Case ID: ohio-law-abs_1/html/0845-02.html
Source: Caselaw Access Project
Author: {"author": "ALLEN, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

No. 882
    BROWN v. BROWN
    Ohio Supreme Court
    No. 17556.
    Decided March 13, 1923
    Error to the Court of Appeals of Licking County
    283. PARTNERSHIP.
    Partnership debt not created by partner loaning individuality to another partner money which is used for partnership purposes.
    Attorneys — Flory & Flory and Edward Kibler, Newark, for J. Brown; McDonald & Slabaugh and Fitzgibbon & Montgomery, Newark, for W- A. Brown.
   ALLEN, J.

Epitomized Opinion

W. A. Brown and J. Brown, brothers, entered into a farming and stock raising partnership whereby W. A. was to furnish the land and J- was to do the work, and each was to buy one-half the stock- To raise money J- borrowed from- his sister, and delivered to her a note and chattel mortgage upon his undivided half of the property. At the time of the formation of the partnership W- A. advanced to J. money and the latter executed a note therefor. W- A. instituted an action against J., alleging the unpaid note, the agreement of J. to pay it out of the proceeds of the partnership, and had a receiver appointed. By cross-petition the sister set up her mortgage upon the interest of J. in the partnership property. The Common Pleas Court found in favor of the -sister, but the Court of Appeals reversed this finding upon the ground that W. A. had a, lien upon -the funds in the hands of the receiver superior to the lien of the sister. In reversing the judgment of the Court of Appeals the Supreme Court held:

1- “Where a partner borrows money on his individual credit from another partner, and later gives a note as evidence of such loan, such borrowing does not create a partnership debt, though the mioney be applied to partnership purposes.”

2. “A -separate creditor, who holds a valid chattel mortgage upon the interest of a partner 'in a partnership, has a lien upon the surplus due the partner after add partnership debts are paid,- which lien -is superior to a claim for an individual debt due from the partner to his co-partner-” Citing 12 OS. 647.