26 S.W.2d 1112 | Ark. | 1930
STATEMENT BY THE COURT.
Appellant brought this suit to foreclose a mortgage against the partnership interest of appellee in an Insurance agency business, and from the judgment holding the claim of an intervener for a partnership debt superior to his mortgage prosecutes this appeal.
McMichael and Rogers, appellee, composed a partnership engaged in the business of writing insurance under the firm name of McMichael-Rogers Agency. Rogers received $150 per month out of the profits of the business for his services, and he and McMichael shared the remaining profits and losses on a one-half interest basis. On November 30, 1928, McMichael sold to Roy Williams a one-half interest in the agency for $1,200, and he and Rogers, the other partner entered into a written *634 agreement to pay all indebtedness of the firm to that date and to guarantee Williams that his interest in the business would be free from all debts of the agency up to and including that date. The agency was heavily indebted, and had on its books numerous accounts of different customers. McMichael was to see to the collection of the indebtedness, and apply the sauce on the debts of the company at the time of the change of the partnership to the Williams-Rogers Agency, under which name it continued in business. On February 1, 1929, while the accounts of the old firm were still being collected, Rogers, being indebted to Homer Crow, appellant, in the sum of $1,700, as evidenced by his promissory note, and to secure the payment of same, executed and delivered to Crow a chattel mortgage on an undivided one-half interest in the general insurance business including fixtures, books, contracts, expirations and any and all other rights, privileges and property incident to the Williams-Rogers Agency doing business in Fayetteville.
Appellant brought the suit to foreclose the mortgage, and the Motor Credit Company file an intervention claiming a prior lien on the interest of Rogers in the William-Rogers Agency, alleging that, prior to the date of the execution of the Crow mortgage in February, 1929, the McMichael-Rogers Agency was indebted to it in the sum of $2,300 for money advanced by it at various times to that agency, setting out the dates and the amounts advanced. It also alleged that the interest of Rogers, mortgaged to Crow, was subject to the indebtedness to the Motor Credit Company.
Appellant denied the allegations of the intervention, and that the interest of Rogers in the agency was subject to the claim of the Motor Credit Company, and denied that it had any lien on the interest of Rogers in the Williams-Rogers Agency, McMichael, the retiring member of the old firm, and Rogers having covenanted with Williams, upon his purchase of McMichael's interest *635 in the firm, that they would assume and pay all the indebtedness of the agency up to December 1, 1928.
Williams filed a cross-complaint against McMichael setting out his purchase of McMichael's interest in the insurance agency, and also the agreement of McMichael and Rogers to pay the indebtedness of the old partnership, reciting that all indebtedness of the agency after December 1, 1928, the date of Williams' purchase of an interest, should be assumed and paid by Williams and Rogers.
Upon the hearing Rogers agreed in open court that appellant Crow should take under his mortgage the one-half interest of the Williams-Rogers Agency owned by Rogers subject to the termination of the claim of the Motor Credit Company and McMichael, without waiving the right to claim the lien of the mortgaged interest to the prior and superior to the claim of the Motor Credit Company, intervener.
The court held that the old firm was indebted to the motor Credit Company in the sum of $2,217.72, the balance of the indebtedness against the insurance agency up to and including November 30, 1928, and that the one-half interest of Rogers, appellee, in the insurance agency was subject to his payment of $1,108.86 of the indebtedness to the Motor Credit Company, and a charge against his interest in the business at the time the executed the mortgage to Crow, and that Crow took under his mortgage all the interest that Rogers had in the agency at the time of its execution subject to the payment of the firm's debts, and that Crow was the present owner of one-half interest in the agency subject to the prior claim of the Motor Credit Company for $1,108.86; adjudicated this company to have a valid claim for said amount against Rogers' interest, and gave Crow judgment for appeal the amount with interest, and from this judgment the appeal is prosecuted. (after stating the facts). Appellant urges as the only question for determination that the court erred in holding the lien of his chattel mortgage on the undivided interest in the Williams-Rogers Agency inferior and subject to the equitable lien of the Motor Credit Company, a creditor of the old partnership. Appellee Rogers continued in the partnership business with Williams after he had purchased the McMichael interest, and mortgaged his undivided one-half interest therein to secure his individual debt to Homer Crow, appellant. The rule is announced in 47 C.J. 919, 410, as follows:
"The rights of the creditor of an individual partner in the firm assets are confined to the share or interest of his debtor in such assets, and since a partner's share thereof can be ascertained only after the firm debts have been paid, all individual creditor is entitled to be paid only out of the debtor partner's share in the surplus which remains after the firm debts have been paid, and the equities between the partner and his copartners have been adjusted, and the partner's share has been ascertained and set apart." Our case, Parker v. Wells,
The agreement between McMichael and Rogers with Roy Williams, purchaser of McMichael's interest in the agency, to which appellant Crow was not a party, to pay the debts of the old partnership could not have had effect to release the assets from the equitable lien of the Motor Company or estop it from asserting the superiority of its claim against such partnership assets over the mortgage of Rogers' interest to Crow. The mortgage was given by a partner of his interest in the firm property to secure an individual debt after the creation of the debt to the Motor Credit Company, a general creditor of the firm, and only covered the partner's interest in the assets after the payment of the firm creditors, the lien of same being subject and inferior to the rights of the creditor of the partnership in such assets. The decree is affirmed. *637
