In re Salladay
| Decision Date | 20 October 1927 |
| Docket Number | No. 316-D.,316-D. |
| Citation | 22 F.2d 300 |
| Parties | In re SALLADAY. |
| Court | U.S. District Court — Eastern District of Illinois |
Alfred A. Johnson, of Danville, Ill., for bankrupt.
A. B. Dennis, of Danville, Ill., for Mrs. Matro.
Motion is made by interested parties to set aside the adjudication and dismiss the voluntary petition of bankrupt as surviving partner of Mater & Salladay, on the ground that, inasmuch as prior to the filing of the voluntary petition Mater died, and his estate is being administered in the probate court, this court has no jurisdiction to adjudicate the surviving partner bankrupt and administer the assets of the partnership now in the possession of the surviving partner.
Under the Illinois statute (Smith-Hurd Rev. St. 1925, c. 106½, § 25, subd. 2, par. d) title to firm property vests in the survivor in trust for the payment of debts. The estate of neither of the partners is entitled to any share of the partnership assets until and unless the copartnership debts have been paid in full. The surviving partner is charged with the duty of converting the assets into cash, paying the partnership debts, and accounting for the surplus, if any, to the respective estates of the partners. Thus it will be seen that the Illinois statute does not contemplate that the administrator of the estate of the deceased partners shall have title to or possession and custody of any of the assets of the copartnership.
Under the Bankruptcy Act (11 USCA), so far as creditors are concerned, the separate estates of the individual partners and of the partnership are distinct entities, each embraced with a trust in favor of the creditors of the respective entity. Courts have differed somewhat upon the proposition of whether the surviving partner may file a petition in bankruptcy, but it seems logical that this court has jurisdiction of such a petition, and that the surviving partner has a right under the Bankruptcy Act to be adjudged bankrupt, and to have the benefits of a discharge in bankruptcy as surviving partner. In view of this right, this court is without discretion to deny his petition.
The Circuit Court of Appeals for the Seventh Circuit, in the case of In re L. Stein & Co., 127 F. 547, held that, in case of the insanity of a partner and the appointment of a conservator of his estate, the partnership might still be adjudged bankrupt, though the insane partner might not be adjudicated. The court recognized the correctness of decisions to the effect that a copartnership may be adjudged a bankrupt after the death of one partner, and cited a number of cases in support of that proposition.
In the case of In re Wells (D. C.) 298 F. 109, Judge Hickenlooper passed upon the express question here involved, stating that, where the Ohio Code (...
To continue reading
Request your trial
-
Virshup v. Industrial Bank of Commerce
...held; thus see In re Stringer, D.C.E.D.N.Y., 234 F. 454, affirmed 2 Cir., 253 F. 352; In re Pierce, D.C.Wash., 102 F. 977; In re Salladay, D.C.E.D.Ill., 22 F.2d 300 (and cases cited); In re Dunn, D.C.E.D.N.Y., 53 F.2d 516; 1 Collier on Bankruptcy 700 (14th Ed. 1940). Further documentation i......
-
Matter of Danenberg
...cert. denied, 317 U.S. 677, 63 S.Ct. 159, 87 L.Ed. 543 (1942). 13 N.Y.Partnership Law §§ 62 and 74 (McKinney). 14 Cf. Matter of Salladay, 22 F.2d 300 (E.D.Ill. 1927). ...