- Flynote
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Insolvency - Proof - Partnership - Proof by Partnership against Partner - Exception when Debt arises where trade of Firm distinct from trade of Partner - Law 13 of 1895, secs.67 and 69
A partner in a firm carrying on business as tirnber and general builders' merchants, clairned to prove on behalf of the firm a debt in the insolvent estate of another partner, who had carried on the business of builder and contractor, and alleged that the debt was one as between merchant and rnerchant which had nothing to do with the relation of the parties as members of the same firm, and that the business of the firm was quite distinct from the business of the insolvent partner. It was not clear that the trade of the firm was distinct from the trade of the insolvent:
Held, that the clairrn was not admissible.
The general rule is that a partnership may not prove upon a partner's insolvent estate. - The reason for that rule discussed.
Where a trade distinct from that carried on by the firm is carried on by one or more of the partners and a debt from the said partner or partners to the firm arises in the ordinary way of business in respect of the distinct trades, according to English law, proof of such debt is allowed in favour of the firm against
the insolvent estate of the said partner or partners in competition with his or their separate creditor.
Quaere whether such exception exists in South Africa.