Penn Bank v. Furness

Citations

• 114 U.S. 376
• 5 S. Ct. 900
• 29 L. Ed. 168
• 1885 U.S. LEXIS 1770

Syllabus

<p>A, B, & 0, 'being partners in business, and all believing the firm to be solvent, 0 withdraws. A & B pay 0 a fixed sum as his capital and continue the business. They borrow money of a bank on the notes and responsibility of the new firm, part of which is used to pay to 0 his capital, and then fail, owing the money so borrowed. It turns out that the old firm was insolvent at the time of the dissolution, and C contributes towards the discharge of its liabilities an amount in excess of the amount of capital so drawn out by him. In a suit- in equity by the bank to charge .the o’.d firm with the money loaned to the new firm : Held, That this could not be done, as the transaction was entirely between the bank and the new firm.</p>