Schmidlapp & Bros. v. S. D. Currie & Co.

Citations

• 55 Miss. 597

Syllabus

<p>1. Partnership. Power to dispose of its property.</p> <p>The general creditors of a firm have no lien on its assets, anymore than ordinary creditors have upon the property of an individual debtor. And the power of a firm to dispose of its property, all the members cooperating, is as unlimited as that of an individual.</p> <p>2. Same. Payment of individual debt. Rights of creditors.</p> <p>During the existence of a partnership which is neither bankrupt nor contemplating bankruptcy, one of the members of the firm may, with the consent of • the other partner or partners, upon a bona-fide consideration, with no benefit reserved, assign and transfer the assets of the partnership in payment of his individual debt, if no lien has attached to such assets; and such transfer is good against the firm creditors.</p> <p>5. Same. Assets. Soto applied.</p> <p>The doctrine that firm assets must first be applied to the payment of firm debts, and individual property to individual debts, is only a principle of administration adopted by the courts where from any cause— as, dissolution of the firm by death, limitation, or bankruptcy — -they are called upon to wind up the business of a partnership, and find that the members have made no valid disposition of, or charge upon, its assets. The right of the firm creditors to demand the primary application of the firm assets to the payment of their debts is based upon the right of each of the partners to demand this, as against his copartners.</p>