177 Mass. 52 | Mass. | 1900
This is a petition by a creditor, Very, to prove a claim against the Warwick Cycle Manufacturing Company in insolvency. Very, as well as the cycle company, is in insolvency, and his claim is pressed by his assignee. The company seeks to set off a larger debt due to it from a New York partnership, of which Very was a member. The partnership also is insolvent, and the other member has disappeared, but its
We are of opinion that the judge of the Superior Court was right. There is no doubt that apart from insolvency the set-off would not have been allowed. Bridgham v. Tileston, 5 Allen, 371. Snyder v. Spurr, 33 Conn. 407. Tucker v. Oxley, 5 Cranch, 34, 39. The general rule is clear, and the insolvency of all the parties does not raise an equity in favor of "the creditors of the cycle company which is superior to the right of Very’s personal creditors to have his personal assets applied to the full payment of their claims before any part of them is used to pay the debts of the firm to which he belonged. See Pub. Sts. c. 157, § 121; Williams v. Brimhall, 13 Gray, 462, 465; Addis v. Knight, 2 Merivale, 117, 122; Jackson v. Clymer, 43 Penn. St. 79, 83; Wright v. Rogers, 3 McLean, 229; Lowell, Bankruptcy, § 274. If the debt due from Very’s firm to the cycle company, were proved against his separate estate, it would be only in subordination to the claims of his separate creditors, which in this case would exhaust his estate. Clarke v. Stanwood, 166 Mass. 379, 384. M’Culloh v. Dashiell, 1 Harr. & Gill, 96, 100. In Tucker v. Oxley, ubi supra, the bankrupt law then in force was construed to let in partnership creditors against the separate estate on an equal footing with personal creditors. " See also Story, Eq. Jur. § 1437, n. 1. Of course Very’s claim against the cycle company is a part of his personal assets, and if it is extinguished by setting off a claim against his firm, it is applied to payment of a partnership debt just as much as if the money were collected and then paid to the firm creditors. Williams v. Brimhall, ubi supra.
It is said that but for Very’s insolvency the cycle company could have got a judgment against him separately under Pub. Sts. c. 164, § 13, and thus have made his liability separate. So it might have contracted with Very alone in the first place. It is enough to sa,y that it did not do so.
Judgment affirmed.
