Frank v. Peters

Perkins, J. Suit by Frank against Peters and Marlow, and Chambers and Meredith. The complaint states that on the 30th of October, 1855, Peters and Marlow were [344] merchants trading in partnership, and, as partners, executed to the plaintiff a note for 400 dollars, being for goods purchased of him; that on the 28th of January, 1856, Marlow sold out his interest in the firm to his copartner, Peters; that afterwards, in February, 1856, Peters sold the entire stock of goods on hand to Chambers; that in March following, Chambers sold the same goods, or such of them as remained unsold, to Meredith. The complaint further states that the plaintiff has not been paid for the goods; that Chambers knew it; that Peters and Marlow are insolvent; and that it is a fraud on him, plaintiff, for Meredith to keep the goods which have not been paid for to plaintiff. Payment is sought from Chambers and Meredith. Chambers and Meredith having severally paid for the goods,1fin purchase, to the persons from whom they bought, object, to paying over again, and they severally demurred to the complaint as to them. The Court sustained the demurrers, and rendered judgment for them, and against Peters and Marlow, the makers of the note described in the complaint. Man-low had a right to sell out his share in the partnership to Peters. The latter, after the sale, was the sole owner of the goods, and could sell them as he pleased; and a purchaser from him could resell them, saving, of course, in all cases, the question of fraud. See Hubbs v. Bancroft, 4 Ind. R. 388. But fraud in the sales in this case is not alleged. Frank must look to the assets, the proceeds of the sale of the goods in the hands of Peters and Marlow, his debtors, or to their pecuniary responsibility, rather than to the goods themselves, or to the purchasers of them from Peters and Marlow, in the present case, there being no fraud, and the latter purchasers having paid for the goods. M'Donald v. Beach, 2 Blackf. 55. The simple fact that men may be insolvent, in the popular sense of the word, does not deprive them of the power of selling their property by bona fide sales. Anderson v. Smith, et al., 5 Blackf. 395. But when events occur which place partnership property in the charge of trustees and Courts of equity, then it may be required to be first applied to the [345] payment of partnership debts. See Parsons on Merc. Law, pp. 185, 186, 187, et seq.; 2 Blackf. supra; Reed v. Thayer, at this term (1). J. S. Scobey and W. Cumback, for the appellant (2). O. B. Hord, for the appellees (3). Per Curiam. — The judgment is affirmed with costs. Footnotes [(1)] Ante, 157.