In Johnson v. Shirley, a hardware partnership became insolvent and executed a voluntary assignment of all firm assets to a trustee for the benefit of creditors; prior to the assignment, one partner had executed chattel mortgages on his undivided one-half interest in the stock to secure his personal antecedent debts. The assignee petitioned to sell the property free of liens and apply proceeds first to firm debts, while the mortgagees sought priority for their claims. The trial court ordered the sale and directed that firm creditors be paid in full before any distribution to the individual mortgage holders. The appellate court affirmed, holding that the mortgages conveyed only the mortgagor's interest in any surplus remaining after payment of partnership debts and that separate transfers by individual partners could not divest the firm property of liability for joint obligations.

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