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Free Books / Society / Law / Partnership, Private Corporations, Public Corporations / | ![]() |
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Cases, Judicial Opinions, And Comments. Part 2 |
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This section is from the book "Popular Law Library Vol8 Partnership, Private Corporations, Public Corporations", by Albert H. Putney. Also available from Amazon: Popular Law-Dictionary.
39 Mechem's Elements of Partnership, sec. 205, p. 138.
40 Haley vs. Oase, 142 Mass., 316; Hess vs. Lowrey, 122 Ind., 225; Collier vs. McOall, 84 Ala., 190; Strang vs. Bradner, 114 U. 8.. 555: Chester vs. Dickerson, 54
N. Y., 1; Morehouse vs. Northrop, 33 Conn., 380; Stanhope vs. Swafford, 80 Iowa, 45; Haney Mfg. Co. vs. Perkins, 78 Mich., 1; Hyrne vs. Erwin, 23 8. C, 226.
In Dogget, Executrix vs. Dill,41 a claim against a partnership was filed in the probate court against the estate of a deceased partner.
It was insisted that a partnership demand could not be allowed against the individual estate of a deceased partner until the legal remedy against the partnership assets and surviving partners had been exhausted.
The Supreme Court decided the claim was properly allowed in the Probate Court, and said: "We have concluded to briefly refer to some of the authorities which have a bearing on the question, with the view of showing that the decisions of this court are fully sustained by the weight of authority.
"Story on Partnership, Sec. 362, says: The doctrine formerly held upon this subject seems to have been, that the joint creditors had no claim whatsoever in equity against the estate of the deceased partner, except when the surviving partners were at the time, or subsequently became, insolvent or bankrupt. But that doctrine has been since overturned, and it is now held, that in equity all partnership debts are to be deemed joint and several, and consequently the joint creditors have, in all cases, the right to proceed at law against the survivors, and an election also to proceed in equity against the estate of a deceased partner, whether the survivors be insolvent or bankrupt, or not.' The same doctrine, but in different language, is declared by Story in his work on Equity Jur., Sec. 676.
41 108 III., 663.
"Collyer on Partnership, Sec. 580, declares the law in the following language: 'It is now established beyond controversy, that in the consideration of courts of equity, a partnership debt is several as well as joint, and that upon the death of a partner a joint creditor has a right in equity to proceed immediately against the representative of the deceased partner for payment out of his separate estate, without reference to the question whether the joint estate be solvent or insolvent, or to the state of the accounts among the partners.'
"Dixon on Partnership, 113, says: 'When a liability exists the creditor may, at his option, either pursue his legal remedies against the survivor, or resort in equity to the estate of the deceased, and this altogether without regard to the state of the accounts between the partners themselves, or to the ability of the survivor to pay.'
"Lindley on Partnership, 1053, says: 'Whatever doubt there may formerly have been upon the subject, it was clearly settled before the judicature acts, that a creditor of the firm could proceed against the estate of the deceased partner without first having recourse to the surviving partners, and without reference to the state of the accounts between them and the deceased. See, also, Parsons on Mercantile Law, 192; Adams' Equity, 173; Smith on Mercantile Law, 48; 3 Kent's Com., 63, 64, and note.' "
The court then cites English cases and decisions of the Supreme Court of the United States and of the following states: Connecticut, Indiana, Mississippi, Vermont, Arkansas, New Jersey, Alabama, Florida, Texas, New Hampshire, and then proceeds: "In New York and Georgia a contrary rule has been adopted, as will be found in the following cases: Lamenas vs. Trustees, 11 Page 80; Voorhis vs. Childs, 17 N. Y., 354; Bennett vs. Woolford, 15 Ga., 213. Upon an examination of the New York cases, it appears that the rule there adopted was supposed to be predicated on the old English cases, and when the courts of England established the doctrine which is laid down in the law in Devaynes vs. Noble, 1 Mer., 529, and Wilkinson vs. Henderson, I. M. & K., 582, the New York courts refused to follow the English rule, but adhered to what was supposed to be the law in England as declared in that court prior to that time. Georgia seems to follow the New York rule. In a late case in Wisconsin, (Sherman vs. Kreul, 42 Wis., 33), the Supreme Court says: 'We are disposed to adopt the New York rule, that in order to recover against the administrators the plaintiff should allege and show that the surviving partner is insolvent/ It is also claimed by the appellant that the New York rule has been adopted in North and South Carolina, Ohio and Pennsylvania; but without stopping to determine precisely what the rule of the courts of these states may be, we are satisfied that the decided weight of authority is in harmony with the rule adopted in this State, and we are not inclined to change the rule heretofore adopted in this State, and follow the doctrine established by the courts of New York and Georgia, although we fully recognize the great ability of those courts."
"It is also claimed that Silverman vs. Chase is in conflict with Moline Water Power & Manf. Co. vs. Webster, 26 III., 233, and Pahlman vs. Graves, Id. 405. This position is, in our judgment, based on a misapprehension of those cases. In those cases there was a controversy between partnership and individual creditors, and the principle of marshaling assets was applied, as it should have been. Where there are individual creditors and partnership creditors, there is no doubt in regard to the law that all individual creditors have a prior claim against the individual assets, and an individual creditor would have the right to insist that no part of the separate assets should be taken and applied in payment of firm debts until all separate debts had been paid in full. This familiar rule was applied in the two cases referred to, and also in the case of Ladd vs. Griswold, 4 Gilm., 25. But there is no contest between individual and partnership creditors here, and hence the doctrine of marshaling assets does not apply. In this case no claims have been presented or allowed against the estate, of any character, except the one in controversy, and no individual creditor is resisting the allowance of the claim."
 
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