Bauer Grocer Co. v. McKee Shoe Co. , 1899 Ill. App. LEXIS 407 ( 1900 )

Mr. Justice Harker

delivered the opinion of the court.

It is contended by the plaintiff in error that the judgment and execution upon which the defendant bases its right of priority over other creditors are void. The contention is founded upon the proposition that a surviving partner has no power to give a note and power of attorney to confess judgment in the name of the firm. That a surviving partner has no such power is a well established rule of law. But, while a judgment confessed upon it would be void as to the estate of the deceased partner, it would be valid as to the partner who executed the note and warrant. If the note was for a partnership debt, we see no reason why the judgment could not be satisfied out of the partnership assets. Where one of «two partners dies, suits at law must be against the surviving partner, and in the event of recovery satisfaction can be obtained out of the partnership property.

AVhen Trexler’s partner died, the law made it his duty to take exclusive possession of the effects of the partnership, to pay its debts out of the same and to settle its business. Sec. 89, Ch. 3, Hurd’s Revised Statutes, 123. He was invested with large discretion in settling up the affairs of the partnership. It will hardly be contended that satisfaction of a judgment rendered against him upon summons, etc., for a partnership debt, could not have been had out of the partnership assets prior to the assignment. The execution lien of a judgment creditor who, in the absence of fraud, obtains judgment b)7 confession, is equal to the execution lien of a creditor who has obtained his judgment after a summons and trial.

It is contended that the County Court erred in not holding the'judgment void to the extent of $72, the amount of the attorney’s fees included. The right of an insolvent debtor to prefer one creditor over others can only be exercised as to the amount actually due. He has no right to give a note for the amount due which provides for the collection of ten per cent additional as an attorney fee for the preferred creditor. The provision as to the attorney fee is a mere gift and fraudulent as to other creditors. Hulse et al. v. Marshon et al., 125 Ill. 52; Young v. Clapp, 147 Ill. 176; First National Bank of Pana v. Havens and Geddis Co., 61 Ill. App. 213.

An attempt is made to distinguish this case from the ones cited, in that the defendant in error, at the time of accepting the notes from Trexler, did not know he was insolvent, while, in the cases cited, the preferred creditor did know that their debtor was insolvent. On principle, we do not see how that should make any difference. When an insolvent debtor, voluntarily and without consideration, executes a conveyance or gift, his act in so doing is, as ' to existing creditors, fraudulent and void, regardless of whether the donee had knowledge of his insolvent condition.

The order of the County Court will be affirmed as to payment of amount of judgment of defendant in error except as to attorney fee of $72, and as to that amount, it will be reversed. The cause will be remanded with directions to the County Court to enter an order in accordance with this opinion.

Affirmed in part, reversed in part and remanded.