In re Ozias L. Nims and David Long, Bankrupts. itors of O. L. Nims, agent, by that copartnership name. The assignee is directed to keep an account of the joint stock or property of the copartnership of O. L. Nims, agent, and not an account of property owned by the two partners jointly, which is not the property of such copartnership by that name. He is also directed to keep an account of the separate estate of each of the two partners; and the interest of each of them in joint property which is not the property of the copartnership of O. L. Nims, agent, by that name, is separate estate. The statute further directs, that the proceeds of the joint stock or property of the copartnership of O. L. Nims, agent, shall be appropriated to pay the creditors of that copartnership. All the assets in this case are the proceeds of the joint property of such copartnership. They cannot go to pay the creditors of the copartnership of O. L. Nims & Co. The creditors of the copartnership of O. L. Nims & Co. are not creditors of the copartnership of O. L. Nims, agent. It is only when there shall be a balance of the joint stock of the copartnership of O. L. Nims, agent, after paying the joint debts of such copartnership, that such balance can be divided among the separate estates of the two bankrupts, so as to be applied to pay their separate debts as members of the copartnership of O. L. Nims & Co. It is suggested, that the language of section 5,121 does not in terms prescribe the rule of distribution when debts are proved against the bankrupts jointly, which are not partnership debts, but that that section deals only with the mode of distribution as between partnership creditors and creditors of the partners separately, and, where the rights of those classes of creditors are involved, applies the equitable rule, that the joint property shall be first applied to pay the joint debts, and the separate property to pay the separate debts of the partners respectively; that the creditors of O. L. Nims & Co. are no more creditors of the bankrupts separately, than are the creditors of O. L. Nims, agent; that both classes are joint creditors; and that, as the creditors of O. L. Nims, agent, can resort to the separate property of the bank In re Ozias L. Nims and David Long, Bankrupts. rupts as fully as the creditors of O. L. Nims & Co. can, the latter ought to be permitted to resort, equally with the former, to any joint assets. The answer to this suggestion is, that debts against the bankrupts jointly, as members of the firm of O. L. Nims & Co., are debts against each partner separately, and that, if there be debts against them jointly which are not debts against them severally, and are not debts of the copartnership of O. L. Nims, agent, such latter debts are outside of the provisions of § 5,121. This does not authorize the Court to treat as debts of the copartnership of O. L. Nims, agent, debts which are not debts of the copartnership of O. L. Nims, agent. In Forsyth v. Woods, (11 Wallace, 484,) the Supreme Court had under consideration § 36 of the bankruptcy Act of March 2d, 1867, (14 U. S. Stat. at Large, 534,) the provisions of which are those found in § 5,121 of the Revised Statutes. In referring to those provisions, the Court, through Mr. Justice Strong, says: "It is not certain that a promise by a partnership and a promise by the individual partners collectively have the same effect. If a firm be composed of two persons associated for the conduct of a particular branch of business, it can hardly be maintained that the joint contract of the two partners, made in their individual names, respecting a matter that has no connection with the firm business, creates a liability of the firm, as such. The partnership is a distinct thing from the partners themselves, and it would seem that debts of the firm are different in character from other joint debts of the partners. If it is not so, the rule that sets apart the property of a partnership exclusively, in the first instance, for the payment of its debts, may be of little value. That rule presumes that a partnership debt was incurred for the benefit of the partnership, and that its property.consists, in whole or in part, of what has been obtained from its creditors. The reason of the rule fails when a debt or liability has not been incurred for the firm as such, even though all the persons who compose the firm may be parties to the contract." The rule thus referred to by the Court is the arbitrary rule of In re Ozias L. Nims and David Long, Bankrupts. the bankruptcy statute of the United States. The District Judge, in his decision in the District Court, says, that, after a very careful reading of the books, he is unable to find any case in this country or in England, except the case of Forsyth v. Woods, which advances the view thus advanced in that case. He adds: "That this is not the foundation of the rule which gives partnership creditors priority over separate creditors as to the joint property, seems to be indicated by the cases which postpone the partnership creditors when there has been