The discharge did not purport to forever re- | dividual estates and vice versa, and may lease the bankrupt from all his debts and marshal the assets of the partnership estate liabilities, but only from all such "debts and and individual estates so as to prevent preiclaims" as were by said bankruptcy act erences and secure the equitable distribu"made provable against his estate." That tion of the property of the several estates." the debt was one which might have been The history and present status of this case proved in bankruptcy proceedings against differentiate it from any authority to which the estate of the individual partner is evident our attention has been called, or which carefrom the whole tenor of the law, and es- ful search has enabled us to find. Collier, pecially from chapters 1, 3, §§ 1, 4 (30 Bankr. 5th ed. § 5a, p. 74. The partnership Stat. at L. 544, 547, U. S. Comp. Stat. 1901, ceased to do business, and had been dissolved, pp. 3418, 3423), chap. 3, §§ 4, 5, of that law so far as the parties could dissolve it, in (30 Stat. at L. 547, U. S. Comp. Stat. 1901, 1893. Moreover, in that year, by general pp. 3423, 3424). See also § 16 (30 Stat. assignment under the state insolvency law, at L. 550, U. S. Comp. Stat. 1901, p. 3428). the partners conveyed all their unexempt inIndeed, subdivision "g" of said § 5 expressly dividual and firm assets to an assignee. provides that the court may "permit the The plaintiff has not made it appear that proof of the claim against the in- any such firm assets now exist. This court The first decision, Ex parte Yale (1721) 3 P. dend received thereon, the creditor, upon afterWms. 25, note a, was as follows: "So, on the wards bringing an action against the solvent other hand, if there be two partners, and one of partner and the bankrupt jointly, for the same them becomes a bankrupt, and, on a separate debt. was required to furnish full indemnity to commission being sued out against him, his the bankrupt against all costs of the action. certificate is allowed, this does not only dis- Ex parte Stanton (1840) 1 Mont. D. & De G. charge the bankrupt of what he owed sepa- 273. rately, but also of what he owed jointly, and on the partnership account; because by the act of Parliament the bankrupt, upon making a full discovery and obtaining his certificate, is to be discharged of all his debts. Now, the debts he owes jointly with another are equal. ly his debts as what he owes on his separate account; consequently, he is to be discharged of both his joint and separate debts." In allowing a rule discharging from custody a bankrupt detained on account of a debt, it was held that, when he obtained his certificate of discharge in bankruptcy, he was entitled to personal immunity against any execution which might be issued in reference either to a partnership or a separate liability. Thomson v. Harding (1857) 3 C. B. N. S. 254. The other decision is Ex parte Hammond b. (1873) L. R. 16 Eq. 614, 29 L. T. N. S. 72, 21 Week. Rep. 865, which holds that a certificate of discharge, granted in an individual proceeding for liquidation brought by one partner, is a complete release of all his debts, both joint and separate. This decision is placed upon the ground that the statute provides that an order of discharge releases the debtor from all debts provable under the bankruptcy, and the joint debts are provable thereunder. These two decisions are consistent with the practice justifiably inferred from the correlative English decisions (II.) in regard to the provability of joint debts in an individual proceeding; and seem to be regarded as having settled the law in England upon the question at issue. A few other English decisions have been found which bear out the cases establishing the rule as above shown. In an action upon a promise against two jointly as partners, one pleaded that he was a bankrupt, and that the cause of action arose before he was a bankrupt; whereupon the plaintiff entered a nolle prosequi as to him. Noke v. Ingham (1745) 1 Wils. Ch. 89. In an action against partners on a bill of exchange, one of them pleaded bankruptcy and a certificate in bar; whereupon the plaintiff entered a nolle prosequi as to him. Aflalo v. Fourdrinier (1829) 6 Bing. 306. So, one of several defendants in of debt having pleaded bankruptcy, entered a nolle prosequi as to him. Middlecoat (1830) 6 Bing. 445. an action Where a joint debt had been proved under a separate commission in bankruptcy, and a divi Necessity of making firm or copartners parties. 