Mechanics' Savings Bank v. Fargason

Citations

• 79 Miss. 64

Syllabus

<p>1. PARTNERSHIP. Insolvency. Creditors. Distribution of assets.</p> <p>In winding- up the business of an insolvent copartnership, firm creditors should be given firm assets, and individual creditors the separate assets of the partner who is their debtor; and the equities of such a distribution cannot be defeated by the acts of the partners.</p> <p>2. Same. Individual creditor paid loith firm, assets. Ratification.</p> <p>A creditor of a partner, having knowledge of the facts, who is paid with the funds of the copartnership, the payment not being accepted in good faith in due course of business, is liable to account therefor to the firm creditors; and the ratification of such a payment by the other partners does not preclude firm creditors from enforcing the liability.</p> <p>3. Same. Deed of trust by partner on firm property.</p> <p>A deed of trust executed by a partner on his interest in firm property, to indemnify a surety on his individual obligation, binds only his interest remaining after firm creditors are paid.</p>