Page:Federal Reporter, 1st Series, Volume 1.djvu/820

 812 FEDERAL REPORTER. �In re Jewett, 1 N. B, lî. 419, Judge Drummond held that wtiere there are both individual and partnership creditors, but the assets were individual only, consisting of goods pur- chased by the bankrupt from the partnership on its dissolu- tion, prior to the bankruptcy, the creditors would be entitled to be paid pari passu with the individual creditors. �In the subsequent case of Knight, 2 Biss. 518, Judge Drum- mond gave the matter a very careful and extended consid- eration, and held that the federal courts, in construing the bankrupt law, were not bound by the Massachusetts cases, and an exception to the rule was adopted, that "where there are both partnership and individual debts, but no partnership assets and no solvent partner, the debts of the firm and of the members can be proved, and the estate be distributed pari passu among the creditors. To the same efifect are In re Downing, 3 N. B. E. 748 ; In re Bice, 9 N. B. E, 373 ; In re Long, Id. 227; In re McEwen, 12 B. E. 11. �I find no case in which the question has arisen upon the fraudulent appropriation by one of the partners of a portion of the assets ; but, as the English cases recognize this as a well established exception to the general rule, I ses no reason ■why we should not regard it as equally applicable here. �But I have corne to the conclusion, with considerable hes- itation, that the facts do not make out a case of fraudulent abstraction of the partnership funds. Obviously, it is not every case where a partner overdraws his account, even with- out the consent of his other partners, that fraud can be im- puted. Anderson, Hamilton & Co. had the entire oontrol and management of the partnership business, and although Swearingen & Biggs were actually and legally partners in the concern, they do not appear to have taken part in the actual conduet of its business, and apparently lent their names to Anderson, Hamilton & Co. for their accommoda- tion, with the understanding that they were to have one- quarter of the profits for so doing. �The withdrawal of the $68,000 was made in February, was entered upon the books of the conjoint firm, and waa afterwards charged to Hamilton's individual account. No bank- ��� �