1. Under bankruptcy law of 1867. (a) In general. Under III., a, 1, are shown some decisions rendered during the operation of the bankruptcy law of 1867, in harmony with the English rule that, partnership debts being provable in an individual proceeding in bankruptcy, they are necessarily released by the discharge therein. But there is a serious conflict among the decisions rendered under the law of 1867, and against the line of cases above indicated stands a class holding to the doctrine that the bankrupt cannot be relieved from his firm debts unless he make the firm or copartners parties to his proceeding in some way so as to have the firm adjudicated bankrupt, and give the court, or the assignee appointed, jurisdiction over the joint assets. As it is said in Re Elliott (1900) 2 N. B. N. Rep. 350: "Under the act of 1867. the authorities were conflicting as to the effect of a discharge of a partner upon his individual petition, without any proceedings on behalf of the partnership, or without making the copartners parties to the proceeding. It was held by some cases that such discharge released the bankrupt from his individual debts, and also his partnership obligations. This was also the rule in England. But it was held by other courts that such discharge did not release the bankrupt from partnership ob igations." The leading case of this latter class of cases, will not presume that they do. This case therefore does not involve any question of marshaling assets, nor of the right of the plaintiff against the firm assets or the other partner. Respondent alone appears to have been served with summons in this action. The question here presented to this court affects the judgment against him alone. It is also to be borne in mind that this is not an objection to the entry of a decree of discharge, but only to the right of the appellant to renew or extend this judgment. The entry of the judgment materially af fected the nature of the claim on which it was based, so far as these proceedings are concerned. It might be that in certain contingencies this court would examine that judgment for the purpose of ascertaining was Re Little (1868) 2 Ben. 186, 1 Nat. Bankr. Reg. 341, Fed. Cas. No. 8,390. Here, a member of a firm who had filed an individual petition in bankruptcy in which no allusion was made to the firm, although a large part of the debts specified were copartnership debts, and the statement of assets included copartnership assets, was held entitled to amend so as to join his partner with him in the proceeding. on the ground that, until that was done, he could not be discharged from the firm debts. This decision was based upon the theory that the intent of the statute is that the creditors of a firm shall be required to meet but once, and in one bankruptcy forum, all questions in regard to the bankruptcy of a firm and their debts against it. Numerous decisions to the same general effect followed, based on various grounds. Where there are firm debts and firm assets, a member of the firm cannot, upon his individual petition, without joining the remaining members and having the firm declared bankrupt, be discharged from his partnership liabilities. Re Winkens (1869) 2 Nat. Bankr. Reg. 349, Fed. Cas. No. 17,875. There must be an adjudication of bankruptcy against all the partners composing a firm before any step can be taken to reach in bankruptcy the partnership assets. An assignee appointed in an individual proceeding of one of the partners has no right to interfere there with. Re Shepard (1869) 3 Ben. 347, 3 Nat. Bankr. Reg. 172, Fed. Cas. No. 12,754. "It is difficult to see how any member of a firm can be released from his personal liabil ity as such without the court substantially looking into all the transactions of the firm and settling up its affairs. A man cannot be discharged from his liabilities as a member of a firm, unless the debts and assets of the firm are considered and adjudicated upon by the court." Re Noonan (1873) 3 Biss. 491, Fed. Cas. No. 10,292. The discharge of a bankrupt, granted upon his individual petition to which the members of a firm of which he was a member were in no way parties, does not discharge him from the partnership debts. Hudgins v. Lane (1874) 2 Hughes, 361, Fed. Cas. No. 6,827. So, the discharge of a partner under a petition in involuntary bankruptcy filed against him individually, and not against the firm property, does not discharge him from firm what the original contract was. Such a proposition is, however, academical in this case. When the judgment was entered it became a lien on any unexempt real estate within the county where the judgment was docketed, which belonged to the defendant and respondent Wallblom, and the creditor became entitled to appropriate new rights and remedies against him in consequence. So far as this case involves that judgment, the original cause of action was merged therein. In McKittrick v. Cahoon, 89 Minn. 383, 62 L. R. A. 757, 99 Am. St. Rep. 606, 95 N. W. 223, this court held that where, by an order in bastardy proceedings, the putative father of a natural child was required to pay a monthly stipend for its support, and upon refusal a final money judgment was liabilities, when it appears that there were at the time of the proceeding copartnership assets. Crompton v. Conkling (1877) 9 Ben. 225, Fed. Cas. No. 3,407. A member of a firm filing a petition