankruptcy, and none was made in the petition in bankruptcy. Re Stevenson (1899) 2 Am. Bankr. Rep. 231, 93 Fed. 789; Re Grimes (1899) 2 Am. Bankr. Rep. 730, 96 Fed. 529. It has been held that, when an application is made at a proper time and in the proper way for a homestead exemption out of partnership property, it should be strictly construed as against such application. Re Jennings (1909) 166 Fed. 639; Re Camp (1899) 91 Fed. 745. Now the property in controversy was purchased with partnership funds and was owned by partners, and the question is: Was it purchased for partnership purposes, or was it owned or held as partnership property? In view of the evidence, direct and circumstantial, and drawing all reasonable and just inferences therefrom, it cannot, in my opinion, be said that the referee erred in his conclusions, and that here has been a miscarriage of justice therein."

In Re Handlin (1875) 3 Dill. 290, Fed. Cas. No. 6,018, each of two partners claimed individual exemptions of the amount allowed by the Constitution of Arkansas in the property of the bankrupt partnership. The Bank ruptcy Act provided for the exemption of household furniture and other necessary articles to a certain amount, and such other property as was exempted from levy and sale upon execution or other process under the provisions of the law of the state in which the bankrupt had his domicil. The Constitution of the state provided for

the exemption of all personal property of a resident to a certain value, which might be selected from sale on execution or other process issued for the collection of a debt. The court held that under these provisions bankrupt copartners were not entitled to separate or individual exemptions in the partnership property.

In Cowan v. Their Creditors (1888) 77 Cal. 403, 11 Am. St. Rep. 294, 19 Pac. 755, it appeared that a partnership conducting a business of fruit growing filed a petition to be declared insolvent. Each of the partners filed a petition for an exemption out of the firm property. In sustaining a denial thereof, the court held that, in an insolvency proceeding instituted by a partnership, neither member could claim to have any part of the partnership property or assets set apart to him as exempt.

In Fingerhuth v. Lachmann (1890) 37 III. App. 489, it appeared that a partnership made an assignment for the benefit of creditors. One of the partners claimed an exemption as head of a family. The petition was dismissed on demurrer. Sustaining the ruling, the court said: "The only question in the case is whether the statutory exemptions can be taken from partnership property. That is a new question in this state, and elsewhere the authorities are conflicting. Down to 1878 they are collected in Thompson on Homestead & Exemptions, of that date. It is unnecessary to review and weigh those authorities here, as the same reasons for which the supreme court, in Trowbridge v. Cross (1886) 117 III. 109, 7 N. E. 347, denied a homestead to one partner, in real property of a firm, apply with equal force to exclude exemptions from the personal property of a firm." See, to the same effect, Wills v. Douns (1890) 38 III. App. 269.

In the case of Re Croft Bros. (1878) 8 Bliss. 188, Fed. Cas. No. 3,404, it appeared that, in a voluntary assignment of property by a partnership, the assignee exempted to one of the partners certain property as articles of trade. It also appeared that the partner to whom the property was exempted had paid for a house and fur

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niture out of the partnership assets. It was held that an individual member of a partnership could not claim exemptions from the copartnership assets until after all the creditors had been paid. The court said: "But this court has uniformly held that exemptions cannot be taken from соpartnership assets that the partnership assets are a trust fund for the payment of the creditors of the firm, and that no exemptions can be set apart from them to the individual partners, until all the partnership debts are paid. This has been the rule of this court ever since I have been upon the bench, and I think ever since the Bankrupt Law was passed."

In the case of Re Turnock (1916) 145 С. С. А. 179, 230 Fed. 985, it appeared that a partnership was dissolved, and the property was divided between the partners. The partnership was insolvent, and was subsequently adjudicated a bankrupt. The trustee set off exemptions to the individual members of the partnership, which were objected to. The court held that under the law of Indiana no exemptions were allowed out of partnership assets, saying: "We cannot agree with Crawford v. Sternberg (1915) 135 С. С. A. 641, 220 Fed. 73, that moneys withdrawn by each partner, with the consent of his copartners, on the eve of bankruptcy and for the purpose of thereby securing an exemption, may be thus retained by him. In so far as such moneys are in his possession at the time of filing the petition, they must be deemed firm, not individual, assets, for all purposes."

In Ex parte Hopkins (1885) 104 Ind. 157, 2 Ν. Ε. 587, the assignee set off as exempt to each partner who composed the firm which had assigned its property for the benefit of creditors certain property to be selected by the partners. The court having refused to confirm the assignee's findings, he appealed. The court held that a partner could not claim an exemption out of partnership property, saying: "It is settled by the decisions of this court, however, that partnership property, or an interest therein, cannot be claimed by

a member of the firm as exempt from sale on execution for a partnership debt. Love v. Blair (1880) 72 Ind. 281; Smith v. Harris (1881) 76 Ind. 104; State ex rel. Talbott v. Emmons (1885) 99 Ind. 452. The interest of a partner in partnership property is not an interest in the specific property, but an interest in what may remain of the partnership assets, after the payment and discharge of all debts and liabilities of the firm to third persons and to each other upon the close of the copartnership business."

