Claiborne & Mather v. Their Creditors

Simon, J. delivered the opinion of the court. This case was once before tis : In conformity with the decision of this court, reported in 13 La. Rep. 280, the claims of Leplicher, Leon Bernard and Julien, as set forth in their opposition, were to be settled and determined according to the legal principles therein established. One of those, principles was, that the funds under the control of the inferior court, proceeding from the policies of insurance of the steam boat Marmora, being partnership funds, must be first applied to the payment of the partnership debts, in preference to those of the individual debtor; and that as by the tableaux of distribution, the funds in hand would pay no more than sixty-five per cent, of the said partnership debts, no part of them could go into the hands of Leplicher, until those debts are paid. But the lower court, in the judgment appealed from and now under consideration, decreed that Bernard and Julien should recover of the two insurance companies, as set forth in the said judgment, the whole amount transferred and assigned to them by Leplicher, to wit: $3364 16 ; and that the balance (including the residue of Leplicher’s portion) of the proceeds of the policies of insurance, as adjusted, after deductingthe claims of Bernard and Julien, should be paid over by the said insurance companies respectively to the syndic of the creditors of Claiborne & Mather; to be distributed, according to the tableau, among the creditors of the partnership, and that Leplicher’s opposition be dismissed. From this judgment, the insurance companies and the syndic appealed. Leplicher prays in his answer that the judgment appealed from be amended, and that judgment be rendered in his favor against the insurance companies for his entire interests in the steamer covered by the policies. The principal point which this cause would present, has already been passed and decided upon by this court in the opinion reported in 13 La. Rep. 279; and there it was clearly established that the claim of Leplicher and his assignees, for his [505] proportion of the fund, being considered as involving a de~ mancl for a partition! and settlement of the partnership con-. cerns, zoas subject to the payment of the partnership debts, which is the first step to be taken / and that none of the partners could he entitled to any part of the common funds, until all the debts are paid. This is in accordance with the general . „ , . . .. jurisprudence of this court, m which it has been repeatedly held, that on the dissolution of a partnership, all debts due must be paid before there is a division among the partners, and that the property, acquired by a partnership, does not he-long to either of the partners separately, but remains a corn-mon stock and pledged for the payment of the debts of the firm; 10 M. R. 640,- 11 M. R. 427 / 5 Martin N. 8. 568 and 626. The partnership in question was dissolved by the extinction of the thing which was the object of the contract; La. Code, art. 2847/ and Leplicher had no more right, after the , dissolution, to transfer any part of his share or any portion of the partnership fund, to the prejudice of his co-partners or of the creditors of the firm, than one of the heirs of a succession would have before the payment of the debts ; 5 Martin N. S. 824. The creditors must he paid first, and they have, by law, a right of preference or privilege on the partnership estate for that purpose ; Idem art. 2794 / 8 Martin N. 8: 606. It is the geu-eral and settled jurisprudence, solution ^of^a {JeJj^d^must t;e division among remahiía'eomí ^ged fol- The ¡jg^Tlihefirm6 The partner-snip in a Steamboat is dissolved imnof the boat, object Tf* the oontr?ot of partnership; and the insurance from'the loss of comes^fundout of v'.'ych all the creditors of the partnership must be tirst paid, a right of pre^ íeTTTnuhepart-nelishli) ,est?*e> to be hrst paid ; and no partner can assign his share, until the firm are°paid;he We therefore conclude that the district judge erred in chang-J & ° ing the destination of a part of the partnership fund, and in ordering the sum of $3864 16 to be paid to Bernard and Julien by the two insurance companies, to the prejudice of the creditors of the firm ; this sum, together with the balance coming to Leplicher, must be first applied to. the payment of the partnership debts. ’ r But it is urged that the syndic of the creditors of Claiborne . <& Mather has no right to receive the portion of Leplicher and his assignees ; and that as Leplicher has not failed, he is enti-tied to liquidate his own affairs, to receive his dues, and to pay his .own debts : this would be correct, if this case did not present a concurso of the creditors of the partnership, wbo are [506] here represented by their duly appointed syndic. The insolventS) being found in solido with Leplicher, have placed the creditors of the firm on their hilan for the whole amount of their claims, and as all the suits relative to the insolvents’ surrender, to the claim set up by Leplicher and his assignees, and t0 settlement °f the partnership concerns, were consolidated; we may thus fairly consider the creditors of the firm as litigating their rights, through their syndic, with Leplicher and his assignees, and as making opposition to the latter’s recovering any Part Proceeds of the policies, until the debts are satisfied; indeed, to bring this matter to a final adjustment, this . . . is, in our opinion, the only course to he pursued. Leplicher and his assignees cannot be allowed to draw any thing from ^ paj.tnej.ghip fund, before the debts are paid, and we see no reason why the syndic of the concurso should not be permitted to the liquidation of the concerns, and to appropriate the funds finder the tablead to' the payment tff the partnership debts. It is admitted that the amount of the claims against the firm, as established by proof, is much larger' than the fund which is now under the control of the court for distribution; and if so, Le-plicher and his assignees, having, as that court said in its first opinion, become parties to the insolvent proceedings, it appears to us proper that the final settlement and liquidation should also be made b‘y the syndic of the creditors under the control of the inferior court. So where two partners make a partnership af-own, The third solvent"’ Tannit take out his share of the partnership fund nership10 ciebts are first paid. It is therefore ordered, adjudged and decreed that the judgment of the District Court be annulled, avoided and reversed, and this court proceeding to give such judgment, as, in our opinion, ought to have been rendered in the lower court, it is ordered, adjudged and decreed, that the proceeds of the policies of insurance of the steamer Marmora, be paid over by the Louisiana State arid the Western Insurance Companies respectively to the syndic of the creditors of Claiborne & Mather, to be distributed among the creditors of the steamer Marmora under the control of the inferior court by a tableau of distribution', filed for that purpose; the appellees paying the costs of this appeal.