Court Opinion

ID: 6243912
Source: CourtListenerOpinion
Date Created: 2022-02-17 20:52:36.116296+00
Date Added: 2024-06-11T08:59:14.390201
License: Public Domain

Opinion by
Me. Justice Green,
As a matter of course the agreement of January 15, 1892, not having been signed by all the members of the firm before the death of H. Horton, never became an operative agreement, and may be entirely dismissed from consideration.
It is a fact found by the master that at the death of H. Horton, on November 4, 1892, there was an aggregate of indebtedness of the firm, which yet remained at the time of distribution, of $81,316.64, and the total assets at the time of distribution were but $78,525.31. There was no controversy as to this state of facts, and it is therefore entirely correct to say, that the assets of the firm were not enough to pay the debts of the firm which existed at the time of H. Horton’s death, and still existed at the time of distribution. That being so, how can it be held that one of the firm, who was then a creditor of the firm, can participate in the distribution, when there was not enough óf assets to pay the other creditors of the firm ? It is not disputed that under the general rule applicable in such cases this could not be done. And it is not contended that an administrator of a partner who is dead has any other or higher rights in this respect than his intestate would have had if he were living. On the other hand it is conceded by the learned counsel that, “ Were it not for the agreement of December 1, 1882, the estate of H. Horton would be postponed as to its claim against the assets of the Ridgway Bank as it existed before November 4, 1892, till *600the creditors of the Bank as it then existed were paid.” But how can such an agreement as that, which is a mere convention between the partners themselves, have the effect of changing the law as to the right of creditors, upon the fund. The agreement does not purport to do anything of the kind. It is nothing more than an agreement among the partners themselves providing a method of settlement of their affairs in the event of the death of one of their number. It makes no provision for the case of insolvency, nor for interfering in any manner whatever with the rights of creditors in that event. Even if such an attempt were made it would be utterly abortive. We are referred to no authorities, nor are any. principles stated in the argument, upon which we could for a moment justify ourselves in holding that the rights of the creditors of the bank in the event of insolvency are abridged or changed in any degree. In our latest utterance upon this general subject we have adhered strictly to the rule as it has always been understood and expressed in such exigencies as this. In McCruden v. Jonas, 173 Pa. 507, our Brother McCollum, delivering the opinion, said, “ The learned court below in awarding to Mrs. Greenbaum the balance of the fund remaining after paying thereout the claims of the other creditors in full, gave her all that she was entitled to, and all that the parties to whose rights she succeeded could possibly have received from it. As they were liable for all the claims of the other creditors they could not have participated in the distribution until those claims were satisfied. This is a proposition in accordance with equity, and well sustained by the decisions of this Court.”
The assignments of error are not sustained.
Decree affirmed and appeal dismissed at the cost of the appellant.