in bankruptcy asking only for a discharge as an individual, omitting to set forth the fact of his membership in a firm, or a statement of firm debts and assets, is, by his discharge therein, discharged only from his individual indebtedness. Corey v. Perry (1877) 69 Me. 140, 24 Am. Rep. 15, 17 Nat. Bankr. Reg. 147. When there were assets of a firm in existence at the time of its dissolution, an individual petition in bankruptcy, subsequently brought by one of the members without making the others parties, does not give the court jurisdiction of the firm assets so that it can discharge the petitioner from the debts he owes as a member of the firm. Re Plumb (1878) 9 Ben. 279, Fed. Cas. No. 11,231. It seems that in individual bankruptcy proceedings giving no schedule of firm debts or assets, nor praying for a discharge from firm liabilities, the discharge granted relieves the bankrupt only from individual indebtedness, and not from partnership liability; as the assignee, under such a proceeding, acquires no title to firm assets. An individual discharged in a bankruptcy proceeding begun. carried on, and ended by him solely is not relieved, by force of his discharge, from partnership debts. Trimble V. More (1881) 15 Jones & S. 340. A member of a late partnership cannot, in case of the existence of partnership assets, be discharged from the liabilities of the firm, unless the firm is declared bankrupt, and the firm assets are brought into the bankruptcy court to be administered according to the provisions of the bankruptcy act. Honegger v. Wettstein (1881) 15 Jones & S. 125. The discharge in bankruptcy of a firm and its members individually from their debts does not discharge a member from debts he owed as a member of another firm, when no claims against that firm were proved in the proceeding, and the assets thereof were not administered. Perkins v. Fisher (1882) 80 Ky. 11. The court held, incidentally, in Re Johnston (1883) 17 Fed. 71, that the individual obligations only of a bankrupt partner were discharged in a separate commission in bank obtained for the total amount due, the ingly be had in bankruptcy proceedings. rights of the person entitled to recover un-Jarecki Mfg. Co. v. McElwaine, 5 Am. der the order of filiation were merged in the Bankr. Rep. 751, 107 Fed. 249; Curtis v. judgment, and the debt evidenced thereby Woodward, 58 Wis. 499, 46 Am. Rep. 647, was not excepted from the operation of the 17 N. W. 328. Collier, in his note to Re bankruptcy act of 1898 (§ 17), although | Freund, 1 Am. Bankr. Rep. p. 31, says: "Both the claim on which the judgment was based, on principle and by the weight of authority standing by itself, would not have been dis- it would seem to be law that a discharge charged. granted to one member of the firm releases him from all his provable debts and liabilities,—both from those incurred individually and from those incurred as a member of the partnership. The few cases which held to the contrary under the former act seem to have been based upon a misconception of the extent of the rights of an assignee in the bankrupt's property, and as to the effect upon the firm of the bankruptcy are assets belonging to the firm, and not to copartnerships previously terminated by bankruptcy, insolvency, assignment, or otherwise, in Re Winkens (1869) 2 Nat. Bankr. Reg. 349, Fed. Cas. No. 17,875. Such a judgment as the one here sought to be extended, filed in the bankruptcy proceedings, might, under appropriate conditions, have been paid in full or in part by the application thereto of the whole or a proper part of the funds in the hands of the respondent's trustee in separate bankruptcy proceedings. Its full discharge as an indi vidual liability on a firm debt may accordruptcy brought by him, it appearing that there were assets of the firm in existence. A practice, not in harmony with the doctrine of the cases above shown, seems to be advanced in Re Grady (1870) 3 Nat. Bankr. Reg. 227, Fed. Cas. No. 5,654, which holds that, where a bankrupt was a member of two firms, and, without notice to his copartners, filed an individual petition in voluntary bankruptcy, including a statement of the assets and liabilities of the two firms, the assignees in bankruptcy may compel an adjudication of the bankruptcy of the firms so as to have an administration of the firm assets, in order that the bankrupt may be discharged from all his liabilities. b. In absence of joint assets. The decisions are practically unanimous, under the bankruptcy law of 1867, that, in the absence of joint assets, a discharge in an individual proceeding in bankruptcy is effectual as against the partnership debts. Where a member of a late copartnership files his individual petition under the bankrupt act, and inserts in his schedules debts contracted by the copartnership; and there are no partnership assets to be administered, he will be entitled to be discharged from all his debts, individual as well as