Sparhawk v. Russell

Hubbard, J.

In the distribution of the estates of deceased insolvent persons, the only distinctions are in relation to debts to which a preference may be given by the laws of the United States, and to taxes and duties due to the Commonwealth. All other debts of whatsoever kind are to be paid ratably in proportion to their respective amounts. If the insolvent was a partner in some firm, at the time of his decease, and died in possession of both partnership estate and separate estate, and was indebted as a partner as well as on his private account, no difference is made in the distribution of his estate, by the payment of the separate debts from the separate estate, and of the partnership debts from the joint estate, and then by applying the surplus of one fund, (if there be a surplus) towards the liquidation of the debts payable out of the other fund ; but each claim is alike proveable as a debt due from the estate, and no distinction is made as to the origin of the debt, and no difference in the estate to be divided. This distinction as to the nature of the debts, whether joint or separate, and the distribution of estate when joint or separate, which is recognized and practised upon in the settlement of estates of living insolvents, is not recognized in the distribution of deceased estates. A partner, therefore, who has a claim against a deceased partner’s estate, whether it arises from a private debt due to him, or is the result of a partnership balance, is equally entitled, with every other creditor, to prove his demand ; otherwise, he might be left without remedy. These principles were discussed and settled in the case of Wilby v. Phinney, 15 Mass. 116.

*308In the present- case, the debt of Thomas J. Whittemore, the surviving partner, was duly proved, and was properly allowed bj the commissioners; and it is of no legal consequence whether its allowance will render the separate estate of the deceased partner insufficient to pay his separate debts or not, if paid out of that fund, or that it will render the partnership estate insufficient to pay the partnership debts, in case it is charged upon the partnership fund; the estate of the deceased partner, in the hands of his administrator, being equally liable for the payment of separate debts and joint debts, without reference to the nature of the estate from which such payments are to be made.

If Thomas J. Whittemore, the surviving partner, is solvent, then as he is liable for the partnership debts, the creditors of the firm cannot suffer from his receiving a proportional dividend on the debt due to him from the deceased partner.

On the other hand, as Thomas J. Whittemore is represented to be insolvent, and his estate has passed into the hands of Mr. Russell, as his assignee, the joint and separate creditors will not be without their appropriate remedy, if the money to be received by Mr. Russell shall be the proceeds of a partnership or private claim; because the joint and separate creditors may, on petition, have the funds in the hands of the assignee apportioned agreeably to the statute, and the moneys received in this case will be the subject of adjustment under such petition; so that the joint and separate creditors will receive their dividends according to the nature of the estate to be divided, as soon as their respective claims are ascertained.

Allowance of the claim affirmed.