Cleveland v. Battle

Citations

• 68 Tex. 111
• 3 S.W. 681
• 1887 Tex. LEXIS 648

Syllabus

<p>Fraudulent Assignment.—A member of an insolvent mercantile firm transferred his interest therein to his brother and without the knowledge of his partner, who afterward learned both of the transfer and of the insolvent condition of the firm. The purchaser knew that the conveyance was in fraud of creditors. Six days after learning of such transfer and insolvency (which were then known only to the parties), the partner who had not sold out, united with the purchaser from his former partner in a deed of assignment, in which he designated such purchaser as his partner, and which purported to convey all their property, with a provision that accepting creditors should release their claims. In a suit between the assignee and an attaching creditor of the original partnership, held:</p> <p>1. The facts disclose a clear case of conspiracy to defraud the creditors of the original partnership.</p> <p>3. As to creditors of the original firm the goods assigned were in the same position as to ownership that existed before the fraudulent conveyance to the brother was made.</p> <p>3. The assignment made by a firm thus fraudulently create 1, did not convey the property of the original firm, or the individual property of its members.</p> <p>4. It passed no more than such interest as the remaining partner of -the original firm might have after payment of partnership debts, which could be nothing, since the firm was insolvent.</p> <p>5. Since the partner who sold his interest did not join in the assignment, no release of creditors could be exacted, for such release can be required only when all the partnership property, as well as the individual property of the members composing the insolvent firm, passes by the deed of assignment.</p> <p>6. Objecting creditors could enforce their demands against the part nership property, disregarding the attempted assignment.</p> <p>7. The goods were subject to attachment.</p>