copartnership; and it is not necessary to make the other partners parties to the proceeding. Re Abbe (1868) 2 Nat. Bankr. Reg. 75, Fed. Cas. No. 4. A petition was drawn for the discharge of the petitioner individually; but, he being the surviving partner of a firm all the other members of which had died insolvent, and nearly all of the debts being firm debts, leave to amend so as specifically to include partnership liabilities was applied for. The court, in granting the application, remarked that, without examination of the question, he was of the opinion that a discharge granted in the petition as filed would discharge the petitioner from his copartnership as well as individual liability; but that it would certainly be safer to amend the petition. Re Bidwell (1868) 2 Nat. Bankr. Reg. 229, Fed. Cas. No. 1,392. The necessity of joining the other members of the firm was declared to exist only as to copartnerships actually existing, or where there Where there are no partnership assets to be collected and paid out, one member of a former partnership may be, upon his individual petition, discharged from all his debts, partnership and private. Re Marks (1877) Fed. Cas. No. 9,094. It is stated, obiter, in Honegger v. Wettstein (1881) 15 Jones & S. 125, that a member of a late partnership may, upon his individual petition, be discharged from all his debts, partnership as well as individual, provided there are no partnership assets. A former partner petitioning alone, after dissolution of the partnership, and when there are no assets in existence, is, by the order of discharge, discharged from all debts, both partnership and individual. Keeler v. Snodgrass (1882) 8 Ohio Dec. Reprint, 490. It is declared in Sarver v. Scarlett (1883) 9 Ohio L. J. 312, citing Keeler v. Snodgrass, 8 Ohio Dec. Reprint, 490, that, where a partner in an individual proceeding in bankruptcy states his joint debts, the discharge obtained is against them as well as his individual debts. If there are no partnership assets, partnership claims are provable in an individual proceeding by one of the partners; and, therefore, the discharge of a partner therein relieves him from firm liabilities. Curtis V. Woodward (1883) 58 Wis. 499, 46 Am. Rep. 647, 17 N. W. 328. When, before the individual petition in bankruptcy of one of the members was filed, the firm had been dissolved, and a general assignment made of all its property, the discharge granted operates as a discharge of partnership liabilities as well as of individual indebtedness. West Philadelphia Bank v. Gerry (1887) 106 N. Y. 467, 13 N. E. 453. In one case, Daugherty v. Strauss (1880), 1 Tex. App. Civ. Cas. (White & W.) p. 509, it does not appear whether partnership assets existed or not. It was held therein that a discharge in bankruptcy of a member of a copartnership releases him, not only from his individual debts, but from the debts of the firm also. of one member." In Re Meyers, 96 Fed. | 472, 122 Fed. 389. That case involves an 408, relied upon by appellant, upon an ob- obviously different state of facts, and is jection to discharge on the ground of fraud, in its reasoning not of necessity entirely there were independent and merely Individ- inconsistent with the rule here applied. ual proceedings by the two partners. The petition asked for discharge of both individual and partnership debts. Brown, J., said (p. 411): "No adjudication of the firm as a bankrupt is asked, nor could such an adjudication be made without a formal application therefor, and the presence of both partners in the same proceedings. Where there are absolutely no firm assets, separate proceedings may be valid, and a discharge of each partner separately may possibly be had, because the firm debts are several as well as joint." Appellant also relies largely upon Re Mercur, 58 C. C. A. 2. Under bankruptcy law of 1898. (a) In general. There are at least two classes of cases under the bankruptcy law of 1898, in relation to the practice when joint assets exist. According to one class, it seems that, in order to secure a discharge from firm debts, an adjudication of the firm as bankrupt, or other proceedings in which it is joined, is necessary in order to give the trustee appointed the right to interfere with the firm assets, and, also, in order that the rights and liabilities of all the parties may be arrived at in a single proceeding. In the early history of partnership law, the courts fell into the habit of speaking of a partnership as "a separate entity." The inaccuracy and impropriety of such nomenclature was so clearly and repeatedly demonstrated as to lead to its substantial abandonment. Recent decisions on the marshaling of assets under the present bankruptcy law have led to the undesirable resurrection of the phrase. Its misleading and ambiguous character is well illustrated by the subtleties of appellant's brief and by his use of it as a justification for a fallacious conclusion derived by unwarranted