35 Iowa 83 | Iowa | 1872
In addition to the facts above stated, about which there is no contest, we think the evidence conclusively establishes that the Hulls paid certain debts of the firm subsequently to its dissolution, and to the disposition of the other real estate, and that the conveyance of Poston’s interest in the land to them was for the purpose of devoting it to the payment of the firm debts ; that is, to re-imburse the Hulls for the amount paid by them, which Poston was bound, as between the parties, to pay.
I. It will be remembered that the land in question was purchased with partnership funds, was partnership property, and the conveyance of Poston to the Hulls was made for the purpose of subjecting the property to the payment of partnership debts. It will not be questioned that partnership property is first liable to the payment of partner
Applying these well-settled principles to the facts before us we are brought to the conclusion that plaintiff is entitled to the relief granted him in the district court. The Hulls had an equitable right to enforce against Poston’s interest in the land in queston their claim for the amount paid by them upon the debts of the firm which Poston was bound to pay. His voluntary conveyance, being intended to effectuate that right, will be supported in equity.
II. Defendants’ counsel insist that the evidence establishes the facts, that at the time of the dissolution of the firm it possessed property of greater value than the amount of its debts ; that Poston received, by sale of his interest in the firm assets, money and property that was not applied in payment of his debts, and that, in view of these facts, it would be inequitable to enforce the claim of plaintiff. "We are unable to agree with counsel. Defendants’ claims, which were, after the dissolution of the firm, merged into judgments, are against Poston individually. We know of no obligation resting upon the parties to retain firm property to secure such debts ; that is, the Hulls were not required, for that purpose, to deny Poston the right to draw out of the firm assets a part of his interest or prohibit him selling his interest therein. The property so drawn out of the firm became individual property of Poston and was liable to the claim of defendants ; that which
III. It is insisted that the judgments of defendants are liens upon Poston’s interest in the land. That is true as the law regards the rights of the parties. But equity regards them differently and applies the just principles above announced under which the lands are secured for the payment of partnership debts. The deed-of Poston, made to effectuate that purpose, equity will enforce.
We have considered all the points made in this court and carefully considered the pleadings and evidence. Our conclusion' is that the decree of the district court ought to be
Affirmed.