253 F. 352 | 2d Cir. | 1918
A voluntary petition in bankruptcy was filed by the bankrupt on January 12, 1915. Matters connected with this bankruptcy have been heretofore adjudicated in several reported cases in the District Court. 230 Fed. 177; 233 Fed. 799 ; 234 Fed. 454; 244 Fed. 629. When the matter came before this court a year ago, we decided that the claims of Mary E. Lewis, H. Leroy Lewis, and the H. J. Lewis Oyster Company were not entitled to share in the distribution of the firm assets of Stringer & Co. The case is reported in 240 Fed. 892, 153 C. C. A. 578.
It appears now that tlie referee has declared an additional dividend of 10 per cent, to the firm creditors of Stringer & Co., but that he has been stayed from paying it until it can be determined whether the sale price of a New York Stock Exchange membership is an asset of the firm of Stringer & Co. or the individual property of G. Franklin Stringer. The referee has held that it is an asset of Stringer & Co., and his action has been sustained by the District Judge; and the question which is now presented to this court is whether the District Judge fell into error in holding that the seat on the Stock Exchange is to be held as an asset of Stringer & Co. or the individual property of G. Franklin Stringer, as a liquidating partner of Jewell & Stringer. The decision of this court in the former case said nothing whatever as to the disposition of this asset; that question not having been presented to us at that time. The petitioners in the present case are the same parties whose claims were presented in the first case and held not to be claims against the assets of Stringer & Co. The petitioners, having been excluded as to certain of their claims from the firm assets, are now here as exceptants, objecting to the decision of the lower court that the seat on the Stock Exchange is a firm asset, and they seek to have it decided that the asset is an asset of Stringer individually.
*355 “The membersMj) in the Slock Exchange that had become the property of G. Franklin Stringer was thus contributed to Stringer & Co. as a part of its capital which the bankrupt had promised to furnish.”
As Stringer & Co. was a stock brokerage firm doing business on the Stock Exchange by virtue of Stringer’s membership therein, and as the obligations incurred by that firm on the Exchange were liabilities against the seat held by Stringer, the conclusion that the seat was an asset of the firm seems justified upon the facts disclosed.
This court cannot hold that one who puts into a partnership his individual assets is to have the transaction treated as though it were a voluntary transfer of his assets to some third person, which can be declared fraudulent as to creditors unless he retains in his individual possession sufficient remaining assets to pay the whole of his debts. I know of no case which asserts that doctrine, and if there be any we are concluded by our decision in the Matter of Braus from following it, if we were so disposed. If A. transfers his property to B., he puts his property beyond his creditors, for the creditors of A. cannot levy upon the property of B. If, however, A. and B. form a corporation or a partnership, into which A. puts his property, lie does
The Bankruptcy Act (Act July 1, 1898, c. 541, § 5h, 30 Stat. 547 [Comp. St. 1916, § 9589]) expressly declares that in the event of one or more, but not all, of the members of a partnership being adjudged bankrupt, the partnership property is not to be administered in bankruptcy, unless by consent of the partner or partners not adjudged bankrupt; but such partner or partners not adjudged bankrupt shall settle the partnership business as expeditiously as its nature will permit, and account for the interest of the partner or partners adjudged bankrupt. It follows, of course, that by the consent of the partner or partners not adjudged bankrupt the partnership property may be administered in the bankruptcy proceedings of one of the partners. In re Filmar, 177 Fed. 170, 100 C. C. A. 632; In re Harris (D. C.) 108 Fed. 517.
. We know of no reason why, under the circumstances of this case, the court having jurisdiction over Stringer as an individual and as sole surviving partner of the firm of Stringer & Co. has not complete jurisdiction over the partnership estate; there being no surviving and solvent partner who is entitled to administer upon the partnership estate, and no administrator, so far as it appears, of such a partner. See In re Pierce (D. C.) 102 Fed. 977. Under tire circumstances as disclosed by the record in this case it is quite immaterial that the firm of Stringer & Co. has not been adjudicated a bankrupt. We know of no reason why the court below should not distribute the funds in the trustee’s hands and which belong to the firm creditors of Stringer & Co.
My Associates concur in the result, on the ground that the case presented by the petition cannot be distinguished from In the Matter of Braus.
The petition for review is dismissed, and the order appealed from is affirmed.