230 F. 985 | 7th Cir. | 1916
On October 22, 1914, Turnock & Sons, a partnership, was dissolved, and the property, worth $3,500, was divided among the members of the firm, all residents of Indiana. The firm liabilities were $11,000. Each partner knew of the insolvency. The dissolution was for the express purpose of enabling each of them to claim $600 exemptions, and for no other purpose. On October 30, 1914, one of them filed his voluntary petition in bankruptcy, and ah involuntary petition was filed to have the firm adjudged bankrupt. Adjudications followed as to the firm and each member individually. The individual assets were merely nominal.
The question arising on the petition to review and revise is whether the referee and the District Court erred in sustaining the firm creditors’ objection to the report of the trustee setting off to each partner for exemptions certain property which had belonged to the firm and which in the dissolution division had been apportioned as between them.
Even if the state law in analogous proceedings were binding, it is to be noted that in Goudy v. Werbe, supra, the dissolution was effected, not, as in this case, by a division of the firm assets among the partners, without making any provision whatsoever for the payment of the debts, but by a sale to one partner, who assumed the payment of the debts. Moreover, that sale was expressly found to have been made in good faith, without intent to hinder creditors, and without any purpose of securing the exemptions.
We cannot agree with Crawford v. Sternberg, 220 Fed. 73, 135 C. C. A. 641, that moneys, withdrawn by each partner with the consent of his copartners, on the eve of bankruptcy and for the purpose of thereby securing an exemption, may be thus retained by him. In so far as such moneys are in his possession at the time of filing the petition, they must be deemed firm, not individual, assets, for all purposes. See, too, Amundson v. Folsom, 219 Fed. 122, 135 C. C. A. 24; In re Abrams (D. C.) 193 Fed. 271.
It therefore becomes unnecessary to determine whether so much of the findings, denominated by the referee “findings of fact,” as holds that the dissolution was fraudulent, as to firm creditors, is, in the light of the other findings, a conclusion of law or fact.
The petition must be dismissed.