5 Ohio St. 508 | Ohio | 1856
It is assigned for error that the court below erred in the distribution made of the funds in the hands of the plaintiff, George Miller, assignee of William B. Travis ; and also in the distribution of the funds in the hands of Small, the receiver. The determination of these assignments of error involves the question whether either Travis, or the creditors of the several firms, had any priority over each other in the payment of debts out of the funds created by the sale of the goods.
Partnership property is primarily liable to pay partnership debts; and the surplus, if any, belongs to the partners. This primary liability arises from the equity of the partners, who have a lien upon the partnership property, which they may enforce to pay the partnership debts, in preference to the creditors of the
Applying these principles to the case before us, it appears .that the partnership of Travis, Estill & Co. was dissolved, and the interest of Travis in the partnership property of Travis, Estill & Co. was divested by the contract under which the plaintiff in error withdrew the interest and capital stock of Travis in the firm, and Estill & Beebout agreed to pay the debts of the firm. The effect of this contract was a sale by Travis, to Estill and Beebout, of the partnership effects, and divested Travis of all further lien upon them. In such a transaction, where one partner takes the partnership property and agrees with the outgoing partner to pay the debts of the firm, there may, in some cases, be circumstances which will induce a court of equity to recognize and assert a lien upon the partnership property, in favor of the outgoing partner. Thus, if there be a voluntary dissolution of partnership with an agreement that one of the partners shall take the partnership property and pay
Estill & Beebout, with the goods thus held by them, commenced doing business under the name and firm of Estill & Bee-bout ; and, afterwards, under that name and firm, assigned the goods and assets of the firm, and their individual property, to Samuel W. Beebout, in trust, to pay the creditors of the firm. It seems there were no creditors of that firm.
If the assignment, however, was intended for the benefit of the creditors of the firm of Estill & Beebout, which existed prior to the formation of the firm of Travis, Estill & Co., then it was an attempt to give the creditors of the old firm a preference over the creditors of Travis, Estill & Co., and the assignment operated, under the statute, for the benefit of creditors generally.
Travis, in his assignment to Miller of his individual and firm property, undertook to give his individual creditors a preference. Whether such a preference can be given in firm property by a partner, or whether his partners could not have insisted upon his assignee applying the firm property thus assigned to the payment of the firm debts, it is not necessary in this case to inquire; for the partners of Travis, Estill & Beebout, soon after his assignment, apportioned and divided the firm property, and delivered to Miller, the assignee of Travis, the amount of the assets which Travis would have been entitled to, had there been a dissolution of the partnership by mutual consent; and then Es-till & Beebout agreed to pay the firm debts. This promise of
The agreement of Estill and Beebout with Travis, through . Miller, his assignee, to pay the partnership debts of Travis, Es-till & Co. cannot be interposed to disturb the distribution of the assets in the hands of the receiver and of Miller, to creditors. The creditors must be first paid ; and, when paid, the balance of the funds, if any, may be adjusted, in view of this agreement of Estill & Beebout with Travis. There not being, however, sufficient funds to pay the debts, the creditors of Travis, Estill & Co. receive a pro rata amount upon the whole of their claims; and the amount of those claims remaining unpaid, after the application of the fund derived from the assets of Estill & Beebout,
The decree of the court below was in accordance with these views, and must be affirmed.
The order of distribution seems to have been made generally to creditors ; and was not, as the assignment of errors assumes, confined to creditors named in the report.
Whether the court erred in disallowing the claim of Travis against Travis, Estill & Co., we cannot determine, as the record does not disclose the facts upon which the court passed.
The order directing the assignee and receiver each to pay one half the costs, was not, so far as we can' perceive, an abuse of discretion in the court below. We cannot, therefore, disturb it.
Decree of the district court affirmed.