Singer, Nimick & Co. v. Carpenter

Citations

• 125 Ill. 117
• 17 N.E. 761

Syllabus

<p>1. Partnership—priority as between individual creditors and, those of the firm. The law does not recognize the creditor of a firm as having a superior equity to that of the individual creditor for payment from the partnership assets. It recognizes, however, that the members of the partnership have a superior lien on the partnership property for the payment of the firm debts, and allows the creditors to avail themselves of this lien to the exclusion of individual creditors, when it has not been surrendered by the partners.</p> <p>2. Same—and herein, when partnership property becomes that of the individual partner. Where a partnership firm, by contract of sale, transfers all its property to another, so as to invest the purchaser with the equitable title, the interest of each of the partners is thereby terminated, and with it the right of the firm creditors to have the property, or the proceeds of the sale, applied first to the payment of their demands. The proceeds will be the individual property of the partners, and, as such, liable for their individual debts in preference to the claims of the firm creditors.</p> <p>3. The members of a partnership entered into an agreement with a corporation composed of themselves and others, to transfer the firm property to the corporation, for which shares of stock should be issued to the several partners in certain proportions. This contract was not fully consummated until after the death of one of the partners, and a debt of the firm was proved against his estate: Held,, that the stock issued to the deceased partner was not partnership property, and that the creditor of the firm was not entitled to have the proceeds of such stock applied in payment of his claim, to the exclusion of the individual creditors of the deceased partner.</p> <p>4. An insolvent partnership firm, in good faith, not knowing, at the time, of its insolvency, sold and transferred its property to a corporation, for shares of stock in the corporation, which