Court Opinion

ID: 7966540
Source: CourtListenerOpinion
Date Created: 2022-09-09 00:51:06.749962+00
Date Added: 2024-06-11T16:34:39.510225
License: Public Domain

Dickinson, J.
The partnership firm of Geo. A. Clark & Bro. presented a claim of indebtedness of $146,333 for allowance against the insolvent estate of the firm of Shotwell, Clerihew & Lothman, which was disallowed by the' assignee. The claimants appealed to the district court. The matter was referred to George C. Ripley, Esq., upon whose report, in favor of the claimants, judgment was entered allowing the claim. From that judgment the assignee of the insolvent estate prosecutes this appeal.
*464From the findings of fact by the referee we draw this brief statement of the case, omitting some facts which we deem immaterial: For some years prior to February, 1884, the assignors, Shotwell, Clerihew & Lothman, were engaged in business at Cincinnati, Ohio, as partners. William Clark, a member of the partnership' firm of Geo. A. Clark & Bro., these claimants, was a limited partner in that firm. During the continuance of that copartnership, and prior to 1884, the claimants, Géo. A. Clark & Bro., loaned large sums of money, for which the notes of the firm were given. Such indebtedness amounted to $145,000 on January 1, 1884. Prior to February 2, 1884, it was agreed by the members of that firm that it should.be dissolved at that time, and the three general partners, Shotwell, Clerihew, and Lothman, agreed to form a new. partnership to do business at Minneapolis, in this state. They were to enter upon the new business February 4, 1884. These agreements were carried into effect. It was further agreed between the claimants and the members about to form the Minneapolis partnership, that the latter should take the assets and pay the liabilities of the Cincinnati firm, including the indebtedness of $145,000 to Geo. A. Clark & Bro. Pursuant to this agreement, new notes were executed by Shotwell, Clerihew & Lothman to Geo. A. Clark & Bro., amounting to $145,000, and they were taken by the latter firm in place of the notes previously given them by the old firm. These notes bore no interest on their face; but about a month subsequent to the giving of those notes a further agreement was entered into, under seal, whereby it was contracted, among other things, that, if any of the notes should not be paid at maturity, then they should all immediately become due and payable. It was also provided therein that the indebtedness represented by the notes should “draw interest at and after the rate of six per cent, per annum.” There is no specific finding by the referee as to when the notes became payable, and the evidence is not before us. The assets of the Cincinnati firm thus transferred to the new or Minneapolis firm consisted of over $145,-000 in merchandise, about $7,000 cash, besides bills and accounts receivable. The Minneapolis firm proceeded to pay all the debts of the old partnership except that due to these claimants. Upon, the *465said $145,000 of notes held by the latter, the Minneapolis firm— Shotwell, Clerihew & Lothman — paid $21,000 prior to February 4, 1887. At about the latter date a computation was made and agreed upon between the debtors and these claimants of the amount of interest unpaid on the said notes; and in March, 1887, a new note was executed in favor of' these claimants by the debtor firm for $146,333, and this was taken in place of the notes previously given. This note included $22,333 interest on the former notes, as determined by the computation and agreement of the parties. This note of $146,333 evidences the claim here in question. Shotwell, Clerihew & Lothman continued their partnership business until June 20, 1888, when they made the assignment for the benefit of creditors.
One ground upon which the assignee disputes the propriety of the-allowance of this claim is because, as is said, the claim was the debt:, of another partnership which this firm assumed, and the creditors of this insolvent firm are equitably entitled to be first paid out of the-insolvent estate. This may be sufficiently answered in two ways.. This assignment is of both partnership and individual property, for-the payment of all the debts of the assignors, whether they be debta^ of the partnership or of the individual members. The original indebtedness to these claimants, and which is now represented by the note for $146,333, was a debt for which these assignors were responsible. Their liability has never ceased, and, in any possible view of the case, the claim is provable as a debt of the insolvent assignors. But again, when the Minneapolis firm purchased the assets of the Cincinnati firm, on the dissolution of the latter, and agreed to pay its debts, including that owing these claimants, that became a debt of the new partnership. That indebtedness has never been paid, and the note in question represents the same debt. It is a debt of the insolvent partnership.
But, further, it is contended that the allowance was erroneous to the extent of the $22,333 of interest included in the note last given. No error is apparent in this. This interest may have accrued subsequently to the maturity and default in payment of one of the notes, upon which event, by the terms of the agreement above referred to, all the notes were to become immediately payable, and upon whicu *466interest would be chargeable as from maturity. Or it may be that the agreement of the parties at the time of making the written contract, shortly after the notes were given, included an agreement that the notes should draw interest from their date, and that the obviously incomplete statement in the writing, recited in the foregoing statement of the case, was intended to express such an agreement. If by mistake in the omission, after the word “after,” of whatever was necessary and was intended to have been written to make the sentence complete, the writing failed to express the agreement of the parties, it would not follow that the agreement actually made should not be effectual. A suit for reformation might have been maintained; and, even without a judicial reformation of the contract, the parties might with propriety carry into effect any contract which they may have made for the allowance of interest.
Judgment affirmed.