a conversion of joint into separate property. It is well settled, that partners may, during the continuance of the partnership, by agreement, convert joint into separate estate, or vice versa. This conversion determines the character of the property for the purposes of its distribution in bankruptcy. Accordingly, when one partner, without fraud, sells out to the other, the property becomes separate property, and the creditors of the firm are postponed to the separate creditors of the purchasing partner. If the rule of distribution is founded on the theory that the fund which is derived from the creditors is primarily the fund for their payment, and the law therefore appropriates it to them, it could not be permitted that the debtors themselves, by agreement, should defeat this result." The remarks of Mr. Justice Strong, in Forsyth v. Woods, are not understood to go any further than to say, that, under the bankruptcy statute, if there are partnership debts and partnership assets, it will be presumed that such assets were obtained from the partnership creditors, so that, if such assets remain to be administered in bankruptcy, they shall be applied first to pay debts of the partnership. This rule of distribution is a statutory one, and applies only to partnership assets which remain such to be administered in bankruptcy. There was never any statute in England, in terms like our statute, during the, time the English decisions referred to were made. Those decisions proceeded on a general equitable idea, that creditors of joint debtors who were in fact partners should be allowed to share in the assets of the partnership, although not creditors of the partnership, or in respect In re Ozias L. Nims and David Long, Bankrupts. to any matter growing out of or connected with the partnership. Hence, the decisions in England, of which the case of Hoare v. The Oriental Bank Corporation, (L. R., 2 Appeal Cases, 589,) is a recent instance, holding that a joint debt, not shown to have been incurred as a partnership transaction, and as arising out of partnership business, could be proved against the partnership estate, where the partners were the joint debtors. In this last case, it was suggested as a ground for allowing the proof, that the creditor could, before the insolvency, have sued the debtors composing the partnership, jointly, upon the obligation held by him, and, upon recovering judgment, have taken out execution against the partnership assets. But there was no such controlling statutory rule as the one of our statute. The provisions of our bankruptcy statute, in the matter in hand, are like those of the Massachusetts insolvency law of 1838, ch. 163, § 21. Under that law, it was held, in Ex parte Weston, (12 Metcalf, 1,) that only partnership debts could come against partnership assets. (See, also, Somerset Potters Works v. Minot, 10 Cushing, 592.) It follows, that the order under review must be reversed and vacated, with costs. The same decision is made in the case of Blackmar. William H. Greene, for the assignee in bankruptcy. Sherman S. Rogers, opposed. The Southern Home. THE SOUTHERN HOME. A vessel bound to keep out of the way of another vessel, and having no lookout, was, in this case, held to be not in fault for a collision between the two vessels, because the case was one of inevitable accident. The yellow fever having disabled most of her crew, which was adequate, it was proper for her to pursue her voyage, without putting back or seeking an intermediate port or anchoring, her precautions, with the remaining crew, being reasonable. (Before WAITE, Ch. J., Southern District of New York, June 30th, 1879.) THIS was an appeal from a decree of the District Court, dismissing the libel, in a suit in rem, in Admiralty. This Court found the following facts: "About four o'clock in the morning of the 22d of September, 1875, a collision occurred between the German bark Bremen, owned by the libellants, and the British schooner Southern Home, three or four miles to the eastward of the light ship, off Sandy Hook. The Bremen was bound on a voyage from Bremen to New York, and the Southern Home from San Domingo to New York. The wind was somewhat west of north, and both vessels were beating in to New York, the Bremen being on her starboard and the Southern Home on her port tack. Both vessels were steering by the wind, and close hauled. The weather was fine, and the moon shining brightly. The sea was tolerably smooth, and the wind steady, at a five or six knot breeze. Both vessels had their regulation lights set and burning brightly. The Bremen was well manned and found, and her lookout, who was on duty, discovered the green light of the Southern Home off his port bow, when the vessels were a long distance apart. He promptly reported it, and the Bremen was kept steadily on her course. There was no fault whatever in her navigation. She had taken a pilot on board about noon of the previous day, to bring her into New York, and he was, at the time, in charge. The Southern Home left San Domingo on the 31st of August. She was staunch, strong |