In Thurlow v. Warren (1889) 82 Me. 164, 17 Am. St. Rep. 472, 19 Atl. 158, it appeared that plaintiffs were copartners, owning a pair of oxen. An assignment was made for the benefit of creditors. The assignee having taken the pair of oxen, the plaintiffs sought to replevy them, on the ground that they were exempt. It was held that the statute applied only to individually owned property, and not to that owned jointly. The court said: "The clause under which this case falls provides, 'If he has more than one pair of working cattle, he may elect,' etc., with several like uses of the singular pronoun. Rev. Stat. chap. 81, § 62, cl. 7. It would seem, therefore, that the property which can claim exemption from writ and execution must be owned in severalty, and not jointly."

In the case of Re Price (1870) 6 Nat. Bankr. Reg. 400, Fed. Cas. No. 11,410, a partner applied for an allowance out of the partnership assets. It was held that under the provisions of the Bankrupt Act an exemption could not be allowed to individual partners out of the partnership estate, as such exemption could only be allowed in cases where there was a surplus after payment of the partnership creditors.

In Prosser v. Hartley (1886) 35 Minn. 340, 29 N. W. 156, it appeared that a partnership had assigned its property for the benefit of creditors. The suit was instituted by the successor of the assignee, to recover the value of certain goods which were in the assignee's hands, and were converted to his own use. He had turned over to the members of the partnership certain articles as exempt. The court held that no right of exemption in partnership property existed in favor of either of the partners, saying: "This property had been partnership property and, so long as it was such, no right of exemption existed in respect to it in favor of the copartners, nor of either of them."

In the case of Re Bundy (1914) 218 Fed. 711, it appeared that a partnership filed a petition in bankruptcy. One of the members claimed an exemption out of the partnership property. The referee denied the claim. In sustaining the finding of the referee, the court said: "The question here presented is whether a member of a copartnership is entitled to exemptions out of the partnership estate. Exemptions allowed bankrupts are governed by the state law, or, as expressed in the United States Bankruptcy Law of July 1, 1898 (chap. 3, § 6a): This act shall not affect the allowance to bankrupts of the exemptions which are prescribed by the state laws in force at the time of the filing of the petition in the state wherein they

have had their domicil for the six months, or the greater portion thereof, immediately preceding the filing of the petition.' In this situation, recourse must be had to the exemptions allowed under the laws of this state, and as interpreted by its supreme court. It does not appear, however, that the Mississippi supreme court has passed upon the precise question at issue; but counsel for the bankrupt and the referee have cited a number of Mississippi cases, considered as establishing their respective positions. The court has examined these authorities, with the conclusion that none cited control the case at bar. The subject of 'exemptions' is exhaustively treated in Cyc., which authority is decidedly against individual parties claiming exemptions in the partnership property as against the partnership debt; numerous reasons, with authorities, being advanced in support of the proposition: 'By the great weight of authority, individual partners cannot claim exemptions in the partnership property as against a

partnership debt. This is held on various different grounds: (1) On the well-known ground that partnership property is subject to the payment of partnership debts, before all other claims; (2) the impracticability, or even inequity, of allowing an exemption out of the property; (3) that under the theory of the civil law that a partnership is an entity, a theory not generally recognized by the common law, and one which is inconsistent with its principles, and that the partnership property does not belong to the individual partners, but to the firm, that is, to the legal entity; (4) that the different exemption statutes contemplate only individuals, and have no reference to partnerships. .'18 Сус. 1383 (citing authorities). There can be little doubt of the correctness of the law as above stated, and, without the state law expressly provides for exemptions out the firm's assets, it follows that this bankrupt has no claim against the estate of exemptions. Collier's Work on Bankruptcy, 1914 ed., an acknowledged authority, discussing this question, beginning at page 196, states that 'on principle, they [the individual partners] cannot claim exemptions therefrom, the partnership being an entity, and the partners having no interest in the assets until all its creditors are paid.' Re Beauchamp (1900) 3 N. B. N. Rep. 712, 101 Fed. 106; Re Mosier (1901) 112 Fed. 138. The position of the Federal courts upon this question is convincingly stated by the circuit court of appeals, ninth judicial circuit, in the case of Jennings v. Stannus (1911) 27 Am. Bankr. Rep. 384, 112 С. С. А. 91, 191 Fed. 347, in which it is laid down: 'The strong reason in support of this view rests upon the innate difference between the individual and a copartnership, as it relates to their respective property rights. Each is a distinct entity. The former holds by the exclusive right, subject only to the right of his creditors to have his property applied to their legitimate demands. Exemption statutes are enacted to meet this express condition, to relieve the debtor in a measure against the demands of his cred

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