When a creditor holds an obligation of a bankrupt firm upon
which member of the partnership have, as joint principals or
sureties, made themselves individually liable, he is entitled,
under the Bankruptcy Law, to prove his claim both against the
partnership estate and the individual estates. P.
276 U. S.
302.
18 F.2d 3 reversed.
Certiorari, 275 U.S. 512, to a decree of the circuit court of
appeals reversing a decree of the district court which had
permitted Mitchell, as County Treasurer, to prove a claim of the
County against a bankrupt firm of bankers, with which its funds
were deposited, and also against members of the firm individually.
Hampel et al. were trustees in bankruptcy.
Page 276 U. S. 301
MR. JUSTICE HOLMES delivered the opinion of the Court.
J. H. P. Davis & Co. of Fort Bend County, Texas, partners,
were adjudicated bankrupts both as a firm and individually. They
were bankers and depositors of county funds. As such, they had
given two joint and several bonds both signed by the firm in its
firm name as principal and by some of the members of the firm
Page 276 U. S. 302
individually, with others, as sureties. The county sought to
prove its claim not only against the firm, but also against the
separate estates of the surviving members, all of whom had bound
themselves severally as well as jointly. The double proof was
allowed by the district court, but was disallowed by the circuit
court of appeals on the ground that the Bankruptcy Act, § 5f, by
appropriating the individual estate of a partner to his individual
debts, excluded by implication debts that were also debts of the
partnership from sharing with the former on equal terms. Act July
1, 1898, c. 541, 30 Stat. 548; Code, Tit. 11, c. 3, § 23. 18 F.2d
3.
We are of opinion that the district court was right. Except so
far as the statute may prevent it, a solvent man dealing with
another for money to be advanced to or deposited with his firm may
determine the security to be given as he and the other may agree.
He may mortgage his private estate, and we perceive no reason why
he may not create a claim against it in bankruptcy by a separate
contract of his own. The firm creditors know that they will be
postponed to individual creditors, and that they have no voice or
knowledge as to who the individual creditors shall be, or what the
amount of their claims. The only real equity is not to disturb the
equilibrium established by the parties. Those who take less
security have no claim to be put on a footing with those who
require more. It is not necessary to go into nice speculations as
to what a partner can add to the liability already incurred when he
offers a separate contract in addition to that which is made by his
firm. We may assume that, by the firm contract, he is bound to the
uttermost farthing -- but he is bound only as a member of the firm,
and therefore subject to the bankruptcy rule. His creditor may
require more, and we can see nothing to hinder his putting himself
in the position of a separate
Page 276 U. S. 303
debtor also. Certainly we find no prohibition in the bankruptcy
law.
Myers v. International Trust Co., 273 U.
S. 380. By making a separate contract, although in the
same instrument, he calls the separate liability into being, as
presumably he intends to and as he has a right to do.
Robinson
v. Seaboard National Bank of New York, 247 F. 667, 668, 669.
The intent and transaction are not illegal in Texas. Their specific
effect depends on the Bankruptcy Act.
We have dealt with the only question which induced the granting
of the writ. It does not appear to us necessary to go into further
details.
Decree reversed.