State Bank of Florida v. Roche

Citations

• 35 Fla. 357

Syllabus

<p>1. While it is the well established rule in equity that where one creditor holds security upon two funds, with liberty to resort to either for the payment of his demand, and another creditor holds a junior security up m one only of the fund, the former will be compelled to exhaust the fund which he alone can reach before resorting to the other fund and thereby depriving the latter creditor of his security, yet the rule is one of equity and can not be invoked by the creditor against another m cases where it would injuriously affect the rights of the prior creditor or third person.</p> <p>2. In a contest between partnership creditors to be paid out of the assets of a common partnership debtor, it appeared that one partnership creditor held a mortgage security for the payment of his claim executed by one member of the firm and his wife on the property of the latter, who was in no way connected with or responsible for the partnership debts other than the execution of said mortgage: Held, That the creditor holding the mortgage security could not be compelled to first resort to such security, and leave the partnership assets to the other creditors.</p> <p>3. Where, in such a contest, it clearly appears from the evidence produced by a partnership creditor that his claim brought forward for payment out of partnership assets is a partnership demand, it is error for the court to reject such claim in the absence of proof that it was not a partnership liability, or other, wise not entitled to share in such assets.</p>