Court Opinion

ID: 6411592
Source: CourtListenerOpinion
Date Created: 2022-06-25 11:53:06.533443+00
Date Added: 2024-06-11T15:51:23.586995
License: Public Domain

Shaw, C. J.*
Distribution is to be made of the assets as they stand at the time of the dividend. The amount of assets which came from the private estate of Horace Gray is to be ascertained for purposes of distribution; and the amount of assets which came from the joint estate of Horace Gray & Co. is to be ascertained, including the interest which has accrued upon it, either by debts due to the estate drawing interest remaining unpaid, or by other increase in value of the assets.
The assets are to be distributed by comparing the separate assets with the debts of the separate creditors as proved; and if the amount is sufficient to pay the whole of the separate debts as proved, the surplus is to be added to the assets of the joint estate and distributed among the joint debts as proved. The same rule would apply if the assets of the joint estate were sufficient to pay the joint debts in full, and there was a deficit in the estate of one of the partners, leaving not enough to pay the separate debts.
As against the debtors, all being liable in solido to pay toe partnership debts, all the creditors have a right to full payment. The difficulty arises where there is not sufficient to pay the whole.
*268The relative claims of the classes of creditors are fixed by the liquidation and allowance of the joint and separate debts; and though these allowances are in fact settled afterwards, they all relate back to the day of liquidation, being the day of first publication of notice. The debts are to be paid as they stood then, whether on interest previously or not, whether due at a future day with interest or not; and interest is added or abated so as to ascertain the debts actually due at that time.
In the case before us, the private debts as liquidated and allowed are first to be paid in full out of the separate estate. Then the balance of that estate is to be distributed among the joint creditors. If there is a surplus as against both, then, before paying back that surplus to the debtor, as the creditors have a superior equity against him, that surplus would be applied in the same way ; the interest accruing from the separate assets to the payment of the interest of the separate creditors from whose assets it arose; and that from the joint assets to the payment of the interest of the joint creditors. But it is hardly necessary to speculate on such a contingency. It is only alluded to to show the practicableness of the rule we have adopted.
Supposing the statute not to have made any express provision on the subject, or to leave the point in doubt, then we must ascertain the policy of the law, and in expounding the statute or supplying its deficiency we must resort to principle or to analogous cases. Williams v. American Bank, 4 Met. 317.
The result is, that the order of the master, in directing a dividend on the estate of Horace Gray & Co., allowing interest to the separate creditors of Gray out of his separate estate, be annulled and reversed ; and that the master be directed to order that after the separate debts be paid in full, without interest computed, the balance, if not sufficient to pay the joint debts in full as proved, shall be distributed ratably among the joint creditors of Horace Gray & Co.

Decree accordingly.

This case was argued on the 6th of January 1858, before all the judges except Thomas and Merrick, JJ