Cummings v. Hayes

Mb. Justice Waterman delivered the opinion of the court.

The court held that Cummings and Howard were general partners and the defendants liable as such; and also that the proof of the publication of the partnership articles was insufficient under the statute “ to form a limited partnership and to furnish public information thereof; ” whereupon judgment for the entire claim of appellees was rendered.

Limited partnerships seem not to have been known in Europe prior to A. D. 1166, when, by the statutes of Pisa and Florence, they were recognized. Europe, to the Jews and Lombards, is indebted for this method of enabling persons not desiring to actively participate in trade, to venture therein without exposing their entire estates to loss.

Once established, this form of association has persisted, and is to-day recognized by nearly all the States of the Hnion.

The provision of the statute authorizing limited partnerships must be substantially complied with, or those who associated under it will be liable as general partners. Henkel v. Heyman, 91 Ill. 96 .

Such portions of the statute as look to the protection of persons dealing wfith the firm, are, in favor of the public, to be liberally construed, and must be strictly observed by the partners. Smith v. Argall, 6 Hill, 479 ; Argall v. Smith, 3 Denio, 435 ; Haggerty v. Foster, 103 Mass. 17 -19; Maloney v. Bruce, 94 Pa. State, 249; Lachaise v. Marks, 4 E. D. Smith, 610-626; Fox v. Graham, Michigan Nisi Prius Cases, 90; Durant v. Abendroth, 69 N. Y. 148 .

What portions of the statutes are designed for the protection of those who may deal with the firm ? Manifestly, the statements of capital contributed by the special partners, the duration of the partnership, the names of the parties, and certainty as to their assent thereto.

Not only those proposing to become, but one who is a creditor, might be interested in an examination of the record which the law requires shall be made and kept.

The statute prescribes that “The persons desirous of forming such- partnership shall make and severally sign a certificate” and that “such certificate shall be acknowledged by the several persons signing the same.”

Whether acts required by the statute, not merely things which may be done by virtue of the natural right to contract, that is, whether the signing and acknowledging of the certificate are matters that can be delegated, is a question that we do not feel called to express an opinion upon, holding as we do that the certificate filed in the office of the clerk of the county, to be by him recorded in a book and kept subject to inspection by all persons, must be such that therefrom, and without outside inquiry or examination, it can be determined with certainty whom the parties forming such limited partnership are, and that each of them has joined therein and assented thereto; and that if it is permissible for a partner to sign and acknowledge such certificate by an attorney, the signing and acknowledgment by such attorney must be accompanied by evidence showing his authority to so act.

In the present case nothing appeared of record showing that Mr. Gaither had any warrant for doing what he did. One examining the record could not therefrom determine whether a limited partnership had been formed; to ascertain this he was required to prosecute outside inquirju There was before him nothing tending to show where or when either Mr. Gaither or Mr. Cummings could be found, or when or in what manner, if at all, Mr. Gaither had been constituted, for this purpose, the attorney of Mr. Cummings.

The inquirer, if considering whether he would extend credit, might desire to know with certainty whether Mr. Cummings was a general or special partner; if he who inspected the record was already a creditor, having an overdue claim, his decision whether he would proceed against the firm by attachment or otherwise, might depend upon whether he found that Mr. Cummings’ entire estate could be holden for his debt, or only the amount put into the firm.

Mr. Cummings is no longer living. If Mr. Gaither had also died, it is easy to see how difficult, if not impossible it might have been to satisfactorily show that there ever was a power of attorney authorizing the signature and acknowledgment.

In the present case the power of attorney under which Mr. Gaither acted has been destroyed. Mr. Gaither, being yet living, is able to testify to its contents. The statute was not in this case substantially complied with; a material and important omission was made; certainly in a matter vital to the interest of all dealing with the firm was withheld.

That in this there was no evil motive nor intent to evade the law is of no consequence.

Mr. Cummings and Mr. Howard were endeavoring to avail themselves of a privilege granted by • statute, and it was incumbent upon them to see that there was compliance with every requirement of the law by which they sought to withdraw their general estates from the hazard of a business in which they engaged. Hot having so complied, judgment for a debt of the firm has been rendered against their estates. -

The judgment of the Superior Court is affirmed.