deducare not parties may, above all other, be the parties who have knowledge of the real financial condition of the petitioning individual." Individual proceedings against all the members of a firm do not authorize the trustee appointed to interfere with firm assets in the absence of a petition and adjudication against the firm. Re Mercur (1903) 58 C. C. A. 472, 122 Fed. 389. Since, in order to secure a discharge from firm debts, there must be an adjudication of the firm as bankrupt, and a firm trustee appointed where there are firm assets, a discharge obtained in an individual proceeding discharges from individual liabilities only. Dodge v. Kaufman (1905) 46 Misc. 248, 91 N. Y. Supp. 727. According to the other class of decisions, both firm and individual assets and liabilities must be scheduled, and prayer be specifically made for a discharge from firm as well as individual debts; and due notice of the pro Thus, when there is evidence of the existence of firm assets, or circumstances justifying the presumption of their existence, a discharge from firm debts cannot be had in individual proceedings by the partners; the partnership itself must be brought into bankruptcy, and the firm assets duly administered in a single proceeding and petition for discharge from firm ceeding. Re Meyers (1899) 96 Fed. 408. Whenever a person who is a member of an existing partnership, or who was a member of a defunct partnership, desires to go into a court of bankruptcy, he must bring the firm and the other partners into court with him; so long as there is partnership property to be administered or partnership debts to be paid. "everybody, whether creditors or partners, having an interest in the fund or in the liability existing, should be before the court, to the end that, when the proceeding is closed. the rights and liabilities of all parties shall be determined for all time." Re Freund (1899) 1 Am. Bankr. Rep. 25. A partner cannot obtain a discharge from partnership liabilities, unless there are proceedings had on behalf of the partnership itself, or unless the copartners are made parties to the individual proceedings. Re Elliott (1900) 2 N. B. N. Rep. 350. Some of the reasons given by the court why a partner should not be discharged from firm obligations in the absence of proceedings on behalf of the firm, are: "1. The effect of a discharge in such cases would be to impose upon the other partners who are not parties to the proceedings the entire obligations of the firm. 2. The presence of the other partners may develop the fact to be that the petitioning individual is really indebted to his late firm. 3. The partners who debts must be given to the remaining partners and all firm creditors. The proper foundation to be laid when a partner in an individual bankruptcy proceeding desires to be discharged also from partnership debts is very explicitly set out in Re Laughlin (1899) 96 Fed. 589, 3 Am. Bankr. Rep. 1, in the following language: "In the petition originally filed it should be averred that the petitioner is indebted in his individual capacity, if such be the fact, and also as a member of a firm, naming it, and giving the names of the several partners; and the petition should pray for a discharge from the firm as well as his individual debts. To this petition should be attached the proper schedules, setting forth the firm debts, the firm property, if any, and all other matters, the same as is required in the case of a proceeding brought by all the partners. Schedules of the individual property and debts should also be attached to the petition. In the notice to the creditors to attend the first meeting, it should be stated that the firm, as well as the individual, creditors, are notified to attend, as the bankrupt is seeking a discharge from both classes of claims; and also in the petition for a discharge a release from the firm, as well as the individual, debts, should be asked; and, in the notice to creditors of the filing and hearing upon the petition for discharge, the fact that a release from the firm debts is prayed for tions from a fiction of law. His argument | scheduled, so as to give notice to the plaincommands admiration for its ingenuity and tiff's assignor? This question must also be industry, but compels the conviction that its result would be a plain perversion of the letter and purposes of the bankruptcy law. The learned trial court properly held that the discharge in bankruptcy operated as a full defense. 