Parker v. Merritt

Citations

• 105 Ill. 293
• 1883 Ill. LEXIS 87

Syllabus

<p>1. Partnership—right of retiring partner to lien on partnership assets for payment of firm, debts. If one partner, on a dissolution of the firm, sells his interest in the partnership stock of goods to his co-partner, relying alone upon the agreement of the latter to pay the firm indebtedness, the retiring partner will have no equitable lien on the goods for the payment of the partnership liabilities, that can be enforced in equity.</p> <p>2. But where, on the dissolution of a partnership, an amount of the stock of goods equal to the firm indebtedness is left with one who continues the business, to be converted into money, with which he is to pay the partnership indebtedness, he can not be held a purchaser, so as to subject the goods to the payment of his individual debts as against the equities of the retiring partner, but he is a trustee of such goods for the payment of the firm liabilities, and the trust may be enforced in equity by the retiring partner for the benefit of the partnership creditors, as'against subsequent purchasers or execution creditors with notice of the equities of the retiring partner.</p> <p>3. Same—articles of dissolution construed, as whether passing title to goods to partner continuing the business. On the dissolution of a partnership, the articles of dissolution provided that an invoice of the goods, etc., and a schedule of the firm debts, should be made, and that the surplus of the assets above the indebtedness should be divided, and that one partner should retain a sufficient amount of the goods, etc., from which he agreed to pay such debts within a given time, and as rapidly as such assets could be realized for that purpose. The partner so retaining the goods continued the business, and a creditor of such partner, having notice of the facts, levied his execution upon the goods. It was held, that the retiring partner could maintain a bill in equity to enjoin the sale on the execution, and have the proceeds of the goods applied in paym