One of two partners committed an act of bankruptcy. The solvent partner later disposed of partnership property to the defendant. A commission was afterwards issued against the bankrupt partner, and the plaintiffs as assignees under the commission brought an action of trover against the defendant. The partners were joint tenants at law (though not in equity) of partnership property. The defendants submitted that the plaintiffs could not recover on either count. If at the date of the sale to the defendant the goods were the property of both partners as alleged in the first count (ie. if the joint tenancy had not been severed by the act of bankruptcy) then each partner had the right to dispose of the whole, and the disposal of one partner was the disposal of both: but if the partnership was dissolved by the act of bankruptcy of one partner (so that the joint tenancy was severed) the action still could not be maintained; for then the assignees under the commission and the solvent partner would be tenants in common, and trover and detinue did not lie at the suit of one tenant in common against another.
Held: The act of bankruptcy dissolved the partnership and severed the joint tenancy. ‘An act of bankruptcy by one partner, is to many purposes a dissolution of the partnership, by virtue of the relation in the statutes, which avoid all the acts of a bankrupt from the day of his bankruptcy; and from the necessity of the thing, all his property being vested in the assignees, who cannot carry on a trade.’
Judges:
Lord Mansfield
Citations:
(1776) 2 Cowp 445
Jurisdiction:
England and Wales
Cited by:
Cited – Re Dennis (A Bankrupt) CA 22-May-1995
A joint tenancy was severed (under the former law) on the event of an act of bankruptcy, and not only by the later actual adjudication of bankruptcy. The vesting of the debtor’s property in the trustee which occurred on adjudication was automatic; . .
Cited – Morgan v Marquis 2-Nov-1853
The defendants had possession of some flour for sale under instructions from Perrin. The jury found that the sale was to be for the account of Perrin and one Shute and not Perrin alone, and that Perrin and Shute were joint tenants. Perrin committed . .
Lists of cited by and citing cases may be incomplete.
Insolvency
Updated: 07 December 2022; Ref: scu.186745
