The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1855-01-31
LEGAL INTELLIGENCE.


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court OF Common Pleas-speclsl Term.
IMPORTANT DECISION IN RELATION TO SPECIAL
PAKTsERs
JAN. 29.-In re La Chaise d Fducke %. Lord Byovn
and dnother.-1his argued last week. and the
points of law duly reported Yesterday the following
opinion and decision rendered -
NGRAHAM, F. 1.-The plaintiffs, being creditors Of
Lord Brown, for injunction against the part
nership property and The complaint show We
the indebtedness Of the Arm Of Lord Brown to the
plaintiffs upon note Of $l,o73 6o that Lord BSown
formed limited partnership in December $780, to con-
tnue i've years. and that the other defendant Marks
~as the special partner having Advancsi 900 there
to that during the existence Of the partnsuhp Marks
withdrew from the funds Of the firm slsa39 80. and
about the Isl Of July 1884, received from the firm their
notes for SIT b00 that 1T about that time the rm
ed upon their creditors notice Of the dissolution the
limited partnership; that ~ the time Marks received
such OF money from TIE firm they nsolvent,
that such moneys transferred contemplation
Of Insolvency; that the firm OF Lord Brown
solvent AMI wholly unable to pay their debts, aud
have in possession several Thousand dol
lars OF assets Of said partnership, out of
preferences over the debt due to the ,lant,as.
The deien dans Lore Lro~n, do not Geny the lndebt
edness the plaintiffs They admit the insolvency Of
the ilm and that they have IN tre POSSESSION Of
the OF the firm. They explain The moneys PAID
marks have been divide nds PROFITS, which they al
ege have been mace in good faith and after allow
for ali LOSSES sustained AZ the times Of such div
dends the years lSO1 52 and 49, and such
dividends made from the net profits. They ais
that the time OF the dissolution in july 1854
they believed the to have been solvent Thaton such
dissolution they bought from defendant Marks his
terest the OF the firm special partner for
which the notes Of Lord d Brown given, pay able
alter all the liabilities OF the special partnership shall
have matnred. That Lord Il Brown boughi the
shp) which duly transferred TO them, they in
CURED liability Tor said purchase Of $l4O OUO Of which
they have since paid $40 900 That Lord Brown there
upon formed general copart ship which Marks
rad interest That such new firm Jailed in Novem-
ber 1904 anu that there Que to the cr-tors Of
the limited partnership 10000 and of the general
partnership 81 100 They also aege the pending of
another actie in this court by Lottmer and Others
ia henalf of all the creditors OF such limited
partnership, praying Tor injun ;tion and
ceivsr prior TO the commencement OF this action
II this action had been by the plaintiffs creditors OF
Lord Brown, behalf OF ali the conditions oil the
limited partnership and Marks had not been sought to
be charged general partner think the facts appear
ing before sufficient to warrant the granting OF this
motion The firm is admitted now to be insolvent,
owing about 500 900, and by proceeding to winch but
little value be attached Tar as the claims vi
dtors concerned the whole assets OF the firm Of
Lord Brown the limited partnership have been sold
to Lord Brown, the general partners, 30 far rs ap
pears from the evidence consideration OF their
ing pay ali the liabilities OF the limited partnership
amounting to STAG, 0O0 Had such liabilities been dis
charged maturity OF the creditors would have
bad any need of complaint against the arrangement
but when oebts to the amount of $65 600 are lett
paid, the creditors may well clam void sale of the
whole assets OF the firm by the partners to themselves,
when they told they have no eiaim upon such as
must rely upoa the individual iaulty Lord
4 Brown, the members OF the general partnership, to
whom they claim such assets belong No such arrange
ment De sustained TO deprive the creditors OF the
limited partnership Of their right 70 insist that the
assets OF that ir shall be applied to tho payment Of
its Gebts and although the defendants may have gone
and paid, with borrowed money, Of their liza
btes, there is nothing in that fact to justify then,
in withholding from such creditors the assets still
naming IN their hands and which under any circum-
Qlnr.ld Ia nlialt in nj
Of the limited partnership. That su Oh transfer be-
the parties can be sanct oned deprlvng
creditors their light follow tn. assets of the firm for
the discharge oi It's debts seems to me inconsistent With
every principle OF Justice equity II may be- that
upon dissolution of firm, one partner may sell 10
the other partner all his interest in the assets Of the
rm, and tr Transaction bona fde, and Tor the
purpose OF winding up the affairs the rm, creditor
cannot take such property from liens obtained against It
BY the creditors u the partner makingthe purchase.
