Union National Bank v. Bank of Commerce

Citations

• 94 Ill. 271

Syllabus

<p>1. Partnership debts, and debts of individual partners—out of what fund, respectively, to be paid. In the distribution of thq assets of insolvent partners, the rule in equity is, that partnership creditors have a-primary claim upon the partnership assets, to the exclusion of the creditors of the individual partners, until all the partnership debts shall be satisfied;—and the same rule will exclude partnership creditors from participation in assets of the individual partners until all their individual debts are paid. .</p> <p>2. Same—what constitutes individual indebtedness, as distinguished from partnership indebtedness. Where three members of a partnership firm gave their joint and several promissory note, payable to the firm, and the firm subsequently indorsed the note to a third person, such third person will hold the note as an individual claim against the makers, as distinguished from a partnership claim,—having the right to hold the firm liable also, not as makers, but as indorsers;—and this individual character of the claim against the makers will not be in the least modified or changed by the fact that the note has been reduced to judgment against them.</p> <p>3. Assignment for the benefit of creditors—of its construction as to what creditors are included. A debtor in failing circumstances made a deed of assignment of all his property for the benefit of his creditors. The deed directed the assignee “to pay over and discharge in full, with lawful interest, if the net. proceeds should be sufficient for that purpose, all and singular the debts due from the said party of the first part, to the persons severally named in the schedule of creditors to be thereunto annexed, it being intended to include in said schedule the names of all the creditors of the party of the first part, with the amount due to each of said creditors. And if the said net proceeds should not be sufficient for the payment, of the said debts in full as aforesaid, then to apply the same, so