2. The most serious question in this case is this: Was the indebtedness properly should be specifically set forth. Notice of the filing of the petition, and of the creditors' meetings, should be sent to the nonjoining partner or partners, in order that, if necessary, they may appear and protect their rights and interests in the proceedings. The attention of the referees in this district is called to this matter, and they are instructed that it is their duty to examine all petitions referred to them; and, if it appears that the bankrupt is seeking a discharge from firm, as well as individual. debts, then, if necessary, the petition and schedules must be amended so as to comply with the foregoing requirements, before the adjudication is entered thereon; and care must be taken, in framing the notices to creditors, that they conform to the views herein expressed." Followed in Re Hartman (1899) 96 Fed. 593. The adoption of the practice above set out is apparent in a number of subsequent decisions. Thus, where, in a voluntary petition filed by a member of a firm, the petition for adjudication, the notice to creditors, and the petition for discharge make no reference to firm liability, and do not ask any relief against firm debts, a discharge granted on such a record will not operate to bar firm debts, but will only af fect the debts owing by the bankrupt individually, notwithstanding the schedules attached to the petition show that a large part of the indebtedness of the bankrupt consists of firm debts. Re McFaun (1899) 96 Fed. 592. So, where a partner in an individual proceeding desires a discharge against firm creditors, the petition must show that he was a member of the firm, and must aver that he asks a discharge from the firm, as well as individual, creditors; and this fact must be set forth in the notice given to creditors for the first meeting, and also in the petition for discharge, and in the notice to creditors thereof. Re Russell (1899) 97 Fed. 32. answered in the affirmative. In the sched- Rep. 407, 95 Fed. 263, Affirming 1 Am. Bankr. An individual petition in bankruptcy in order to obtain the petitioner's discharge from the firm debts, after an unsuccessful attempt to obtain the discharge of the firm as such, must state the adjudication of the firm and the members composing it, as bankrupts, and must pray for a discharge from both firm and individual debts, and show full notice to creditors of those facts. Re Meyers (1899) 2 N. B. N. Rep. 111, 3 Am. Bankr. Rep. 260, 97 Fed 757. There is one decision under the law of 1898, Jarecki Mfg. Co. V. McElwaine (1901) 107 Fed. 249 (III., a, 1), in harmony with the English rule. b. In absence of joint assets. With one exception, the decisions under the act of 1898, as under the act of 1867, agree that a discharge in an individual proceeding is effectual as against partnership debts in the absence of joint assets. It is declared by the court in Re Hirsch (1899) 2 N. B. N. Rep. 137, 3 Am. Bankr. Rep. 344, 97 Fed. 571, that, under the act of 1998, as under the act of 1867, a partner may, at his option, proceed upon his individual petition for his own adjudication and discharge without reference to the other partners, where all are insolvent, and there are no firm assets whatever. "There is nothing in the present act or rules necessarily excluding this course in such a case it prejudices no one; and it is recommended by its simplicity and convenience in often avoiding the useless burden of proceeding adversely and by publication against an insolvent partner who may be inimical, or whose whereabouts may be unknown, and whose presence in the cause, real or constructive, would not be of the least benefit to creditors." It is conceded, obiter, in Re Meyers (1899) 1 N. B. N. 575, 2 Am. Bankr. Rep. 707, 96 Fed. 408, that, where there are absolutely no firm assets, a discharge of firm debts in a separate proceeding may be valid, because firm debts are separate as well as joint. And where, in an individual petition in bankruptcy, no reference is made to a firm which had gone out of business, but the affairs of which had not been formally settled, although A partner who filed a petition in bankruptcy the bulk of the indebtedness set forth in the asking to be adjudged a bankrupt, and included schedules was for goods purchased by the firm; in his schedules partnership indebtedness, and and where the adjudication was entered against gave notice of the first meeting to both firm the petitioner only, he is entitled to ask a and individual creditors, is by his discharge redischarge only against his individual creditors. leased from both firm and individual debts; Re Carmichael (1899) 2 Am. Bankr. Rep. 815. since, by the act of 1898, firm debts were prov Where two copartners, petitioning as inable against his estate, there being no partnerdividuals, asked for an adjudication against ship assets. Re Kaufman (1905) 136 Fed. 262. the firm, which had been previously dissolved. It not appearing in LOOMIS V. WALLBLOM but gave no notice of the proceedings to the that any firm assets existed, that decision harother partners, who did not join in, an adju- monizes with the cases above shown. dication declaring the petitioning partners One decision, however, under the law of bankrupt "as copartners and as individuals" (1898, is not in line with those above set out, was vacated. Re Altman (1899) 2 Am. Bankr. it being held that where, in an individual peti |