(ketchum vs. Durbee Bar I'd City Pr. p 1907 Butsuch
doctrine cannot bs extended to such as the pre-
sent one and GoubI whether it be any OF
limited partnership. Tue right to grant SUCH motion
sett.din the case OF Jessup Laning Paige ASA
and has been since followed by the supreme Court IN
Whitewright slim pson, Bart B. G Rep $40. and the
rule adopted in those cases to limited partnerships
extended by Judge Eomonds 70 general partner
ship, IL Dillon Vi. Horn Mney, How TT. Rep, p 3D.
Ana when II appears that dissolution made, or
To b. made, OF The assets in giving preference to
creditor another the provisions OF the 23th section
the Code comprehensive enough to warrant such
proceeding. In the cases, however, 20 whica l
have referred, the action commenced not for The
benefit Of the plaintiffs solely, but Of AL ths
creators Of the insoiveht firm. The appointment Of
receiver in those would have secured the pare
nershp funds assets tor the joint benefit Of all aud
upon distribution Of such the creditors would
have been entitled equally to share in the pro,
thereof There is manifest proprety in quring such
form Of action before the property of the hrm should
thus be placed in the hands OF the ;ever There IL
equity in taking from firm the whole of their pro-
p.rty 10 individual creditor to the
eiason OF others The improperly of thus pa ling In
the bands Of the wnole Of ths OF the
hrm TO pay clam OF 81 ,00O and thereby deprIving
other creditors amounting to SOL 900, Of auy proceed
iLgs against such until the krst creditor Is pa
is manifest that II require argument to show
that ought not To be doLe Even II the plaintiffs
judgment creditors, they could only have order al
loving receiver to take sufficient the afssts of the
firm TO obtain the Of dschargog their debt; and
until they udgmept creditors there is no propre.y
IN giving them receiver unless IN case where the
effect Of such receivershp vii operate to all the
creditors If the firm think, also, there liz a difficulty
10 the present action which iorms objection the
granting OF their motion IL should be required to
such ORDER that all the defendants sought be
mace liable rs partners admit the indebtedness The
defendant MARKS to whose answer have not before
ferred denied such indebtedLe He denies Join,
n,ebt.dness whatever, and does admit the plain
un's CLAIMS II he Is sought to be held liable as a de-
iendant ne certainly does not admit the Indebtedness
but, On the contrary, his answer shows a state
ment oil facts which would, IL proved entite him to
verdict. Besides, other creditors mignt not even
II the action had been commenced ior all the Gre
dtors, have been xiling 10 engage 10 such contest
not necessary for to pass upoa the questions
argued beiors to the liability OF MARKS. His li
IL II u
war; ant me In granting this motion Ii ne 10 not liable
it can only be decided at the end o. proactsd ltga
tion and the funds and assets of an insolvent firm
should not be tied from all the creditors for the pur
pose Of enabling creditor TO such con-
uoversy The granting OF injunction aud appointing
OF receiver In cases Of this kind 10 admitted by the
Chancellor 70 be in addition the former DO wers Of
court OF equity and 1t seems to to be proper that
the power should only be exercised where the claim
uDdisputed, and where the property will speedily
possible b. applied to the of the creditors Au oo
lection was made upon the argument and it appears
the DEFENDANTS that another action IL pending
In this court for the benefit Of all the crstors aud
That such action commenced prior TO the present
one The mere existence Of such action although y
PRIOR ole, has no ELECT upon tots motion Whether prior
OF subsequent in its IL affords no pround
TO stay proceedngsin other actions, until after judg
ment has been rendered in In which the other
After such judgmt motion formerly could be made
TO stay proceedings In other suits far as relates to
the appointment OF receiver This settled by the
~ hsAl llia nnniinn for -.