Rainey v. Nance

Citations

• 54 Ill. 29

Syllabus

<p>1. Partnership—of the application of firm assets and of the separate property of the individual partners, to the payment of debts. As to the order in which partnership debts, and the individual debts of the partners shall be paid, the rule is, that no one partner has a right or share in the firm property, except the portion which remains after full payment of all the partnership liabilities; and each partner has a right to have the same applied to the payment of all such liabilities before any one of the partners, or his personal representatives, or his creditors, can claim any right to the same.</p> <p>2. And as between the partners themselves, there is a lien upon the partnership assets, as the primary fund for the payment of partnership debts, or at least an equity, which may be enforced through the partners, in favor of creditors of the firm, although it may not directly attach in the creditors, by virtue of their original claims, in all cases.</p> <p>3. Though it is only in cases where there is a dissolution by death, or bankruptcy of one partner, that the right of the joint creditors can attach as a quasi lien upon the partnership effects, as a derivative, subordinate right, under and through the lien and equities of the partners.</p> <p>4. In equity, in case of insolvency or death of a partner, thus terminating the partnership, the joint creditors are entitled to a priority of payment out of the joint fund, and the separate creditors to a like priority out of the separate property of the partners, unless specific liens have been acquired on the respective classes of property. But in case of a surplus in either fund, not subject to any specific lien, creditors of the other class may participate in such surplus.</p> <p>5. One partner can not, as against his copartners, give to his individual creditor, by mortgage, pledge, or otherwise, a specific lien upon his interest in the firm property, to the exclusion of creditors of the firm who have not acquired such