Court Opinion

ID: 6133548
Source: CourtListenerOpinion
Date Created: 2022-02-04 21:29:48.545282+00
Date Added: 2024-06-11T08:54:24.130420
License: Public Domain

Landon, J.:
I dissent. The facts clearly appeared, and were not disputed, that when Johnson assigned to Yan Brocklin the firm was insolvent and Yan Brocklin- also.- Under these circumstances one partner •could not, by selling to the other, divest the equitable lien of the firm creditors upon the firm property, nor could the purchasing partner, by making a general assignment, give to his individual •creditors a preferred lien upon the firm property over the equitable *460lion of the firm creditors. (Stanton v. Westover, 101 N. Y., 265 ; Menagh v. Whitwell, 52 id., 146.) The defendant was entitled to have a verdict directed in his favor.
But if the case rested solely upon the good faith of the purchasing partner, the verdict should be set aside as against the clear weight of the evidence. This partner was insolvent when he came into the firm. lie first bought his equal share in the business and property by giving his note, and then the whole property by giving another note, neither of which he had the means to pay or secure, except by the scheme, which he adopted, of buying out the whole property, with full notice of the firm’s indebtedness, and then pledging and assigning it to secure these and his other individual debts in preference over the firm debts-. He must have known when he purchased the firm property that it was utterly inadequate to protect both classes of debts, and he promptly applied it to protect his relatives, who were his individual creditors. He should be held to have intended to do what he did do. It is true he made some payment to Claflin & Co. after he purchased from Johnson, but it does not appear that this payment exceeded the price of the goods they forwarded him after such purchase. He claims that he was duped by Johnson, but if so, what title that gave him to exact reprisals from Claflin & Co. is not apparent.
Judgment and order affirmed, with costs.