Shackelford's Adm'r v. Clark

• Decision Date: 31 October 1883
• Citation: 78 Mo. 491
• Parties: SHACKELFORD'S ADMINISTRATOR, Appellant, v. CLARK.
• Court: Missouri Supreme Court

78 Mo. 491

SHACKELFORD'S ADMINISTRATOR, Appellant,

v.CLARK.

Supreme Court of Missouri.

October Term, 1883.

Appeal from Clay Circuit Court.--HON. GEO. W. DUNN, Judge.

AFFIRMED.

Henry Smith and James T. Farris for appellant.

Simrall & Sandusky for respondents.

MARTIN, C.

This was a suit for the foreclosure of a deed of trust, and was commenced in the DeKalb circuit court at the October term, 1878, and was thence taken by change of venue to the circuit court of Clay county. The deed was executed by Samuel P. Clark to Hugh J. Robertson, trustee, on the 7th day of September, 1871, for the purpose of securing the payment of four notes, one in the sum of $980 executed by said Samuel P. Clark to Ryland Shackelford, the other three executed by Gilmer, Clark & Co., one in favor of John Lynn in the sum of $1,000; one in favor of John Howdeshell in the sum of $1,000, and one in favor of the Missouri City Savings Bank in the sum of $4,000. The deed of trust provides that if said notes should not be paid when due, the trustee should sell “and receive the proceeds of sale, out of which he shall pay first the costs and expenses of this trust, and next the notes and interest on the same, and the remainder, if any, shall be paid to Samuel P. Clark, or his legal representatives.”

There notes were all past due when the deed was executed. The land described in it was the individual property of Samuel P. Clark, the grantor in the deed. The note in favor of Ryland Shackelford was the individual debt of said Samuel P. Clark, and was given for money borrowed for his private use; the remaining three notes were the firm debts of the co-partnership of Gilmer, Clark & Co., a firm composed of John A. Gilmer, Samuel P. Clark and William Gilmer, all of whom are still living, and were given for money which went into the business of the firm. At the date of the execution of the deed of trust, as well as at the commencement of the suit, said firm was insolvent, and was possessed of no firm assets; each member of the firm was also insolvent. These facts all appear in the record, and in an agreed statement of facts. On trial of the case the court rendered a judgment or decree foreclosing the deed of trust, and directing the proceeds of the security to be applied on all the notes pro rata, after payment of costs. From this decree the case comes before us on appeal.

There is but a single question presented to us for decision, and that is the refusal of the court to adjudge a priority in favor of the Shackelford note, and its consequent action in adjudging that the proceeds of the sale be applied equally upon all the notes described in the deed in the ratio of their respective amounts. No principle in the law of partnership is better settled than that the creditors of a partnership have priority over the creditors of an individual member thereof in respect to the funds of the partnership. Phelps v. McNeely, 66 Mo. 554; Hilliker v. Francisco, 65 Mo. 598. This principle rests upon the most persuasive and satisfactory reasons. Each partner has the right to appropriate or compel the appropriation of all the partnership assets to the payment of partnership debts. This right is conceded to him because he is personally bound for the payment of all such debts. He has the right to devote his partner's share of the firm assets as well as his own share, to the payment of the firm debts. Being bound for his partner's share of the firm obligations, as to such partner's share of the firm assets he occupies the relation of a surety, with the attending right to devote such share of the assets to the satisfaction of the share of debt which his partner ought to pay in order to relieve him from liability therefor, and to emancipate his interest in the assets from the risks of the adventure. This...