Wood's Collyer On the Law of Partnership : With An Appendix of Forms. With Additions From Lindley And Other English Authors, And Full American Notes And References to American Cases

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Pearson & Henderson v. Keedy, 6 B.
Monr. (Ky.) 139.
An exception exists, however, to this rule, where the firm is dissolved either by the death or retirement of a partner, and the survivor or remaining partners are insolvent ; Vance v. Cowing, 13 Ind.
460 ; or where it appears that the prop- erty, or a part of it, was purchased from or improved by funds obtained from the creditor seeking relief, and the partners are fraudulently preferring other cred- itors, or has been fraudulently disposed of
... by them. Conro v. Port Henry Iron Co., 13 Barb. (N. Y.) 58 ; Sanderson v.
Stackdale, 11 Md. 573. In Bank of St.
Mary's v. St. John, 35 Ala. 567, the note holders of a foreign banking corpora- tion which has suspended payment and become insolvent, may, without first ob- taining judgment at law, proceed in equity against the bank, its directors, stockholders and agents, charging them with fraud and misapplication of the as- sets and seeking a discovery and account.
Such a bill may be sustained under the general powers and jurisdiction of the court, which regards the capital stock of the company and all its assets as a trust fund for the payment of its cred- itors, and the directors, stockholders and agents as trustees.


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