IN BE HAMILTON.
the estate of a bankrupt, where a dividend bas been declared in favor of such creditor, under a trust for the benefit of creditors, prior to the filing of the petition in bankruptcy. SAME-PROOF OF (''LAIM-DECLARATION OF DIVIDEND UNDER TRUST AFTER PROOF OF DEBT.-Nothing less, however, than the payment of a sum of money, or the present right to receive such money before the proof of debt is made, will prevent a creditor from proving for the whole amount of his claim. SAME-!5AME-FRAUDULENT CONVERSION OF FIRM PROPERTY BY BANKRUPT PARTNERS.-lf a partner has fraudulently converted property or money of the firm to his own use there would seem to be no reason why proof on behalf of the joint estate should not be allowed in respect of such property against his separate estate and in competition with his separate creditors. 8A.ME-SAME-WJml!f ABSTRACTION OF FmmSNOT FRAUDULENT.-In order to constitute fraud, however, in such a case, there must be something more than a mere abstraction of the funds without the knowledge of the copartner, particularly if it be done by one having the soIe managtJment of the business.
In Bankruptcy. BROWN, J. This case arises upon petitions of the assignee.
to expunge certain proofs of debt made by Swearingen & Biggs, the Bank of Kentucky, and William Hughes, trustee. The material facts of the case are as follows: On the fifteenth of September, 1875, Swearingen & Biggs, a firm of distillers, composed of George W. Swearingen and Andrew Biggs, en· tered into a temporary partnership with Anderson, Hamilton & Co., a firm engaged in a general provision business, composed of William B. Hamilton, the bankrupt, W. T. Hamilton and D. M. Anderson, to pack pork together on general account for the season of 1875-6. The profits and losses of this business were to be divided in the proportion of threefourths to Anderson, Hamilton & Co., and one-fourth to Swearingen & .Biggs. No firm name was agreed upon, but for convenienc'3 it will be designated in this opinion as the conjoint firm. The money to carryon its operations was to be raised by paper bearing the name of Swearingen & Biggs as drawers, and Anderson, Hamilton & Co. as acceptors. William B. Hamilton also became an inliorser of such paper in his individual character. v.l,no.l0-51
The hogs were bought in the name of Anderson, Hamilton A new set of books was opened, and the transactions relating to said business were entered under the name of Anderson, Hamilton & Co. After making this contract, and while the pork packing season. was going on, Swearingen & Biggs continued their business as before, at the same store, and Anderson, Hamilton & Co. continned their office at the same place as before, kept up their separate books in the name of Anderson, Hamilton & Co., and borrowed money and did business in that name as before. Neither of these firms had any interest in the business of the other, except the joint interest in the hog product of that season. In the course of their business a large amount of paper was drawn by Swearingen & Biggs upon Anderson, Hamilton & Co., and accepted by them, generally, in favor of Hamilton Bros., who indorsed the paper, which was also indorsed and negotiated by William B. Hamilton. Amongst the paper so negotiated were the bills proven in this case by the bank of Kentucky, amount. ing to $80,000. . In June, 1876, the conjoint firm was dissolved by reason of great financial embarrassment, and the control of the hog product and the other assets of the joint account was transferred to Swearingen & Biggs. On the twenty-sixth of June an agreement or settlement was made between the conjoint firm and its creditors holding paper drawn, accepted and indorsed as above stated, by which it was agreed that upon the turning over by Swearingen & Biggs to a trustee (William Hughes being afterwards named by the creditors as such trustee) of all the hog product and other assets of Anderaon, Hamilton & Co., and paying the creditor $66,000 in 6, 12 and ] 8 months, with interest, securing the same upon real estate, and by warehouse receipts upon whisky of Swearingen & Biggs, the creditors would obligate themselves not to sue Swearingen & Biggs, and to accept such hog products and the sum of $66,000 in full satisfaction of the liabilities of said Anderson, Hamilton & CQ. and Swearingen & Biggs,
& Co., and the product was also sold in their name.
IN RE HAMILTON.
and of their accommodation indorsers or acceptors, Hamilton Bros. Before this agreement was executed William B. Hamilton, the bankrupt, in order to facilitate it, agreed in writing that the proposed settlement with the conjoint firm might be made, without in any manner releasing or his individual liability as indorser on any of the paper held by the credit. ors, assenting to remain bound as if the settlement had not been made. Swearingen & Biggs thereupon transferred to Hughes, as trustee for the creditors, all the assets of the conjoint firm, and paid them the $66,000. Subsequent to the making of this agreement William B. Hamilton filed his petition in bankruptcy, and was duly adjudicated a bankrupt. 1. As to the claim of Swearingen Biggs. This firm has proven against the individual estate of William B. Hamilton for three-fourths of $100,000 and interest, this being the amount which they were compelled to payout of their private means in order to payoff the debts of the conjoint firm. By the terms of tho conjoint partnership agreement, as before stated, the profits and losses between the two firms of Anderson, Hamilton & Co., and Swearingen & Biggs, were to be divided in the proportion of three·fourths to the former and one-fourth to the latter. Swearingen & Biggs contend that, by the rules of law governing partnerships, as by the rules governing joint debtors, each partner is bound to contribute to the other his proportion of the loss which may be paid by that other part. ner in excess of that partner's own proportion j and that, in event of any partner being insolvent, the others and solvent ones must be assessed the portion of the insolvent ones also. Anderson, Hamilton & Co. being insolvent and worthless, Swearingen & Biggs now claim the right to prove against William B. Hamilton, the only partner in said firm having assets, upon the ground that they have paid all the debts of the partnership, and that William B. Hamilton is responsible individually to them for three-fourths of the losses incurred in their conjoint business.